BUSINESS OPERATIONS – March 2023

ARPA Board Holds its Annual Election of Officers: The ARPA Board of Directors held its annual officer elections at its meeting on February 23. The Board elected Lorenz Sutherland (La Junta), President; Ron Clodfelter (Las Animas), Vice President; Gary Cranson (La Junta), Treasurer; and ARPA staff member, Arvenia Morris, Secretary. Mr. Sutherland has been on the ARPA Board of Directors since October 2014 and has served as president since April 2021. Mr. Clodfelter was appointed to the Board in 2010 and was first elected Vice President in February 2022. Mr. Cranson has been on the ARPA Board since February 2017 and was first elected Treasurer of the Board in May 2019.

ARPA Board Reviews Power Supply Options: John Krajewski of JK Energy Consulting presented the Board with an analysis of various options for future power supply that centered around renewable energy resources. The options included replacing the ARPA/Lamar wind turbines with larger units, an operational assessment of the existing wind turbines that included an economic evaluation for extending the life of the turbines, and participation in a sizable wind/solar renewable energy project. The addition of the renewable resources to ARPA’s power supply portfolio, will allow it to position itself to meet the State’s Roadmap to Renewable Energy.

Standard & Poor’s Ratings Services (“S&P”) Affirms ARPA’s Credit Rating:  S&P Global Ratings affirmed its ˈBBBˈ long-term and underlying rating on Arkansas River Power Authority’s outstanding electric revenue bonds. The outlook is stable. The rating reflects ARPA’s strengths based upon its member relations, a decline in debt service requirements, a purchase power agreement that will provide power at a competitive rate through January 2025, followed by a fixed-rate, long-term contract extending through 2043 at similarly competitive rates. Click to view the full Standard & Poor’s Rating Report.

ARPA Board College Scholarship Funding: The ARPA Board of Directors, in conjunction with its members, established the College Scholarship Program in 2000. The Program is administered through ARPA’s member municipalities of Holly, La Junta, Lamar, Las Animas, Springfield and Trinidad. The scholarship is awarded to one high school senior in each of the high schools served by ARPA members. Application forms, scholarship requirements, and eligibility criteria are available either through the counselor’s office of the member high schools or at the local office of the electric utility.

Summary of January 2023 Financial and Operating Statements: During the month of January, revenue from power sales were 1.5% better than budget and total cost of goods sold were slightly over budget (0.7%). Net Revenue for the month was $304,451. Member Energy sales were 2.5% better than budget and 2.6% better than January 2022.

ARPA Board Receives Report on Financial Compliance:  Aarin Ritter, Finance Manager for ARPA, provided the annual Financial Compliance Report to the ARPA Board at its February meeting. Ms. Ritter reported that the Authority is in full compliance with its Bond Covenants including fully funding its Bond Accounts, meeting its Debt Service Coverage Ratio, and the posting of its ongoing financial disclosures, including the quarterly financial reports, on the Municipal Securities Rulemaking Board website- EMMA.  ARPA’s financial disclosures can be found at https://dataport.emma.msrb.org.

Next ARPA Meeting: The next regularly scheduled meeting of the ARPA Board of Directors is Thursday, May 25, 2023. The meeting will be held in La Junta at the Otero Junior College Student Center, 2001 San Juan. The meeting notice and agenda will be posted on ARPA’s website (arpapower.org) under Public Notices and will also be posted in a designated location in each of the member cities at least 24 hours in advance of the meeting. ARPA board meetings are open to the public.

BUSINESS OPERATIONS – December 2022

ARPA Board Adopts 2023 Budget: At its December meeting the ARPA Board of Directors approved its operating budget for 2023 in the amount of $25,487,853. Rates will remain unchanged and stable for the 2023 budget which includes:

• Revenues of approximately $31 million
• Power supply expense of approximately $15 million
• Transmission expense of approximately $3.5 million
• A&G expense of approximately $1.2 million
• Debt Service expense of $8.3 million

 ARPA Board Adopts a Resolution to Change How Renewable Generation (Rooftop Solar) is Handled: The ARPA Board, at its December 1 meeting, adopted a resolution to change its Wholesale Rate that deals with its Avoided Cost Rate. ARPA’s Avoided Cost Rate is the rate that is used to reimburse members and their customers for the excess output that comes from renewable resources such as rooftop solar units. ARPA’s Distributed Generation Policy allows its member city utilities to offer “Net Metering” whereby the city utility customers with roof top solar (or other renewable generation types) can generate a portion of their own power use. If any of the power generated is in excess of what the customer can use, it is generated back to the grid. With this change, ARPA will now reimburse the customers for that excess energy at the same average rate it pays for its other power supply. Rick Rigel, ARPA’s General Manager stated that “this change provides for a more fair and equitable reimbursement for those kWhs that are generated back to our member utilities”. The change is effective January 1, 2023.

Summary of October 2022 Financial and Operating Statements: During the month of October, revenue from power sales were under budget by 5.3% and total cost of goods sold were under budget by 7.8%. Net Revenue for the month was $219,801. Year to Date revenues from power sales are only slightly less than budget and cost of goods sold are 4.4% under budget. Net Revenues YTD are $5.84 million. Member Energy sales were 5% less than budget in October and were nearly the same as October 2021. Member Sales YTD are slightly less than budget and slightly less than 2021 sales.

ARPA Board Adopts Resolution in Response to the CEO Application for Grid Resilience Funding: The Department of Energy (DOE) has allocated Colorado funds to improve grid resiliency through the Infrastructure Investment and Jobs Act (IIJA) that will be administered through the Colorado Energy Office (CEO). A portion of the funds are reserved for municipal utilities that serve rural areas. The ARPA Board adopted a Resolution urging the CEO to prioritize funding for rural municipal systems that will help harden and modernize their systems. Uses such as the replacement of aged utilities infrastructure, relocation of power lines, power pole management, and the undergrounding of electrical equipment.

Next ARPA Meeting: The next regularly scheduled meeting of the ARPA Board of Directors is Thursday, February 23, 2023. The meeting will be held at the Otero Junior College Student Center, 2001 San Juan in La Junta, CO. The meeting notice and agenda will be posted on ARPA’s website (arpapower.org) under Public Notices and will also be posted in a designated location in each of the member cities at least 24 hours in advance of the meeting. ARPA board meetings are open to the public.

BUSINESS OPERATIONS – November 2022

Notice of Proposed Budget: NOTICE IS HEREBY GIVEN that the proposed 2023 Budget for the Arkansas River Power Authority is currently available for inspection by the public, in the City Clerk’s Office at each member municipality.
The ARPA Board of Directors will hold a public hearing on the proposed Budget on December 1, 2022 at the Otero Junior College Student Center beginning at 10:15 AM. Any public comment or questions concerning the proposed 2023 Budget should be directed to Rick Rigel, General Manager, Arkansas River Power Authority, PO Box 70, Lamar, Colorado, 81052, phone number 719-336-3496, or email arpa@arpapower.org.

The proposed 2023 budget includes:
• Total Revenues of $30.67 million
• Power Supply costs of $14.89 million
• Transmission costs of $3.58 million
• A&G costs of $1.21 million
• Debt Service costs of $8.3 million

ARPA Welcomes 3 New Members to the Board of Directors: Aaron Williamson (Trinidad), Heath Piper (Springfield) and Randy Holland (Holly). Aaron Williamson, a Trinidad City Councilmember, was appointed to the ARPA Board of Directors by the Mayor and City Council in June 2022. Heath Piper is a Springfield native. He is a certified journeyman lineman and has served as the electric superintendent for the Town of Springfield for the past 2 years. Randy Holland was recently hired as the administrator for the Town of Holly and was appointed to the ARPA Board of Directors by the Holly Board of Trustees. Randy has been involved with municipal administration of public works for the past 38 years.

Summary of September 2022 Financial and Operating Statements: During the month of September, revenue from power sales were slightly under budget and total cost of goods sold were under budget by 5.8%. Net Revenue for the month was $388,457. Year to Date revenues from power sales are right on budget and cost of goods sold are 4.1% under budget. Net Revenues YTD are $5.62 million. Member Energy sales were 3% less than budget in September and 4% less when compared to September 2021. Member Sales YTD are slightly less than budget and slightly less than 2021 sales.

Next ARPA Meeting: The next regularly scheduled meeting of the ARPA Board of Directors is Thursday, December 1, 2022. The meeting will be held at the Otero Junior College Student Center, 2001 San Juan in La Junta, CO. The meeting notice and agenda will be posted on ARPA’s website (arpapower.org) under Public Notices and will also be posted in a designated location in each of the member cities at least 24 hours in advance of the meeting. ARPA board meetings are open to the public.

BUSINESS OPERATIONS – September 2022

ARPA Board Reviews Preliminary 2023 Budget: A preliminary budget was presented to the ARPA Board of Directors at its August 25 meeting. The budget includes total revenues of $30.6 million, power supply costs of $14.9 million, transmission costs of $3.5 million, A&G costs of $1.2 million, and debt service costs of $8.3 million. The budget also includes achieving a 1.29x debt service coverage and full funding for bond reserve accounts as required by ARPA’s bond covenants. There is no rate increase included in the 2023 budget. ARPA adopted a rate decrease in 2021 that is carried forward in its 2023 budget, and the lower rate is projected to remain in effect through 2024. The budget hearing and final approval of the 2023 budget is scheduled for December 1 at the Board of Directors meeting to be held in La Junta.

FitchRatings Reaffirms ARPA’s Investment Grade Credit Rating of BBB- with Stable Outlook: Fitch Ratings recently affirmed its investment grade BBB- long-term rating on the Arkansas River Power Authority’s power revenue bonds. The outlook is stable. The rating reflects ARPA’s strong revenue defensibility and strong operating risk profile. ARPA’s strong revenue defensibility is derived from its all-requirements long-term wholesale power supply contracts and the independent legal ability of ARPA, and its members, to raise electric rates if necessary. Operating risk is characterized by a low operating cost burden, reflecting ARPA’s low purchased power costs. ARPA’s power supply is provided primarily through a purchase contract through January 31, 2025. The Rating weaknesses identified included ARPA’s debt service being elevated due to the issuance of debt related to revenue bonds associated with the Lamar Repowering Project. The full Fitch rating report can be viewed here.

Summary of July 2022 Financial and Operating Statements: During the month of July, revenue from power sales were 0.5% under budget and total cost of goods sold were under budget by 5.9%. Net Revenue for the month was $803,576. Year to Date revenues from power sales are 0.5% less than budget and cost of goods sold are 4.4% under budget. Net Revenues YTD are $4.53 million. Member Energy sales were 1.1% less than budget in July and 1.4% less when compared to July 2021. Member Sales YTD are 0.7% less than budget and 0.9% better than 2021.

Western Area Power Administration Drought Impact on Hydro-Electric Facilities Update: The current ongoing drought has severely impacted the hydro generation allocations ARPA has with the Western Area Power Administration (WAPA). ARPA has an allocation of hydropower generated by the Loveland Area Projects (WAPA-LAP) and the Lamar Utilities Board has an allocation from the Colorado River Storage Projects (WAPA-CRSP). These two allocations collectively, provide approximately 28% of ARPA’s power supply.
WAPA-LAP (the significantly larger of the two allocations) has provided notice of implementing a “Drought Adder” to its rate effective January 1, 2023. The rate adjustment will increase the WAPA-LAP rate to ARPA by approximately 16%. ARPA is absorbing the increase and does not anticipate a rate increase resulting from the WAPA rate adjustment.
WAPA-CRSP has had to increase its rate and reduce deliveries to its customers due to declining water levels that provide hydro-generation from its Glen Canyon Dam facility. WAPA-CRSP implemented a “Deliverable Sales Amount” (DSA) program effective December 1, 2021, that reduced deliveries of power to its customers by approximately 30% and increased rates 11%. ARPA is providing the delivery shortfall to Lamar as WAPA evaluates the impact of the two-year program and its long-term options for meeting its hydro-electric delivery obligations.

Next ARPA Meeting: The next regularly scheduled meeting of the ARPA Board of Directors is Thursday, October 27, 2022. The meeting will be held at the Otero Junior College Student Center, 2001 San Juan in La Junta, CO. The meeting notice and agenda will be posted on ARPA’s website (arpapower.org) under Public Notices and will also be posted in a designated location in each of the member cities at least 24 hours in advance of the meeting. ARPA board meetings are open to the public.

BUSINESS OPERATIONS – June 2022

2022 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.

Two-Year Plan:

• Work on the transition of partial requirements supply from Xcel Energy to Guzman Energy at the end of the existing agreement in January 2025.
• Consider repowering of the existing wind turbines, taking into account economic feasibility and the expected life of the existing turbines.
• Monitor developments related to regional transmission organization (RTO) and organized energy markets.
• Continue low-cost energy efficiency measures.
• Continue trend toward replacing street lighting with LED fixtures.

Five-Year Plan:

• Complete transition from Xcel Energy to Guzman Energy for partial requirements supply.
• Continue actions from Two Year action plan.

The 2022 Integrated Resource Plan can be found in its entirety on the website of the Arkansas River Power Authority at:  http://www.arpapower.org/irp/

Eight Students Receive Scholarship Funding from ARPA and its Member Municipalities: In 2000 ARPA established a College Scholarship Program that awards a $1,000 scholarship to one high school senior in each of the high schools served by ARPA members. The Program is administered through the member municipalities of Holly, La Junta, Lamar, Las Animas, Springfield and Trinidad. The scholarships are funded equally between ARPA and its members. Congratulations to the following individuals on receiving the scholarship for the 2022-2023 school year: Holly: Jailynn Lopez; Lamar: Chloey Palmer; McClave (Lamar): Rylan Herrera and Cassidy Jagers; La Junta: Jacob Reeder; Trinidad: Mikailah Feinman; Springfield: Alayah Meltabarger and Las Animas: Caden Morlan. Good luck Students in your future endeavors!

Summary of April 2022 Financial and Operating Statements: During the month of April, revenue from power sales were less than budget by 4.1% and total cost of goods sold were under budget by 9.9%. Net Revenues from Operations for the month were $1,312,575. Year to Date revenues from power sales are just under budget by 1.2% and cost of goods sold are 3.6% under budget. Net revenues YTD are $2,742,159. Member Energy sales for April were 3.9% less than budget. Member Sales YTD are 0.5% under budget and approximately 0.2% less than 2021. Wind generation was 14% of the power supply resources for April.

ARPA Enters Into Environmental Attributes Management Agreement with Guzman Energy: ARPA, and one of its members, Lamar Utilities Board, together own five wind turbine generators. Wind is a renewable resource and the power produced from those generators, combined with other resources, make up the power supply portfolio of the six ARPA member municipalities. The environmental attributes associated with the renewable energy can be used to offset, or reduce, emissions from conventional generation. Through the Management Agreement, Guzman Energy will manage the marketing of ARPA’s Environmental Attributes and will serve as ARPA’s “Authorized Representative” within the Western Renewable Energy Generation Information System (WREGIS). WREGIS is an independent, renewable energy generation tracking system for the Western Interconnection territory. WREGIS tracks the renewable and environmental attributes associated with renewable energy generation.

Next ARPA Meeting: The next regularly scheduled meeting of the ARPA Board of Directors is Thursday, August 25, 2022. The meeting will be held in La Junta at the Otero Junior College Student Center, 2001 San Juan. The meeting notice and agenda will be posted on ARPA’s website (arpapower.org) under Public Notices and will also be posted in a designated location in each of the member cities at least 24 hours in advance of the meeting. ARPA board meetings are open to the public.

BUSINESS OPERATIONS – March 2022

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 through March 28, 2022. 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 26, 2022. Interested parties may provide written comments directly to ARPA 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 College Scholarship Funding: The Arkansas River Power Authority Board of Directors established the College Scholarship Program in 2000. 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. Currently, 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.

Summary of January 2022 Financial and Operating Statements: During the month of January, revenue from power sales were 2.4% less than budget and total cost of goods sold were right on budget. Net Revenue for the month was $294,110. Member Energy sales were 1% less than budget in January but 2.6% better when compared to January 2021.

Town of Holly Trustees Appoints New Representative to the ARPA Board of Directors: Blaine Ice, a Trustee for the Town of Holly since April 2020, was appointed to the ARPA Board of Directors beginning January 1, 2022. Mr. Ice replaces outgoing Board Member Calvin Melcher who represented the Town of Holly on the ARPA Board from February 2019 through December 31, 2021. We wish to thank Calvin Melcher for his past service on the Board of Directors.

ARPA Holds Special Election for Vice President: At the February meeting the Board of Directors held a special election and elected Ron Clodfelter (Las Animas) to the office of Vice President. Other officers include P. Lorenz Sutherland (Pres., La Junta), Gary Cranson, (Treas., La Junta), and staff member Arvenia Morris serves as Secretary. The officers will hold office until the next annual election in May.

ARPA Board Receives Report on Financial Compliance: Aarin Ritter, Finance Manager for ARPA provided the annual Financial Compliance Report to the ARPA Board at its February meeting. Ms. Ritter reported that the Authority is in full compliance with its Bond Covenants including fully funding its Bond Accounts, meeting its Debt Service Coverage Ratio, and the posting of its ongoing financial disclosures, including the quarterly financial reports, on the Municipal Securities Rulemaking Board website- EMMA. ARPA’s financial disclosures can be found at https://dataport.emma.msrb.org.

Next ARPA Meeting: The next regularly scheduled meeting of the ARPA Board of Directors is Thursday, May 26, 2022. The meeting will be held in La Junta at the Otero Junior College Student Center, 2001 San Juan. The meeting notice and agenda will be posted on ARPA’s website (arpapower.org) under Public Notices and will also be posted in a designated location in each of the member cities at least 24 hours in advance of the meeting. ARPA board meetings are open to the public.

BUSINESS OPERATIONS – December 2021

Integrated Resource Plan (IRP): The Arkansas River Power Authority is in the process of preparing an 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. The IRP must be submitted to WAPA by July 1, 2022.

One of the requirements of EPAMP is to provide opportunity for public participation. ARPA will accept written and verbal comments from affected retail customers of the six ARPA communities at its February 24, 2022 meeting and for a thirty working day period following the February 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 26, 2022.

Interested parties may provide written comments directly to ARPA outside of the listed 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 Approves Power Sales Agreement with Guzman Energy, LLC: The Board of Directors of the Arkansas River Power Authority approved a resolution to enter into a Power Sales Agreement with Guzman Energy, LLC, headquartered in Denver, CO. The Agreement which is for the purchase and sale of electricity and related support functions begins February 1, 2025 and extends through 2043. Guzman Energy will provide power supply, scheduling, and transmission services to the Authority. With this Agreement comes predictable, fixed wholesale power pricing that ARPA believes will result in lower wholesale power rates for its member communities.

ARPA Board Adopts 2022 Budget: At its December meeting the ARPA Board of Directors approved its operating budget for 2022 in the amount of $24,858,361. Rates will remain unchanged and stable for the 2022 budget which includes:

• Revenues of approximately $30.46 million
• Power supply expense of approximately $14 million
• Transmission expense of approximately $3.5 million
• A&G expense of approximately $1.3 million
• Debt Service expense of $8.3 million

Summary of October 2021 Financial and Operating Statements: During the month of October, revenue from power sales were 4.7% less than budget and total cost of goods sold were under budget by 10%. Net Operating revenue for the month was $440,512. Year to Date revenues from power sales are just under budget (0.4%) and cost of goods sold are 3.1% under budget. Net Operating revenues YTD are $5 million. Member Energy sales were 5.3% less than budget in October and 4.5% less when compared to October 2020.

Operating Committee Reviews Distributed Generation (DG) Policy: The ARPA Operating Committee reviewed ARPA’s DG Policy at its meeting in November. The focus of the meeting dealt with the reporting requirements and compensation method related to residential and commercial solar installations in the member’s communities. The Committee will discuss the policy in further detail at its February meeting.

Next ARPA Meeting: The next regularly scheduled meeting of the ARPA Board of Directors is Thursday, February 24, 2022. The meeting will be held in La Junta at the Otero Junior College Student Center, 2001 San Juan. The meeting notice and agenda will be posted on ARPA’s website (arpapower.org) under Public Notices and will also be posted in a designated location in each of the member cities at least 24 hours in advance of the meeting. ARPA board meetings are open to the public.

BUSINESS OPERATIONS – October 2021

ARPA Board Reviews 2022 Budget: The ARPA Board of Directors reviewed its proposed 2022 budget at the September meeting. The proposed 2022 budget includes:

• Power Sales Revenues of $30.46 million
• Power Supply costs of $14.23 million
• Transmission costs of $3.5 million
• A&G costs of $1.3 million
• Debt Service costs of $8.27 million

ARPA’s 2022 Budget Hearing is scheduled for December 2, in La Junta at the Otero Junior College Student Center. 

ARPA’s Six Member Systems-A bit of History: Holly: The Town of Holly purchased its municipal utility in 1949. The utility serves an area of approximately 24 square miles with 31 miles of distribution facilities. Holly manages and operates 1.8 MW of diesel generation for ARPA. La Junta: The La Junta municipal electric utility was created in 1939 and serves an area of approximately 10 square miles. La Junta operates approximately 55 miles of distribution line and 6.3 miles of transmission line. Lamar: The Lamar municipal electric utility has been in existence since 1920 and serves approximately 170 square miles, comprised of areas both within and outside the municipal boundaries. Lamar’s facilities include approximately 345 miles of distribution line and 36 miles of transmission line. Lamar operates and manages ARPA’s wind turbines. Las Animas: The Las Animas municipal electric utility was established in 1941 and serves an area of approximately 22 square miles. Las Animas’ facilities include about 50 miles of distribution line and 13 miles of transmission line. Springfield: The Springfield municipal electric utility was established in 1947 and serves an area of approximately two square miles. Springfield has approximately 26 miles of distribution line, which includes four miles of distribution line to the ARPA wind turbine in Springfield. Trinidad: The Trinidad municipal electric utility was established in 1949 and serves an area of approximately 9 square miles. Trinidad’s facilities include approximately 72 miles of distribution line.  Trinidad operates and manages 5.8 MW of diesel generation for ARPA.

Summary of August 2021 Financial and Operating Statements: During the month of August, revenue from power sales were 6.3% better than budget and total cost of goods sold were over budget by 1.5%. Net Operating revenue for the month was $827,483. Year to Date revenues from power sales are just under budget (0.3%) and cost of goods sold are 2.9% under budget. Net Operating revenues YTD are $4.1 million. Member Energy sales were 5.9% more than budget in August and 1.1% less when compared to August 2020. Member Sales YTD are 0.5% less than budget and 3% lower than 2020.

Next ARPA Meeting: The next regularly scheduled meeting of the ARPA Board of Directors is Thursday, October 28, 2021. The meeting will be held in Trinidad at the Golf Course Clubhouse, 1415 Franklin D Azar Drive. The meeting notice and agenda will be posted on ARPA’s website (arpapower.org) under Public Notices and will also be posted in a designated location in each of the member cities at least 24 hours in advance of the meeting. ARPA board meetings are open to the public.

BUSINESS OPERATIONS – September 2021

ARPA Board Reviews Preliminary 2022 Budget: A preliminary budget was presented to the ARPA Board of Directors at its August 26 meeting. The budget includes total revenues of $30.4 million, power supply costs of $14.3 million, transmission costs of $3.5 million, A&G costs of $1.4 million, and debt service costs of $8.3 million. This debt service amount is a reduction of $1.2 million from the 2020 budget due to the retirement of the 2010 Bonds in January 2021. The budget also includes achieving a 1.29x debt service coverage and full funding for bond reserve accounts as required by ARPA’s bond covenants. There is no rate increase included in the 2022 budget. ARPA adopted a rate decrease in 2021 that is carried forward in its 2022 budget, and the lower rate is projected to remain in effect through 2024. The budget hearing and final approval of the 2022 budget is scheduled for December 2 at the Board of Directors meeting to be held in La Junta.

FitchRatings Reaffirms ARPA’s Investment Grade Credit Rating of BBB- with Stable Outlook: Fitch Ratings recently affirmed its investment grade BBB- long-term rating and underlying rating on the Arkansas River Power Authority’s power revenue bonds. The outlook is stable. The rating reflects ARPA’s strong revenue defensibility and strong operating risk profile. ARPA’s strong revenue defensibility is derived from its all-requirements long-term wholesale power supply contracts and the independent legal ability of ARPA, and its members, to raise electric rates if necessary. Operating risk is characterized by a low operating cost burden, reflecting ARPA’s low purchased power costs. ARPA’s power supply is provided primarily through a purchase contract through January 31, 2025. The Rating weaknesses identified included ARPA’s debt service being elevated due to the issuance of debt related to revenue bonds associated with the Lamar Repowering Project. The full Fitch rating report can be viewed here.

Summary of July 2021 Financial and Operating Statements: During the month of July, revenue from power sales were 1.9% under budget and total cost of goods sold were under budget by 7.7%. Net Operating revenue for the month was $870,198. Year to Date revenues from power sales are 1.5% less than budget and cost of goods sold are 3.6% under budget. Net Operating revenues YTD are $3.27 million. Member Energy sales were 2.5% less than budget in July and 4.9% less when compared to July 2020. Member Sales YTD are 1.6% less than budget and 3.5% lower than 2020.

Western Area Power Administration CRSP Hydro Update: WAPA is currently reviewing a 24-Month Study report for the Colorado River. The Colorado River Storage Project sells hydropower generated at 11 federal dams in the Upper Colorado River Basin, including Glen Canyon Dam. The Colorado River is at historically low water levels following two decades of drought. When there is less hydropower, replacement power may need to be purchased in the open market, to fulfill contractual obligations, which is frequently more expensive than federal hydropower. WAPA is working with power customers to mitigate drought impacts and alleviate any loss of hydropower generation. Unfortunately for WAPA-CRSP customers, it appears the hydro-allocations will be reduced to reflect the decreased generation from the hydro generating resources.

Next ARPA Meeting: The next regularly scheduled meeting of the ARPA Board of Directors is Thursday, September 30, 2021. The meeting will be held at the Holly Senior and Community Center, in Holly, CO. The meeting notice and agenda will be posted on ARPA’s website (arpapower.org) under Public Notices and will also be posted in a designated location in each of the member cities at least 24 hours in advance of the meeting. ARPA board meetings are open to the public.

BUSINESS OPERATIONS – August 2021

2020/2021 Operations: As the ARPA Board prepares to begin its budgeting process for 2022, it does so by looking back over a handful of significant events that occurred during the first half of 2021. The events ranged from the repurposing and demolition of the Authority’s coal fired Lamar Repowering Plant to new legislation impacting the operations of electric utilities statewide. The first two significant events began with the new year. The Authority reduced its basic energy rate by 3.6%. The rate decrease became effective as of January 1 and followed on the heels of a rate reduction that was implemented in 2019. The two rate reductions have lowered ARPA’s total all-in-rate to its members by approximately 4.5%.

In January, the Authority also retired approximately $14.8 million in debt by paying off its 2010 bonds. The financial impact resulted in an annual cost savings of approximately $1.2 million. This, in combination with refinancing ARPA’s entire debt (which occurred in 2018), was instrumental in ARPA’s ability to reduce its rates.

In late 2020, ARPA executed a contract for the partial repurposing and partial demolition of its Lamar power plant. The two endeavors were completed at a cost of approximately $1.6 million. ARPA provided funds to the City of Lamar for the repurposing of the northside plant facilities from coal handling to agriculture processing. These facilities included two concrete storage domes, a rail car unloader, and conveyor system. The City, in turn, is working with a private enterprise to repurpose the equipment and property. The demolition occurred for the plant’s coal fired-boiler, steam turbine generator, and baghouse. The demolition work began shortly after the first of the year and was substantially complete by the end of June.

In 2019, the Colorado legislature set goals for the reduction of Green House Gases (GHG) that will require utilities to reduce their carbon emissions. During this past legislative session, additional reporting requirements were developed related to the GHG reduction effort, and the Air Quality Control Commission was assigned the task of developing programs to meet the GHG reduction goals and address Environmental Justice. The legislature also established a State Electric Transmission Authority with the intended purpose of developing badly needed transmission facilities in the state. The need for transmission is especially critical for the ARPA members and Southeast Colorado. Southeast Colorado has some of the best renewable attributes in the state for solar and wind, but additional transmission facilities are needed to develop these resources.

Summary of June 2021 Financial and Operating Statements: During the month of June, revenue from power sales were just better than budget and total cost of goods sold were under budget by 1.6%. Net Operating revenue for the month was $679,058. Year to Date revenues from power sales are 1.4% less than budget and cost of goods sold are 2.7% under budget. Net Operating revenues YTD are $2,403,036. Member Energy sales were 1.7% less than budget in June and 6.8% less when compared to June 2020. Member Sales YTD are 1.4% less than budget and 3.2% lower than 2020.

Next ARPA Meeting: The next regularly scheduled meeting of the ARPA Board of Directors is Thursday, August 26, 2021. The meeting will be held at the Lion’s Den in Springfield, CO. The meeting notice and agenda will be posted on ARPA’s website (arpapower.org) under Public Notices and will also be posted in a designated location in each of the member cities at least 24 hours in advance of the meeting. ARPA board meetings are open to the public.