2017

Rolla Municipal Utilities

Provided to Rolla City Council

May 15, 2017

Fiscal Year 2nd Quarter Report

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TABLE OF CONTENTS

1945 Rolla Board of Public Works Statement 3

Second Quarter Financial Recap 4

Status of Pending Projects 5 -7

Miscellaneous 7-9

2017 Comparative Rate Information 10-12

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Rolla Herald - November 1945

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SECOND QUARTER FINANCIAL RECAP (Unaudited)

OPERATING INCOME and EXPENSES

2nd Quarter

FY 2016 2nd Quarter

FY 2017 CHANGE

OPERATING REVENUES $15,311,609 $14,891,904 ($419,705)

OPERATING EXPENSES $15,081,312 $14,746,350 ($334,962)

OPERATING INCOME $230,297 $145,554 ($84,743)

OTHER INCOME & EXP. $475,617 $280,047 ($195,570)

NET INCOME $705,914 $425,601 ($280,313)

Upon completion of the second quarter of FY 2017, Operating Revenues are down

$419,705 as compared to last year. Operating Expenses are down $334,962 for the same period resulting in an Operating Income of $145,554, which is down $84,743. When combined with miscellaneous income and expenses, RMU experienced a Net income of $425,601, which down $280,313 as compared to the second quarter of FY2016.

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STATUS OF PENDING PROJECTS

ELECTRIC DEPARTMENT

ELECTRICAL EXTENSIONS/UPGRADES o Missouri Highway Patrol Troop I Headquarters: Directional bore for new primary, new riser

pole, and new service with three-phase underground and padmount transformer. Started, November 17, 2016. Ongoing.

o K D Gardens, Vichy Road – Set one new pole, extended underground primary, set two transformers and installed new service. Started, November 22, 2016. Ongoing.

o Veterans’ Park – New underground primary, set transformer and installed service. Started, December 12, 2016. Ongoing.

o 10th Street and Angus Valley Drive – Pole replacement for CenturyLink. Started, January 26, 2017. Completed, January 30, 2017.

o City of Rolla Wastewater Lift Station, HyPoint – Replaced transformer and service for installation of larger pumps. Started, February 9, 2017. Completed, February 9, 2017.

o Johnson Laird between Highway 72 and Richard Drive – Overhead 4kV primary and secondary installation. Started, January 26, 2017. Completed, February 15, 2017.

RMU participates in Rolla High School "Experts in the Classroom"

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o Annual dielectric and structure testing by Mid America Testing. February 20, 2017. o Parkwood Drive and Kent Lane – Reconfiguration of 4kV overhead. Started, February 22,

2017. Completed, March 22, 2017. o 12kV Distribution System Connection – Old St. James Road and Nagagomi Substation –

Conversion of 4kV to 12kV distribution system. Started, February 23, 2017. Ongoing. o Country Ridge Road and Palmer Court – Installed four street lights and underground

conductor. Started, February 23, 2017. Completed, March 28, 2017. o Poe’s Rural and City Gas Company, 2052 Old St. James Road – Installed new pole,

transformer and service. Started, March 7, 2017. Completed, April 20, 2017. o Family Video, 403 W 6th Street – Installed transformer. Started, March 17, 2017.

Completed, March 23, 2017. o Fairground Substation – Replaced failed busbars and heaters. March 8, 2017. o Hutchison Drive – Rebuild single-phase overhead 4kV distribution system. Started, March

17, 2017. Ongoing. o 1509 Ozark – Installed transformer and pedestal. Started, March 17, 2017. Completed,

March 20, 2017. o Casey’s General Store, Highway 72 – Replaced pole for upgrade. Started, April 7, 2017.

Ongoing. o IHOP, North Bishop – Set transformer, installed primary conductor and new service.

Started, March 30, 2017. Completed, March 31, 2017.

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WATER DEPARTMENT

WATER MAIN INSTALLATION o Old St. James Road – Iowa Street and Arkansas Avenue to 10th and Old St. James Road –

Replaced 10” and 12” water mains with 12” and 16” PVC. Started, January 3, 2017. Ongoing.

o McCutchen Road – Replaced 16” water main. Started, January 18, 2017. Completed, March 31, 2017.

o HyPoint Well #3 – Replaced piping, electrical and treatment equipment. Started, February 4, 2016. Ongoing.

o Bacteriological Laboratory – Inspected and Certified by Missouri Department of Health and Human Services. February 23, 2017.

o Conversion of current water meters to radio reads – Routes 5 and 6. Started, April 7, 2017. Completed, April 10. 2017.

Thirteen (13) WATER TAPS

FIBER

o Substation regulators – Installed new controllers. Started, January, 2016. Completed, February, 2017.

o HyPoint Tower #1 – Installed PLC to replace RTU. Started, March 30, 2016. Completed, February 14, 2017.

o Upgrade of RTU’s to PLC’s at water towers and wells. Started, March 30, 2016. Ongoing. o 1000 N Pine Street – New fiber service. Started, March 10, 2017. Completed, March 22,

2017. o RMU staff breaker testing and coordination with SCADA provider in reviewing programming

and operations. Ongoing.

o Substation voltage regulator controllers – Operational issues with upgraded controllers. Staff working with manufacturer to resolve issue. Ongoing.

MISCELLANEOUS

PERSONNEL/TRAINING

o Hired Customer Service Representative, January 30, 2017.

o In house promotion from Customer Service Representative to Grounds Keeper/Tree Trimmer. February 27, 2017.

o Hired Night Serviceman, March 6, 2017.

o Hired Accounting Assistant, March 22, 2017.

PRESENTATIONS o Discussion and Information to Missouri Science and Technology student group. January

23, 2017. o Field presentation at RMU well site for Missouri Science and Technology water

resources class. February 10, 2017. o Missouri Science and Technology Earth Day Celebration. April 20, 2017.

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o Rolla Lions Club presentation, “Investing in Rolla”. April 6, 2017.

TRAINING o MPUA Spring Tech Days – Held in Rolla, MO, March 15, 2017. 13 attended. o Missouri Department of Natural Resources; Small Water System Basics – Held in Rolla,

MO, April 13, 2017. 2 attended. o American Water Works Association; Webinar – Foundations in Water Loss: Resolving

Apparent Water Losses at your Utility. April 12, 2017. 2 attended. o APPA; Webinar – Reliable Public Power Provider. April 11 & 18, 2017. 1 attended.

MISCELLANEOUS o American Public Power Association (APPA) – Certificate of Excellence – Recognition of

utilities that achieve excellence in reliability by significantly outperforming the electric industry average as reported by the Energy Information Administration.

o RMU Service Department remodel – Started March 20, 2017. Ongoing. o RMU is currently working to establish an on-line bill paying system (Paymentus).

Management is working with SunGard in completing installation of required software which will accommodate Paymentus installation. The on-line bill paying system should be operational in the near future.

MJMEUC/MoPEP UPDATES o Members of RMU management met with MPUA senior staff to discuss a Rolla Board of

Public Works President’s wind energy proposal. After review and discussion by MPUA and MoPEP, it was concluded that the proposal did not meet the objectives of the MoPEP Pool.

o MJMEUC Board of Directors authorized staff to file with the Federal Energy Regulatory Commission (FERC) requesting an exemption from certain Public Utilites Regulatory Policy Act (PURPA) requirements. PURPA requirements are for electric utilities to purchase the output of certain qualifying facilities that may locate in their territories which creates a risk that qualifying facilities of 20MW or greater may demand a MoPEP member city to purchase the output. This requirement would lead to higher cost for MoPEP members should the connection be at a retail distribution level instead of wholesale such as MJMEUC. MJMEUC requests appropriate action be taken at local level to support the effort.

o The Utility Alliance has created MPUA Resources Service Group to address and assist smaller communities that are having issues regarding stagnant or sagging growth, reduced revenues, deteriorating assets and/or service, new demands on service, inability to implement technology due to staffing, etc. The strategy is to develop resources for these smaller communities.

o State Capital bill HB 656 is still a concern and is being watched closely. HB 656 is a small cell pole attachment bill. MPUA/MoPEP is working with sponsors in hopes of removing language that allows companies to attach to utility poles, water towers and buildings without any contracts. This is a continual effort to get utility owned poles defined as right-of- way. Work continues to mitigate those issues.

o MoPEP has created a sub-committee from the Services and Rates Committee. The working group from Rates and Resources sub-committee will review power resources,

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load forecasts, market activity, rate structuring and other initiatives and report their recommendations to the Service and Rates Committee.

o A two day hearing was held by Missouri Public Service Commission regarding Clean Line Energy’s Grain Belt Express Project. Six municipal Utilities were in attendance the first day with three attending the second day. A ruling is expected soon.

o Ameren received an approval of a $92M rate increase which includes a 12.5% increase in customer charges. KCP&L’s requested 7.5% increase is currently going through to MoPSC processing. Locally, Intercounty Electric recently announced increases to their availability and kWh charges effect beginning April, 2017.

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2017 COMPARATIVE RATE INFORMATION

Requests for residential rate information were sent to several utilities within a 60 mile radius of Rolla. The following is a summary of the results received.

Rate comparisons do not indicate the level of service provided with the actual commodity.

Water Residential: Based on a Thirty (30) day month (5/8" meter) Consider:

Type of source water

Type of treatment

Level of Service supplied

Condition of system

ISO Rating & water system

Capital project budget

Available response equipment

Response to customers/leaks

NOTE: Rate change from previous year.

5000 Gallons 2016 2017

St. James $15.82 $15.82

St. Robert $14.44

Cuba $13.40 $13.40

Hermann $16.90 $39.30

Lebanon $15.19 $15.19

Salem No response No response

Owensville $18.20 $18.20

Waynesville $23.75 $24.50

Richland $18.15 $18.15

Rolla $23.50 $22.92

Houston $29.52 $30.46

Newburg $24.40 $29.22

Sullivan $28.79 $28.79

Public Water #2 of Phelps County No response $41.15

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2017 COMPARATIVE RATE INFORMATION (con’t)

Electric Residential: Based on a Thirty (30) day month Consider:

Condition of System

Level of Service Provided

Outage response

Outage prevention/tree trimming

Safety and Training

Capital project budget

Available response equipment

Long term planning

*Ameren adjusts $.00124/kWh 3 times per year Rolla has a PCA of $-0.0053

**Crawford Electric has $26 SAF + $.0813 kWh

***Sullivan has FAC of $.0063/kWh Summer rates

^Cuba has mthly adjusted FAC Winter rates

^^Richland has adjustable FAC

^^^St. James has a 6% pilot Note: Rate change from previous year

2016 2017

700 kWh 1300 kWh 2000 kWh 700 kWh 1300 kWh 2000 kWh

IOU

AmerenUE **$93.29 **$166.37 **$251.63 *$97.55 *$173.45 *$262.00

$68.51 $104.68 $145.21 $70.46 $107.96 $150.10

Co

-Op’s

Crawford $82.91 $131.69 $188.60 **$82.91 **131.69 **$188.60

Intercounty $84.26 $134.62 $193.38 $90.60 $142.80 $203.70

Gascosage $78.48 $116.52 $160.90 $81.50 $123.50 $172.50

Laclede $82.20 $126.36 $177.88 $80.70 $129.30 $186.00

Three Rivers $81.63 $128.97 $183.50 $86.13 $133.61 $192.64

MM

MP

EP

Cit

ies

Sullivan $79.55 $130.79 $187.49 ***$79.55 ***$130.79 ***$187.49

Cuba $73.98 $128.40 $190.14 ^$71.39 ^$123.59 ^$182.74

Houston $68.85 $113.55 $165.70 $69.90 $115.14 $167.92

Newburg $104.43 $165.89 $237.71

$104.43 $165.99 $237.81

$83.27 $139.19 $204.51 $83.28 $139.19 $204.43

Richland $81.00 $138.66 $205.93 ^^$97.58 ^^$15.58 ^^$223.33

Salem No Response No Response

St. Robert No Response $80.04 $129.25 $186.64

Mo

PE

P C

itie

s

Hermann $97.83 $155.97 $223.80 $97.83 $155.97 $223.80

Lebanon $80.36 $131.51 $187.72

$80.36 $131.51 $187.72 $76.70 $125.51 $179.13

Waynesville $87.30 $151.20 $225.75 $87.30 $151.20 $225.75

St. James $83.63 $144.97 $208.52 ^^^$83.64 ^^^$144.97 ^^^$208.53

Rolla $79.30 $132.70 $195.00 $78.59 $128.81 $187.40

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2017 COMPARATIVE RATE INFORMATION (con’t) NOTES: ELECTRIC

Ameren Missouri has a FAC of $.00124/kWh which is adjusted three times per year. They have an energy efficiency rate of $.003892/kWh which is not reflected in the comparative data. Rates were adjusted on April 1, 2017.

Crawford Electric has a $26 service availability charge plus $.083/kWh.

Intercounty Electric Cooperative increased their rates April 1, 2017, which are reflected in the comparative data.

Laclede Electric Cooperative had a rate increase effective April 1, 2017, which is reflected in the comparative data.

Three Rivers Electric Cooperative had a rate increase effective April 1, 2017, which is reflected in the comparative data.

City of Sullivan has a FAC of $.0063/kWh.

City of Cuba has a monthly adjustable FAC. It was $.0108 for the month of March, which is reflected in the comparative data.

City of Houston adjusts their rates every January.

City of Richland FAC adjustment is based on amount of power purchased from supplier. IMF is $16 as of April 1, 2017.

St. James Municipal Utilities could possibly see an increase of 1-3% in May, 2017. There is a 6% City pilot which affects the cost to the customer.

Rolla has a power cost adjustment of $0.0035/kWh.

WATER

Hermann Municipal Utilities has a $21.75 service charge plus $.0036 per gallon of water consumed.

St. James Municipal Utilities has a 6% City pilot fee added to water.

Rolla has a water cost adjustment of $-0.1160 per 1,000 gallons.