2016
Annual Budget
BOARD OF DIRECTORS
TABLE OF CONTENTS
INTRODUCTION ......................................................................................................................................................................... 1
BUDGET MESSAGE ........................................................................................................................................................................................... 1
VISION, MISSION AND VALUES ....................................................................................................................................................................... 3
BUDGET PROCESS ............................................................................................................................................................................................ 4
BUDGET SCHEDULE ......................................................................................................................................................................................... 4
FINANCIAL REVIEW .................................................................................................................................................................. 5
FINANCIAL SUMMARY...................................................................................................................................................................................... 5
COMPARATIVE STATEMENTS OF REVENUES AND EXPENSES ..................................................................................................................... 6
BUDGET SUMMARY .................................................................................................................................................................. 7
REVENUE AND EXPENDITURE BUDGET ........................................................................................................................................................ 7
BUDGET CONTINGENCY................................................................................................................................................................................ 10
SOURCE AND USE OF FUNDS........................................................................................................................................................................ 11
REVENUE AND EXPENDITURE DETAIL ....................................................................................................................................................... 14
ELECTRIC SYSTEM RESOURCES.......................................................................................................................................... 17
POWER RESOURCES ...................................................................................................................................................................................... 17
RESOURCES AND DELIVERIES...................................................................................................................................................................... 19
OPERATING REVENUES ......................................................................................................................................................... 21
OPERATING REVENUES ................................................................................................................................................................................ 21
MUNICIPAL LOADS ........................................................................................................................................................................................ 22
WHOLESALE MUNICIPAL RATES................................................................................................................................................................. 23
MUNICIPAL SALES ......................................................................................................................................................................................... 24
SURPLUS SALES AND OTHER ELECTRIC REVENUES ................................................................................................................................ 25
SURPLUS SALES ............................................................................................................................................................................................. 26
WHEELING REVENUES ................................................................................................................................................................................. 26
OTHER REVENUES .................................................................................................................................................................. 27
INTEREST AND OTHER INCOME .................................................................................................................................................................. 27
OPERATING EXPENDITURES ............................................................................................................................................... 29
OPERATING EXPENDITURES ........................................................................................................................................................................ 29
PURCHASED POWER ..................................................................................................................................................................................... 30
FUEL EXPENSE............................................................................................................................................................................................... 32
PRODUCTION EXPENSES .............................................................................................................................................................................. 34
TRANSMISSION EXPENSES ........................................................................................................................................................................... 37
ADMINISTRATIVE AND GENERAL EXPENSES............................................................................................................................................. 39
DEBT EXPENSE......................................................................................................................................................................... 43
DEBT EXPENSE .............................................................................................................................................................................................. 43
LONG-TERM DEBT OUTSTANDING ............................................................................................................................................................. 44
DEBT SERVICE COVERAGE ........................................................................................................................................................................... 45
CAPITAL ADDITIONS .............................................................................................................................................................. 47
CAPITAL ADDITIONS ..................................................................................................................................................................................... 47
2016 CAPITAL ADDITIONS SUMMARY ...................................................................................................................................................... 49
PRODUCTION CAPITAL ADDITIONS ............................................................................................................................................................ 51
TRANSMISSION CAPITAL ADDITIONS ......................................................................................................................................................... 56
GENERAL PLANT CAPITAL ADDITIONS ...................................................................................................................................................... 60
ACRONYMS AND TERMS ....................................................................................................................................................... 63
INTRODUCTION
Introduction
Budget Message
TO THE BOARD OF DIRECTORS:
Jackie Sargent
General Manager/
Chief Executive Officer
I am pleased to present you with Platte River Power Authority’s (Platte
River) 2016 Annual Budget. You will find the budget supports Platte
River’s Strategic Financial Plan (SFP), mission and the strategic direction
you have helped establish for the organization. Platte River looks at
managing costs from a holistic perspective – operating the system in a
safe, compliant and reliable manner, while cost effectively optimizing
resources. We have, and will continue to be, responsible stewards so
that our member communities continue to receive affordable electric
service that is environmentally responsible.
Budget Summary – 2016 total revenues are projected to be $217.5 million, an increase of $5.8
million over 2015. Expenditures are forecast to be $262.9 million which reflect an overall increase
of $17.4 million when compared to the 2015 Budget. The budget includes a contingency
appropriation of $20.0 million that can be used to meet unforeseen circumstances that were not
known at the time the budget was prepared. Expenditures in excess of revenues will be funded by
prior reserves and reimbursed with funds from an estimated $56.0 million debt financing currently
planned for 2016. Details of the revenue and expenditures are contained in the subsequent sections
of this document.
Items of significance impacting the 2016 Budget are summarized below.
Renewable Resource Additions – The 30 MW Rawhide Flats Solar facility is expected to be online
by fall of 2016. This facility, along with the tripling of wind capacity in 2015, will move us forward
in diversifying and expanding our portfolio of resources. We will continue to monitor evolving
technologies and look to identify opportunities to integrate new resources when they will add value
and benefit the system overall.
Demand Side Management – Interest in energy efficiency continues to grow on the part of the
Municipalities and their customers. This is exemplified by the increasing customer participation in
program offerings, in part driven by the collaboration among Platte River and the Municipalities in
establishing the joint Efficiency WorksTM program. Platte River will again increase funding for
energy efficiency in 2016 because helping customers conserve electricity is the right thing to
do. The Municipalities will likely continue to add funding and other support for these programs
based on their own individual efficiency goals and budgets.
Platte River and the Municipalities are also collaborating on the development of a Demand
Response (DR) pilot program. The pilot is intended to explore how DR resources might be operated
2016 Annual Budget
Page 1
INTRODUCTION
by Platte River to maximize system benefit and to help identify the value of specific
resources. Residential air conditioning, electric water heating and municipal level voltage control
will initially be considered.
Service Reliability – Preventive and predictive maintenance of the power generation and
transmission facilities is required to ensure service reliability. Craig Unit 1 is scheduled for a sixweek maintenance outage, which will include major turbine work and boiler
inspection. Investments in other capital projects that maintain the safety, reliability, security and
efficiency of the generating and transmission facilities will continue.
Staffing – In order to achieve the strategic goals of the organization, additional positions are
planned for 2016. They will support functions such as DSM program expansion, document
management, telecommunications, drafting, administrative support, cyber security, fuels and water,
and generation dispatch.
Surplus Sales – The surplus sales market has experienced weakness over the past few years and
we are projecting lower market prices in 2016. The impact of lower market pricing translates to
lower surplus sales revenues counted on as a revenue credit in setting wholesale rates. While
surplus sales will continue to provide a benefit to the Municipalities’, the reduction in revenues
results in increased rate pressure.
Wholesale Rate Increase – The budget continues to align with our SFP in maintaining long-term
financial stability while providing competitive wholesale rates and access to low-cost capital. The
2016 Budget includes a 4.5% increase in the Tariff 1 rate. This rate increase is necessary to ensure
Platte River’s overall financial health and will help provide smoothing with regard to future
anticipated rate increases.
A budget work session was held with the Board of Directors September 24, 2015. A public hearing
with review of the proposed budget was held October 29, 2015, with a second public hearing and
adoption of the budget December 10, 2015. Once adopted by the Board of Directors, a copy of the
2016 Budget will be filed with the State of Colorado.
Page 2
2016 Annual Budget
INTRODUCTION
Vision, Mission and
Values
VISION
As a respected leader and responsible
energy partner, improve the quality of
life for the citizens served by our
owner communities.
MISSION
Provide safe, reliable, environmentally
responsible, and competitively priced
energy and services.
VALUES
 Safety – Working safely and protecting the public, our employees, and the assets we manage is
non-negotiable.

Integrity – Being ethical and holding ourselves accountable to conduct business in a fair,
honest, open, compliant, and environmentally responsible manner is at the core of what we do.

Customer Service – Providing quality service at a competitive price while being responsive to
our owners’ needs creates added value and improves customer satisfaction.

Respect – Encouraging constructive dialogue that promotes a culture of inclusiveness,
recognizes our differences, and accepts varying viewpoints will lead us to optimal solutions for
even the most difficult challenges.

Operational Excellence – Engaging employees to strive for excellence and continuous
improvement ensures that we provide reliable service while managing costs and creating a
rewarding work environment.

Innovation – Supporting the development of technologies to promote the efficient use of
electricity, protect the environment, and create a diversified energy supply portfolio mitigates
risk and creates opportunities.

Sustainability – Maintaining financial integrity, minimizing our environmental impact, and
supporting responsible economic development in our owner communities ensures the longterm viability of the organization and the communities we serve.
2016 Annual Budget
Page 3
INTRODUCTION
Budget Process
Platte River is a political subdivision of the State of Colorado and is subject to the Local Government
Budget Law, C.R.S § 29-1-101, et seq. Platte River accounts for its financial operations as a
proprietary fund and the 2016 Budget has been prepared using the accrual method of accounting
and accepted governmental budgeting practices. Since Platte River operates as a proprietary fund, it
is not subject to Colorado’s Taxpayer’s Bill of Rights provisions. The statutory deadline for
submission of Platte River’s Annual Budget to its Board of Directors is October 15 of each year. By
that date, a notice is published in newspapers of general circulation stating that the Annual Budget
is available for inspection by the public. The date and time for the public hearings will also be
published.
State law allows Platte River to carry over into 2016 any unexpended balance of funds appropriated
for 2015 expenditures. The 2015 unexpended amounts may be due to construction delays, change
in scope, or payment timing differences and will be determined after the December 31, 2015, yearend closing. The amounts required in 2016 to complete 2015 projects will then be transferred to
the appropriate budget categories in 2016. The 2016 capital expenditures will be funded either
from current operations and/or a debt financing.
Budget Schedule
Formulate key goals and objectives
Identify major Budget assumptions
Preliminary Capital Budget projections
Develop initial Operating Budget
Budget review and analysis by staff
Prepare Budget documentation
Budget delivered to Board
Public hearing and Board review
Finalize Proposed Budget
Public hearing and Board adoption
File Budget with State
Jan
Page 4
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
2016 Annual Budget
FINANCIAL REVIEW
Financial R evie w
Financial Summary
The Local Government Budget Law of Colorado, generally accepted accounting principles, Platte
River’s Fiscal Resolution, General Power Bond Resolution, and SFP provide the framework for
Platte River’s financial activities. The 2016 Budget was developed in compliance with this
framework as well as having an adaptive strategy to cost effectively maintain reliability, manage
risk, and ensure regulatory compliance.
Platte River is committed to sound financial and management planning. The key to meeting this
commitment is in following the goals of the SFP, which include a minimum annual net income of
$6.0 million, minimum total debt service coverage of 1.50 times, a debt-to-capitalization ratio of
50% or less, and a target minimum of 200 unrestricted days cash on hand. The SFP is designed to
provide long-term financial stability by generating adequate cash flows, maintaining access to low
cost capital, providing stable and competitive rates, and effectively managing financial risk.
The following table is a comparison of the key financial indicators.
2014
Actual
SFP Targets
Net Income ($000)
$6.0 Million Minimum
Debt Service Coverage (2)
1.50 Times Minimum
Debt-to-Capitalization Ratio
50% or Lower
Unrestricted Days Cash on Hand (3)
200 Minimum
Other Selected Data ($000)
Accumulated net assets
Dedicated reserves and available funds
Long-term debt, net
Capital additions
$
$
$
$
$
16,606
1.71x
31/69
284
494,908
114,138
223,552
19,527
2015
Budget
$
$
$
$
$
9,940
1.60x
28/72
190
502,419
111,647
200,174
35,501
2015
Estimate (1)
$
$
$
$
$
6,347
1.48x
29/71
220
501,255
96,222
200,174
35,367
2016
Budget
$
10,705
1.53x
32/68
224
$ 511,960
$ 131,765
$ 238,429
$ 42,030
(1) 2015 Estimate represents ten months actual and two months budget adjusted for revised projections on all budget schedules.
(2) 2015 Estimate for debt service coverage is slightly below the target of 1.50 times mainly due to lower revenues due to a weak surplus
sales market. Coverage remains well above the legal minimum of 1.10 times and Platte River’s overall financial condition remains
favorable. The 2016 Budget has been adjusted to reflect current conditions of the surplus sales market.
(3) 2015 Budget below target of 200 days. Capital and outage spending draws down cash that will be replenished with a future debt
financing. A reimbursement resolution was put in place in 2013 to capture expenses for Yampa capital projects to be reimbursed with
the debt funds. Due to the uncertainty of the Yampa capital projects, another reimbursement resolution was put in place in 2014 to
capture expenses for Rawhide Unit 1 and transmission capital projects. A debt financing is planned for 2016 to fund these projects
and cash will be reimbursed. The 2015 Estimate for days cash on hand is expected to be higher as a result of higher beginning
balances from favorable results in 2014 and lower expenses in 2015.
2016 Annual Budget
Page 5
FINANCIAL REVIEW
Comparative Statements of Revenues and Expenses
Operating Revenues
Sales to Municipalities
Sales for resale and other
Total operating revenues
Operating Expenses
Purchased power
Fuel
(1)
Operations and maintenance
(1)
Administrative and general
Depreciation (1)
Total operating expenses
Operating income
Nonoperating Revenues (Expenses)
Interest income
Other income
Interest expense
Amortization of bond financing costs (1)
Allowance for funds used during construction
Net increase (decrease) in fair value of investments (1)
Total nonoperating revenues (expenses)
Income
2014
Actual
2015
Budget
2015
Estimate
2016
Budget
$ 169,772,581
30,094,445
199,867,026
$ 176,586,359
33,598,968
210,185,327
$ 175,664,649
24,709,351
200,374,000
$ 185,597,777
30,200,485
215,798,262
26,904,471
49,974,673
55,336,895
14,395,046
28,374,235
174,985,320
33,304,959
51,110,567
65,064,065
16,280,198
26,547,900
192,307,689
33,018,225
47,778,856
62,850,024
15,837,383
26,876,750
186,361,238
34,262,779
54,986,727
61,754,485
18,910,080
26,958,600
196,872,671
24,881,706
17,877,638
14,012,762
18,925,591
641,792
1,368,407
(10,788,257)
366,784
96,859
39,040
(8,275,375)
688,324
787,824
(9,786,778)
349,250
24,185
(7,937,195)
723,430
898,817
(9,786,747)
349,250
149,216
(7,666,034)
1,039,037
654,059
(10,533,519)
369,268
262,922
(12,055)
(8,220,288)
$ 16,606,331
$
9,940,443
$
6,346,728
$
10,705,303
(1) Actual and estimate include nonappropriated expenses of vacation accrual, depreciation expense, amortization of bond financing costs, and
unrealized investment holding gains and losses.
Page 6
2016 Annual Budget
BUDGET SUMMARY
Budg et Summary
Revenue and Expenditure Budget
The 2016 Budget includes total revenues of $217.5 million, an increase of $5.8 million over the
2015 Budget. Expenditures total $262.9 million, a $17.4 million increase from the 2015 Budget. The
budget includes a contingency appropriation of $20.0 million that can be used to meet expenditures
that could not be foreseen at the time the budget was prepared. Operating expenses are projected
to be $169.9 million, an increase of $4.2 million. Capital additions total $42.0 million, an increase of
$6.5 million. Debt expense is projected to be $31.0 million, an increase of $2.4 million based on
scheduled debt service payments. A new debt financing of approximately $56.0 million is planned
for 2016. Expenditures in excess of revenues will be funded by prior reserves and reimbursed with
funds from the debt financing.
Described below are significant revenue and expenditure items contained in the 2016 Budget, with
comparisons to the 2015 Budget. Revenues are expected to increase $5.8 million with increases in
Municipal sales and interest income and decreases in short-term surplus sales, contract surplus
sales, wheeling revenues, and other income. Major revenue items are described below.

Municipal sales are projected to increase $9.0 million in 2016, as a result of the 4.5% Tariff 1
rate increase. Energy deliveries and total billing demand are projected to both increase
0.7%.

Interest income is expected to increase $0.3 million. The increase in interest income is due
to higher projected investment rates and increased cash reserves due to the planned debt
financing.

Short-term surplus sales are decreasing $2.0 million due to lower projected surplus sales
prices. The average price is 20% lower than 2015 at $26.10 per MWh. Offsetting a portion of
the price decrease is a 16% increase in energy available for surplus sales.

The capacity sale to a regional utility from the combustion turbines ended June 2015,
causing a decrease in revenue of $1.2 million.

Wheeling revenues are expected to decrease $0.2 million mainly due to a decrease in loads
of transmission customers.
Operating expenses are expected to increase $4.2 million. Fuel reflects the largest increase of $3.9
million followed by administrative and general of $2.6 million, purchased power of $1.0 million, and
transmission of $0.5 million. Production expenses are expected to decrease $3.8 million. The
following are significant items impacting the change in operating expenses.

Maintenance Outages:
o
Rawhide Unit 1 had a maintenance outage in 2015, which accounts for the majority
of the Rawhide Unit 1 production expense decrease of $5.2 million. In 2016, a
2016 Annual Budget
Page 7
BUDGET SUMMARY
maintenance outage is planned for Craig Unit 1, increasing costs $1.1 million. Details
of the Craig Unit 1 maintenance outage can be found in the Production Expenses
section of this document.



Page 8
Coal Expense: Overall coal expense is increasing $4.4 million.
o
Rawhide Unit 1 is increasing $3.5 million due to a higher generation forecast as
there is no planned outage in 2016. Partially offsetting the increase is the delivered
coal price for Rawhide Unit 1, which is decreasing 4% per ton based on market
pricing.
o
The Craig Units coal expense is increasing $0.9 million. Delivered coal pricing for the
Craig Units is increasing 13%. The higher prices are a result of receiving fewer tons
of coal in order to reduce coal inventory levels at the Craig Station. Higher prices per
ton are driven by fixed costs the coal mines will continue to need to recover over
fewer tons mined. This amount is an estimate, as all participants of the Craig Station
are currently working collectively on a strategy to reduce inventory. Lower
generation is expected due to the Craig Unit 1 six-week scheduled maintenance
outage, modeling projections, and additional solar energy (see below).
Renewable Resources and Demand Side Management:
o
A long-term purchase power agreement for 30 MW from the Rawhide Flats Solar
project is expected to be online by fall of 2016. The cost is estimated to be $0.9
million in purchased power. Ancillary services for regulation are expected to begin
in 2017. The additional solar energy also impacts fuel expense as it is expected to
reduce Craig coal generation, dependent on market conditions.
o
The DSM budget has increased $1.2 million for expansion of programs. This increase
will bring the total DSM budget to $3.6 million. The 2016 increase in funding is part
of a multi-year expansion of energy efficiency programs and a new demand
response pilot program.
Salaries and Benefits: These expenses were developed in accordance with the Board policy
on Employee Total Compensation. Salaries and benefits reflect an increase of $1.1 million.
o
Regular wages are increasing $2.4 million and include staffing increases, a market
based adjustment of 2.9%, and position step increases. There are nine new positions
planned that will support functions such as DSM programs, document management,
telecommunications, drafting, administrative support, cyber security, fuels and
water, and generation dispatch. The sources for the salary adjustment include data
from regional utilities and Mountain States Employer Council.
o
Overtime reflects a decrease of $1.1 million, which is mainly attributable to the
completion of the 2015 Rawhide Unit 1 maintenance outage.
2016 Annual Budget
BUDGET SUMMARY
o

Benefits are decreasing slightly, $0.2 million. The defined benefit pension
contributions are decreasing $0.5 million mainly due to closing the plan in 2010 to
new participants. Offsetting the decrease are increases in defined contribution
pension costs of $0.1 million and social security of $0.1 million, followed by smaller
increases in other benefit expenses totaling $0.1 million. New employees and overall
salary increases drive the increases in the defined contribution pension plan and
social security. Medical and dental expenses are expected to be flat and are based on
a mid-range projection provided by Gallagher Benefit Services using historical
claims and industry cost projections.
Other Expenses:
o
Ancillary services and reserve purchases are increasing $0.5 million due to a rate
increase from Xcel Energy.
o
Information technology expenses are increasing $0.3 million for investments in
cyber security and software purchases accounted for as services rather than capital
assets.
o
Wheeling expenses are increasing $0.1 million as a result of projected rate increases
from Western Area Power Administration (Western).
o
Natural gas expense is decreasing $0.4 million as a result of 52% lower generation
because of the addition of solar and the distribution of resources based on the
market-based model projections. The delivered natural gas price is projected to
decrease 26% to $3.33 per MBtu.
A debt financing for approximately $56.0 million is planned in 2016 to fund capital additions for
Rawhide Unit 1 and transmission. Debt expense is increasing $2.4 million, of which $1.7 million
relates to the new debt and $0.9 million relates to existing debt. Interest of approximately $0.3
million will be charged to capital projects during construction, partially offsetting debt expense.
Capital additions are projected to increase $6.5 million to $42.0 million. Transmission and general
plant capital projects are expected to increase $5.5 million and $2.2 million, respectively, while
production capital is decreasing $1.2 million. The capital expenditures do not include unspent 2015
capital funds that may be carried over into the 2016 Budget. Descriptions and details on the capital
projects can be found in the Capital Additions section of this document.
2016 Annual Budget
Page 9
BUDGET SUMMARY
Budget Contingency
The 2016 Budget includes a contingency appropriation of $20.0 million. This amount is unchanged
from the original amount in the 2015 Budget. The contingency can be used to meet unexpected
expenditures which could not have been reasonably foreseen at the time of the adoption of the
budget. Events that may require the use of the contingency include unplanned generation or
transmission outages, spikes in power market or natural gas prices, unplanned expenditures to
maintain operations of the power supply to the Municipalities, or an adoption of an accounting
policy which impacts the current expenditures. It may also be used for existing capital projects that
require expenditures above those budgeted as the result of scheduling changes, payment timing
differences, changes in work scope, price fluctuations, or new projects that the Board of Directors
deem important to be started before the next budget year. The contingency has been used five out
of the last ten years ranging from 22% to 100% of the total contingency budgeted. Prior to
transferring contingency to an expense category, staff must notify the Board of Directors of the
reason for the transfer and present a resolution proposed for adoption.
Year
Contingency
Appropriation
Budget ($000)
Appropriated
Amount
($000)
2006
$10,000
$10,000
100%
Increase in the accrual of operations and maintenance
costs related to the 2008 outage and a down payment
for the 128 MW GE 7FA combustion turbine.
2007
$10,000
$2,890
29%
Additional expenditures to complete several capital
projects, including a coal silo reinforcement.
2008
⁽¹⁾$20,000
-
-
2009
$20,000
-
-
2010
$20,000
$6,000
30%
Additional expenditures for timing changes related to
the 230 kV transmission expansion capital projects.
2011
$20,000
$5,407
27%
Cost overruns for the 230 kV transmission capital
projects.
2012
$20,000
-
-
2013
$20,000
-
-
2014
$20,000
-
-
2015
$20,000
⁽²⁾$4,340
%
22%
Purpose
Additional expenditures for the Craig Unit 2 NOx
removal capital project, and ancillary services related to
additional wind generation.
(1) Increase in contingency amount based on increasing budgets and level of usage in prior years.
(2) Excludes $2.3 million contingency transfer for capital projects requested at the December 2015 Board of Directors meeting.
Page 10
2016 Annual Budget
BUDGET SUMMARY
Source and Use of Funds
2014
2015
2015
2016
Actual
Budget
Estimate
Budget
$ 169,772,581
2,112,500
23,821,994
4,159,951
199,867,026
$ 176,586,359
1,218,750
27,968,968
4,411,250
210,185,327
$ 175,664,649
1,218,750
19,261,148
4,229,453
200,374,000
$ 185,597,777
25,939,556
4,260,929
215,798,262
644,384
1,368,407
2,012,791
712,509
787,824
1,500,333
750,924
898,817
1,649,741
1,026,982
654,059
1,681,041
201,879,817
211,685,660
202,023,741
217,479,303
33,872,068
21,370,705
45,453,696
$ 198,390,750
$ 245,557,728
$ 223,394,446
$ 262,932,999
$
$
$
$
Source of Funds
Operating Revenues
Municipal sales
Surplus sales - contract
Surplus sales - short-term
Wheeling
Total operating revenues
Other Revenues
Interest income
Other income
Total other revenues
Total revenues
Funds from prior reserves and debt financing
Total Sources
(3,489,067)
Use of Funds
Operating Expenses
Purchased power
Fuel expense
Production expenses
Transmission expenses
Administrative and general
Total operating expenses
26,904,471
49,974,673
46,669,986
8,517,703
14,337,057
146,403,890
33,304,959
51,110,567
51,800,508
13,263,557
16,280,198
165,759,789
33,018,225
47,778,856
50,345,347
12,485,422
15,762,443
159,390,293
34,262,779
54,986,727
48,017,971
13,736,514
18,910,080
169,914,071
Debt Expense
Interest expense
Principal
Allowance for funds used during construction
Total debt expense
10,788,257
21,768,010
(96,859)
32,459,408
9,786,778
18,850,415
28,637,193
9,786,747
18,850,415
28,637,162
10,533,519
20,718,748
(262,922)
30,989,345
Capital Additions
Production
Transmission
General
Total capital additions
14,911,952
3,452,016
1,163,484
19,527,452
24,064,364
8,888,811
2,547,571
35,500,746
23,906,952
8,017,830
3,442,209
35,366,991
22,874,392
14,384,006
4,771,185
42,029,583
198,390,750
229,897,728
223,394,446
242,932,999
Total expenditures
Contingency Appropriation
Total Uses
$ 198,390,750
15,660,000 ⁽¹⁾
$ 245,557,728
$ 223,394,446
20,000,000
$ 262,932,999
(1) 2015
Excludes
Estimate
$2.3 million
represents
contingency
ten months
transfer
actualfor
and
capital
two months
projects
budget
requested
adjusted
at the
forDecember
revised projections
2015 Boardon
ofall
Directors
budget schedules.
meeting.
2016 Annual Budget
Page 11
BUDGET SUMMARY
The following chart shows a comparison of revenues and expenditures for 2014 Actual, 2015
Budget, 2015 Estimate, and 2016 Budget.
$ Millions
Revenues and Expenditures
300
250
$202
200
$212
$217
$202
150
100
50
0
2014 Actual
Operating Expenses
Page 12
2015 Budget
Debt Expenses
2015 Estimate
Capital Additions
2016 Budget
Revenues
2016 Annual Budget
BUDGET SUMMARY
Sources
2016 Sources
Municipal Sales
$
Surplus Sales - Short-term
Wheeling
Interest and Other Income
Funds from Prior Reserves
Total Sources $
185,597,777
25,939,556
4,260,929
1,681,041
45,453,696
262,932,999
Source
Wheeling
2%
Surplus Sales
Short term
10%
Interest and Other
Income
1%
Funds from Prior
Reserves
17%
Municipal Sales
70%
Uses
Administrative
and General
7%
Transmission
5%
Fuel
21%
Board
Contingency
8%
Debt Service
12%
2016 Uses
Purchased Power
$
Fuel
Production
Transmission
Administrative and General
Debt Service
Capital Additions
Board Contingency
Total Uses $
34,262,779
54,986,727
48,017,971
13,736,514
18,910,080
30,989,345
42,029,583
20,000,000
262,932,999
Production
18%
Purchased Power
13%
Capital Additions
16%
2016 Annual Budget
Page 13
BUDGET SUMMARY
Revenue and Expenditure Detail
REVENUES
Municipal sales
Surplus sales - contract
Surplus sales - short-term
Wheeling
Interest income
Other income
Total Revenues
Funds from prior reserves and debt financing
2014
Actual
2015
Budget
2015
Estimate
2016
Budget
$ 169,772,581
2,112,500
23,821,994
4,159,951
644,384
1,368,407
201,879,817
$ 176,586,359
1,218,750
27,968,968
4,411,250
712,509
787,824
211,685,660
$ 175,664,649
1,218,750
19,261,148
4,229,453
750,924
898,817
202,023,741
$ 185,597,777
25,939,556
4,260,929
1,026,982
654,059
217,479,303
33,872,068
21,370,705
45,453,696
$ 198,390,750
$245,557,728
$ 223,394,446
$ 262,932,999
$ 20,802,383
1,446,040
22,248,423
$ 23,093,008
2,323,577
25,416,585
$ 22,054,797
2,380,648
24,435,445
$ 25,495,360
1,204,864
26,700,224
236,916
4,348,490
1,609,703
134,130
3,031,000
278,129
108,183
17,430
133,121
12,533
357,706
10,267,341
432,000
3,744,983
1,907,869
128,040
2,928,564
240,880
108,000
17,724
186,000
10,000
381,469
10,085,529
416,869
3,744,983
1,844,930
138,881
2,428,565
275,001
130,477
18,487
229,000
19,942
365,806
9,612,941
555,000
3,284,063
1,987,702
128,040
2,953,281
281,480
135,000
19,000
200,000
10,000
344,946
9,898,512
32,515,764
35,502,114
34,048,386
36,598,736
1,813,200
2,145,369
1,709,615
2,303,200
Total Operating Personnel Expenses
30,702,564
33,356,745
32,338,771
34,295,536
Materials and Expenses
Office expenses
Safety expenses
Furniture and equipment - minor
Local business expense
Postage and deliveries
Rawhide O&M materials
Other O&M materials
Rawhide coal
Yampa coal
Oil
35,398
189,653
23,335
119,574
25,856
3,597,598
462,905
28,253,570
19,496,005
71,432
63,500
245,431
107,200
182,610
45,760
7,950,282
791,604
28,362,771
20,656,447
239,000
65,658
218,499
103,838
166,422
38,033
7,972,336
526,864
27,481,352
17,399,292
184,816
69,700
223,176
114,200
178,627
29,406
4,657,930
576,200
31,846,397
21,572,793
139,000
Total Revenues and Prior Funds
(3,489,067)
EXPENDITURES
Personnel Expenses
Salaries
Regular wages
Overtime wages
Total Salaries
Benefits
Pension contribution - defined contribution
Pension contribution - defined benefit
Social security
Long-term disability
Medical and dental
Recruiting
Life insurance
Accidental death
Workers' compensation
Unemployment compensation
Salary and pension services
Total Benefits
Total Personnel Expenses
Less charged to capital and other
Page 14
2016 Annual Budget
BUDGET SUMMARY
2014
Actual
2015
Budget
2015
Estimate
2016
Budget
Materials and Expenses (continued)
Natural gas (Rawhide A, B, C, D and F)
Natural gas (Craig startup)
Gasoline and diesel
Tools, shop and garage equipment
Purchased power
Yampa operating expenses
Computer equipment - minor
Wheeling expense
Outage accrual
Total Materials and Expenses
Contractual Services
Professional services
Rawhide contracted services
Other contracted services
Insurance
Travel and training
Telephone services
Utilities
Dues, memberships and fees
Trustees fees
Windy Gap lease and rent
Other leases and rents
Economic development
Fiscal impact payment
Energy efficiency - rebates/incentives
Demand response - rebates/incentives
Total Contractual Services
Financing Expenses
Long-term interest expense
Principal retirements
Other financing expenses
Allowance for funds used during construction
Total Financing Expenses
Capital Additions
Personnel expenses
Capital expenditures
Capital reimbursements and trade-in value
Allowance for funds used during construction
Total Capital Additions
Total Expenditures
Contingency Appropriation
Total Expenditures and Contingency
$
1,271,867
78,154
252,719
83,327
25,026,778
11,551,438
204,723
2,192,682
5,900,779
98,837,793
$
993,984
59,000
305,620
119,700
36,426,242
11,306,909
331,500
4,147,884
(8,485,238)
103,850,206
$
1,743,803
107,971
202,290
120,893
36,139,508
10,467,244
182,924
4,112,353
(8,485,238)
98,748,858
$
540,358
59,000
237,800
138,200
33,081,568
12,348,699
320,324
4,239,375
3,794,450
114,167,203
774,184
3,314,441
3,532,311
1,174,396
644,703
165,494
466,659
446,468
30,134
3,965,794
65,834
60,000
61,099
2,134,386
16,835,903
2,001,831
12,457,670
4,493,998
1,305,700
789,758
177,055
542,472
612,648
30,136
3,972,421
77,675
60,000
61,099
1,934,275
28,516,738
2,015,426
12,531,640
4,063,740
1,221,910
687,256
156,716
542,281
616,523
30,135
4,093,079
76,095
60,000
61,099
2,113,534
28,269,434
2,140,931
3,087,913
5,242,666
1,239,000
783,928
166,723
538,372
680,411
42,136
4,316,533
95,695
60,000
61,099
2,655,575
301,950
21,412,932
10,788,257
21,768,010
27,630
(96,859)
32,487,038
9,786,778
18,850,415
36,100
28,673,293
9,786,747
18,850,415
33,230
28,670,392
10,533,519
20,718,748
38,400
(262,922)
31,027,745
1,593,799
18,031,267
(194,473)
96,859
19,527,452
1,942,834
35,413,337
(1,855,425)
35,500,746
1,933,470
35,223,932
(1,790,411)
35,366,991
2,073,182
41,477,948
(1,784,469)
262,922
42,029,583
198,390,750
$ 198,390,750
229,897,728
15,660,000 ⁽¹⁾
$ 245,557,728
223,394,446
$ 223,394,446
242,932,999
20,000,000
$ 262,932,999
(1) Excludes $2.3 million contingency transfer for capital projects requested at the December 2015 Board of Directors meeting.
2016 Annual Budget
Page 15
Page 16
2016 Annual Budget
ELECTRIC SYSTEM RESOURCES
Electric System Resources
Power Resources
Platte River’s power resources include generation from coal and natural gas units, allocations of
federal hydropower from Western, purchases from wind and solar developers, other spot market
purchases, and a forced outage exchange agreement.
Coal
Coal-fired generation includes Rawhide Unit 1 (280 MW), located 25 miles north of Fort Collins, and
18% ownership in Craig Units 1 and 2 (154 MW combined), located in northwest Colorado.
Natural Gas
Gas-fired combustion turbines located at Rawhide Energy Station (Rawhide) include five simple
cycle combustion turbines, which includes four GE 7EAs (65 MW each) and a GE 7FA (128 MW).
The combustion turbines are utilized to meet peak load demands, to provide reserves during
outages of the coal-fired units, and to make short-term surplus sales.
Hydropower
Hydropower is received under two long-term contracts with Western. Colorado River Storage
Project (CRSP) contract rate of delivery amounts are 106 MW in the summer and 136 MW in the
winter. Actual capacity available varies by month. During the summer season, available capacity
ranges from 51 MW to 60 MW. In the winter season, available capacity ranges from 72 MW to 85
MW. Loveland Area Projects (LAP) capacity is 30 MW in the summer and 32 MW in the winter.
Wind
Wind generation includes 78 MW provided under long-term purchase power agreements. The
agreements are for deliveries from Spring Canyon Energy Center (60 MW) in Colorado, Silver Sage
Wind Project (12 MW) and Medicine Bow Wind Project (6 MW), both in Wyoming.
Solar
Solar generation includes 30 MW provided under a long-term purchase power agreement. The
Rawhide Solar Flats facility will be located at Rawhide. The facility is expected to be online by fall of
2016.
Other Purchases
Spot market purchases provide energy to satisfy loads, replacement power during outages, and
reserve requirements.
Forced Outage Exchange Agreement
Platte River has a forced outage exchange agreement with Tri-State Generation and Transmission,
Inc. (Tri-State) whereby in the event that either Rawhide Unit 1 or Tri-State’s Craig Unit 3 is out of
service the other utility will provide up to 100 MW of generation on a short-term basis.
2016 Annual Budget
Page 17
ELECTRIC SYSTEM RESOURCES
The table summarizes the power resources available with related generation, capacity factors and
costs to either generate or purchase energy. Resource allocation and assumptions were developed
using a market-based hourly model.
Power Operations
Rawhide Unit 1 (280 MW)
Generation (GWh)
Capacity factor
Fuel cost ($/MWh)
O&M cost ($/MWh)
Total Rawhide ($/MWh)
Craig Units 1 and 2 (154 MW) (1)
Generation (GWh)
Capacity factor
Fuel cost ($/MWh)
O&M cost ($/MWh)
Total Craig ($/MWh)
Combustion Turbines (388 MW) (2)
Generation (GWh)
Capacity factor
Fuel cost ($/MWh)
O&M cost ($/MWh)
Total Combustion Turbines ($/MWh)
Purchased Power
Western-CRSP (106 MW-Summer/136 MW-Winter) (3)
Generation (GWh)
Capacity factor
Total Western-CRSP ($/MWh)
Western-LAP (30 MW-Summer/32 MW-Winter)
Generation (GWh)
Capacity factor
Total Western-LAP ($/MWh)
Wind (78 MW) (4)
Generation (GWh)
Capacity factor
Total Wind ($/MWh) - Delivered
Solar (30 MW)
Generation (GWh)
Capacity factor
Total Solar ($/MWh)
Other Purchases
Energy (GWh)
Total Other Purchases ($/MWh)
$
$
$
$
2014
2015
2015
2016
Actual
Budget
Estimate
Budget
2,167
88.4%
13.3
10.8
24.1
1,083
80.1%
18.4
10.3
28.7
$
22
0.7%
57.4
64.1
121.5
$
502
47.4%
27.1
$
110
40.4%
39.2
$
90
40.2%
54.6
$
$
$
$
1,962
80.1%
14.7
19.9
34.6
1,081
80.1%
19.7
9.9
29.6
$
19
0.6%
52.0
83.2
135.2
$
502
47.4%
27.1
$
110
40.3%
39.2
$
297
43.8%
47.2
$
0.0%
-
$
48
41.6
$
$
$
$
$
1,988
81.0%
14.1
19.5
33.6
945
70.1%
19.1
10.5
29.6
$
45
1.3%
38.8
34.2
73.0
$
502
47.4%
27.1
$
110
40.3%
39.2
$
277
40.5%
47.8
$
0.0%
-
$
141
41.6
$
$
$
$
$
2,318
94.2%
13.9
11.2
25.1
1,014
74.9%
21.8
11.7
33.5
$
9
0.3%
58.9
149.1
208.0
$
502
47.3%
27.1
$
110
40.2%
39.2
$
295
43.1%
48.3
$
0.0%
-
$
17
19.2%
51.0
$
222
35.1
$
21
54.8
$
$
(1) 2014: 78 MW each = 156 MW, 2015 and 2016: 77 MW each = 154 MW
(2) Rawhide Units A, B, C, D = 260 MW, Rawhide Unit F = 128 MW
(3) Western-CRSP capacity amounts shown represent the Contract Rate of Delivery. Actual capacity available varies by
month. During the summer season, available capacity ranges from 51 MW to 60 MW. In the winter season, available
capacity ranges from 72 MW to 85 MW.
(4) Medicine Bow = 6 MW, Silver Sage = 12 MW, Spring Canyon = 60 MW
Page 18
2016 Annual Budget
ELECTRIC SYSTEM RESOURCES
Resources and Deliveries
Other Purchases Solar
21 GWh
17 GWh
LAP
110 GWh
Wind
295 GWh
Combustion
Turbines
9 GWh
CRSP
502 GWh
Rawhide Unit 1
2,318 GWh
Craig Units 1 & 2
1,014 GWh
Total Resources = 4,286 GWh
Losses & Other
68 GWh
Surplus
Short-term
994 GWh
Municipalities
3,224 GWh
Total Deliveries = 4,286 GWh
2016 Annual Budget
Page 19
Page 20
2016 Annual Budget
OPERATING REVENUES
Ope rating Reve nue s
Operating Revenues
Operating revenues of $215.8 million are anticipated during 2016, a $5.6 million increase over the
2015 Budget. Municipal sales are projected to be $185.6 million, short-term surplus sales $25.9
million, and transmission wheeling revenues $4.3 million. The Municipal revenues are based on
Platte River’s load forecast and wholesale rates. Contract sales are for a term greater than one year
and can represent capacity and/or energy contracts. Short-term surplus sales are for a term of one
year or less and include seasonal, monthly, and hourly spot market sales. The spot market prices
are based on current market projections. Wheeling revenues represent payments from other
utilities for the use of Platte River’s transmission system.
2014
Actual
2015
Budget
2015
Estimate
2016
Budget
Municipal Sales
Surplus Sales  Contract
$169,773
2,113
$176,586
1,219
$175,665
1,219
$185,598
-
Surplus Sales  Short-term
Wheeling
Total Operating Revenues
23,822
4,159
$199,867
27,969
4,411
$210,185
19,261
4,229
$200,374
25,939
4,261
$215,798
Operating Revenues ($000)
The following chart compares operating revenues for 2014 Actual, 2015 Budget, 2015 Estimate,
and 2016 Budget.
Operating Revenues
$ Millions
240
200
160
120
80
40
0
2014 Actual
Municipal Sales
2016 Annual Budget
2015 Budget
Surplus Sales-Contract
2015 Estimate
2016 Budget
Surplus Sales-Short Term
Wheeling
Page 21
OPERATING REVENUES
Municipal Loads
Platte River’s long-range load forecast is developed using an econometric model that incorporates
independent variables including population, employment, and weather. The forecast also includes
demand and energy changes anticipated from energy efficiency programs. The 2016 Budget
monthly demand and energy load projections were based on the Ten-Year Official Load Forecast
resulting in an increase of 0.7% for both energy and billing demand.
Municipal Loads
Summer Peak Demand (MW)
Winter Peak Demand (MW)
Billing Demand (MW)
Energy (GWh)
2014
Actual
2015
Budget
2015
Estimate
2016
Budget
626
550
6,054
3,154
646
569
6,108
3,202
639
573
6,033
3,197
651
573
6,148
3,224
The following chart compares monthly energy usage by the Municipalities for 2014 Actual, 2015
Estimate, and 2016 Budget.
Municipalities' Energy Usage
GWh
350
300
250
200
150
100
50
0
JAN
FEB
MAR
APR
2014 Actual
Page 22
MAY
JUN
JUL
2015 Estimate
AUG
SEP
OCT
NOV
DEC
2016 Budget
2016 Annual Budget
OPERATING REVENUES
Wholesale Municipal Rates
Platte River’s General Power Bond Resolution and Power Supply Contracts with the Municipalities
require that wholesale rates be established to provide revenues sufficient to meet operation and
maintenance costs, capital additions, and debt obligations. Additionally, wholesale rates are
required to provide an earnings margin adequate to meet bond covenants and provide for the
establishment and maintenance of necessary reserves.
A 4.5% increase in the Tariff 1 rate to the Municipalities will take effect January 1, 2016. It is
estimated that the average rate to the Municipalities, after the increase, would be $57.56 per MWh.
The renewable premium will remain $24.00 per MWh. In 2016, Platte River’s wholesale rate will
continue to be among the lowest in the region.
The following chart highlights Platte River’s historical and projected average wholesale rate to the
Municipalities.
Average Municipal Rate
$/MWh
60
$52.98
$53.82
2013 Actual
2014 Actual
$55.15
$57.56
50
40
30
20
10
0
2016 Annual Budget
2015 Budget
2016 Budget
Page 23
OPERATING REVENUES
Municipal Sales
Total Municipal revenues in 2016 are projected to be $185.6 million, an increase of $9.0 million
over the 2015 Budget. Demand revenues are projected to be $53.8 million, an increase of $2.7
million, and energy revenues are projected to be $129.2 million, an increase of $6.3 million.
Municipal revenues also include $2.5 million in renewable energy premiums, the same as 2015.
2014
Actual
2015
Budget
2015
Estimate
Fort Collins
Demand
Energy
Renewable energy premium
Total
$ 23,813,566
54,459,397
1,824,007
80,096,970
$ 24,333,363
57,652,940
1,824,003
83,810,306
$ 24,114,345
57,769,220
1,698,425
83,581,990
Longmont
Demand
Energy
Renewable energy premium
Total
13,428,881
29,370,515
727,203
43,526,599
13,661,972
31,228,379
519,337
45,409,688
13,377,177
30,729,197
483,581
44,589,955
14,395,453
32,765,532
519,333
47,680,318
Loveland
Demand
Energy
Interruptible
Renewable energy premium
Total
11,197,773
23,450,297
4,685,397
165,600
39,499,067
11,295,294
24,685,432
4,385,834
132,000
40,498,560
11,240,254
24,671,865
4,685,431
122,911
40,720,461
12,009,126
26,165,047
4,276,950
131,999
42,583,122
Estes Park
Demand
Energy
Renewable energy premium
Total
1,829,779
4,761,102
59,064
6,649,945
1,797,999
5,010,741
59,065
6,867,805
1,794,196
4,923,048
54,999
6,772,243
1,938,574
5,302,141
59,063
7,299,778
50,269,999
51,088,628
50,525,972
53,823,593
112,041,311
4,685,397
116,726,708
118,577,492
4,385,834
122,963,326
118,093,330
4,685,431
122,778,761
124,962,848
4,276,950
129,239,798
2,775,874
2,534,405
2,359,916
2,534,386
$ 169,772,581
$ 176,586,359
$ 175,664,649
$ 185,597,777
Total Municipalities
Demand
Energy
Energy
Interruptible
Total Energy
Renewable energy premium
Total Municipal Sales
Page 24
2016
Budget
$
25,480,440
60,730,128
1,823,991
88,034,559
2016 Annual Budget
OPERATING REVENUES
Surplus Sales and Other Electric Revenues
Total surplus sales and other electric revenues for 2016 are projected to be $30.2 million, a
decrease of $3.4 million from the 2015 Budget. The budget includes short-term surplus sales of
$25.9 million and wheeling revenues of $4.3 million.
Surplus Sales - Contract
Surplus Sales - Short Term
Total Surplus Sales
Wheeling Revenue
Total Surplus and Wheeling
2014
Actual
$ 2,112,500
2015
Budget
$ 1,218,750
2015
Estimate
$ 1,218,750
2016
Budget
23,821,994
25,934,494
27,968,968
29,187,718
19,261,148
20,479,898
25,939,556
25,939,556
4,159,951
4,411,250
4,229,453
4,260,929
$ 30,094,445
$ 33,598,968
$ 24,709,351
$ 30,200,485
$
-
The following chart compares surplus sales and wheeling revenues for 2014 Actual, 2015 Budget,
2015 Estimate, and 2016 Budget.
Surplus Sales and Wheeling Revenues
$ Millions
40
35
30
25
20
15
10
5
0
2014 Actual
2015 Budget
Surplus Sales - Contract
2016 Annual Budget
2015 Estimate
Surplus Sales - Short Term
2016 Budget
Wheeling Revenue
Page 25
OPERATING REVENUES
Surplus Sales
A long-term contract for capacity with a regional utility expired in June of 2015, reducing revenues
$1.2 million. Short-term surplus sales are projected to be $25.9 million, a decrease of $2.0 million.
More energy will be available for sale mainly due to higher generation from Rawhide Unit 1 as there
is no planned outage, resulting in an overall higher capacity factor. However, average sales prices
are projected to be lower. The estimated average short-term sales price is $26.10 per MWh versus
$32.72 per MWh included in the 2015 Budget. The short-term surplus energy sales represent 994
GWh, up 16%.
Surplus Sales
2014
Actual
2015
Budget
2015
Estimate
2016
Budget
Contract Sale ($000)
Surplus Sales ($000)
Total Surplus Sales ($000)
Short Term Energy (GWh)
$2,113
23,822
$25,935
770
$1,219
27,969
$29,188
855
$1,219
19,261
$20,480
752
$25,939
$25,939
994
Wheeling Revenues
Platte River charges other utilities for the use of its transmission system per Tariff―Schedule 4:
Wholesale Transmission Service. The wheeling revenues include a long-term contract with
PacifiCorp for 29 MW of capacity on the Craig-Bonanza Transmission Line. Also included are
charges for network transmission service for delivery to various Xcel Energy and Tri-State
substations over Platte River’s transmission system. The transmission system usage rates are
adjusted annually based on the prior year’s actual transmission system costs and loads. Wheeling
revenues are projected to be $4.3 million, a decrease of $0.2 million. The decrease is based
primarily on load projections received from Xcel Energy and Tri-State.
Wheeling Revenues ($000)
2014
Actual
2015
Budget
2015
Estimate
2016
Budget
Craig-Bonanza
Network and Other
Total Wheeling Revenues
$958
3,201
$4,159
$925
3,486
$4,411
$919
3,310
$4,229
$922
3,339
$4,261
Page 26
2016 Annual Budget
OTHER REVENUES
Other Re venue s
Interest and Other Income
Interest and other income of $1.7 million is anticipated for 2016, an increase of $0.2 million over
the 2015 Budget. Interest income is estimated to be $1.0 million. This is a $0.3 million increase due
to higher projected investment rates and increased cash reserves due to a planned debt financing.
Other income of $0.7 million includes water leases, fiber and tower leases, and other miscellaneous
revenues and is $0.1 million less than the 2015 Budget. The water lease with a local municipality
was renewed for one year and is scheduled to expire at the end of September 2016.
Interest and Other Income ($000)
2014
Actual
2015
Budget
2015
Estimate
2016
Budget
Interest Income
Other Income
Total Interest and Other Income
$645
1,368
$2,013
$712
788
$1,500
$751
899
$1,650
$1,027
654
$1,681
The following chart compares interest and other income for 2014 Actual, 2015 Budget, 2015
Estimate, and 2016 Budget.
Interest and Other Income
$ Millions
2.5
2.0
1.5
1.0
0.5
0.0
2014 Actual
2016 Annual Budget
2015 Budget
2015 Estimate
Interest Income
Other Income
2016 Budget
Page 27
Page 28
2016 Annual Budget
OPERATING EXPENDITURES
Ope rating Expe nditure s
Operating Expenditures
Operating expenditures to perform the normal operations of generating and delivering electricity
include purchased power, fuel, production, transmission, and administrative and general expenses.
Total operating expenses in 2016 are estimated to be $169.9 million, an increase of $4.2 million
over the 2015 Budget. Increases in fuel, administrative and general, purchased power, and
transmission are partially offset by a decrease in production expenses.
Operating Expenses ($000)
Purchased Power
Fuel Expense
Production Expenses
Transmission Expenses
Administrative and General
Total Operating Expenses
2014
Actual
2015
Budget
2015
Estimate
2016
Budget
$26,904
49,975
46,670
8,518
14,337
$146,404
$33,305
51,111
51,800
13,264
16,280
$165,760
$33,018
47,779
50,345
12,485
15,763
$159,390
$34,263
54,987
48,018
13,736
18,910
$169,914
The following chart compares operating expenses by category for 2014 Actual, 2015 Budget, 2015
Estimate, and 2016 Budget.
Operating Expenditures
$ Millions
180
160
140
120
100
80
60
40
20
0
2014 Actual
Purchased Power
2016 Annual Budget
Fuel
2015 Budget
Production
2015 Estimate
Transmission
2016 Budget
Administrative and General
Page 29
OPERATING EXPENDITURES
Purchased Power
Purchased power includes purchases made under long-term contracts for hydropower, wind
energy, solar energy, and renewable energy credits. Spot market purchases provide energy to
satisfy loads, replacement power during outages, and reserve requirements. An accrual for
estimated future replacement power costs during major maintenance outages is also included.
Total purchased power is projected to be $34.3 million in 2016, an increase of $1.0 million over
2015. During 2016, $17.9 million in hydropower will be purchased from Western to meet a portion
of the Municipalities’ load requirements. Other purchases of $4.3 million are required to meet peak
loads, replacement power during outages, and purchased reserves. This is a decrease of $4.3 million
due to the maintenance outages in 2015 partially offset by an increase in reserve purchases due to a
rate increase from Xcel Energy. Wind purchases are projected to be $9.4 million from long-term
purchase agreements from the Spring Canyon ($6.7 million), Silver Sage ($2.1 million), and
Medicine Bow ($0.6 million) wind facilities. Solar purchases include $0.9 million from the long-term
purchase agreement from the Rawhide Flats Solar facility, which is planned to be online by fall of
2016. Renewable energy credits of $0.6 million are the same as the 2015 Budget. The replacement
power outage accrual includes $1.2 million for the 2018 maintenance outage. The prior year
represented the reversal of previous amounts accrued for the 2015 maintenance outage of $3.1
million.
2014
Actual
Western Purchased Power
Loveland Area Projects (LAP)
Demand (kW-Mo)
Demand $
2015
Budget
$
373,419
2,027,665
$
373,704
2,029,212
$
$
109,771,331
2,273,364
4,301,029
$
$
109,536,421
2,268,499
4,297,711
Colorado River Storage Project (CRSP)
Demand (kW-Mo)
Demand $
$
1,450,002
7,511,011
$
1,450,002
7,511,010
Energy (kWh)
Energy $
Total LAP
Energy (kWh)
Energy $
Total CRSP
Total Western
Other Purchases
Energy (kWh)
Energy $
Reserves $
Total other purchases
Page 30
2015
Estimate
2016
Budget
372,606
2,023,254
372,606
$ 2,023,254
109,536,421
$ 2,268,499
$ 4,291,753
109,536,421
$ 2,268,499
$ 4,291,753
1,450,002
7,511,010
1,450,002
$ 7,511,010
$
$
502,466,838
$
6,125,071
$ 13,636,082
502,466,838
$ 6,125,071
$ 13,636,081
502,466,838
$ 6,125,071
$ 13,636,081
502,466,838
$ 6,125,071
$ 13,636,081
$ 17,937,111
$ 17,933,792
$ 17,927,834
$ 17,927,834
140,798,053
5,855,287
2,768,287
8,623,574
217,192,505
$ 7,616,218
$ 2,592,805
$ 10,209,023
21,524,855
$ 1,178,434
$ 3,116,337
$ 4,294,771
$
$
$
47,822,000
1,988,388
1,790,912
3,779,300
$
$
$
2016 Annual Budget
OPERATING EXPENDITURES
2014
Actual
Wind
Energy (kWh)
Energy $
$
Solar
Energy (kWh)
Energy $
$
Forced Outage Exchange
Other Power Charges
Renewable Energy Credits
Replacement Power Outage Accrual
Total Purchased Power
$
(964,070)
$
74,770
$
618,408
$
1,877,693
$ 26,904,471
90,092,890
3,581,259
$
-
2015
Budget
2015
Estimate
2016
Budget
296,518,402
9,239,376
276,941,973
$ 8,474,237
294,964,300
$ 9,365,624
-
$
-
$
$
$
64,800
$
564,700
$ (3,121,283)
$ 33,304,959
$ (1,049,484)
$
(21,324)
$
599,222
$ (3,121,283)
$ 33,018,225
$
16,909,090
861,519
$
$
64,800
$
567,020
$ 1,181,211
$ 34,262,779
The following charts show the historical and projected purchased power expenses and energy
purchased by source for 2014 Actual, 2015 Budget, 2015 Estimate, and 2016 Budget.
Purchased Power Expense
$ Millions
Energy Purchased
GWh
40
1,100
35
1,000
30
900
25
800
20
700
15
600
10
500
5
400
0
300
200
-5
2014 Actual
2015 Budget
2015 Estimate
2016 Budget
LAP
CRSP
Other & Exchange
Wind
Solar
Renewable Energy Credits
Outage Accrual
2016 Annual Budget
100
0
2014 Actual
LAP
2015 Budget
CRSP
2015 Estimate
Other
Wind
2016 Budget
Solar
Page 31
OPERATING EXPENDITURES
Fuel Expense
Fuel expense includes coal purchased for Rawhide Unit 1, Craig Units 1 and 2, and natural gas
expense for the combustion turbines. Rawhide Unit 1 coal is purchased under a long-term market
based contract with Cloud Peak Energy. Coal for the Craig Units is purchased under long-term
contracts with Trapper Mining, Inc. and Colowyo Coal Company. The majority of the natural gas is
purchased at market prices as needed.
Total fuel expense is forecasted to be $55.0 million, an increase of $3.9 million. Fuel costs are
increasing at Rawhide $3.5 million. The increase is mainly due to a higher generation forecast as
result of model projections and no planned outage for Rawhide Unit 1 in 2016. Partially offsetting
the increase, the delivered coal price for Rawhide Unit 1 is decreasing approximately 4% per ton
based on market pricing. The Craig facilities fuel costs are increasing $0.9 million as delivered coal
pricing for the Craig Units is increasing 13%. The higher prices are a result of receiving fewer tons
of coal in order to reduce coal inventory levels at the Craig Station. Higher prices per ton are driven
by fixed costs the coal mines will continue to need to recover over fewer tons mined. This amount is
an estimate, as all participants of the Craig Station are currently working collectively on a strategy
to reduce inventory. Lower generation is expected due to the Craig Unit 1 six-week scheduled
maintenance outage, modeling projections, and additional solar energy. Natural gas for the
combustion turbines is decreasing $0.4 million as a result of lower generation required due to the
addition of solar energy and modeling projections. The delivered gas price is $3.33 per MBtu, a 26%
decrease from the 2015 Budget, which is also based on current market projections.
2014
Actual
2015
Budget
2015
Estimate
2016
Budget
Rawhide Unit 1
Coal burned MBtu
$/MBtu
Coal expense
Car lease and other
Oil
Fuel handling
Testing and analysis
Total Rawhide Unit 1 Fuel Expense
22,186,008
$
1.26
$ 28,028,470
225,100
64,296
412,507
56,899
$ 28,787,272
19,818,579
$
1.41
$ 28,016,271
346,500
180,000
229,745
42,000
$ 28,814,516
20,046,175
$
1.36
$ 27,166,654
314,698
158,466
354,685
36,241
$ 28,030,744
23,407,223
$
1.35
$ 31,578,897
267,500
80,000
337,341
49,000
$ 32,312,738
Craig Units 1 and 2
Coal burned MBtu
$/MBtu
Coal expense
Trapper post-mining reclamation
Oil
Natural gas
Fuel handling
Total Craig Units 1 and 2 Fuel Expense
10,803,244
$
1.79
$ 19,284,843
211,162
7,137
78,154
334,238
$ 19,915,534
11,024,380
$
1.85
$ 20,411,981
244,466
59,000
59,000
527,620
$ 21,302,067
9,651,087
$
1.78
$ 17,177,102
222,190
26,350
107,971
470,696
$ 18,004,309
10,340,771
$
2.06
$ 21,322,718
250,075
59,000
59,000
442,838
$ 22,133,631
Page 32
2016 Annual Budget
OPERATING EXPENDITURES
2014
Actual
Rawhide Units A, B, C, D and F
Gas burned MBtu
$/MBtu
Natural gas expense
Other gas expense
Total Natural Gas Expense
Total Fuel Expense
262,690
$
4.80
$ 1,259,888
11,979
$ 1,271,867
$ 49,974,673
2015
Budget
2015
Estimate
215,377
4.49
967,044
26,940
993,984
508,800
$
3.40
$ 1,728,481
15,322
$ 1,743,803
$ 51,110,567
$ 47,778,856
$
$
$
2016
Budget
$
$
$
104,325
3.33
347,869
192,489
540,358
$ 54,986,727
The following charts show the historical and projected fuel expense and unit price by generation
resource for 2014 Actual, 2015 Budget, 2015 Estimate, and 2016 Budget.
Fuel Expense
$ Millions
36
32
28
24
20
16
12
8
4
0
2014 Actual
2015 Budget
Rawhide Unit 1
2015 Estimate
Craig Units 1 and 2
2016 Budget
Combustion Turbines
Fuel Unit Cost Per MBtu
$/MBtu
6
5
4
3
2
1
0
2014 Actual
Rawhide Unit 1
2016 Annual Budget
2015 Budget
2015 Estimate
Craig Units 1 and 2
2016 Budget
Combustion Turbines
Page 33
OPERATING EXPENDITURES
Production Expenses
Production expenses include operating and maintenance expenses (excluding fuel) incurred at the
Rawhide and Craig generating stations, and power operations.
Total 2016 budgeted production expenses of $48.0 million reflect a decrease of $3.8 million from
2015. Rawhide Unit 1 expenses are projected to be $31.0 million, a decrease of $5.2 million, as there
is no planned maintenance outage in 2016. Craig Units 1 and 2 total $11.8 million, an increase of
$1.1 million mainly as a result of the 2016 maintenance outage described below. Production
expenses for the combustion turbines are projected to be $1.4 million, a decrease of $0.2 million
from the 2015 Budget. Power operations expenses are $3.8 million, which is up $0.5 million due to
personnel expenses and investments in tools for resource forecasting, pricing, and NERC analysis
and reporting. New positions in production include a drafter, fuel and water engineer, and a
generation dispatch supervisor.
Craig Unit 1 Maintenance Outage
The Craig Unit 1 outage is scheduled for the fall and will focus on completing maintenance and
capital work to ensure the safe reliable operation of the plant through 2020. Projects planned for
the six week outage are replacement of the obsolete distributed control system, replacement of two
rows of L-1 buckets on the low pressure turbine due to significant safety concerns of premature
blade failure, and extensive inspections and repair work throughout the boiler due to identified
tube thinning. In addition, normal auxiliary equipment maintenance will be performed throughout
the plant on pumps and motors. Platte River’s share of the maintenance and capital outage budget
is projected to be $1.6 million and $2.3 million, respectively.
2014
Actual
Rawhide Unit 1
Personnel Expenses
Regular wages
Overtime wages
Benefits allocation
Total - Personnel Expenses
Operations and Expenses
Office expenses
Safety expenses
Local business expense
Postage and deliveries
O&M materials and supplies
Gasoline and diesel
Tools and shop equipment
Computer equipment - minor
Outage accrual
Total - Operations and Expenses
Page 34
$
8,225,205
867,505
4,144,576
13,237,286
27,139
94,582
12,943
8,010
3,787,351
183,774
60,469
41,430
4,023,086
8,238,784
2015
Budget
$
8,683,492
1,622,923
4,016,831
14,323,246
23,400
130,909
38,200
22,560
8,095,143
233,330
84,500
40,500
(5,363,955)
3,304,587
2015
Estimate
$
2016
Budget
8,438,100
1,648,825
3,861,025
13,947,950
24,673
107,568
42,682
13,903
8,135,031
148,793
85,822
22,991
(5,363,955)
3,217,508
$
9,369,102
565,380
3,586,721
13,521,203
25,740
104,329
15,250
10,060
4,785,634
165,600
82,900
56,300
2,613,239
7,859,052
2016 Annual Budget
OPERATING EXPENDITURES
Rawhide Unit 1 (continued)
Contractual Services
Professional services
Contracted services
Insurance
Travel and training expenses
Telephone services
Utilities
Dues, memberships and fees
Total - Contractual Services
2014
Actual
$
Windy Gap
Nonallocable expenses
Rawhide operating portion
Total - Windy Gap
Total - Rawhide Unit 1 Production
56,322
3,271,710
480,236
200,185
58,643
369,861
41,256
4,478,213
2015
Budget
$
2015
Estimate
836,335
12,430,670
526,800
258,165
61,142
403,760
38,850
14,555,722
$
846,703
12,505,318
489,489
228,165
52,885
421,876
37,578
14,582,014
2016
Budget
$
1,003,935
3,058,913
499,000
222,710
64,040
398,060
44,475
5,291,133
2,421,538
1,544,256
3,965,794
2,441,100
1,531,321
3,972,421
2,498,452
1,594,627
4,093,079
2,504,500
1,812,033
4,316,533
29,920,077
36,155,976
35,840,551
30,987,921
Craig Units 1 and 2
Yampa operating expenses
Fiscal impact payment
Total - Craig Units 1 and 2 Production
11,030,233
61,099
11,091,332
10,671,774
61,099
10,732,873
9,880,883
61,099
9,941,982
11,760,676
61,099
11,821,775
Total Thermal Production
41,011,409
46,888,849
45,782,533
42,809,696
471,397
55,979
243,952
157,425
198,364
286,297
3,984
532
1,729
1,210
1,420,869
491,024
52,560
212,392
245,918
83,875
175,469
316,800
10,730
600
2,100
500
1,591,968
408,651
48,548
186,116
128,987
164,485
310,400
280,211
6,295
630
1,485
1,220
1,537,028
439,558
41,203
177,055
132,900
110,500
159,969
299,600
5,000
600
2,000
500
1,368,885
Rawhide Units A, B, C, D and F
Regular wages
Overtime wages
Benefits allocation
O&M materials and supplies
Professional services
Contracted services
Insurance
Travel and training expenses
Telephone services
Utilities
Dues, memberships and fees
Total - Rawhide Units A-D, and F Production
Wind Site
Regular wages
Overtime wages
Benefits allocation
O&M materials and supplies
Contracted services
Total - Wind Site Production
1,821
2,474
5,160
9,630
12,893
31,978
Power Operations Expenses
Regular wages
Overtime wages
Benefits allocation
Local business expense
O&M materials and supplies
Yampa operating expenses
Computer equipment - minor
Contracted services
Travel and training expenses
Telephone expenses
Dues, memberships and fees
Total - Power Operations Expenses
Total Production Expenses
2016 Annual Budget
-
2,300,249
102,215
1,095,829
2,802
22,509
23,706
24,338
282,362
99,249
20,114
232,357
4,205,730
$
46,669,986
-
2,075,940
54,000
809,636
1,450
1,930
20,196
17,750
245,615
70,350
20,074
2,750
3,319,691
$
51,800,508
-
1,899,302
55,910
760,877
956
3,895
22,912
13,671
208,507
42,420
16,536
800
3,025,786
$
50,345,347
2,347,151
66,000
879,631
1,902
3,000
20,244
73,304
364,178
64,075
17,105
2,800
3,839,390
$
48,017,971
Page 35
OPERATING EXPENDITURES
The following charts show the historical and projected generation output from owned facilities and
production expenses by resource for 2014 Actual, 2015 Budget, 2015 Estimate, and 2016 Budget.
Generation Output
GWh
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
2014 Actual
2015 Budget
Rawhide Unit 1
2015 Estimate
Craig Units 1 and 2
2016 Budget
Combustion Turbines
Production Expenses
$ Millions
55
50
45
40
35
30
25
20
15
10
5
0
2014 Actual
Page 36
2015 Budget
2015 Estimate
Rawhide Unit 1
Craig Units 1 and 2
Wind
Power Operations
2016 Budget
Combustion Turbines
2016 Annual Budget
OPERATING EXPENDITURES
Transmission Expenses
Transmission expenses include all operations and maintenance expenditures incurred on Platte
River’s regional transmission system, Platte River’s share of operating and maintaining jointly
owned transmission facilities, ancillary services for regulation of wind (solar to be incurred in
2017), and wheeling expenses paid to Western and/or others. Platte River’s share of joint
ownership projects include costs for the AultFort St. Vrain, CraigBonanza, HaydenBlue River,
CraigAult transmission lines, and the Yampa Project transmission costs. The joint ownership
project budgets were developed by the operating agents and approved by the participants through
the engineering and operating committees.
The 2016 budgeted transmission expenses total $13.7 million, reflecting an increase of $0.5 million.
The increase is mainly due to $0.3 million in additional personnel expenses, including a
telecommunications planner, and an additional $0.2 million in ancillary services and wheeling
expenses for anticipated rate increases from Xcel Energy and Western.
2014
Actual
Personnel Expenses
Regular wages
Overtime wages
Benefits allocation
Total - Personnel Expenses
$
Materials and Expenses
Office supplies
Safety expenses
Local business expense
Postage and deliveries
O&M materials and supplies
Gasoline and diesel
Tools and shop equipment
Total - Materials and Expenses
2,540,304
131,448
1,210,983
3,882,735
7,058
15,604
5,746
3,270
243,008
42,363
24,535
341,584
2015
Budget
$
2015
Estimate
2016
Budget
3,489,930
216,337
1,455,938
5,162,205
$ 3,331,865
250,684
1,421,588
5,004,137
$
3,683,157
300,742
1,453,774
5,437,673
7,700
12,100
9,850
7,000
587,433
44,000
24,000
692,083
7,351
8,912
9,608
7,119
397,881
33,789
30,815
495,475
8,200
16,720
9,140
4,346
448,724
44,000
46,000
577,130
Contractual Services
Professional services
Contracted services
Travel and training expenses
Telephone services
Utilities
Dues, memberships, fees
Leases and rents
Yampa transmission expenses
Total - Contractual Services
3,125
1,734,375
66,312
35,960
(20,173)
52,008
65,834
163,261
2,100,702
82,000
2,379,549
131,010
46,396
19,012
438,424
77,675
87,319
3,261,385
37,931
2,035,964
128,314
41,723
12,329
448,349
76,095
92,752
2,873,457
93,000
2,479,284
112,581
44,123
19,512
479,045
95,695
159,096
3,482,336
Total Transmission
6,325,021
9,115,673
8,373,069
9,497,139
Transmission by Others
Wheeling expense
2,192,682
4,147,884
4,112,353
4,239,375
8,517,703
$ 13,263,557
$ 12,485,422
$ 13,736,514
Total Transmission Expenses
2016 Annual Budget
$
Page 37
OPERATING EXPENDITURES
The following chart shows the historical and projected transmission expenses by expense type for
2014 Actual, 2015 Budget, 2015 Estimate, and 2016 Budget.
Transmission Expenses
$ Millions
14
12
10
8
6
4
2
0
2014 Actual
Personnel Expenses
Page 38
2015 Budget
Materials and Expenses
2015 Estimate
2016 Budget
Contractual Services
Wheeling
2016 Annual Budget
OPERATING EXPENDITURES
Administrative and General Expenses
Administrative and general expenses include all expenditures incurred that are not directly
allocated to capital or assignable to fuel, production, or transmission expenses. These expenses are
budgeted by operating and maintenance functions.
The 2016 Budget projects administrative and general expenses to be $18.9 million, an increase of
$2.6 million. Due to increased interest in the DSM programs, the DSM budget is increasing $1.2
million to $3.6 million. Personnel expenses are increasing $1.2 million for new positions to meet
needs in customer services for DSM programs, document management, executive administration,
and cyber security. Other expenses are increasing $0.2 million mainly for investments in cyber
security and cloud-based software solutions, which are accounted for as a service versus a capital
asset.
2014
Actual
2015
Budget
2015
Estimate
$ 5,892,417
46,692
2,662,183
8,601,292
$ 6,943,240
24,000
2,684,779
9,652,019
$ 6,661,146
47,834
2,680,839
9,389,819
Office Operations and Expenses
Office expenses
Furniture and equipment - minor
Local business expenses
Postage and deliveries
Gasoline and diesel
Computer equipment - minor
Total - Office Operations and Expenses
1,737
16,452
37,534
14,575
26,538
133,168
230,004
27,900
107,200
80,735
16,200
28,200
265,250
525,485
30,326
103,838
63,046
17,011
19,693
146,223
380,137
30,360
103,600
92,960
15,000
28,200
185,820
455,940
Safety and Training Expenses
Safety expenses
Local business
Contracted services
Dues, memberships and fees
Wellness and incentive program
Training expenses
Total - Safety and Training Expenses
20,065
718
9,287
735
103,301
233,614
367,720
9,600
1,500
3,100
1,550
141,197
266,153
423,100
9,343
3,267
930
140,988
219,653
374,181
9,305
1,500
2,250
1,475
152,797
305,612
472,939
Contractual Services
Professional services
Contracted services
Business travel and training
Telephone services
Utilities
Dues, memberships and fees
Other financing expenses
Total - Contractual Services
202,819
214,158
26,201
37,102
115,241
16,956
27,630
640,107
409,621
162,728
40,250
33,963
117,600
22,824
36,100
823,086
366,609
234,828
44,004
31,800
106,591
21,773
33,229
838,834
353,496
103,257
54,250
27,895
118,800
30,291
38,400
726,389
Insurance
407,863
462,100
452,210
440,400
Board and Enterprise Expenses
Local business expense
Travel and training expenses
Dues, memberships and fees
5,430
13,754
100,126
5,000
13,100
107,750
4,702
14,994
105,873
8,000
19,700
116,825
Operations
Personnel expenses
Regular wages
Overtime wages
Benefits allocation
Total - Personnel Expenses
2016 Annual Budget
2016
Budget
$
7,906,494
21,940
2,883,759
10,812,193
Page 39
OPERATING EXPENDITURES
Operations (continued)
Board and Enterprise Expenses (continued)
Trustees fees
Economic development
Total - Board and Enterprise Expenses
Reporting and Other Expenses
Office expenses
Local business expenses
Contracted services
Total - Reporting and Other Expenses
Planning and Customer Service Expenses
Professional services
Contracted services
Travel and training expenses
Total - Planning and Customer Service Expenses
Total Administrative and General Operations
Demand Side Management Expenses
Energy Efficiency
Contracted services
Rebates/incentives
Total - Energy Efficiency Expenses
Demand Response
Contracted services
Rebates/incentives
Total - Demand Response Expenses
Total Demand Side Management Expenses
2014
Actual
$
2015
Budget
30,134
60,000
209,444
$
30,136
60,000
215,986
2015
Estimate
$
30,135
60,000
215,704
2016
Budget
$
42,136
60,000
246,661
6,346
33,896
55,235
95,477
4,500
25,500
77,780
107,780
3,307
17,986
79,146
100,439
6,000
25,500
116,930
148,430
513,669
54,694
1,406
569,769
575,000
102,825
677,825
447,539
34,048
2,429
484,016
530,000
53,380
583,380
11,121,676
12,887,381
12,235,340
13,886,332
70,472
2,134,386
2,204,858
465,725
1,934,275
2,400,000
286,466
2,113,534
2,400,000
606,454
2,655,575
3,262,029
-
-
75,000
301,950
376,950
2,400,000
2,400,000
3,638,979
109,460
(3,500)
202,343
308,303
82,000
5,200
317,024
404,224
99,017
1,736
130,494
267,033
498,280
80,050
3,600
30,000
389,214
502,864
589,133
589,133
461,983
461,983
521,504
521,504
715,473
715,473
Office Equipment Maintenance
Contracted services
Telephone services
Total - Office Equipment Maintenance
2,540
13,142
15,682
2,200
14,880
17,080
3,009
13,142
16,151
2,622
12,960
15,582
Vehicle Maintenance
Materials and supplies
Tools and shop equipment
Contracted services
Total - Vehicle Maintenance
5,898
1,824
9,260
16,982
24,000
3,600
7,800
35,400
15,029
2,120
7,180
24,329
22,000
10,000
32,000
Security Maintenance
Materials and supplies
Tools and shop equipment
Contracted services
Total - Security Maintenance
14,930
65,493
80,423
7,530
2,400
64,200
74,130
2,147
400
64,292
66,839
7,250
5,700
105,900
118,850
Total Administrative and General Maintenance
1,010,523
992,817
1,127,103
1,384,769
Total Administrative and General Expenses
$ 14,337,057
$ 16,280,198
$ 15,762,443
$ 18,910,080
Maintenance
Building and Grounds
Materials and supplies
Tools and shop equipment
Professional services
Contracted services
Total - Buildings and Grounds Maintenance
Computer Maintenance
Contracted services
Total - Computer Maintenance
Page 40
2,204,858
-
2016 Annual Budget
OPERATING EXPENDITURES
The following chart shows the historical and projected administrative and general expenses by
expense type for 2014 Actual, 2015 Budget, 2015 Estimate, and 2016 Budget.
Administrative and General Expenses
$ Millions
20
18
16
14
12
10
8
6
4
2
0
2014 Actual
Personnel Expenses
2016 Annual Budget
2015 Budget
A&G Operations
2015 Estimate
Demand Side Management
2016 Budget
HQ Maintenance
Page 41
Page 42
2016 Annual Budget
DEBT EXPENSE
Debt Expe nse
Debt Expense
The 2016 Budget includes debt expense of $31.0 million, an increase of $2.4 million from the 2015
Budget. Principal repayments are increasing $1.9 million and interest expense is increasing $0.7
million. A debt financing of approximately $56.0 million is planned for 2016 and the related debt
service payments represent the majority of the overall debt expense increase. Interest during
construction of approximately $0.3 million will be charged to Rawhide Unit 1 and transmission
capital projects identified to be funded by the debt. The other debt related to the Medicine Bow
wind turbines was paid off in 2014.
Debt Expenses ($000)
2014
Actual
2015
Budget
2015
Estimate
2016
Budget
Principal
Interest Expense
Revenue Bond Service
Allowance for Funds Used During Construction
Other Debt
Net Debt Expenses
$21,596
10,788
$32,384
(97)
172
$32,459
$18,850
9,787
$28,637
$28,637
$18,850
9,787
$28,637
$28,637
$20,719
10,533
$31,252
(263)
$30,989
The following chart shows the historical and projected revenue bond service by source for 2014
Actual, 2015 Budget, 2015 Estimate, and 2016 Budget.
Revenue Bond Service
$ Millions
35
30
25
20
15
10
5
0
2014 Actual
2015 Budget
Interest Expense
2016 Annual Budget
2015 Estimate
2016 Budget
Principal
Page 43
DEBT EXPENSE
Long-Term Debt Outstanding
Long-term debt outstanding on December 31, 2016, is projected to be $238.4 million consisting of
fixed-rate debt issued under Platte River’s General Power Bond Resolution. This amount includes
an estimate of $56.0 million for a fixed-rate debt issuance planned for 2016. The weighted average
cost of debt during 2016 is forecast to be approximately 4.4%.
2014 Actual
Bond Issue
Power Revenue Bonds:
Series GG
$
Series HH
2015 Budget
58,175,000
$
2015 Estimate
41,560,000
$
2016 Budget
41,560,000
$
30,520,000
113,825,000
113,725,000
113,725,000
113,625,000
Series II
42,695,000
37,430,000
37,430,000
31,955,000
Series JJ
-
-
-
56,000,000
214,695,000
192,715,000
192,715,000
232,100,000
Unamortized debt expense
Total Power Revenue Bonds
8,857,449
7,459,138
7,459,138
6,329,007
Total Net Long-Term Debt
$ 223,552,449
$ 200,174,138
$ 200,174,138
$ 238,429,007
Platte River is committed to maintaining strong credit ratings as it is significant in determining cost
of debt. The senior lien debt credit is rated AA by all three credit rating agencies: Moody’s, Fitch,
and Standard & Poor’s (S&P). The key factors in determining these ratings are the diversity and
economic strengths of the Municipalities, Platte River’s financial position, management expertise,
and overall competitive position. Platte River’s competitive position is determined, in part, by
looking at various financial indicators, such as wholesale rate competitiveness, net income, debt
service coverage, and various balance sheet ratios including debt-to-capitalization and working
capital.
Credit Ratings of Power Revenue Bonds
Bond Issue
Moody's Fitch
S&P
Series GG
Series HH
Series II
Page 44
Aa2
Aa2
Aa2
AA
AA
AA
AA
AA
AA
2016 Annual Budget
DEBT EXPENSE
Debt Service Coverage
Debt service coverage is a key indicator of financial strength and is used by the rating agencies
when reviewing Platte River’s credit quality. Debt service coverage is a measure of Platte River’s
ability to generate cash to pay bondholders and for other business purposes. Funds on deposit in
the rate stabilization account can be used to shift, for purposes of bond covenant debt service
coverage, current period revenues to future years when those revenues could be withdrawn to
assist in meeting debt coverage. The following table summarizes Platte River’s historical and
projected debt service coverage.
2014
Actual
Net Revenues
Operating revenues
Operating expenses, excluding depreciation
Net operating revenues
$
Plus interest and other income
Net revenues before rate stabilization
Bond Service
Power revenue bonds
Allowance for funds used during construction
Net revenue bond service
Coverage:
Power revenue bonds
2016 Annual Budget
2015
Estimate
2016
Budget
$ 210,185,327
(165,759,789)
44,425,538
$ 200,374,000
(159,484,488)
40,889,512
$ 215,798,262
(169,914,071)
45,884,191
2,012,791
55,268,732
Rate Stabilization
Deposits
Withdrawals
Total net revenues
199,867,026
(146,611,085)
53,255,941
2015
Budget
1,500,333
45,925,871
-
1,576,425
42,465,937
-
1,681,041
47,565,232
-
-
$
55,268,732
$
45,925,871
$
42,465,937
$
47,565,232
$
32,384,523
(96,859)
32,287,664
$
28,637,193
28,637,193
$
28,637,162
28,637,162
$
31,252,267
(262,922)
30,989,345
$
1.71x
$
1.60x
$
1.48x
$
1.53x
Page 45
Page 46
2016 Annual Budget
CAPITAL ADDITIONS
Capital A ddit ions
Capital Additions
Capital additions are budgeted by production, transmission, and general plant functions. Capital
additions include expenditures of $5,000 or more for property, equipment, or construction projects
with an estimated useful life greater than two years. Expenditures less than $5,000 are reflected
within the operating expense budget. In general, capital additions consist of projects that are aimed
at improving system reliability, replacing and upgrading aging infrastructure, implementing
technology improvements, and firming water resources. These projects are necessary to maintain a
reliable low cost energy system.
Project management continues to be a focus for 2016. The project management framework is for
project leads to follow when initializing, planning, executing, controlling, and closing a project. All
capital and operations and maintenance projects that meet certain criteria follow this framework.
This is a process that will continue to evolve striving towards operational excellence.
The 2016 capital additions total $42.0 million; $22.9 million for production, $14.4 million for
transmission, and $4.8 million for general plant. In total, this represents a $6.5 million increase
from the 2015 Budget. A portion of unspent capital expenditures from the 2015 Budget may be
requested to be carried over into the 2016 Budget.
Capital additions for the 2016 Budget and a comparison with years 2014 and 2015 are as follows:
Capital Additions ($000)
2014
Actual
2015
Budget
2015
Estimate
2016
Budget
Production
Transmission
General Plant
Total Capital Additions
$14,912
3,452
1,164
$19,528
$24,064
8,889
2,548
$35,501
$23,907
8,018
3,442
$35,367
$22,874
14,384
4,772
$42,030
2016 Annual Budget
Page 47
CAPITAL ADDITIONS
The following chart shows the historical and projected capital additions for 2014 Actual, 2015
Budget, 2015 Estimate, and 2016 Budget.
Capital Additions
$ Millions
45
40
35
30
25
20
15
10
5
0
2014 Actual
2015 Budget
Production
Page 48
2015 Estimate
Transmission
2016 Budget
General Plant
2016 Annual Budget
CAPITAL ADDITIONS
2016 Capital Additions Summary
Production Capital Additions
Rawhide Projects
Coal Dust Pneumatic Conveying System
Rawhide Unit 1 Distributed Control System (DCS) Replacement and Expansion
Soot Blower Replacement
Conveyor Belt Fall Protection Guard Rails
Grading and Drainage Improvements - Coal Silos
Grading and Drainage Improvements - Crusher Building
Fixed Fire Suppression - SDA Computer Control Servers
LED Lighting
CO Analyzer Replacements - Combustion Turbines - Units A-D, F
Grading and Drainage Improvements - Rawhide Pump Station
NOx Analyzer Replacements - Combustion Turbines - Units A-D
Erosion Control - Owl Creek Gas Yard
HVAC Unit Replacement - Rawhide Resource Room
Hay Storage Building
HVAC Controls Replacement - Rawhide Administration Building
$
Total Rawhide Projects $
Rawhide Purchases
Rail Cars - Aluminum
Cat Loader Replacement
Brush 1 Fire Truck Replacement
Network Analyzer Tool
Large Floor Machine
Dual Feed Welder Replacement
Other Production Projects
Yampa Environmental Projects *
Yampa Work Orders *
Yampa Controls Projects *
Windy Gap Firming Project *
$
Total Rawhide Purchases $
3,433,562
495,670
100,000
52,000
44,392
15,000
4,140,624
Total Rawhide Capital Additions $
7,384,871
$
10,386,648
1,903,020
1,454,087
1,745,766
15,489,521
Total Other Production Projects $
Total Production Capital Additions $
Transmission Capital Additions
Transmission Projects
Boyd 115/230kV Substation Transformer T2 Addition *
$
LaPorte Substation - 230kV Expansion
Generation Availability Transformer - Rawhide Substation
Interconnection Transformer - Rawhide Flats Solar
Oil Breaker (2062/2066) Replacements and Relay Upgrades - Rawhide Substation
Oil Breaker (362/462) Replacements and Relay Upgrades - Richard Lake Substation
Breaker Replacements - Boyd Breakers 2062, 3062, 3166 *
Annual Meter, Relay or Annunciator Additions, Replacements or Upgrades
Battery Bank Replacements
Sign Installations - 230kV Substations
Oil Breaker (164) Replacement - Terry Street Substation
2016 Annual Budget
1,232,754
717,973
368,608
190,817
134,646
134,646
125,723
112,560
66,481
52,807
51,481
24,528
11,986
10,534
8,703
3,244,247
22,874,392
5,736,882
1,730,804
1,648,650
1,010,646
709,568
284,207
265,020
150,249
127,482
88,879
86,095
Page 49
CAPITAL ADDITIONS
Transmission Projects (continued)
LaPorte Substation - 115kV Adaptation and Refurbishment *
$
Foothills Substation
Remote Terminal Unit (RTU) Replacement - Drake Substation
HVAC Unit Replacements - Substations
Circuit Switcher (T1) Addition, Breaker (4006/4012) Replacements, Relay Upgrade - Harmony Substation
Oil Breaker (2082) Replacement - Timberline Substation
Circuit Switcher (T3) Addition, Breaker (4002/4042) Replacements, Relay Upgrade - Harmony Substation
Total Transmission Projects $
70,827
62,172
57,700
41,695
32,375
17,394
2,921
12,123,566
Other Transmission Projects
Transformer Replacement - Ault KU1A 345/230kV (Western Joint Facilities)
$
Breaker (1586/1482) Replacements - Ault Substation (Western Joint Facilities)
Switch 663 Replacement - Loveland West Tap (Western Joint Facilities)
Total Other Transmission Projects $
2,072,000
118,440
70,000
2,260,440
Total Transmission Capital Additions $
14,384,006
General Plant Capital Additions
General Plant Projects
Headquarters Campus
Lock-Out Tag-Out Computer System
Fiber Optic Route to Estes Park
Patch Panel Replacement - Rawhide Relay Room
Patch Panel Replacement - Headquarters Communications Room and Microwave Room
SONET Communication System Replacement
PBX Telephone System Server Replacements
Patch Panel Replacement - Harmony Substation
Patch Panel Replacement - Boyd Substation
Loop iNet Management Software
EqualLogic Storage Area Network Replacement
Modular Messaging Replacement
Patch Panel Replacement - Longs Peak Substation
SolarWinds NetFlow Module - SCADA Services
SolarWinds NetFlow Module - Information Technology
MV-90 Database Connector
Border Router Replacement
Office Furniture Replacement - General Manager
Battery Replacements - Panorama Peak
Total General Plant Projects
General Plant Purchases
Vehicle Fleet Replacements
Bucket Truck Replacement and Addition
Boom Truck Replacement
Generator Replacement - Trailer
Optical Time Domain Reflectometer (OTDR) Replacements
Plotter Replacement
Total General Plant Purchases
$
$
$
2,546,536
156,428
132,284
123,560
110,833
106,080
99,903
98,333
77,388
50,105
50,000
48,799
32,378
15,924
15,000
14,500
14,000
13,939
11,727
3,717,717
$
485,893
236,939
217,424
59,212
43,000
11,000
1,053,468
Total General Plant Capital Additions $
4,771,185
TOTAL CAPITAL ADDITIONS $
42,029,583
* Projects with unspent 2015 funds that will be requested to be carried over to the 2016 Budget.
Page 50
2016 Annual Budget
CAPITAL ADDITIONS
Production Capital Additions
Production capital additions include expenditures for power plant upgrades, equipment purchases
and replacements, and other projects at the Rawhide and the Craig generating stations. Also
included in production additions is the Windy Gap Firming Project.
The 2016 production capital additions total $22.9 million and consist of $7.4 million for Rawhide
projects, $13.7 million for Platte River’s share of the Yampa Project capital additions, and $1.8
million for Platte River’s share of the Windy Gap Firming project. The Yampa capital budget was
prepared by the Yampa Operating Agent (Tri-State) and has been approved by the Yampa
Engineering and Operating Committee of which Platte River is a member. The Yampa additions
include $10.4 million for environmental upgrades.
Rawhide Projects
Coal Dust Pneumatic Conveying System
Installation of a pneumatic conveying coal dust collection system from
the rotary car dumper dust collector to the plant silos. The new system
will reduce the coal dust in the coal handling areas, reduce the
combustible dust risk, and potentially reduce wash downs. In addition to
discharging the dust in the plant silos, options to discharge in the active
silos and at the rotary car dumper will be available to handle abnormal
situations.
Rawhide Unit 1 Distributed Control System (DCS) Replacement
and Expansion
Replace and upgrade the Foxboro DCS and Allen Bradley Programmable
Logic Controllers at Rawhide Unit 1 to a common DCS platform. Unifying
the controls onto a single platform is expected to reduce long term costs
related to spare parts, training, and support while eliminating obsolete
and aging control hardware/software and improving technical support
received from the DCS original equipment manufacturer. The DCS
upgrade will positively impact the ability to achieve NERC/CIP
compliance and overall control systems cyber security. This upgrade will
also allow Platte River to take advantage of the latest control and
operator interface technologies which will improve performance,
efficiencies, and safety.
Soot Blower Replacement
Replace all of the existing soot blowers for the Rawhide Unit 1 boiler to
ensure unit heat rate and reliability. The current soot blowers are
obsolete, require frequent maintenance, and replacement parts are
becoming scarce. The new soot blower power and controls have a “plug
in” feature, which is safer for plant personnel.
2016 Annual Budget
$1,232,754
Project time frame: 2016-2017
Total cost estimate: $1,774,282
717,973
Project time frame: 2013-2016
Total cost estimate:
$10,238,366
368,608
Project time frame: 2016-2018
Total cost estimate: $1,088,608
Page 51
CAPITAL ADDITIONS
Rawhide Projects
Conveyor Belt Fall Protection Guard Rails
Design, purchase, and install braided steel cable or removable handrail
piping for both the handrail and mid-rails along the conveyor gallery,
including conveyors 2, 3, 6, 7, 8, and the uncovered portion of 10A. This
project will correct fall protection deficiencies on existing coal conveyor
walkways and ensure compliance with OSHA requirements.
Grading and Drainage Improvements – Coal Silos
Design and installation of soil holding materials such as erosion mats and
blankets, and/or a retaining wall in addition to drainage improvements
along the road west of the coal silos. The bank along the road is washing
away and eroding causing mud to cover the asphalt driveways. The lack
of drainage in this area results in standing water which ices over in the
winter causing a safety hazard.
Grading and Drainage Improvements – Crusher Building
Restore proper grading and drainage in the area around the crusher
building with the installation of new asphalt and drainage
improvements. Over the years wash downs in the crusher building and
water line leaks have caused erosion of the asphalt and dirt banks on the
north side of the building resulting in corrosion of the steel along the
bottom of the building.
Fixed Fire Suppression – SDA Computer Control Servers
Install a NOVEC 1230 fire suppression system in the control room for the
new SDA computer control servers. This control room currently has no
fire suppression. The NOVEC system will allow for tie in to the plant wide
fire alarm and detection system, reducing the risk to personnel and
eliminating damage to computers and electronic components in the
event of a chemical release.
LED Lighting
Replace all exterior and interior lighting throughout the plant with LED
lighting which is more energy efficient and requires less maintenance
than the standard high pressure sodium lighting.
CO Analyzer Replacements – Combustion Turbines – Units A-D, F
Replace the outdated and obsolete CO analyzers in all five combustion
turbines with new T-series analyzers. The existing analyzers are
different models which complicate maintenance and threaten the
availability of the turbines. This project will standardize CO monitors
which will simplify maintenance, improve reliability, and include new
enhanced features.
Grading and Drainage Improvements – Rawhide Pump Station
Replace and widen the existing access driveway in front of the Rawhide
pump station to allow crane access to the roof for increased safety. The
use of a crane is critical for removal or placement of large pumps and
motors. The existing curbs and gravel area limit the position of the
crane’s proximity to the building, causing a potential safety hazard.
Page 52
$190,817
Project time frame: 2015-2016
Total cost estimate: $238,476
134,646
134,646
125,723
112,560
Project time frame: 2016-2018
Total cost estimate: $342,560
66,481
52,807
2016 Annual Budget
CAPITAL ADDITIONS
Rawhide Projects
NOx Analyzer Replacements – Combustion Turbines – Units A-D
Replace the NOx analyzers in the four EA combustion turbines with new
42i-series models. The existing 42C-series analyzers will no longer be
supported and parts will not be available. These analyzers are essential
in order to preserve generator availability and ensure reliability of the
units.
Erosion Control – Owl Creek Gas Yard
Design and implement an erosion mitigation plan to ensure the integrity
and protection of the gas delivery infrastructure and security of the site.
Engineering design will take place in 2016, with construction and
implementation planned for 2017.
HVAC Unit Replacement – Rawhide Resource Room
Replace the small cooling unit which serves the resource room with a
new larger capacity unit. The current cooling unit is underrated due to
an increase in equipment and employee use of the room.
Hay Storage Building
Design, engineer, and construct a new hay storage building to prevent
rain/snow damage, mold, and eliminate the safety hazards involved in
using tarps to cover the hay. New safety requirements require fall
protection to be used while accessing high profile structures. Currently
the hay is covered by tarps that frequently need replacement due to sun
and wind damage. The stacked hay does not have proper fall protection
as it is stacked in an area with no surrounding structure.
HVAC Controls Replacement – Rawhide Administration Building
Upgrade the existing HVAC controls in the Rawhide administration
building to a new state-of-the-art HVAC system. The existing controls
have reached end of life and are becoming obsolete and costly to
maintain.
Total Rawhide Projects
$51,481
24,528
Project time frame: 2016-2017
Total cost estimate: $50,000 to
$100,000
11,986
10,534
Project time frame: 2016-2017
Total cost estimate: $60,534
8,703
$3,244,247
Rawhide Purchases
Rail Cars – Aluminum
Purchase a fleet of aluminum rail cars to replace the existing steel rail cars
which are reaching end of life and becoming obsolete. The aluminum cars
have a lighter body weight and can haul approximately 20 percent more
coal than the steel cars. In addition, it is an optimal time to purchase the
aluminum cars due to a surplus of inventory and a strong market for the
steel cars to be used in other industries. An anticipated value/credit for
sale of existing steel cars of $1,188,000 is netted against the total project
cost.
Cat Loader Replacement
Replace Cat loader 237 at Rawhide to ensure reliability. The loader is
heavily used for operations in the coal yard including the following: coal
2016 Annual Budget
$3,433,562
495,670
Page 53
CAPITAL ADDITIONS
Rawhide Purchases
reclaiming and stock out operations, ash monofill maintenance, gravel pit
maintenance, and other small scale applications. Utilizing the buy-back
program the trade-in value is $350,000, which is netted against the total
cost of the project.
Brush 1 Fire Truck Replacement
Replacement of the Brush 1 fire truck. The chassis for the current unit has
been in service since 2003 and repairs are becoming more frequent and
increasingly expensive. The truck is necessary to protect off-road areas for
wildland/grass fires that a standard fire engine cannot access. Most of
Rawhide’s 4,800 acres are considered wildland, including the new area for
the solar project.
Network Analyzer Tool
Purchase a network analyzer tool to diagnose the fiber optic and copper
wired ethernet Rawhide controls are run on. This tool is necessary to keep
these critical networks optimized and to have the ability to diagnose and
repair them expeditiously.
Large Floor Machine
Purchase a large riding floor scrubbing machine. An additional 20,000
square foot of floor cleaning has been added to the cleaning schedule and
the purchase of this machine would allow maintenance to stay on schedule
with the weekly floor cleaning. Maintaining a clean facility is a high
priority for Platte River and adding another floor scrubber will assist staff
in maintaining the floors in a timely and efficient manner.
Dual Feed Welder Replacement
Replace the duel feed welder used in the mechanical maintenance shop.
The new fabrication system has a dual wire feeder and will replace the two
dedicated shop welders. This single machine is capable of doing the work
of the current stick/tig welding machine and the wire feed machine. The
new single machine will reduce the welding machine footprint and
maximize weld cell space. The new machine also has advanced capabilities
which are not currently available.
Total Rawhide Purchases
TOTAL RAWHIDE CAPITAL ADDITIONS
$100,000
52,000
44,392
15,000
$4,140,624
$7,384,871
Other Production Projects
Yampa Environmental Projects
The Yampa Engineering and Operating Committee approved capital
projects for environmental upgrades for NOx reduction, SCR and related
costs on the Craig Units. The installation of new NOx reduction
technologies will be completed in 2017 for Craig Unit 2. These
technologies will meet the emission limits associated with Colorado’s
implementation of the Regional Haze Rule promulgated by the
Page 54
$10,386,648
Project time frame: 2012–2017
Total cost estimate: $33,004,777
2016 Annual Budget
CAPITAL ADDITIONS
Other Production Projects
Environmental Protection Agency. The project will include new NOx
controls and associated engineering and equipment including
automation of boiler controls, piping, insulation, and work on the
economizer and air heater elements. The amounts shown represent
Platte River’s ownership share responsibility.
Yampa Work Orders
The Yampa Engineering and Operating Committee approved capital
projects for plant improvements and additions at the Craig Station. The
budget includes costs for a bottom ash system, stack lining, low pressure
turbine bucket upgrades, Yampa River channel improvements and other
projects for upgrades and replacements. The amount shown represents
Platte River’s ownership share responsibility.
Yampa Controls Projects
The Yampa Engineering and Operating Committee approved capital
projects for continuing work on the controls projects at the Craig Station.
The amount represents Platte River’s ownership share.
Windy Gap Firming Project
Platte River is participating in the Windy Gap Firming Project storage
system. The Windy Gap system currently has very limited water storage
capability putting Rawhide at risk. Therefore, this project will provide
storage and help ensure a continuous water supply. The project is
expected to move into the design phase in 2016. Construction is
estimated to be complete with the reservoir ready to fill in the spring of
2021. The amounts shown represent Platte River’s share of the project.
Total Other Production Projects
TOTAL PRODUCTION CAPITAL ADDITIONS
2016 Annual Budget
$1,903,020
Carryover estimate: $391,690
1,454,087
Project time frame: 2013–2017
Total cost estimate: $4,241,524
Carryover estimate: $624,658
1,745,766
Project time frame: 2001–2021
Total cost estimate: $53,785,672
Carryover estimate: $189,000
$15,489,521
$22,874,392
Page 55
CAPITAL ADDITIONS
Transmission Capital Additions
Transmission additions include capital expenditures for transmission lines, substations, and
supporting equipment. Projects are based on transmission studies and consultation with the
Municipalities’ staffs through the Joint Technical Advisory Committee. These projects will provide
enhanced system reliability and add capacity to serve new and existing loads.
The 2016 transmission capital additions total $14.4 million for expansion and upgrades to Platte
River’s transmission system. This amount includes substation expansions, new transformers,
breakers, substation signage, relay, and battery bank replacements.
Transmission Projects
Boyd 115/ 230kV Substation Transformer T2 Addition
Addition of a six bay 230kV breaker-and-a-half with nine circuit breakers
and a new 115/230kV auto transformer to enhance the output from
Rawhide, increasing reliability.
LaPorte Substation – 230kV Expansion
Addition of a six bay 230kV breaker-and-a-half with nine circuit breakers
and a new 115/230kV auto transformer to enhance the output from
Rawhide, increasing reliability.
Generation Availability Transformer – Rawhide Substation
Installation of a generation availability transformer at the Rawhide
Substation to mitigate the risk of failure of the substation transformer
and increase the availability of all of the generating units at Rawhide.
This project will also provide the power to auxiliary circuits during a
planned replacement of the Rawhide Substation transformer, a second
source of power to the construction management building and a third
source for the substation control building.
Interconnection Transformer – Rawhide Flats Solar
Design, construct, and commission a new 230/34.5kV interconnection
transformer, foundation, and associated equipment to support the new
Rawhide Flats Solar project.
Oil Breaker (2062/2066) Replacements and Relay Upgrades –
Rawhide Substation
Replace the 35-year old oil breakers 2062 and 2066 at Rawhide with SF6
gas circuit breakers. The current oil breakers are hard to find spare parts
for, less reliable, require more maintenance than the new gas insulated
breakers, and are a potential oil spill hazard. This project will also
replace the primary relays with new SEL-411L relays that provide highly
accurate fault location to more easily identify disturbance locations.
Oil Breaker (362/462) Replacements and Relay Upgrades –
Richard Lake Substation
Replace the 30-year old oil breakers 362 and 462 on transformer T1 at
Richard Lake Substation with new SF6 gas circuit breakers and upgrade
relays. The current oil breakers are less reliable, require more
Page 56
$5,736,882
Project time frame: 2014–2017
Total cost estimate: $9,095,225
Carryover estimate: $99,597
1,730,804
Project time frame: 2014–2016
Total cost estimate: $7,229,747
1,648,650
Project time frame: 2015–2016
Total cost estimate: $1,661,266
1,010,646
Project time frame: 2015–2016
Total cost estimate: $1,040,646
709,568
Project time frame: 2015–2016
Total cost estimate: $739,800
284,207
2016 Annual Budget
CAPITAL ADDITIONS
Transmission Projects
maintenance than the new SF6 breakers, and are a potential oil spill
hazard. Spare parts are also hard to find. Upgraded relays will enhance
fault location.
Breaker Replacements – Boyd Breakers 2062, 3062, 3166
Replace the 30-year old oil breakers 2062, 3062 and 3166 at the Boyd
Substation with new SF6 gas circuit breakers and upgrade relays. The
current oil breakers are less reliable, require more maintenance than the
new SF6 breakers, and are a potential oil spill hazard. Spare parts are
also hard to find. Upgraded relays will enhance fault location.
Annual Meter, Relay or Annunciator Additions, Replacements or
Upgrades
Replacements of relays are required to upgrade old mechanical and solid
state relays that are becoming obsolete with new relays that are more
reliable and provide better event analysis. Relay additions are required
at locations in which there are not currently redundant relays and will
provide improved reliability and more accurate fault location. Meter and
annunciator replacements are necessary for old equipment that is no
longer supported.
Battery Bank Replacements
Replacement of battery bank, rack, and spill containment replacements
at three substations. The battery bank test results have been declining
indicating that they are reaching end of life. Locations will be determined
based on substations with the greatest need.
Sign Installations – 230kV Substations
Install rock monument signs at the LaPorte, Horseshoe, Boyd, Fordham,
and Longs Peak Substations to clearly identify the substations. The new
signs will match the signs installed at both Rawhide and the Dixon Creek
Substation.
Oil Breaker (164) Replacement – Terry Street Substation
Replace the 30-year old oil breaker 164 at the Terry Street Substation
with new SF6 gas circuit breakers. The current oil breakers are less
reliable, require more maintenance than the new SF6 breakers, and are a
potential oil spill hazard. Spare parts are also hard to find. Upgraded
relays will enhance fault location.
LaPorte Substation – 115kV Adaptation and Refurbishment
Rearrangement of the 115kV ring bus is required to accommodate the
changes to the LaPorte Substation 230kV addition. This project will rearrange the 115kV bus ring to separate the new 115/230kV
autotransformer from the existing autotransformer. The project will also
replace the two remaining oil circuit breakers with gas insulated circuit
breakers and update the relaying, improving autotransformer protection
and station service power.
2016 Annual Budget
$265,020
Project time frame: 2015–2016
Total cost estimate: $281,286
Carryover estimate: $16,266
150,249
Project time frame: 2016–2024
Total cost estimate: $1,350,249
127,482
Project time frame: 2015–2020
Total cost estimate: $558,038
88,879
86,095
Project time frame: 2016-2017
Total cost estimate: $134,095
70,827
Project time frame: 2014–2016
Total cost estimate: $334,188
Carryover estimate: $73,179
Page 57
CAPITAL ADDITIONS
Transmission Projects
Foothills Substation
The City of Loveland has requested a new 115/12.47kV substation to
serve load on the west side of the city. Platte River will build an initial
three ring bus, control building and associated structures, switches, and
foundations to support the new Foothills Substation.
Remote Terminal Unit (RTU) Replacement – Drake Substation
Replace the existing Landus and Gear RTU with a newer GE RTU
including a new D20MX head and chassis. The new equipment will have
the point capacity to monitor the live tank breakers that will be installed
in the future.
HVAC Unit Replacements – Substations
Replace wall inset HVAC units at the Drake, Timberline, Mary’s Lake, and
Crossroad Substations. The current units are twelve to nineteen years
old, have high maintenance costs, and the reliability of the units is
declining.
Circuit Switcher (T1) Addition, Breaker (4006/4012)
Replacements, Relay Upgrade – Harmony Substation
Addition of a circuit switcher to replace the existing T1 motor operated
disconnect switch and provide segregation between the City of Fort
Collins and Platte River minimizing the NERC standard requirement for
the City and equipment maintenance benefits for Platte River. This
project will also replace two oil circuit breakers with SF6 gas circuit
breakers and upgrade the relaying and protection system to improve
system reliability.
Oil Breaker (2082) Replacement – Timberline Substation
Replace the 30-year old oil breaker 2082 at the Timberline Substation
with new SF6 gas circuit breakers. The current oil breakers are less
reliable, require more maintenance than the new SF6 breakers, and are a
potential oil spill hazard. Spare parts are also hard to find. Upgraded
relays will enhance fault location.
Circuit Switcher (T3) Addition, Breaker (4002/4042)
Replacements, Relay Upgrade – Harmony Substation
Addition of a circuit switcher to replace the existing T3 motor operated
disconnect switch and provide segregation between the City of Fort
Collins and Platte River minimizing the NERC standard requirement for
the City and equipment maintenance benefits for Platte River. This
project will also replace two oil circuit breakers with SF6 gas circuit
breakers and upgrade the relaying and protection system to improve
system reliability.
TOTAL TRANSMISSION PROJECTS
Page 58
$62,172
Project time frame: 2015-2017
Total cost estimate: $4,097,786
57,700
41,695
32,375
Project time frame: 2016-2017
Total cost estimate: $683,075
17,394
Project time frame: 2016-2017
Total cost estimate: $192,394
2,921
Project time frame: 2016-2017
Total cost estimate: $651,921
$12,123,566
2016 Annual Budget
CAPITAL ADDITIONS
Other Transmission Projects
Transformer Replacement – Ault KU1A 345/230kV (Western
Joint Facilities)
Replace current 166 MVA single phase unit with a newer 600 MVA single
three phase unit.
Breaker (1586/1482) Replacements – Ault Substation (Western
Joint Facilities)
Replacement of oil breaker 1586 and 1482 at the Ault Substation with
new SF6 gas circuit breakers. The current oil breakers are less reliable,
require more maintenance than the new SF6 breakers, and are a
potential oil spill hazard. Spare parts are also hard to find. Upgraded
relays will enhance fault location.
Switch 663 Replacement – Loveland West Tap (Western Joint
Facilities)
Replace line switch 663 at the Loveland West Tap due to age and
maintenance issues. Recent operation of the switch created a potentially
hazardous situation which could have created a line fault or safety
hazard.
TOTAL OTHER TRANSMISSION PROJECTS
TOTAL TRANSMISSION CAPITAL ADDITIONS
2016 Annual Budget
$2,072,000
118,440
70,000
$2,260,440
$14,384,006
Page 59
CAPITAL ADDITIONS
General Plant Capital Additions
General plant additions include expenditures for computer hardware and software, communication
equipment, vehicle replacements, building and grounds modifications, and other general plant
equipment purchases.
The 2016 general plant capital additions total $4.8 million and include additional planning for a
new Headquarters campus, communications upgrades, software purchases, equipment, and vehicle
replacements.
General Plant Projects
Headquarters Campus
Select a cost effective and viable Headquarters campus space alternative
that will meet projected space needs for staff, technology and equipment
for the next 30 years, and incorporate energy efficiency principles. The
2016 project scope will include initiating preliminary engineering, basis
of design, detail engineering, and construction documentation for the
alternative selected, which has not been determined.
Lock-Out Tag-Out Computer System
Purchase and implement a lock-out tag-out system used to ensure safety
concerns are clearly marked on equipment, disconnects are identified,
and to verify equipment is safe for service or maintenance.
Fiber Optic Route to Estes Park
A new fiber route to Estes Park from Loveland offers significant benefits.
It would restore Estes Park’s ability to receive state-of-the-art,
competitively priced broadband services, enable Platte River to
redundantly ring Estes Park with high speed fiber optics for our
transmission operations, eliminate Platte River’s reliance on antiquated
digital microwave technology, and has the potential to provide Estes
Park with redundancy in case of a fiber outage.
Patch Panel Replacement – Rawhide Relay Room
Replace outdated fiber system patch panels in the Rawhide relay room
with new technology to accommodate additional bandwidth.
Patch Panel Replacement – Headquarters Communications
Room and Microwave Room
Replace outdated fiber system patch panels in the communications and
microwave rooms at headquarters with new technology to accommodate
additional bandwidth.
SONET Communication System Replacement
Replace the existing SONET communications system that is reaching end
of life and will no longer be supported by 2018.
PBX Telephone System Server Replacements
Purchase replacement servers for the telephone PBX system. The
existing system is reaching end of life and will no longer be supported by
the manufacturer.
Page 60
$2,546,536
Project time frame: 2016-2018
Total cost estimate: $27,546,536
156,428
132,284
Project time frame: 2015-2017
Total cost estimate: $6,127,491
123,560
110,833
106,080
Project time frame: 2016-2019
Total cost estimate: $2,916,080
99,903
2016 Annual Budget
CAPITAL ADDITIONS
General Plant Projects
Patch Panel Replacement – Harmony Substation
Replace outdated fiber system patch panels at Harmony Substation with
new technology to accommodate additional bandwidth.
Patch Panel Replacement – Boyd Substation
Replace outdated patch panels in the fiber system at Boyd Substation
with new technology to accommodate additional bandwidth.
Loop iNet Management Software
Replace the manufacture discontinued telemetry monitoring system
used to communicate substation equipment.
EqualLogic Storage Area Network Replacement
Purchase replacement EqualLogic storage area network arrays used for
disk-to-disk backup. The existing arrays are nearing end of life and need
to be replaced in order to ensure functionality and necessary service
levels.
Modular Messaging Replacement
Replace and upgrade modular messaging system. The current system is
nearing end of life and will no longer be supported by the manufacturer.
Patch Panel Replacement – Longs Peak Substation
Replace outdated fiber system patch panels at Longs Peak Substation
with new technology to accommodate additional bandwidth.
SolarWinds NetFlow Module – SCADA Services
Add the NetFlow module to the existing SolarWinds SCADA
infrastructure monitoring system. This project will add the ability to
identify and track specific network communications between systems
and allow for troubleshooting network issues.
SolarWinds NetFlow Module – Information Technology
Add the NetFlow module to the existing SolarWinds information
technology network management suite to improve network management
capabilities by providing real-time network utilization and bandwidth
monitoring.
MV-90 Database Connector
Purchase a database connector for the MV-90 metering system to
automate data transfer for the monthly city billing. The new equipment
will allow data to be reported more efficiently and decrease potential
errors.
Border Router Replacement
Purchase a new border router to support the anticipated increased
bandwidth requirements for the next three to five years.
Office Furniture Replacement – General Manager
Replace the office furniture in the General Manager’s office to improve
ergonomics and functionality.
Battery Replacements – Panorama Peak
Replace the backup batteries at the Panorama Peak digital microwave
communications site which have reached end-of-life.
2016 Annual Budget
$98,333
77,388
50,105
50,000
48,799
32,378
15,924
15,000
14,500
14,000
13,939
11,727
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CAPITAL ADDITIONS
General Plant Projects
Total General Plant Projects
$3,717,717
General Plant Purchases
Vehicle Fleet Replacements
Replace twelve vehicles which meet or significantly exceed Platte River’s
vehicle replacement criteria of twelve years or 80,000 miles.
Bucket Truck Replacement and Addition
Purchase two new insulated 37 foot reach bucket trucks on medium duty
chassis. One will replace the existing small bucket truck which has
become unreliable for maintaining critical substation infrastructure. The
second unit is needed due to increased work load for testing and
maintaining breakers.
Boom Truck Replacement
Replace a boom truck with a new like unit that has a 56 foot boom and a
wood deck flatbed for hauling large breakers and other substation
equipment. The current truck is showing high wear and increased safety
concerns.
Generator Replacement – Trailer
Replace the unreliable, non-functional 1978 Caterpillar trailer mounted
generator. This generator is used as a backup power source in the event
of an extended power outage to supply power to the critical computer
room HVAC units serving the data center, telecommunications room, and
SCADA server room.
Optical Time Domain Reflectometer (OTDR) Replacements
Replace two OTDRs used to troubleshoot fiber optic problems on Platte
River’s system. The new unit will provide more accurate fault location,
the ability to scope all connections in a circuit, and allow testing with live
traffic on the fibers.
Plotter Replacement
Replace the color plotter at Rawhide. The current plotter is
approximately eight years old and has reached its end of life.
Total General Plant Purchases
TOTAL GENERAL PLANT CAPITAL ADDITIONS
TOTAL 2016 CAPITAL ADDITIONS
Page 62
$485,893
236,939
217,424
59,212
43,000
11,000
$1,053,468
$4,771,185
$42,029,583
2016 Annual Budget
ACRONYMS AND TERMS
Acronyms and Terms
A&G
Administrative and general expense.
Accrual
An expense is recognized before cash is paid out.
Amortization
Gradual reduction of book value for a non-depreciable asset.
Capacity Factor
The ratio of the average load on a generator for the period of
time considered to the capacity rating of the generator.
CIP
Critical Infrastructure Protection – regulated by NERC.
Contingency
An appropriation of funds to cover unforeseen expenditures,
which may occur during the budget year.
CO
Carbon Monoxide.
CO₂
Carbon Dioxide.
Contract Surplus Sales
Sale of capacity and/or firm sales of energy intended to have
assured availability as set forth by a contract with duration
greater than a year.
CRSP
Colorado River Storage Project – division of Western Area
Power Administration.
Capital and Debt Management Fund A dedicated fund authorized by Platte River’s Strategic Financial
Plan to be used in managing debt and to provide reserves for
future capital additions.
DCS
Distributed control system is an entire system of controllers
connected by networks for communication and monitoring.
Debt Service
Bond interest and principal.
Debt Service Coverage
Net revenue divided by debt service.
Debt-to-Capitalization Ratio
Long-term debt divided by net position plus long-term debt.
Depreciation
That portion of the cost of a fixed asset charged to operations to
allow for lost usefulness.
DSM
Demand Side Management.
Estimate
Current estimate of revenues and expenditures to reflect ten
months actual revenues and expenditures (January through
October) and two months budget revenues and expenditures
2015 Annual Budget
Page 63
ACRONYMS AND TERMS
(November-December). Some modifications were made to
reflect more accurate projections.
FERC
Federal Energy Regulatory Commission.
Fiscal Resolution
A resolution that governs the financial transactions of Platte
River.
General Power Bond Resolution
A resolution for providing the issuance of power revenue bonds.
GW
One thousand megawatts; one million kilowatts.
GWh
One gigawatt of power delivered steadily for one hour.
HVAC
Heating, ventilation and air conditioning.
kW
One thousand watts.
kW-Mo
The maximum kW reached during a calendar month used for
billing demand.
kWh
One kilowatt of power delivered steadily for one hour.
kV
One thousand volts.
LAP
Loveland Area Projects – division of the Western Area Power
Administration.
MBtu
One million Btu. A Btu is a British thermal unit and is the
standard unit for measuring quantity of heat energy, and
represents the amount of heat energy necessary to raise the
temperature of one pound of water one degree Fahrenheit.
Municipalities
Estes Park, Fort Collins, Longmont and Loveland. The four
partner Municipalities of Platte River.
MW
Megawatt; one thousand kilowatts.
MWh
One megawatt of power delivered steadily for one hour.
NERC
North American Electric Reliability Corporation.
Net Income
Revenues less operating costs, depreciation, amortization and
interest expense.
Net Revenue
Total revenues less operation and maintenance expenses during
a period.
NOx
Nitrogen Oxide.
Page 64
2016 Annual Budget
ACRONYMS AND TERMS
O&M
Operation and maintenance expense.
OSHA
Occupational Safety and Health Administration.
OTDR
Optical Time Domain Reflectometer.
Projected
Estimate of revenues and expenditures based on past trends,
current economic conditions, and future financial forecasts.
Rate Stabilization Fund
An account provided for by Platte River’s General Power Bond
Resolution and funded in accordance with Platte River’s
Strategic Financial Plan.
Restricted Assets
Cash and investment accounts restricted to use by bond
covenants or laws and regulations.
SCADA
Supervisory Control and Data Acquisition.
SCR
Selective Catalytic Reduction.
SDA
Spray Dryer Absorber.
SFP
Strategic Financial Plan.
Short-term Surplus Sales
Sales of electric energy having limited or no assured availability
for a period of one year or less.
Western
Western Area Power Administration.
Wheeling
Use of transmission facilities of other utilities.
Yampa Project
Craig Station Units 1 and 2 and related transmission facilities.
2016 Annual Budget
Page 65