Archive for the ‘Monthly Summary’ Category

Tuesday, August 15th, 2017

 

 

BUSINESS OPERATIONS – AUGUST 15, 2017

US District Court (USDC) Files an Amended Final Judgment in ARPA’s Favor: In November 2016, a federal jury in the USDC ruled in ARPA’s favor in a lawsuit filed by ARPA against the boiler manufacturer, Babcock and Wilcox (B&W). The B&W furnished coal fired steam boiler was unable to meet performance and emissions standards according to the contract, and as a result the jury in the trial awarded ARPA $4.19 million in damages. On July 21, 2017, the presiding judge in the case granted ARPA’s motion for pre-and-post Judgment interest and entered an amended Final Judgment that increased the damage award by $3.7 million. B&W has until August 21, 2017 to appeal the verdict in the case.

Mountain West Transmission Owners- RTO Implementation: The Mountain West Transmission Group, consisting of the transmission owners across Colorado, have commenced discussions with the Southwest Power Pool (SPP) to explore the potential benefits of forming an RTO (Regional Transmission Organization) in the West. The formation of an RTO is projected to reduce both transmission and power supply costs; however, there will be cost shifts in the Mountain West service area and those cost shifts could impact ARPA’s costs. ARPA has participated in meetings hosted by the Colorado Public Utilities Commission, the Western Area Power Administration, and SPP regarding the RTO implementation. ARPA will continue to evaluate the impact the RTO may have on operations and prepare for the implementation date, projected to be in the fall of 2019.

Western Area Power Administration Update: A representative from the Western Area Power Administration (WAPA) provided its annual update at a meeting of the Colorado Association of Municipal Utilities (CAMU). As one might expect, the report on reservoir in-flows and storage levels are much improved over past years. WAPA expects the Colorado River Storage Project (CRSP-Lamar allocation) will have excess energy available in 2018. The contract extension/renewals for the CRSP contract will most likely be ready for review and execution by this fall. Renewal of this contract, which terminates in 2024, will extend the contract for another 40 years, or through 2064.

WAPA also provided some positive news as it has notified its customers that as of January 1, 2018, it will take a 14% rate reduction for its WAPA-LAP (Loveland Area Projects-ARPA allocation) service area. This will be the 2nd consecutive year that WAPA-LAP has reduced rates due to a reduction in the “drought adder” component of its power supply costs. Because of the large snowfall amounts this past winter, ARPA was also able to purchase “excess” energy from WAPA, above its monthly allocation, for the months of May and June. The Lamar Utilities Board also benefited from the high snow pack as it also received excess energy above its WAPA allocation for the month of May. The cost of the excess energy was well below market prices.

Trial Judge Orders Settlement Mediation in City of Lamar Case: In late July, the trial judge for the ARPA-City of Lamar lawsuit ordered the parties to engage in a mediation to be completed no later than August 31. This represents a second opportunity for the two sides to reach a settlement that would eliminate a costly trial. If the mediation is not successful, a 4-week jury trial will take place in Pueblo beginning March 5, 2018.

Summary of June 2017 Financial and Operating Statements:  During the month of June, total operating revenues were better than budget by 8.2%. Total cost of goods sold were right on budget and A & G expenses for the month were under budget by 1.7%. There were net revenues of $681,891 for the month. Total Revenues YTD are better than budget by 2.7% as Member sales for June were 0.5% better than June of 2016 and better than budget by 6.7%. Member Sales YTD are about 2.9% better than budget and total net revenues YTD are well above budget at $1.18 million.

Next ARPA Meeting: The next regularly scheduled ARPA board meeting is Thursday, August 31, 2017. The meeting will be held in Lamar at the Cultural Events Center and will begin at 10:00 a.m. ARPA board meetings are open to the public.

Tuesday, June 13th, 2017

 

 

 

BUSINESS OPERATIONS – JUNE 13, 2017

Congratulations to ARPA Award Recipients for 2016: At their meeting on May 25, the ARPA Board of Directors announced the recipients of the Gordon Robertson and Tom Pryor Awards for 2016.

Allen Hill, a former ARPA Board Member from the City of La Junta, has been named the recipient of the Gordon Robertson Award for Distinguished Service on the Board of Directors. Allen was selected for his loyal support to defend the goals and mission of the Arkansas River Power Authority; for his outstanding leadership in the La Junta community; for his immersion into Public Power through his service on the La Junta Utilities Board; for his common sense and vision to think outside the box; for his ability to remain focused on the fiscal sustainability of ARPA and the betterment of all the member communities; and his “it’s a privilege to serve” attitude.

Michelle Miles was named as the Tom Pryor Award recipient for 2016 for Exceptional Contribution to Public Power. Michelle is an ARPA Board Member and a member of the Trinidad City Council. Michelle was recognized for her independent and sound judgment in decision making; her creative ability to find solutions that benefit all; her strong leadership on the Trinidad City Council and ARPA Board of Directors; her vast knowledge in finances and serving as Treasurer of the ARPA Board of Directors; her public service commitment to the citizens of Trinidad and to Public Power; and for her superb negotiating skills and willingness to serve on yet another “negotiating team”.

2017 Integrated Resource Plan: The ARPA Board of Directors approved an Integrated Resource Plan and directed its submittal to Western Area Power Administration. The Resource Plan recommended 2-year and 5-year action plans.
2-Year Action Plan:
• Consider repowering the existing wind turbines;
• Monitor developments related to the Mountain West Transmission Group (MWTG) and its organized energy market;
• Continue low-cost energy efficiency measures;
• Continue trend toward replacing street lighting with LED fixtures.
5-Year Action Plan:
• Continue actions from Two-Year Action Plan;
• Begin process of securing replacement power supply resources at the end of the existing Twin Eagle Resource Management agreement.

Roman Horn Appointed by the Town of Springfield to Serve on the ARPA Board of Directors: Roman Horn was appointed by the Town of Springfield to serve on the ARPA Board for a 4-year term ending December 31, 2019. Roman has been employed by the Town of Springfield for 5 years. He initially worked as the street superintendent before transferring to the electric department where he currently serves as the acting electric superintendent. Roman is not a stranger to the ARPA Organization; he also serves on the Operating Committee. We’d like to welcome Roman to the ARPA Board of Directors and hope he finds his time of service both educational and rewarding.

Summary of April 2017 Financial and Operating Statements: During the month of April, total operating revenues were better than budget by $61,590. Total cost of goods sold were over budget 2.2%, and A & G expenses for the month were over budget by $14,343. There were net revenues of $173,378 for the month. Total Revenues YTD are better than budget by $159,554. Member sales for April were 1.4% better than April of 2016 and better than budget by 3.5%. Member Sales YTD are about 2.8% better than budget.

Next ARPA Meeting: The next regularly scheduled ARPA board meeting is Thursday, July 27, 2017 by WebCast. The meeting will begin at 9:00 a.m. If any member of the public desires an agenda for the meeting or wishes to attend, please call the ARPA office at 719.336.3496 for further instruction. ARPA board meetings are open to the public.

Tuesday, May 16th, 2017

 

 

 

BUSINESS OPERATIONS – MAY 10, 2017

2016 Year in Review: 2016 was a successful year for the Arkansas River Power Authority, especially financially. ARPA, for the 5th consecutive year, had no rate increase in 2016. Our cash position showed an increase of $951,504. Net revenues for the year were $3.6 million. Sales were 1% better than 2015 and 2.5% better than 2014. S&P re-affirmed our credit rating  and we ended the year with a debt service coverage of 1.39x.

ARPA Holds its Election of Officers: The Board held officer elections at its meeting on April 27. Board Members, by resolution, voted to retain the current slate of officers for the next 12 months. Those officers include: David Willhite (Holly), President; Rick Stwalley (Las Animas), Vice President; Michelle Miles (Trinidad), Treasurer; and Arvenia Morris, (Staff), Secretary.

Meet ARPA’s Newest Board Member: Gary Cranson was appointed by the City of La Junta to serve on the ARPA Board for a 2-year term ending December 31, 2018. Gary was appointed to the position previously held by long-time member, A.W. Hill. Gary has an extensive background in electric utility operations having recently retired from a career in the electric utility industry. We’d like to welcome Gary and hope he finds his time on the ARPA Board educational and rewarding. We would also like to thank A.W. for his many years of service (2008-2016).

 ARPA Holds its Annual Pole Top and Aerial Lift (Bucket Truck) Rescue Training: The annual safety training was recently held at La Junta and Las Animas. Staff Members from the La Junta Municipal Utilities led the pole top and bucket truck rescue training which was held on April 19 at the training center north of La Junta. Twenty-one line workers attended the training from the cities and towns of Holly, La Junta, Lamar and Trinidad. On April 25 the City of Las Animas Municipal Utilities led the bucket truck rescue training. This training is held for personnel from the members’ electric and parks departments, and other personnel who operate bucket trucks. There were twenty-one people who attended the training on April 25 including those from the City of Lamar Parks Department and Lamar Light & Power, Town of Springfield, City of Las Animas and Prowers County Road & Bridge Department.

Standard & Poor’s Ratings Services (“S&P”) Affirms ARPA’s Credit Rating:  S&P’s Ratings Services affirmed its ‘BBB-‘long-term rating and underlying rating on the Arkansas River Power Authority’s power revenue bonds. The outlook is stable. S&P’s view is that during the next two years, member rates and energy demand will remain relatively stable given ARPA’s long-term power supply contracts in place. The rating further reflected ARPA’s strengths and weaknesses. Weaknesses included the continued inability to operate the LRP; member rates that are above state averages (although management projects that rate increases over the next few years will be minimal); the loss of load represented by the City of Raton; high debt ratios, and participating member municipalities’ limited service area economies. Strengths identified included a debt service coverage (DSC) that has been restored to covenanted levels in fiscal years 2011 to 2015, improved liquidity and unrestricted cash that is bolstered by a $1.5 million line of credit, currently untapped; a recently signed purchased power agreement that will provide power at a competitive rate through at least 2024; and cost certainty given that most expenses are known and fixed for the next several years. To view the full Standard & Poor’s Rating Report go to: http://www.arpapower.org/docs/Standard_&_Poors_ARPA_28-March_2017.pdf.

Western Area Power Administration – Loveland Area Projects (WAPA-LAP) to Reduce Rates in 2018: ARPA recently learned that WAPA anticipates reducing rates for its LAP customers by 14% effective January 2018. WAPA implemented a drought-adder component to its rate several years ago to repay costs incurred due to drought conditions at its hydro facilities. It was able to reduce that drought-adder rate in 2017 and now anticipates reducing it further beginning 2018. The hydro allocation from WAPA provides approximately 25% of ARPA’s power supply.

Summary of March 2017 Financial and Operating Statements: During the month of March, total operating revenues were better than budget by $42,362. Total cost of goods sold were just over budget 0.2%, and A & G expenses for the month were under budget by $405,617. There were net revenues of $203,163 for the month. Total Revenues YTD are better than budget by $97,964. Member sales for March were 2.4% better than March of 2016 and better than budget by 4.1%. Member Sales YTD are about 2.5% better than budget.

Next ARPA Meeting: The next regularly scheduled ARPA board meeting is Thursday, May 25, 2017 in Holly, CO. beginning at 10:00 a.m. ARPA board meetings are open to the public.

Wednesday, April 12th, 2017

 

 

 

BUSINESS OPERATIONS – APRIL 12, 2017

 Integrated Resource Plan (IRP). The Arkansas River Power Authority is in the process of preparing an Integrated Resource Plan (IRP), as required by the Western Area Power Administration (WAPA) under its Energy Planning and Management Program. ARPA will be accepting written and verbal comments from affected retail customers of the six ARPA communities at the April 27, 2017 meeting and for a ten working day period following the April meeting. At the end of the comment period, all comments received from the public will be reviewed and, if necessary, changes will be incorporated into the IRP. The final IRP will be approved at a public meeting of the ARPA Board of Directors on May 25, 2017. Interested parties may provide written comments directly to ARPA outside of the April 27 public meeting by sending them electronically or via US Mail to the following address: Rick Rigel, General Manager, Arkansas River Power Authority, P O Box 70, Lamar, CO 81052, rrigel@arpapower.org

ARPA Board Discusses Distributed Generation (DG) Policy. With utilities facing an increased interest from its customers and developers to install distributed generation such as wind and solar, it’s only natural that ARPA and its members would experience continued marketing efforts by solar companies. There are many facets to solar developments that must be considered, especially when considering large solar gardens. For instance, what impact would a mid to large solar installation have on power supply contracts, rate structures, and reliability?

The ARPA Board directed staff to continue its efforts on developing a policy for the development of renewable power generating installations including solar developments, and to ensure the policy addresses the following issues:

  • Review of rate modifications that will not increase rates, but would alter how fixed costs are recovered. ARPA’s fixed costs include debt service, administration expenses, and capacity related costs. These fixed costs differ from variable costs such as purchased power and transmission costs associated with energy sales and usage.
  • Evaluate the potential for ARPA to enter into power purchase agreements (PPA) with solar developers above a certain sized installation. For example, ARPA could consider the possibility of contracting with its member community directly for the generated output of solar installation, or contract with the solar developer directly.
  • The Board also discussed whether to place a cap or upper limit on the amount of solar installations it could support in each member community, and as a whole. There are contractual implications related to the sizing of renewable resource developments that will need to be addressed in a policy.
  • Ensure member utility operations are aware of the metering requirements for renewable installations. It is imperative that the utilities be able to capture all renewable generated energy for cost recovery and transmission capacity and scheduling purposes.

Southeastern Colorado Water Conservancy District’s (SECWCD) Pueblo Hydro Project. After an extensive review of the pricing, contract terms and compatibility with existing power purchase agreements, the ARPA Board decided to not pursue a long-term contract for hydro power with the SECWCD. The Board liked many of the attributes the project provided, but ultimately determined that the time and circumstances were not right for the long-term commitment.

Contract Power Rate. ARPA has been working with certain of its members on an economic development effort. After evaluating the potential for an economic development opportunity, and ARPA’s existing tariff structure, the Board directed staff to continue its efforts to evaluate the development of an economic development rate.

Summary of February 2017 Financial and Operating Statements. During the month of February, total operating revenues were less than budget by $44,520. Total cost of goods sold were just over budget 0.9%, and A & G expenses for the month were over budget by $51,585. There were net losses of $220,690 for the month. Total Revenues YTD are better than budget by $55,602. Member sales for February were 3.2% lower than February of 2016 and lower than budget by 2.2%. Member Sales YTD are about 1.8% better than budget.

 Next ARPA Meeting. The next regularly scheduled ARPA board meeting is Thursday, April 27, 2017 by WebCast beginning at 9:00 a.m. ARPA board meetings are open to the public. If anyone wishes to attend, please contact the ARPA office (719) 336-3496 for additional details.

Tuesday, March 14th, 2017

 

 

 

BUSINESS OPERATIONS – MARCH 14, 2017

Integrated Resource Plan (IRP). The Arkansas River Power Authority is in the process of preparing an Integrated Resource Plan (IRP), as required by the Western Area Power Administration (WAPA) under its Energy Planning and Management Program (EPAMP). The IRP will consider all practicable energy efficiency and energy supply resource options to meet future needs. The IRP must adhere to several criteria, which are listed on the WAPA website under the IRP section. ARPA is working with an outside consultant to complete the IRP and submit it to WAPA by June 1, 2017.

One of the requirements of EPAMP is to “provide ample opportunity for full public participation.” ARPA will be accepting written and verbal comments from affected retail customers of the six ARPA communities at the March 30, and April 27, 2017 meetings and for a ten working day period following the April meeting. At the end of the comment period, all comments received from the public will be reviewed and, if necessary, changes will be incorporated into the IRP. The final IRP will be approved at a public meeting of the ARPA Board of Directors in May 2017.

Interested parties may provide written comments directly to ARPA outside of the listed public meetings by sending them electronically or via US Mail to the following address: Rick Rigel, General Manager, Arkansas River Power Authority, P O Box 70, Lamar, CO 81052, rrigel@arpapower.org

Summary of January 2017 Financial and Operating Statements. During the month of January, total operating revenues were better than budget by $100,122. Total cost of goods sold were over budget 7.5%, and A & G expenses for the month were over budget by $133,822. There were net revenues of $92,942 for the month. Member sales for January were 3.8% better than January of 2016 and better than budget by 5.3%.

Wind Generation Report. The wind turbine generator near Springfield is currently down due to a bearing failure. It is expected the generator will be repaired by mid to late March.

ARPA Scholarship Program. In 2000 the Arkansas River Power Authority Board of Directors established a College Scholarship Program. The Program is administered through our member municipalities of Holly, La Junta, Lamar, Las Animas, Springfield and Trinidad, Colorado. The scholarship is awarded to one high school senior in each member municipality. The total scholarship award is $1,000 funded equally between ARPA and the member municipality. Application forms, scholarship requirements, and eligibility criteria are available either through the counseling offices of the member high schools or at the local office of the electric utility. To be eligible, a student must reside with a family that receives electric service from one of the ARPA member municipalities.

Next ARPA Meeting. The next regularly scheduled ARPA board meeting is Thursday, March 30, 2017 at the Las Animas Bent County Fire Department, 435 W 5th Street, Las Animas. ARPA board meetings are open to the public.

Friday, February 17th, 2017

 

 

 

BUSINESS OPERATIONS – FEBRUARY 17, 2017

ARPA Board Reviews Power Supply Options. The ARPA Board is continually evaluating options for current and future power supply and received an update on certain options at its January Board meeting. The discussion included a review of contract terms for the Pueblo Hydro Project. The Southeast Colorado Water Conservancy District (SECWCD) has developed a plan to install a small hydro-electric power generating station at the Pueblo Dam. The ARPA Board is exploring the option of procuring 50% of the total output from the project. The Board also discussed the potential to extend its current power supply contract with Twin Eagle Resource Management. The existing agreement goes through January 31, 2025 and Twin Eagle has proposed a three-year extension to that agreement, for years 2025-2027. The Board also reviewed projections for future index pricing from JK Energy Consulting. The Board directed staff to continue contract discussions with SECWCD and Twin Eagle.

Mountain West Transmission Group (MWTG). The transmission owners in the state have been working on a project which they believe will reduce transmission costs and alleviate certain transmission constraints throughout the state. The initial goal of the group was to develop a Joint Transmission Tariff between the providers. However, after a series of meetings the group determined that the implementation of an RTO (Regional Transmission Organization) would be the most effective way to reduce costs and manage electric resources.

The RTO would manage, among other things, the operation of the transmission and electric generating assets on the grid, including ensuring the adequacy of reliability and economics of the generating resources, and develop auction based electricity products. The plan calls for the implementation of an RTO in 2019. It is difficult to determine what the impact of the RTO may have on ARPA and its members at this point, but it does represent a significant change in how electric utility transmission and generation will be managed.

Redemption of a Portion of Series 2003 Bonds. A payment in the amount of $192,483 ($190,000 principal redemption, $2,483 outstanding interest) was made to ARPA’s Bond Trustee, UMB Bank, to redeem a portion of the Series 2003 Bonds. The Board will evaluate its ability to retire more of these bonds later in the year. The 2003 bond series was for the ARPA wind turbine financing. Once the bonds are retired, ARPA will realize an annual debt service reduction of approximately $256,000.

Summary of Unaudited December 2016 Financial and Operating Statements. During the month of December total operating revenues were better than budget by $38,219. Total cost of goods sold were over budget 4%, and A & G expenses for the month were over budget by $72,669. There were net revenues of $207,102 for the month; year to date (YTD) net income is $3,612,411. Member sales for December were 3.9% better than December of 2015, and YTD sales are better than 2015 by approximately 4.1%.

Wind Turbine Operations. In 2016, the 5 wind turbine generators (3 Lamar; 2 ARPA) produced 18,628 MWHs. Compare this to the year 2008 when the total generation was 24,284 MWHs. Part of the reason for the reduction in generation was mechanical failures. The Baca County turbine, typically the highest producing turbine, was off line about 14 weeks (March-June) due to a transformer failure. In Prowers County, one of the four turbines was off line for 3 months (May-July) due to a gearbox failure.

Next ARPA Meeting. The next regularly scheduled ARPA board meeting is Thursday, February 23, 2017 at the La Junta Holiday Inn Express, 27994 US Hwy 50 Frontage Road. ARPA board meetings are open to the public.

Wednesday, January 4th, 2017

 

 

 

BUSINESS OPERATIONS – JANUARY 4, 2017

 

ARPA Board Authorizes Redemption of a Portion of Series 2003 Bonds. The ARPA Board has been working with its Financial Advisor, Public Financial Management (PFM) to reduce its ongoing debt service obligations. At its December meeting, the Board passed a resolution authorizing the redemption of the 2003 Series Bonds. The Board will initially retire a portion of the bonds in the first quarter of 2017 and evaluate its ability to retire additional bonds later in the year. Once the bonds are retired, ARPA will realize an annual debt service reduction of approximately $256,000.

 2017 Budget – Power Costs Remain Stable for the Sixth Consecutive Year. At its December meeting, the ARPA Board approved a budget for 2017 that results in no power supply cost increase for the sixth consecutive year.

The budget includes total Revenues of approximately $32.7 million with sales budgeted at 266.3 million kWh. The power supply budget is approximately $13.3 million and projects that approximately 63% of the 2017 ARPA power supply will be provided by Twin Eagle Resource Management. Twenty-nine percent of the ARPA member’s power supply requirement is anticipated to be provided by federal hydro-power contracts with the Western Area Power Administration and approximately 8% will be provided by the 5 wind turbine generators owned by Lamar (3) and ARPA (2). Total Transmission cost is budgeted at $2.4 million and includes the cost for Network Transmission Service from both Tri-State and Black Hills, and point-to-point agreements with a variety of third-party transmission providers. Debt Service payments are budgeted at $10.2 million, with $7.9 million in bond interest and $2.3 million in bond principal.

2017 Wholesale Rate Review. Based on its 2017 budget, the Board of Directors adopted Resolution No. 08-16, which resolves that no changes be made to the existing ARPA Rate Tariff.

ARPA Board Approves Transmission Agreement for Service to Trinidad.  At its December meeting, the ARPA Board approved a transmission agreement with San Isabel Electric Association for service to the City of Trinidad. The agreement provides fixed transmission rates through 2019 and the means to establish future rates based on San Isabel’s actual costs to serve the City, stabilizing transmission rates for Trinidad consumers.

Summary of October 2016 Financial and Operating Statements. During the month of October total operating revenues were better than budget by $73,652. Total costs of goods sold were over budget 2.4%, and A & G expenses for the month were just over budget by $80,254. There was a net loss of $101,977 for the month; year to date (YTD) net income is $3,518,426. Member sales for October were 1.2% better than October of 2015, and YTD sales are better than 2015 by approximately 1.1%.

Board of Directors Meeting Dates and Locations for 2017. The Board once again voted to hold five of its 2017 scheduled meetings by WebCast. This alleviates the cost of travel for Board members and staff, and provides an opportunity for additional participation from the member’s governing boards and general public. If anyone wishes to receive a copy of the dates and locations for the 2017 scheduled meetings, and details regarding the WebCasts, please call the ARPA office at 719-336-3496.

Next ARPA Meeting. The next ARPA board meeting is scheduled for Thursday, January 26, 2017 and will be held by WebCast. ARPA board meetings are open to the public.

Tuesday, November 15th, 2016

 

 

 

BUSINESS OPERATIONS – NOVEMBER 15, 2016

ARPA’s Operating Committee Recommends Allocation of Funds for Safety Training and Workforce Development: The ARPA Operating Committee met recently to discuss workforce recruitment and training. The ARPA members have recognized that retaining experienced electric crews is critical to the operations and maintenance of their electric systems. And they have also recognized, and experienced the challenges of recruiting and retaining the expertise needed for their operations. To that end, the Operating Committee recommended to the ARPA Board of Directors that they commit $15,000 for safety training and workforce development in the 2017 budget. Specifically, the Operating Committee recommended the funds be allocated as follows:
• $6,000 ($1,000 to each member) to defray the cost of attendance at hot line schools;
• $1,500 for membership in the Center for Energy Workforce Development;
• $7,500 for third-party training and nominal costs associated with membership hands on training (includes annual pole-top and bucket truck rescue and mobile substation training).

The Center for Energy Workforce Development: Today’s Youth are Tomorrow’s Pipeline for Careers in Energy: ARPA staff recently attended a Center for Energy Workforce Development (CEWD) conference that focused on partnering with educators and workforce centers to create pathways for energy jobs. CEWD provides ready-to-use resources that enable energy companies to attract, train, and hire a workforce that includes youth, military, women, and transitioning adults. CEWD believes building the next generation of energy workers is critical to the future of the industry. ARPA anticipates becoming a member of the Workforce Development group and actively participating with its members to help tailor and implement proven solutions and strategies for developing a long term program to recruit and retain the expertise needed to safely and effectively operate and maintain our electric systems.

ARPA Board Authorizes Extension of Contract with IPP for Marketing and Sale of the Lamar Repowering Project: At its meeting on October 27, the ARPA Board of Directors authorized the General Manager to extend the contract with International Process Plants (IPP) to assist it with the marketing and sale of the Lamar Repowering Project (LRP). IPP will continue its attempt to sell the Plant as a complete unit including the boiler and its ancillary equipment and coal handling facilities, and the 18 mW turbine generator and ancillary equipment, including the air cooled condenser. The extension will allow IPP’s efforts to continue until November 2017.

Proposed 2017 Budget: The final proposed 2017 budget was presented to the ARPA Board of Directors at its October 27 meeting. As presented, the budget includes no base rate increase for 2017. This will be the 6th consecutive year of no power supply cost increase. The budget projects total revenues of $32.6 million, power supply costs of $13.2 million, transmission costs of $2.4 million, and A&G costs of $2.9 million. Debt Service, reflecting retirement of the 2003 bonds, would be reduced to $9.9 million and it anticipates a 1.38x debt service coverage which exceeds its requirement per ARPA’s bond covenants.

Summary of September 2016 Financial and Operating Statements: During the month of September, total revenues were better than budget by $147,666. Total cost of goods sold was under budget 6.9%, and total A&G expenses, not including LRP Engineer and Contractor expenses for the month, were over budget by $120,896. There were net revenues of $283,175 for the month of September. YTD net revenues are $3,620,478. Member sales were about 4.8% better than budget for September and 4.6% better than budget YTD. YTD sales for 2016 are 1.1% higher than 2015 sales.

Next ARPA Meeting: The next regularly scheduled meeting of the ARPA Board of Directors is Thursday, December 8, 2016 at the Otero Junior College Student Center in La Junta. In addition to the regular meeting the Board will consider adoption of the 2017 Budget at a hearing set to begin at 10:30 a.m. ARPA board meetings are open to the public.

Friday, October 14th, 2016

 

 

 

BUSINESS OPERATIONS – OCTOBER 14, 2016

ARPA Board Exploring Possibility of a Purchase Power Agreement for Additional Hydro-Electric Energy: Kevin Meador, Principal Engineer for the Southeastern Colorado Water Conservancy District (SECWCD) provided a presentation to the ARPA Board of its plan to install hydro-electric power generation at the Pueblo Dam. The purpose of the Project is to take advantage of available hydropower and clean renewable energy opportunities, and to provide a long term economic benefit to power and water users in the SECWCD service area. SECWCD estimates that the project would generate an average of 28 million kWh annually, based on a “run of the river” schedule of the Arkansas River. The Arkansas River’s greatest water flows through Pueblo Dam are from March through August which coincides with the peak power summer demands for the ARPA members. SECWCD will own the facility and obtain Purchase Power Agreement(s) (PPA) for the energy output; Colorado Springs Utilities will provide operations expertise and maintain the facility. If SECWCD can secure a PPA within the next few months they will begin construction in 2017 with an estimated completion date in early to mid-2018.

The ARPA Board expressed an interest in securing a PPA with SECWCD and instructed staff to perform an evaluation of the pricing, transmission arrangements, and contract terms that would be necessary for an agreement.

ARPA Board Reviews Preliminary 2017 Budget: A preliminary budget was presented to the ARPA Board of Directors at its September 29 meeting. As presented, the budget includes no base rate increase for 2017. This will be the 6th consecutive year of no power supply cost increase. The budget projects total revenues of $32.6 million, power supply costs of $13.5 million, transmission costs of $2.4 million, and A&G costs of $2.9 million. Debt service, absent a refinancing, will continue at an annual cost of $10.2 million and anticipates a 1.32x debt service coverage as required by ARPA’s bond covenants.

ARPA Board to Consider Retiring 2003 Bonds: In conjunction with the budget discussion, the Board also discussed retiring its 2003 bonds. The bonds are all currently callable and would reduce ARPA’s annual debt service by approximately $256,000 and result in interest savings of approximately $387,000. The Board will continue the discussion at its October meeting.

The proposed 2017 budget for the Arkansas River Power Authority will be available for inspection beginning November 7th at the City Clerk’s office in each member city. The ARPA Board of Directors will hold a public hearing on the proposed Budget at the Otero Junior College Student Center, 2001 San Juan, La Junta, CO., on Thursday, December 8, 2016.

Summary of August 2016 Financial and Operating Statements: During the month of August, total revenues were better than budget by $154,872. Total cost of goods sold was under budget 5%, and total A&G expenses, not including LRP Engineer and Contractor expenses for the month, were over budget by $74,105. There were net revenues of $577,357 for the month of August. YTD net revenues are $3,335,363. Member sales were about 4.7% better than budget for August and 4.5% better than budget YTD. YTD sales for 2016 are 2.2% higher than 2015 sales.

Next ARPA Meeting: The next regularly scheduled meeting of the ARPA Board of Directors is Thursday, October 27, 2016, by WebCast. If you are interested in attending the ARPA Board meeting please call the ARPA office 719-336-3496 for additional details.

Wednesday, September 14th, 2016

 

 

 

 

BUSINESS OPERATIONS – SEPTEMBER 10, 2016

ARPA Board Recognizes Lawrence Sena for Exceptional Contribution to Public Power: The ARPA Board presented its Tom Pryor award to the former mayor of Las Animas, Lawrence Sena, for his loyal support of ARPA’s mission and his “we are ARPA” attitude. Lawrence was recognized for his 25-year career that included serving as Bent County Commissioner, and Councilman and Mayor of Las Animas. Mayor Sena firmly believed in Public Power and that the “customers” of Las Animas Municipal Light and Power were its owners and all decisions should be based on the benefit of the majority of those served.
Congratulations Lawrence and good luck in your future endeavors.

ARPA Board Reviews Refinancing Alternatives: Representatives from Goldman Sachs, attended the August 25th board meeting in Las Animas to present potential refinancing options to the ARPA Board for discussion purposes. With interest rates at a historic low ARPA could realize significant savings over the life of the bonds by refinancing their current bonds that have a retirement date of 2043. The Board looked at a variety of options for refinancing that included a traditional refinancing, refinancing that would provide a higher savings in early years and lower savings in later years, and options that would extend the debt service thereby spreading the total costs over a longer period of time.

The savings could well exceed a million dollars annually depending on interest rates at the time of the refinancing. This amount of savings would provide ARPA the opportunity to continue its rate stabilization efforts. ARPA has not increased power supply costs to its members since 2011 and does not anticipate a rate increase in 2017.

ARPA Board Reviews Preliminary 2017 Budget: A preliminary budget was presented to the ARPA Board of Directors at its August 25 meeting. As presented, the budget includes no base rate increase for 2017. This will be the 6th consecutive year of no power supply cost increase. The budget projects total revenues of $30.9 million, power supply costs of $13.4 million, transmission costs of $2.4 million, and A&G costs of $1.7 million. Debt service, absent a refinancing, will continue at an annual cost of $10.2 million. The budget also includes achieving the 1.25x debt service coverage and full funding for bond reserve accounts as required by ARPA’s bond covenants.

The proposed 2017 budget for the Arkansas River Power Authority will be available for inspection beginning November 8th at the City Clerk’s office in each member city. Any interested elector in an ARPA member community or electricity consumer of an ARPA member (Holly, La Junta, Lamar, Las Animas, Springfield and Trinidad, Colorado) may register objections to the proposed Budget prior to its final adoption. The ARPA Board of Directors will hold a public hearing on the proposed Budget at the Otero Junior College Student Center, 2001 San Juan, La Junta, CO., on Thursday, December 8, 2016.

Summary of July 2016 Financial and Operating Statements: During the month of July, total revenues were better than budget by $381,046. Total cost of goods sold was over budget 3.1%, and total A&G expenses not including LRP Engineer and Contractor for the month were over budget by $156,285. There were net revenues of $788,756 for the month of July. YTD net revenues are $2,758,061. Member sales were about 13.5% better than budget for July and 4.5% better than budget YTD. YTD sales for 2016 are 3.2% higher than 2015 sales.

Next ARPA Meeting: The next regularly scheduled meeting of the ARPA Board of Directors is Thursday, September 29, 2016, in Springfield. ARPA Board meetings are open to the public.