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MSR Public Power Agency

MEETING OF THE COMMISSION

Wednesday, June 22, 2016, 12:00 p.m. Navigant Consulting, Inc.

35 Iron Point Circle, Suite 225 Folsom, CA 95630

AGENDA Distribution:

Commissioners & Alternate Commissioners Others Modesto:

James McFall Steve Gross Martin Caballero (Alt) Alan Hockenson Martin Hopper1 Scott Van Vuren Ed Oborn Ana Vigil Cindy Worley Toxie Buriss Santa Clara: Pat Kolstad, (President) John Roukema Teresa O’Neill1 (Alt) Alan Kuratori Joyce Kinnear1 Ann Hatcher Redding: Barry Tippin (V.P.) 1 Ann Czerwonka1 Paul Cummings (Alt)

1 Please post agenda

M-S-R Public Power Agency

MEETING OF THE COMMISSION

Wednesday, June 22, 2016, 12:00 Noon Navigant Consulting, Inc.

35 Iron Point Circle, Suite 225 Folsom, California

AGENDA Any member of the public who desires to address the Commission on any item considered by the Commission at this meeting before or during the Commission’s consideration of that item shall so advise the Chair and shall thereupon be given an opportunity to do so.

CALL TO ORDER

ROLL CALL

CONSENT ITEMS 1 – 5 (All items are approved by a single action)

There will be no separate discussion of those items unless an item is removed at the request of any Commissioner or member of the public. Those items removed will be separately considered at the end of the consent agenda.

1. Minutes of May 18, 2016

2. Report of Summary invoices paid for May 2016 totaling $7,505,559.42

3. May 2016 Treasurer’s Report

4. June 2016 Outside Services Budget Versus Actual Report, (attached, Martin Hopper)

5. June 2016 WREGIS REC Status Report (attached, Martin Hopper)

END OF CONSENT ITEMS

ACTION ITEMS 6 - 9:

6. Status Reports (attached, Alan Hockenson)

a. San Juan Project Status Report

b. Southwest Transmission Projects Status Report

c. Pacific Northwest Projects Status Report

7. June 2016 General Manager’s Report (attached, Martin Hopper)

M-S-R Public Power Agency Commission Agenda Page 2 June 22, 2016

2016 MSR PPA Commission Meeting Agenda

8. Discussion and Possible Action Regarding Resolution 2016-01 Regarding Resolution of the Commission of the M-S-R Public Power Agency Approving the following:

a. The Defeasance of All or a Portion of the Series 2008L Bonds, Series 2008M Bonds, Series 2008N Bonds, and Series 2011O Bonds with certain proceeds from the sale of assets relating to the Southwest Transmission Project;

b. Approving the application of certain proceeds from said sale of assets to a Mine Reclamation Trust Fund and a Plant Decommissioning Trust Fund;

c. Approving the creation of a Debt Service Coverage Revolving Fund and the application of certain available moneys to said revolving fund;

d. Approving the form and authorizing the execution and delivery of an Escrow Agreement; and authorizing certain other actions in connection therewith (attached, Martin Hopper)

9. Discussion and Possible action Regarding Amendment No. 1 to Amended and Restated Mine Reclamation and Trust Funds Agreement (attached, Martin Hopper)

CONVENE CLOSED SESSION:

a. Existing Litigation: Government Code §54956.9 (d)(1) – 7 Cases (10th US Circuit Court of Appeals 11-9557 et al, NM-PRC Case No. 13-00390-UT, Supreme Court of New Mexico Case No. 35-697; EL15-213, EL11-44 – BPA, EF13-7-000 et al, BP-18-BPA)

RECONVENE OPEN SESSION

a. Report from closed session: Prior Sale of Real Property Conferences with Real Property Negotiators Pursuant to Government Code Section §54956.8, Property: Transmission facilities and entitlement connecting the West wing Substation, 11400 W. Hatfield Road, Peoria, Arizona, to the midpoint of the Victorville-Lugo transmission line.

ANNOUNCEMENTS FOLLOWING CLOSED SESSION

MEMBER REPORTS

PUBLIC COMMENT

CONFIRM DATE AND TIME OF NEXT MEETING

ADJOURN

ALTERNATE FORMATS OF THIS AGENDA WILL BE MADE AVAILABLE UPON REQUEST TO QUALIFIED INDIVIDUALS WITH DISABILITIES.

M-S-R PUBLIC POWER AGENCY DRAFT MINUTES

MEETING OF THE COMMISSION MAY 18, 2016

TheCommissionoftheM-S-RPublicPowerAgency(M-S-RPPA)metMay18,2016,at

theofficesofNavigantConsulting,Inc.(NCI),35IronPointCircle,Suite225,Folsom,CA,

95630. Present from Modesto Irrigation District (MID) were James McFall; present

fromSantaClarawerePatrickKolstad,and JohnRoukema;andpresent fromRedding

wasBarryTippin.AlsopresentwereConsultantAlanHockensonandGeneralCounsel

SteveGross.

ChairKolstadcalledthemeetingtoorderat12:12PM.Aquorumwasattainedwiththe

votingrepresentativesbeingMr.McFall,Mr.Kolstad,andMr.Tippin.

The Commission then considered approval of the Consent Calendar Items.

CommissionerMcFallnotedaneedforcorrectionoftheMembersrepresentativeslisted

inthedraftminutesofApril20,2016(ConsentItem1.) Itwasdiscussedandagreed

theminutescouldbeapprovedsubjecttocorrectionoftheidentifiedCommissioners.It

wasmovedbyCommissionerMcFallandsecondedbyCommissionerTippintoapprove

theConsentCalendar consistingof Items1, 2, 3, 4, and5 as listedbelow.Themotion

carriedunanimously.

1. MinutesofApril20,2016–approved,subjecttocorrection.

2. ReportofSummaryinvoicespaidforApril2016totaling$9,469,321.21–

notedandfiled.

3. April2016Treasurer’sReport–accepted.

4. May 2016 Outside Services Budget Versus Actual Report – noted and

filed.

5. May2016WREGISRECStatusReport–notedandfiled

Mr.HockensonthenbrieflyaddressedtheCommissionregardingtheSanJuanProject,

SouthwestTransmissionProject, andBigHornProject StatusReports andentertained

DRAFTMinutesM-S-RPublicPowerAgencyMeetingofMay18,2016Page2of3

questions thereon. He additionally elaborated on the two accidents at the San Juan

Generating Station requiring hospitalization and noted that all arrangements are in

place to discontinue transmission scheduling by May 25, 2016 when the operations

across the Mead-Phoenix and Mead-Adelanto Transmission Lines will cease and the

assetsdivested.Thereportswerenotedandfiled.

Ms.RyersofBakerTillyVirchowKrause,LLP(BakerTilly)andMr.ScottVanVurenof

MIDjoinedthemeetingtelephonicallywithMs.Ryersmakingadetailedpresentationto

the Commission regarding M-S-R PPA’s 2015 Audited Financials for Year ending

December 31, 2015. Included in this presentation were a number of required

communications and noted that M-S-R PPA received an “unqualified opinion” and

stated they found thereports tobe free frommaterialmisstatements. Shepresented

thehighlightsof the financial statements to theCommission. Shenotedbydefinition,

therewasaweaknessinInternalControlsbecauseoftheroleplayedbytheAuditorin

thepreparationofFinancialStatementsandexplainedthatallofthepublicentitiesshe

audits are identified as having thisweakness and that it is normal for entities of our

size. She expressed her appreciation for the assistance provided by staff and

management in the preparation of the audit. Itwasmoved by Commissioner Tippin

and seconded by Commissioner McFall to accept the Financial Statements and

Independent Auditor’s Report. Upon the call of the roll, the motion carried

unanimously.

ItwasmovedbyCommissionerTippinandsecondedbyCommissionerMcFalltoenter

into a recess at12:37P.M. Upon the call of the roll, themotion carriedunanimously.

TheCommissionreconvenedat12:42P.M. Atthispoint,Ms.RyersandMr.VanVuren

hadleftthemeeting.

TheCommissionthenretiredintoClosedSessionpursuanttoGovernmentCodeSection

54956.9(d)(1) – Conferencewith Legal Counsel – Existing Litigation – 7 Cases (10th

DRAFTMinutesM-S-RPublicPowerAgencyMeetingofMay18,2016Page3of3

US Circuit Court of Appeals 11-9557 et al, NM-PRC Case No. 13-00390-UT, Supreme

CourtofNewMexicoCaseNo.35-697,EL15-213,EL11-44-BPA,EF13-7-000etal,and

BP-18)at12:43P.M.UpontheconclusionoftheClosedSessionat1:00P.M.,theChair

then reported for the record,pursuant to theGovernmentCode, that theCommission

hadtakennoactionswhichrequirepublicdisclosureatthistime.

TheChairthencalledforPublicComment.Therebeingnone,theChairannouncedthat

thenextregularmeetingoftheCommissionwillbeheldWednesday,June22,2016,at

12:00 Noon, at Navigant’s offices in Folsom, CA. The Chair suggested the General

Manager consider the addition of an item for future meetings entitled “Member

Reports”or “MemberComments” forM-S-RMembers toshare information that isnot

otherwise on themeeting agenda. Themeetingwas then adjourned by the Chair at

1:02P.M.

StevenGrossSecretaryMacintosh HD:Users:martinhopper:My Laptop Documents:M-S-R Public Power Agency:Administrative:Commission:Minutes:2016Minutes:MSRPPAMinutes0416.doc

May-16Payee Description Period Covered Amount

LADWP Repair/Repave access to Mkt Pl. Feb-16 16,947.69$ MID Accounting & Coordination Svc Mar-16 61,757.61$ WREGIS Transfer Volume Fee Apr-16 267.83$ Montgomery & Andrews Professional Services Mar-16 70.40$ U.S. Bank Series 2008 M&N Apr-16 52,879.54$ U.S. Bank Series 1998 F&G Apr-16 315,666.22$ Tyler Insurance 2016 Broker Service Fee Mar-16 7,500.00$ Navigant Professional Services Mar-16 3,549.62$ SRP Mead-Phoenix Betterments Mar-16 102,020.87$ KBT Consulting Services Feb-16 29,048.04$ USDOE Firm Energy Mar-16 8,901.93$ TEP WSPP Energy Apr-16 838.78$ Martin Hopper Energy General Manager Services Apr-16 22,039.09$ KBT Consulting Services Mar-16 28,740.53$ PNM Weekly RFF Apr-16 5,000.00$ US Bank Bond Series 2011O Fees Apr-16 2,700.00$ US Bank Bond Series 2014Q Fees Apr-16 2,150.00$ BayTech Maintenance Apr-16 3,600.00$ Duncan Weinberg Legal Services Mar-16 43,254.40$ PNM Weekly RFF Apr-16 49,000.00$ SRP Mead-Phoenix O&M Mar-16 34,967.24$ Flynn Resources SWTP Analysis Mar-16 1,987.50$ USDOE Firm Energy Mar-16 8,901.93$ APPA 2016 National Conference May-16 755.00$ Porter Simon General Legal Services Apr-16 7,083.97$ Politico Legislative Services Apr-16 3,459.45$ Baker Tilly Audit Services Apr-16 16,153.00$ KBT Consulting Services Apr-16 26,035.99$ Flynn Resources SWTP Analysis Apr-16 705.00$ Redding Electric Utility Market Sale to TEP Dec-15 157.67$ City of Santa Clara Market Sale to TEP Dec-16 83.45$ Big Horn Wind Firm Energy Apr-16 2,482,583.27$ Iberdrola Renewables Shaping Apr-16 773,058.00$ PNM Weekly RFF May-16 208,000.00$ PNM Estimated Coal Apr-16 1,105,829.20$

Report of Summary Invoices PaidM-S-R Public Power Agency

LADWP Transmission Service A-V Apr-16 61,595.00$ US Bank Debt Service May-16 515,868.40$ Iberdrola Renewables BigHorn2 Power Apr-16 1,198,633.75$ PNM Demand Charge Apr-16 105,769.05$ PNM Weekly RFF May-16 198,000.00$ PNM Weekly RFF May-16 269,000.00$

7,774,559.42$ To Commission 6/22/16

Treasurer’s Report MAY 2016

M-S-R Public Power Agency Treasurer’s Report

Index

i

Treasurer’s Report for the Month of May 2016

Investment Portfolio Pie Chart

MSR / LAIF / US Treasury 2-Year

Average Maturity Report

General Fund:

Portfolio Summary

Portfolio Details – Investments

Portfolio Details – Cash

Investment Status Report – Investments

Investment Status Report – Cash

Investment Activity by Type

Activity Report LAIF

Trust Funds:

Portfolio Summary

Portfolio Details – Investments

Portfolio Details – Cash

Investment Status Report – Investments

Investment Status Report – Cash

Investment Activity by Type

Received Interest

Realized Gains and Losses

Purchases Report

MSR PUBUC POWER AGENCY TREASURER'S REPORT

FOR THE MONTH OF MAY 2016

UfliBESIBIC!ED ELlfliCS General Fund, net of MCCAA Member C8sh C8ll Reserve Acct.

BESIBICIED EUbi!S MSR 2008 Series l MSR 2008 Seties M MSR 2008 Series N MSR 2011 Series 0 MSR 2013 Series P MSR 2014 Series Q MSR Big Hom Wind Collat Acct. MSR Big Hom Shaping Accl. MSR SJ Coal Reclamation Trust

TOTAL FUNDS

DEMAND ACCOUNTS Union Bank - General Fund

INVESTMENTS (.See Attached,) Bankers Acceptances CertifiC&tes of Deposit(Coll.flns.) Commercial Paper(A1/P1) Corporate Notes-Medium Tenn Federal Agencies L.ocai Agency Investment Fund Money Market Accounts Repurchase Agreements U.S. Treasury lnstnments

TOTAL INVESTMENTS

Add: Deposits in transit less: OUtstanding checks

TOTAl CASH & INVESTMENTS

4130/2016

Cost Value 28,374,915 3517629

31.892,543

14,625,139 3,176,971 1,151,960 5,234,487

336 18,279,383

3,630,092 1,042,921 4 ,969,696

52,110,964

84,003.§28

Standard pet' Gov'tCode

40% No limit

25% 30"4

No Limit $65,000,000

No limit No limit No limit

BJND BALANCES

Receie!!! Disbursements

68,990,014 4,510,017

862,584 431,292 38,050 38,050 14,829 14,829

120,208 48,638 0 336

75,877 37,938 2,482,604 2,482,583

773,064 773,058 22,567 0

4,389,782 3,824,725

73,379,796 8,334,742

CASI::I 6 ltDli:SIIIEtlm

AcluaL 0.0% 0.0% 0.0% 4.1%

37.5% 52.1%

5.2% 0.0% .1..Z2'a

.l.IWll8

• Source of Market Value lnfomlation Is us Bank, Union Bank, and Bloomberg Fl~ Syetems

We certify that this statement is a true and correct record of transactions In the Treasury since the prior report. The agency has sufficient liquid assets on deposit to meet its obligations over the next 8 months. All investments are in compliance with the agency's ;;;;c· -~~ ~~T-"m'

5/31/2016

Cost Value 92,854,912

3 517 629 96,372,541

15,056,430 3,176,971 1,151,960 5,308,057

0 18,317,322 3,630,112 1,042,926 4,992,283

52,678,041

149,048,581

24,243,681

0 0 0

5,156,237 -46,751 ,012 64,974,823

8,443,113 0

1,479,918 124,804,901

0 0

149,048,581

5/3112016 5/3112016 ReseiVes: Unrealized Mkl Value* Mkl. Value* Gain/Loss

96,254,994 (117,547)

6,574,144 8,495,363 13,077 3,129,961 48,147 1,138 1,134,526 17,846 412 1,525,599 3,780,138 (2,320)

0 0 0 0 18,345,032 27,711 0 3,630,112 0 0 1,042,926 0 0 5,037,010 44,747

12,364,230 40,396,575 84,764

12,364,230 136,651,569 (32,782)

Corp Medium Term Notes7.15%

Federal Agency Issues2.77%

Managed Pool Accounts (LAIF)90.08%

M‐S‐R Public Power AgencyInvestment Portfolio May 2016

0.6980.70

0

0.5

1

1.5

2

2.5

3

Earnings Rate

MSR / LAIF / US Treasury 2‐YearMay 2016

MSR LAIF Treas Cons Matr 2Yr MSR Avg

0

100

200

300

400

500

600

Days

General Fund PortfolioAverage Maturity Report

Weighted Average Maturity

Investments

Managed Pool Account.a

Corporate Medium Term Notes

Federal Agency lssuea - Coupon

Investments

Cash

Passbook/Checking (not Included in yield calculations)

Total Cash and Investments

Total Earnings May31 Current Year

Average Daily Balance

Effective Rate of Return

Reporting period 05101/2016-0513112016 Data Updated: SET_MSRG: 06/0712016 13:07 Run Date: 0610712016-13:07

Plr v .. ue

84,974,623.01

5,000,000.00

2,000,000.00

71,974,823.01

24,243,880.74

96,218,303.75

Month Ending 26,652.81

41,889,317.58

0.75%

MSR Public Power Agency Portfolio Management

Portfoiio Summary May 31, 2016

Mllrtlet Book v-.. V1lue

64,974,623.01 84,974,623.01

5,038,750.00 5,156,236.88

1,997,940.00 1,998,000.00

72,011,313.01 72,128,859.89

24,243,880.74 24,243,680.74

98,254,993.75 96,372,540.63

No fiscal year history available

%of Portfolio T1nn

90.08

7.15 1,795

2.77 1,481

100.00% 170

170

D.yato MltUt1ly

367

271

35

35

Modesto Irrigation District 1231 -11th St.

Modesto, CA 95352 (209)526-7308

YTII 385 Equlv.

0.552

1.887

0.775

0.838

0.000

0.838

Portfolio MSRG CP

PM (PRF _PM1) 7.3.0 Report Vw. 7.3.5

"verage CUSIP lnve~~tment f# luuer Ba!.1nee

Managed Pool Aeeounts

SYSLAIF LA IF LocaiAgencylnvelbnentFund

Su~l and Average 33,387,526.24


38982G5NO 16340 Genenll Electric Captal Corp

94974BFGO 16709 Wells Fargo & Company

Subtotal end Average

Federal Agency Issues • Coupon

3136G1E88 111758 Federal Nafl Mig. Assoc.

Subtotal and Average

Total and Average

Data Updated: SET_MSRG: 06/07/2016 13:07 Rc.r~ Dale: 0610712016-13:07

5,151,238.88

1,198,000.00

41,861,317.58


Portfolio Details - Investments May31, 2016

Purchas• o ... ParV11Iue lhrket Value

64,874,823.01 &4,974,823.01

14,17 4,623.01 64,974,123.01

0311512012 3,000,000.00 3,034,170.00

1212812012 2,000,000.00 2,004,580.00

5,000,000.00 6,038,750.00

0212712013 2,000,000.00 1,997,940.00

2,000,000.00 1,197,940.00

71,174,823.01 72,011,313.01

Stated Book Value Rata

64,974,623.01 0.552

14,174,623.01

3,141,630.00 2.900

2,014,606.88 1.500

5,156,238.88

1,998,000.00 0.750

1,918,000.00

72,128,859.81

Page1

YTM Daysto Matul1ty S&P 385 Maturity Data

0.552 1 -------0.552

1.870 222 01/0912017

1.350 594 01/1812018 -------1.687 387

o.ns 271 0212712017 ---------0.775

0.638

271

35

Portfolio MSRG

CP PM (PRF _PM2) 7.3.0

l'lepott Var. 7 .3.5

CUSIP lnYHtmentt# luuer

Passbook/Checking Accounts

SYSGENERAL FUND GENERAL FUND Union Bank of Ca!ifomla

Average Blllance

Total Calh and IIMIItments

Data Updated: SET_MSRG: 06/0712016 13:07 Run Date: 0610712016-13:07

Ave,.ge Balance

0.00

41,869,317.158

MSR Public Power Agency Portfolio Management Portfolio Details- Caeh

May 31,2016

Purcha .. o.te ParVahut Market Value

01/01/1999 24,243,680.74 24,243,680.74

96,218,303.75 H,254,993.75

Stated Book Value Rate

24,243,&80. 7 4

96,372,540.63

Page2

YTM Daysto SS.F 36& Maturity

0.000

0.838 35

Portfolio MSRG


CUSIP lnvestmenttl !tleuer

Managed Pool Accounts

SYSLAIF LAIF lAIF

Managed Pool Accounts Totals


3e9112G5NO 18340 GEC 94974BFGO 16709 WELLS

Corpon~te lllecflum Term NoiH Totala

Federal Agency lnues - Coupon

313eG1E88 16758 FNMA

Fede ... l Agency lssun - Coupon Totals

lnveetment Totals

Data Updated: SET_MSRG: 06/071201613:07 Run Date: 0610712016-13:07

Pat Value

64,97 • • 823.01

14,97.,823.01

3,000,000.00 2,000,000.00

5,000,000.00

2,000,000.00

2,000,000.00

71,97.,&23.01


Investment Status Report - Investments May 31,2016

Stated Maturity Pun:hase YTM YTM Payment Reb; Date i)lta 360 365 Dates

0.552 0.544 0.552 01/15 - Quarterly ------O.M4 0.552

2.900 01/09/2017 0311512012 1.645 1.870 07/09-01109 1.50001/16/2018 12/28/2012 1.332 1.350 07/18-01/16 ------

1 ..... 1.887

0.750 02/27/2017 02/2712013 0.785 o.ns 08127 - 02127 ------0.7611 0.7711

0.829 0.138

Accrued lnter .. t Current AtPureh188 Principii

64,974,823.01

0.00 6<1,17.,1123.01

Received 3,141,630.00 2,014,806.88

0.00 5,156,238.81

1,998,000.00

0.00 1,998,000.00

0.00 72, 128,85t.89

Page1

Book Value

64,97.,823.01

s•,l7c,623.01

3,141,630.00 2,01 • • 606.88

5,158,231.81

1,998,000.00

1,998,000.00

72,128,859.89

Portfolio MSRG CP

PM (PRI' _PMS) 7.3.0 Report Var. 7.3.5

CUSIP !n~~Htment##


SYSGENERALFUND GENERALFUND UBC

Cash Totals

Total Csah and Investments

Data Updated: SET_MSRG: 0610712016 13:07 Run Dale: 0610712016-13:07


Investment Status Report - Cash May 31,2016

Stated Maturtty Purchase PsrValue RaW Dl&l illite

YTM 361.1

YTM 365

24,243,680.7<4 01/01/1999 0.000 0.000

24,243,680.74

911,218,303.75 0.1129 0.8311

Psyment Accrued Interest Dlltel AtPurchue

I -Monthly

0.00

0.00

Current Prtnclpal

24,243,880.74

24,2£3,880.7.

9&,3n,s.o.83

Page2

Booi!VIIue

2<4,243,680.74

24,243,680.7<4

H,372,540.83

Portfolio MSRG CP

PM (PRF _PMS) 7.3.0

CUSIP Investment t1 Issuer

Managed Pool Accounts {Monthly Summary)

i;eglnnlny a.lance

SYSLAIF LAIF local~ncylnvestrnentFund

SubtcQI U,174,123.01

Passbook/Checking Accounts {Monthly Summary)

SYSGENERAL FUND GENERAL FUND Union Bank of california ------Subtotal


Subtotal

Federal Agency hssues - Coupon

Subtotal

Total

Data Updated: SET_MSRG: 0610712016 13:07 Run Date: 0610712016 -13:07

163,183.59

5,156,236.88

1,918,000.00

31,892,543.48


Activity By Typ~ May 1, 2016 through May 31, 2016

Sdteci Tranaaction PurchaeM Rat. Date orDepoelts

0.552 40,800,000.00

40,800,000.00

23,879,997.15

23,1711,997.11

84,4711,997.15

Redemptions or WHhdrawall

0.00

o.oo

0.00

0.00

0.00

Ending Balance

6 ... 1174,823.01

24,243,880.74

5,156,23t.88

1,998,000.00

98,372,540.83

Page 1

Portfolio MSRG CP

PM (PRF _PM3) 7.3.0

Report Ver. 7.3.5

Percent CUSIP Investment t lAuer of Portfolio

Issuer: Local Agency Investment Fund

MSR Public Power Agency Activity Report

issuer: Local Agency Investment Fund May 1, 2016- May 31, 2016

Par Value --··-~-----·-

Beginning Current TnlnAc:tlon Balance Rate Date


SYSlAIF LAIF Local Agency Investment Fund 0.652

Subtotal and Balance

lAuer Subtotal 67.528%

Data Updated: SET_MSRG: 0610712016 13:07 Run Dale: 06107/2016- 13:07

Total

------24,174,623.01

24,174,623.01

24,174,623.01

Par Value

Purchases or Redemptions or Deposits W1thdrawa1s

-40,800,000.00 0.00

40,800,000.00 0.00

40,800,000.00 0.00

40,800,000.00 0.00


Modesto, CA 95352 (209)526-7308

Ending Balance

14,974,623.01

14,974,623.01

14,974,623.01

Portfolio MSRG CP

OA (PRF _OA) 7.2.0 Report Ver. 7 .3.5

Investments

Fedefal Agency Issues • Coupon Federal Agency Issues - Discount

Treasury Securities - COupon

Investments

Cash

Passbook/Checking (not Included in yield calculations)

Total Cash and Investments

Total Earnings May31

Current Year

Average Dally Balance

Effective Rate of Return

Reporting period 05101/2016-05131/2016 Data Updated: SET_MSRT: 06/06/2016 14:31 Run Date: 0610812016 • 14:32

Par Value

1-4,841 ,000.00

29,992,000.00

1 ,390,000.00

46,023,000.00

6,443,113.22

52,466,113.22

Month Ending

36,169.25

52,767,138.17

0.81%

MSR Public Power Agency Trust Portfolio Management

Portfolio Summary May 31,2016

Market Book Value Value

14,858 ,885.96 14,810,198.08

29,986,601.44 29,942,813.85

1,-472,20-4.60 1,479,915.63

46,317,692.00 46,232,927.56

6,443,1 13.22 6 ,443, 113.22

52,780,805.22 52,676,040.78

No fiscal year history available

%of Portfolio

32.03

B4.n 3.20

100.00%

Days to Term Maturity

1,561 1,162

152 29

2,576 713

681 414

681 414


Modesto, CA 95352 (209)526-7308

YTM 385Equlv.

1.-435

0.391

2.856

0.804

0.230

0.804

Portfolio MSRT CP

PM {PRF _PM1) 7.3.0 Repott Ver. 7.3.5

CUSIP Investment t# Issuer



Portfolio Details~ Investments May 31,2016

Average Balance

Pun: hue Date Par Value Market Value

Page 1

Stated Book Velua Rate S&P

YTM Days to Maturity 365 Maturity Dete

SYS17041 17041 local Agency lnves.;...tmen...;...t .... F"""u'-nd;;.._ __ _ 0.00 ______ o-.oo~ ______ o-.oo~ o.280 _____ o_.260 ___ _ Subtotal end Average

Federal Agency Issues - Coupon

3135GOZA4 17159 Federal Nat, Mtg. Assoc.

Federal Nat'l Mig. Assoc. Federal Nafl Mig. Assoc. Federal Nafl Mig. Assoc.

o.oo

3135GOZA4

3135GOZA4 3135GOF73

3136G3NG6

17160 17161 17244

17283 Federal Nafl Mig. Assoc=;.;;;;..· -----

SUbtotal and Average

Federal Agency Issues • Discount

313384YU7 17273

313384YU7

313384YU7 313588YU3

313568YU3 313588YU3 313588YU3

313588YU3 313588YU3

17274 17275 17254

17255

17256 17257

17258

17259

FHLB Discount Note

FHLB Otsoount Note

FHLB Discount Note FNMA Discount Note

FNMA Discount Note

FNMA Discount Note FNMA Discount Note

FNMA Discount Note FNMA Discount Note

13,826,972.27

-------Treasury Securities - Coupon

912828HZ6 15642

SUbtotal and Average

u.s. Treasury

Subtotal and Average

Total and Average

Data Updated: SET_MSRT: 06/0612016 14:31 Run Date: 0610612016- 14:32

29,942,813.85

1,.479,915.63

52,767,138.17

01/1212015

01/1212015 0111212015 11130/2015

0512512016

0412512016

0412512016 0412512016 01/2512018

01/2512016

01/2512016 01125/2016

0112512016 01125/2016

04126/2011

o.oo

2,995,000.00

1,085,000.00 6,291 ,000.00 3,000,000.00

1,270,000.00

14,841,000.00

1,295,000.00

140,000.00 114,000.00 435,000.00

6,300,000.00

48,000.00 3,465,000.00

45,000.00 18,150,000.00

29,992,000.00

1,390,000.00

1,390,000.00

.CS,OZ3,000.00

0.00

3,057,475.70

1 '1 07,633.10 6,<422,230.26 3,009,840.00

1,261 ,706.90

14,868,885.96

1,294,786.90

139,974.80 113,979.48 434,921 .70

6,298,866.00 47,991 .36

3,464,376.30

44,991.90 18,146,733.00

29,986,601.44

1.472,204.60

1 ,472,204.60

.CS,317,892.00

0.00 0.000 0

3,056,337.60 1.875 AA+ 1.360 993 02119/2019

1,107,220.80 6,419,839.68 2,956,800.00

1,270,000.00

14,810,198.08

1,294,323.36

139,926.85 113,940.44 434,280.14

6,289,284.75 47,918.36

3,459,106.61

44,923.46 18,119,129.88

29,942,813.85

1,479,915.63

1,479,915.83

46,232,927.56

1.875 AA+ 1.360 993 02/1912019 1.875 AA+ 1.360 993 02/1912019 1.500 1.802 1,643 11/30/2020

1.200 ___ _!.:!_00 1,447 05/1812020

0.285

0.285 0.285 0.390

0.390 0.390 0.390

0.390 0.390

1.435 1,182

0.289

0.289

0.289 0.396

0.396

0.396 0.396

0.396 0.396

0.391

29 0613012016

29 0613012016 29 06/30/2016 29 06/30/2016

29 06130/2016 29 06130/2016 29 06130/2016

29 06130/2016 29 06130/2016

29

3.875 2.856 713 0511512018 ---------2.856 713

0.804 414

Portfolio MSRT CP

PM (PRF _PM2) 7.3.0

Report Var. 7.3.5

CUSIP Investment## Issuer


SY$30000 MONEY 30000MONEY U.S. Bank Corporate Trust SYS30001 MONEY 30001MONEY U.S. Bank Corporate Trust SYS30002 MONEY 30002 MONEY U.S. Bank Corporate Trust

SYS30003 MONEY 30003MONEY U.S. Bank Corporate Trust SYS31000 MONEY 31000MONEY U.S. Bank Corporate Trust SYS31 003 MONEY 31003MONEY U.S. Bank Corporate Trust SYS32000 MONEY 32000MONEY U.S. Bank Corporate Trust SYS32003 MONEY 32003MONEY U.S. Bank Corporate Trust SYS33000MONEY 33000MONEY U.S. Bank Corporate Trust SY$46001 MONEY 46001 MONEY U.S. Bank Corporate Trust SYS46002 MONEY 46002MONEY U.S. Bank Corporate Trust SY$48003 MONEY 46003MONEY U.S. Bank Corporate Trust SYS5590 MONEY 5590MONEY u.s. Bank Corporate Trust SYS5591 MONEY 5591 MONEY U.S. Bank Corporate Trust SYS5594 MONEY 5594MONEY U.S. Bank Corporate Trust

SYS!I9000 MONEY 69000MONEY U.S. Bank Corporate Trust SYS69001 MONEY 69001 MONEY U.S. Bank Corporate Trust SYS69002 MONEY 69002MONEY u.s. Bank Corporate Trust

SYS69003M0NEY !19003MONEY U.S. Bank Corporate Trust SYS7000MONEY 7000MONEY U.S. Bank Corporate Trust SYS7260 MONEY 7260MONEY U.S. Bank Corporate Trust

SYS7261 MONEY 7261 MONEY U.S. Bank Corporate Trust SYS7262 MONEY 7262MONEY U.S. Bank Corporate Trust SYS785000 MONEY 785000 MONEY U.S. Bank Corporate Trust

SYS785001 MONEY 785001 MONEY U.S. Bank Corporate Trust SYS785002 MONEY 785002 MONEY U.S. Bank Corporate Trust SYS785003 MONEY 785003 MONEY U.S. Bank Corporate Trust

SYS785004 MONEY 785004 MONEY U.S. Bank Corporate Trust SYS798000 MONEY 798000 MONEY U.S. Bank Corporate Trust SYS798002 MONEY 798002 MONEY U.S. Bank Corporate Trust

SYS798003 MONEY 798003 MONEY U.S. Bank Corporate Trust SYS798004 MONEY 798004 MONEY u.s. Bank Corporate Trust SYSBOOOMONEY 8000MONEY U.S. Bank Corporate Trust

SYS8001 MONEY 8001 MONEY U.S. Bank Corporate Trust

Data Updated: SET_MSRT: 06/0612016 14:31 Run Date: 06106/2016 • 14:32

Average Balance

MSR Public Power Agency Trust Portfolio Management Portfolio Detai!s - C:sh

May 31, 2016

Purchase Date Par Value Matitet Value

34,593.69 34,593.69

431,499.76 431,499.76

715.25 715.25

151,913.61 151 ,913.81

48,147.42 48,147.42 72,485.69 72,485.69

17,846.23 17,846.23

26,892.68 26,892.68

765,462.81 785,462.81

0.00 0.00

0.00 0.00

0.00 0.00

0.00 0.00

0.00 0.00 0.00 0.00

0.00 0.00

0.00 0.00

0.00 0.00

0.00 0.00

3,630,111.93 3,830,1 11.93 0.00 0.00

0.00 0.00

0.00 0.00

79,435.37 79,435.37

47,466.47 47,468.47

693.39 893.39 53,394.35 53,394.35

0.00 0.00

0.00 0.00

870.12 870.12

0.00 0.00

0110112015 0.00 0.00 1,042,926.42 1,042,926.42

38,457.83 38,457.83

Steted Book Value Rate

34,593.69 0.230

431,499.76 0.230 715.25 0.230

151,913.81 0.230

48,147.42 0.230

72,485.89 0.230

17,846.23 0.230

26,892.68 0.230

765,462.61 0.230

0.00 0.230

0.00 0.230 0.00 0.230

0.00 0.230

0.00 0.230

0.00 0.230

0.00 0.230

0.00 0.230

0.00 0.230

0.00 0.230

3,630,1 11.93 0.230

0.00 0.230

0.00 0 .230

0.00 0.230

79,435.37 0.230

47,486.47 0.230

893.39 0.230 53,394.35 0.230

0.00 0.230

0.00 0.230

870.12 0.230

0.00 0.230

0.00 0.230 1,042,926 .42 0.230

38,457.83 0.230

S&P

Page 2

YTM Daysto 365 Maturity

0.230

0 .230 0.230

0.230

0.230

0.230

0.230

0.230 0.230

0.230

0.230

0.230

0.230

0.230

0.230

0.230

0.230 0.230

0.230

0.230

0.230

0.230

0.230

0.230

0.230

0.230

0 .230

0.230

0.230

0.230

0.230

0.230 0.230

0.230

1

Portfolio MSRT


CUSIP Investment ## Issuer

Average Balance

Total Cuh and lnvestmenlll

Data Updated: SET_MSRT: 06/061201614:31 Run Date: 0610612016 - 14:32

Average Balance

0.00

52,767,138.17

MSR Public Power Agency Trust Portfolio Management Portfolio Details- Cash

Purchase Date

May 31,2016

Par Value

52,~6. 113.22

Market Value

52,760,805.22

Stated Book Value Rate

52,678,040.78

Page 3

YTM Daysto S&P 385 Maturity

0.804 414

Portfolio MSRT


CUSIP IRVHtment tl Issuer


SY$17041 17041 LAIF

Managed Pool Accounts Totals

Federal Agency Issues - Coupon

3135GOZA4 17159 FNMA



3135GOF73 17244 FNMA

3136G3NGB 17263 FNMA

Federal Agency Issues -Coupon Totals

Federal Agency Issues - Discount

313384YU7 17273 FHLBDN 313384YU7 17274 FHLBDN

313384YU7 17275 FHLBDN

313588YU3 17254 FNMDN

313588YU3 17255 FNMDN

313588YU3 17256 FNMDN

313588YU3 17257 FNMDN 313588YU3 17258 FNMDN

313588YU3 17259 FNMDN

Federal Agency Issues- Discount Totals

Treasury Securities - Coupon

912828HZ6 15842 USTRE

Treasury S.Curttles - Coupon Totals

lnveatment Totals

Data Updated: SET_MSRT: 06/0612016 14:31 Run Dllte: 0610612011! • 14:32

Par Value

0.00

0.00

2,995,000.00 1,085,000.00

6,291 ,000.00

3,000,000.00 1,270,000.00

14,641,000.00

1,295,000.00 140,000.00

114,000.00

435,000.00 6,300,000.00

48,000.00

3,465,000.00 45,000.00

18,150,000.00

29,992,000.00

1,390,000.00

1,390,000.00

48,023,000.00


Investment Status Report - Investments May 31,2016

stat.d Maturity Pun: hUe YTM YTM Payment Rm D.t. Date 360 365 Dates

0.260 0.258 0.260 1 0/15 - Quarterly ----0.000 0.000

1.875 02/1912019 01/12/2015 1.341 1.360 02/19 - 08119 1 .875 02/1912019 01/12/2015 1.341 1.360 02/19 - 08119

1 .875 02/19/2019 01/1212015 1.341 1.360 02/19 - 0811 9

1 .500 1113012020 11130/2015 1.n8 1.802 05130 - 11130 1.200 05/1812020 0512512016 1.184 1.200 11118- 05/18 ------

1.415 1.435

0.285 0613012016 04/2512016 0.285 0.289 06130 -At Maturity 0.285 06130/2016 0412512016 0.285 0.289 06130 -AI Maturity

0.285 0613012016 0412512016 0.285 0.289 06/30 • At Maturity

0.390 0813012016 01125/2016 0.391 0.396 06130 - AI Maturity 0.390 0813012016 0112512016 0.391 0.396 08130-AtMaturlty

0.390 0813012016 01125/2016 0.391 0.396 06130 - At Maturity

0.390 0613012016 0112512016 0.391 0.396 06130 -AI Maturity 0 .390 06/30/2016 0112512016 0.391 0.396 06/30 - AI Maturity

0.390 0613012016 0112512016 0.391 0.396 ------ 08130- At Maturity

0.385 0.391

3.875 05/15/2018 041261201 1 2.818 2.856 05/15- 11/15 ------2.816 2.856

0.793 0.804

Accrued Interest Cu1'1"811t At Purchase Principal

0.00

0.00 0.00

ReceiVed 3,056,337.60

Received 1,107,220.80

Received 6,419,839.68

2,956,600.00

1,270,000.00

o.oo 14,810,198.08

1,294,323.36 139,926.85

113,940.44

434,260.14 6,289,284. 75

47,918.36

3,459,106.61 44,923.46

18,119,1 29.88

o.oo 29,942,813.85

Received 1,479,915.63

0.00 1,479,915.83

0.00 46,232,927.56

Page1

Book Value

0.00

0.00

3,056,337.60 1,107,220.80

6,419,639.68

2,956,800.00 1,270,000.00

14,810,198.08

1,294,323.36 139,926.85

113,940.44

434,260.14 6,289,284.75

47,918.36

3,459,1 08.61 44,923.46

18,119,129.88

29,942,813.85

1 ,479,915.63

1,479,915.63

46,232,927.56

Portfolio MSRT CP

PM (PRF _PMS) 7.3.0 Report Ver. 7.3.5

CUSIP lnvesbnent I Issuer


SYS30000 MONEY 30000MONEY US BANK

SYS30001 MONEY 30001 MONEY US BANK

SY$30002 MONEY 30002 MONEY US BANK

SYS30003 MONEY 30003MONEY USBANK





SYS33000MONEY 33000MONEY USBANK

SYS48001 MONEY 46001 MONEY USBANK







SYS69001MONEY 69001 MONEY USBANK
















SYSBOOOMONEY 8000MONEY USBANK


Data Updated: SET_MSRT: 0610612016 14:31 Rill Date: 0610612016- 14:32

Par Value

34,593.69

431 ,499.76

715.25

151 ,913.81

48,147.42

72,485.89

17,846.23

26,892.88

765,462.81 0.00

0.00

0.00 0 .00

0.00

0.00

0.00

0.00

0.00 0.00

3,630,111.93

0.00 0.00

0.00

79,435.37

47,486.47

893.39

53,394.35 0.00

0.00

870.12

0.00

0.00

1,042,926.42

38,457.83


Investment Status Report - Cash May 31,2016

Stated Maturity Purchase YTM YTM Payment Rate Data Data 360 365 Dates

0.230 0.227 0.230 05101 - Monthly

0.230 0.227 0.230 01/01 -Monthly

0.230 0.227 0.230 01/26- Monthly

0.230 0.227 0.230 08101 -Monthly

0.230 0.227 0.230 05/01 -Monthly

0.230 0.227 0.230 08/01 - Monthly

0.230 0.227 0.230 05/01 - Monthly

0.230 0.227 0.230 08101 -Monthly

0.230 0.227 0.230 09/01 - Monthly

0.230 0.227 0.230 11101 - Monthly

0.230 0.227 0.230 11101 -Monthly

0.230 0.227 0.230 10/01 - Monthly

0.230 0.227 0.230 01/01 - Monthly

0.230 0.227 0.230 01/01 -Monthly

0.230 0.227 0.230 08/01 - Monlhly

0.230 0.227 0.230 05/01 - Monthly

0.230 0.227 0.230 01101 -Monthly

0.230 0.227 0.230 01/25 - Monthly 0.230 0.227 0.230 01/01 -Monthly

0.230 0.227 0.230 01/01 -Monthly

0.230 0.227 0.230 01/02- Monthly

0.230 0.227 0.230 01102 - Monlhly

0.230 0.227 0.230 01/02- Monlhly

0.230 0.227 0.230 04/01 - Monthly

0.230 0.227 0.230 06/01 - Monthly

0.230 0.227 0.230 08/01 - Monthly

0.230 0.227 0.230 05101 - Monthly

0.230 0.227 0.230 05/01 - Monlhly

0.230 0.227 0.230 05/01 -Monthly

0.230 0.227 0.230 08/01 - Monthly

0.230 0.227 0.230 05/01 -Monthly

0.230 01/01/2015 0.227 0.230 05101 - Monthly

0.230 0.227 0.230 01/01 - Monlhly

0.230 0.227 0.230 05/01 - Monlhly

Accrued Interest Current At Purchase Principal

34,593.69

431,499.76

715.25

151,913.81

48,147.42

72,485.69

17,846.23

26,892.68

765,462.81

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00 0.00

3,830,111 .93

0.00

0.00

0.00

79,435.37

47,466.47

893.39

53,394.35

0.00

0.00

870.12

0.00

0.00

1 ,042,926.42 38,457.83

Page2

Book Value

34,593.69

431,499.76

715.25

151 ,913.81

48,147.42

72,485.69

17,846.23

26,892.68

765,462.81

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

3,630,111 .93

0.00

0.00

0.00

79,435.37

47,466.47

893.39

53,394.35

0.00

0.00

870.12

0.00

0.00

1,042,926.42

38,457.83

Portfolio MSRT CP

PM (PRF _PMS) 7.3.0

CUSIP lnvntment #

Cash Totals

Total Cash and lnvestmenta

Data Updated: SET_MSRT: 06/06/2016 14:31 Run Dale: 06106/2016- 14:32


Investment Status Report- Cash May 31, 2016

Stated Maturity Pun:haae Par Value Rate D.U Date

YTM 360

YTM 365

6,443,113.22

52A66,113.22 0.793 0.8M

Payment Dates

Accrued Interest AtPun:hase

0.00

0.00

Current Principal

6,443,113.22

52,676,M0.78

Page 3

Book Value

6~,113.22

52,676,0.0.78

Portfolio MSRT CP

PM (PRF _PMS) 7.3.0

CUSIP lnveetment ## Issuer

Managed Pool Accounts (Monthly Summary)

Subtotal

Passbook/Checking Accounts (Monthly Summary)

SYS30000 MONEY 30000MONEY U.S. Bank Corporate Trust

SYS30001 MONEY 30001 MONEY U.S. Bank COrporate Trust

SYS31 000 MONEY 31000MONEY U.S. Bank Corporate Trust


SYS33000MONEY 33000MONEY U.S. Bank Corporate Trust



SYS7000MONEY 7000MONEY U.S. Bank Corporate Trust





SYS8000MONEY BOOOMONEY U.S. Bank Corporate Trust

SYS8001 MONEY 8001 MONEY u.s. Bank Corporate Trust

Subtotal

Federal Agency Issues • Coupon

3136G3NG6 17283 Federal Narl Mig. Assoc.

Subtotal

Federal Agency Issues - Discount

Subtotal

Traasury Securities • Coupon

Subtotal

Total

Data Updated: SET_MSRT: 06/0612016 14:31 Run Date: 0610612016- 1-4:32


Activity By Type May 1, 2016 through May 31,2016

Beginning Stated Transaction Purchasn Balance Rate Date or Deposits

0.00

0.230 431,291 .81

0.230 431,291.81

0.230 38,050.35

0.230 14,829.19

0.230 22,566.92

0.230 0.00

0.230 0.00

0.230 2,482,803.57

0.230 46,838.32

0.230 46,638.32

0.230 26,931.25

0 .230 37,938.27

0.230 n3,083.eo

0.230 37,938.27

7,1<18,05&.89 4,389,781.78

1.200 05/25/2016 1 ,270,000.00

13,M0,198.011 1,270,000.00

29,942,813.115

1,479,915.63

52,110,984..45 5,851,781.78

Redemptions or Withdrawals

431,291.81

0.00

38,050.35

14,829.19

1,270,000.00

1.40

334.84

2,482,583.27

46,838.32

0.00

0.00

37,938.27

773,058.00

0.00

5,094,725..45

0.00

0.00

5,094,725.45

Ending Balance

0.00

6,~.113.22

14,810,198.08

21,942,813.85

1,479,915.63

52,878,040.78

Page 1

Portfolio MSRT CP

PM (PRF _PM3) 7.3.0 Report Vwr. 7.3.5

Date Received

May2016

CUSIP

912828HZ6

3135GOF73

Data Updated: SET_MSRT: 06/06/2016 14:31 Run Oate: 06100/2016 ·1":32

Investment.,

15842

17244

MSR Public Power Agency Trust Received Interest

Sorted by Date Received Received May 1, 2016- May 31, 2016

Siteurlty Type

TRC

FAC

Par Value

1,390,000.00

3,000,000.00

Current Rate

3.875

1.500

Date Due Date Received

0511512016 0511612016

0513012016 0513112016

Subtotal

Total

Total Cath Overpayment

Total Cath Shortfall

lnttrast


Modesto, CA 95352 (209)526-7308

Amount Due Amount Received Variance

26,931.25

22,500.00

49,431.25

-'9~1.25

0.00

0.00

26,931.25

22,500.00

49,.31.25

49,.31.25

Portfolio MSRT

CP Rl (PRF _Rt) 7.1.1 Report Ver. 7.3.5

Date Received

Cash Accounts

May2016

CUSIP

SYS33000MONEY SYS7000MONEY SYSSOOOMONEY

Data Updated: SET_MSRT: 06/06/2016 14:31 Roo Dale: 06/0612016 -14:32

lnVltltment I#

33000MONEY 7000MONEY 8000MONEY

MSR Public Power Agency Trust Received Interest

Received May 1, 2016- May 31, 2016

Sacurliy Type

PA1 PA1 PA1

Par Current Value Rate

742,962.81

3 ,830,111.93 1,042,92e.42

0.230

0.230 0.230

Date Received

0510212018

0510212016 0510212016

Subtotal

Total

Interest

Amount Received

66.92

20.40 5.60

92.92

92.92

Page2

Portfolio MSRT CP

Rl (PRF _RI) 7.1.1 Report Ver. 7.3.5

Investment#

Issuer

No Sales or Maturities

lnv. Type

Purchase Date

Data Updated: SET_MSRT: 06/06/201614:31 Rl61 Date: 0611l612016 • 14:32

Par Value

MSR Public Power Agency Trust Realized Gains and Losses Sorted By Maturity/Sale/Call Date

Sales/Calls/Maturities: May 1, 2016 - May 31, 2016

Sale Date

Cumtnt RaUl Mat\Jr!ty Date

Days Held

Term Book Value Mat\Jrlty/Sale

Procaeds

0.00 0 0.00 0.00

Reelized Gain/LOU

0.00

Total Earnings

0.00


Modesto, CA 95352 (209)526-7308

Total Total Net Earnings Yield 365

0.00

Portfolio MSRT

CP CG (PRF _CGR1) 7.1.1

Report Ver. 7.3.5

CUSIP

3136G3NG6

Investment I

17283

Fund

33000

Data Updated: SET_MSRT: 06/06/2016 14:31 Run Date: 0610012016 - 14:32

Sec. Type Issuer

FAC FNMA

Total Pun:hues

MSR Public Power Agency Trust Purchases Report

Sorted by Purchase Date - Investment Number May 1, 2016- May 31, 2016

Original Purchase Par Value DateP-xment Periods

1,270,000.00 051251201611/18 - 05118

1,270,000.00

Principal Purchased

1,270,000.00

1,270,000.00

Accrued Interest Rate at at Purchase Purchase

Maturity Date

Modesto Irrigation District 1231 - 11th St.

Modesto, CA 95352 (209)526-7308

YTM 365

Ending Book Value

1.200 0511812020 1.200 1,270,000.00

o.oo 1,270,000.00

Portfolio MSRT CP

PU (PRF_PU) 7.1.1 Report Ver. 7.3.5

M-S-R Public Power Agency Staff Report

Date: June16,2016 From: MartinR.Hopper,GeneralManager To: M-S-RPPACommission Subject: June2016OutsideServicesBudgetversusActualReport MajorLegalProvidersReportingAre:Duncan,Weinberg,Genzer,andPembroke: Through: April30,2016LawOfficesofSusieBerlin: Through: April30,2016PorterSimon: Through: May31,2016MajorConsultingProvidersReportingAre:NavigantConsulting: Through: April30,2016KBTLLC: Through: April30,2016FlynnResourceConsultants: Through: April30,2016Detailedchartsofmonthlybudgetversusactualcostcomparisonsforeachproviderareattachedintheirusualformat.IrecommendtheCommissionnoteandfilethisreport.

M-S-R PPAAll Legal Summary

6/15/16 2016 Legal Expenses.xlsx

Month of: May-2016

By FunctionBudget Current Month

Actual Current Month

Positive Variance

Actual v. Budget % By Function Budget Year

to DateActual Year to

DatePositive Variance

Actual v. Budget %

Generation 7,083 1,584 5,499 22% Generation 35,417 35,940 (523) 101%Gen - Other 2,500 0 2,500 0% Gen - Other 12,500 458 12,042 4%Transmission 30,833 2,156 28,677 7% Transmission 154,167 121,681 32,486 79%Trans - Other 833 0 833 0% Trans - Other 4,167 4,667 (500) 112%Renewables 4,750 792 3,958 17% Renewables 23,750 30,263 (6,513) 127%Rens - Other 25,000 0 25,000 0% Rens - Other 125,000 32,822 92,178 26%Administrative 2,083 1,179 904 57% Administrative 10,417 15,728 (5,312) 151%Total 73,083 5,711 67,372 8% Total 365,417 241,559 123,858 66%

By ProviderBudget Current Month


Positive Variance

Actual v. Budget % By Provider Budget Year



Actual v. Budget %

Duncan 58,750 0 58,750 0% Duncan 293,750 164,192 129,558 56%Berlin 5,000 0 5,000 0% Berlin 25,000 41,392 (16,392) 166%Porter Simon 6,833 5,711 1,122 84% Porter Simon 34,167 35,517 (1,351) 104%Others 2,500 0 2,500 0% Others 12,500 458 12,042 4%Total 73,083 5,711 67,372 8% Total 365,417 241,559 123,858 66%

CURRENT MONTH YEAR TO DATE

-

250,000

500,000

750,000

1,000,000

Jan-2016 Feb-2016 Mar-2016 Apr-2016 May-2016 Jun-2016 Jul-2016 Aug-2016 Sep-2016 Oct-2016 Nov-2016 Dec-2016

AllLegal-Total

CUMMULATIVEBUDGET

CUMMULATIVEACTUAL

M-S-R PPADuncan Summary


Month of: May-2016

Budget Current Month


Positive Variance

Actual v. Budget %

Generation 1,667 0 1,667 0%Gen - Other 0 0 0 0%Transmission 29,167 0 29,167 0%Trans - Other 833 0 833 0%Renewables 2,083 0 2,083 0%Rens - Other 25,000 0 25,000 0%Administrative 0 0 0 0%Total 58,750 0 58,750 0%

Budget Year to Date

Actual Year to Date

Positive Variance

Actual v. Budget %

Generation 8,333 2,881 5,452 35%Gen - Other 0 0 0 0%Transmission 145,833 114,311 31,522 78%Trans - Other 4,167 4,667 (500) 112%Renewables 10,417 9,511 906 91%Rens - Other 125,000 32,822 92,178 26%Administrative 0 0 0 0%Total 293,750 164,192 129,558 56%

CURRENT MONTH

YEAR TO DATE

-100,000200,000300,000400,000500,000600,000700,000800,000

Jan-2016

Feb-2016

Mar-2016

Apr-2016

May-2016

Jun-2016

Jul-2

016

Aug-2016

Sep-2016

Oct-201

6

Nov-2016

Dec-201

6

Duncan-Total

CUMMULATIVEBUDGET

CUMMULATIVEACTUAL

M-S-R PPABerlin Summary


Month of: May-2016



Positive Variance

Actual v. Budget %

Generation 2,083 0 2,083 0%Gen - Other 0 0 0 0%Transmission 0 0 0 0%Trans - Other 0 0 0 0%Renewables 2,500 0 2,500 0%Rens - Other 0 0 0 0%Administrative 417 0 417 0%Total 5,000 0 5,000 0%

Budget Year to Date

Actual Year to Date

Positive Variance

Actual v. Budget %

Generation 10,417 15,899 (5,482) 153%Gen - Other 0 0 0 0%Transmission 0 0 0 0%Trans - Other 0 0 0 0%Renewables 12,500 19,960 (7,460) 160%Rens - Other 0 0 0 0%Administrative 2,083 5,533 (3,450) 266%Total 25,000 41,392 (16,392) 166%

CURRENT MONTH

YEAR TO DATE

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Jan-2016

Feb-2016

Mar-2016

Apr-2016

May-2016

Jun-2016

Jul-2

016

Aug-2016

Sep-2016

Oct-201

6

Nov-2016

Dec-201

6

Berlin-Total

CUMMULATIVEBUDGET

CUMMULATIVEACTUAL

M-S-R PPAMisc Legal Summary


Month of: May-2016



Positive Variance

Actual v. Budget %

Generation 0 0 0 0%Gen - Other 2,500 0 2,500 0%Transmission 0 0 0 0%Trans - Other 0 0 0 0%Renewables 0 0 0 0%Rens - Other 0 0 0 0%Administrative 0 0 0 0%Total 2,500 0 2,500 0%

Budget Year to Date

Actual Year to Date

Positive Variance

Actual v. Budget %

Generation 0 0 0 0%Gen - Other 12,500 458 12,042 4%Transmission 0 0 0 0%Trans - Other 0 0 0 0%Renewables 0 0 0 0%Rens - Other 0 0 0 0%Administrative 0 0 0 0%Total 12,500 458 12,042 4%

CURRENT MONTH

YEAR TO DATE

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Jan-2016

Feb-2016

Mar-2016

Apr-2016

May-2016

Jun-2016

Jul-2

016

Aug-2016

Sep-2016

Oct-201

6

Nov-2016

Dec-201

6

MiscLegal-Total

CUMMULATIVEBUDGET

CUMMULATIVEACTUAL

M-S-R PPAPorter Simon Summary


Month of: May-2016



Positive Variance

Actual v. Budget %

Generation 3,333 1,584 1,749 48%Gen - Other 0 0 0 0%Transmission 1,667 2,156 (489) 129%Trans - Other 0 0 0 0%Renewables 167 792 (625) 475%Rens - Other 0 0 0 0%Administrative 1,667 1,179 487 71%Total 6,833 5,711 1,122 84%

Budget Year to Date

Actual Year to Date

Positive Variance

Actual v. Budget %

Generation 16,667 17,160 (493) 103%Gen - Other 0 0 0 0%Transmission 8,333 7,370 963 88%Trans - Other 0 0 0 0%Renewables 833 792 41 95%Rens - Other 0 0 0 0%Administrative 8,333 10,195 (1,862) 122%Total 34,167 35,517 (1,351) 104%

CURRENT MONTH

YEAR TO DATE

-10,00020,00030,00040,00050,00060,00070,00080,00090,000

Jan-2016

Feb-2016

Mar-2016

Apr-2016

May-2016

Jun-2016

Jul-2

016

Aug-2016

Sep-2016

Oct-201

6

Nov-2016

Dec-201

6

PorterSimon-Total

CUMMULATIVEBUDGET

CUMMULATIVEACTUAL

6/15/16 2016 Input 2016 Legal Expenses.xlsx

Legal Costs - 2015 2016 Budget Reallocated Budget Jan-2016 Feb-2016 Mar-2016 Apr-2016 May-2016 Jun-2016 Jul-2016 Aug-2016 Sep-2016 Oct-2016 Nov-2016 Dec-2016 Total Average Year-End Notes

8.33% 16.67% 25.00% 33.33% 41.67% 50.00% 58.33% 66.67% 75.00% 83.33% 91.67% 100.00% Projection

DWG&P 31,630.50 Generation

SJGS Agreements 20,000 20,000 2,647 235 - - 2,881 720 8,643 Transmission

FERC Gen'l 250,000 250,000 29,099 17,030 24,163 23,574.80 93,867 23,467 281,600 SCE 100,000 100,000 3,161 2,807 6,420 8,055.70 20,444 5,111 61,332 SCE Experts - - - - - -

Trans - OtherOther Trans - TRR 10,000 10,000 - - 4,667 - 4,667 1,167 14,000 CASIO Rate Case/SWTP

RenewablesBPA/PNW Gen'l 25,000 25,000 2,577 4,599 2,335 - 9,511 2,378 28,533

Rens - OtherOMP/BPA Rate Case 300,000 300,000 8,952 10,372 5,670 7,828.62 32,822 8,205 98,466

705,000 705,000 46,435 35,042 43,255 39,459.12 - - - - - - - - 164,192 41,048 492,575 6.59% 11.56% 17.69% 23.29% 23.29% 23.29% 23.29% 23.29% 23.29% 23.29% 23.29% 23.29% 70%

Law Offices of Susie BerlinGeneration

AB32/Cap & Trade/SB136825,000 25,000 4,649 2,496 4,421 4,332.60 15,899 3,975 47,697 Renewables

RES/RPS 30,000 30,000 4,724 5,781 7,680 1,775.50 19,960 4,990 59,880 A&G 5,000 5,000 1,614 1,642 1,575 703.50 5,533 1,383 16,599

60,000 60,000 10,986 9,918 13,676 6,811.60 - - - - - - - - 41,392 10,348 124,176 18.31% 34.84% 57.63% 68.99% 68.99% 68.99% 68.99% 68.99% 68.99% 68.99% 68.99% 68.99% 207%

Others Italics = EstimatesGeneratiion - Other

Montgomery Andrews 30,000 30,000 317 70 70 458 153 1,830 30,000 30,000 317 70 70 - - - - - - - - - 458 153 1,830

1.06% 1.29% 1.53% 1.53% 1.53% 1.53% 1.53% 1.53% 1.53% 1.53% 1.53% 1.53% 6%- -

Sub Total 795,000 795,000 57,738 45,031 57,002 46,271 - - - - - - - - 206,041 51,548 618,581 7.26% 12.93% 20.10% 25.92% 25.92% 25.92% 25.92% 25.92% 25.92% 25.92% 25.92% 25.92% 78%

Porter SimonM-S-R PPA

Generation 40,000 40,000 3,300 6,842 3,916 1,518 1,584.00 17,160 3,432 41,184 Transmission 20,000 20,000 88 220 2,530 2,376 2,156.00 7,370 1,474 17,688

Renewables 2,000 2,000 - - - - 792.00 792 158 1,901 A&G 20,000 20,000 3,606 132 2,088 3,190 1,179.46 10,195 2,039 24,469

82,000 82,000 6,994 7,194 8,534 7,084 5,711.46 - - - - - - - 35,517 7,103 85,242 8.53% 17.30% 27.71% 36.35% 43.31% 43.31% 43.31% 43.31% 43.31% 43.31% 43.31% 43.31% 104%

GRAND TOTAL 877,000 877,000 64,732 52,225 65,536 53,355 5,711 - - - - - - - 241,559 58,652 703,823 7.38% 13.34% 20.81% 26.89% 27.54% 27.54% 27.54% 27.54% 27.54% 27.54% 27.54% 27.54% 80%

2016 Budget Reallocated Budget

G 85,000 85,000 35,940 97,524 G - Other 30,000 30,000 458 1,830 T 370,000 370,000 121,681 360,621 T - Other 10,000 10,000 4,667 14,000 R 57,000 57,000 30,263 90,313 R - Other 300,000 300,000 32,822 98,466 A 25,000 25,000 15,728 41,068

877,000 877,000 241,559 703,823

50/35/15 490,000 490,000 Renew 57,000 57,000

M-S-R PPATotal Outside Consult Summary

6/15/16 2016 Consulting and Outside Service Expenses.xlsx

Month of: May-2016

By FunctionBudget Current Month


Positive Variance

Actual v. Budget % By Function Budget Year



Actual v. Budget %

Generation 9,750 1,000 8,750 10% Generation 48,750 59,983 (11,233) 123%Gen - Other 0 0 0 0% Gen - Other 0 0 0 0%Transmission 5,417 0 5,417 0% Transmission 27,083 24,270 2,814 90%Trans - Other 6,250 0 6,250 0% Trans - Other 31,250 3,330 27,920 11%Renewables 7,667 1,000 6,667 13% Renewables 38,333 28,292 10,041 74%Rens - Other 4,583 0 4,583 0% Rens - Other 22,917 12,000 10,917 52%Administrative 4,583 0 4,583 0% Administrative 22,917 11,361 11,556 50%Total 38,250 2,000 36,250 5% Total 191,250 139,235 52,015 73%

By ProviderBudget Current Month


Positive Variance

Actual v. Budget % By Provider Budget Year



Actual v. Budget %

Navigant 6,250 0 6,250 0% Navigant 31,250 7,424 23,826 24%KBT 25,000 0 25,000 0% KBT 125,000 109,772 15,228 88%Flynn RCI 4,167 0 4,167 0% Flynn RCI 20,833 3,330 17,503 16%Others 2,833 2,000 833 71% Others 14,167 18,710 (4,543) 132%Total 38,250 2,000 36,250 5% Total 191,250 139,235 52,015 73%

CURRENT MONTH YEAR TO DATE

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

Jan-2016 Feb-2016 Mar-2016 Apr-2016 May-2016 Jun-2016 Jul-2016 Aug-2016 Sep-2016 Oct-2016 Nov-2016 Dec-2016

OutsideServicesConsultants-Total

CUMMULATIVEBUDGET

CUMMULATIVEACTUAL

M-S-R PPANavigant Summary


Month of: May-2016



Positive Variance

Actual v. Budget %

Generation 417 0 417 0%Gen - Other 0 0 0 0%Transmission 2,917 0 2,917 0%Trans - Other 0 0 0 0%Renewables 2,083 0 2,083 0%Rens - Other 0 0 0 0%Administrative 833 0 833 0%Total 6,250 0 6,250 0%

Budget Year to Date

Actual Year to Date

Positive Variance

Actual v. Budget %

Generation 2,083 0 2,083 0%Gen - Other 0 0 0 0%Transmission 14,583 3,940 10,644 27%Trans - Other 0 0 0 0%Renewables 10,417 0 10,417 0%Rens - Other 0 0 0 0%Administrative 4,167 3,484 682 84%Total 31,250 7,424 23,826 24%

YEAR TO DATE

CURRENT MONTH

-10,00020,00030,00040,00050,00060,00070,00080,000

Jan-2016

Feb-2016

Mar-2016

Apr-2016

May-2016

Jun-2016

Jul-2

016

Aug-2016

Sep-2016

Oct-201

6

Nov-2016

Dec-201

6

Navigant-Total

CUMMULATIVEBUDGET

CUMMULATIVEACTUAL

M-S-R PPAKBT Summary


Month of: May-2016



Positive Variance

Actual v. Budget %

Generation 7,917 0 7,917 0%Gen - Other 0 0 0 0%Transmission 2,500 0 2,500 0%Trans - Other 2,083 0 2,083 0%Renewables 4,167 0 4,167 0%Rens - Other 4,583 0 4,583 0%Administrative 3,750 0 3,750 0%Total 25,000 0 25,000 0%

Budget Year to Date

Actual Year to Date

Positive Variance

Actual v. Budget %

Generation 39,583 50,628 (11,045) 128%Gen - Other 0 0 0 0%Transmission 12,500 20,330 (7,830) 163%Trans - Other 10,417 0 10,417 0%Renewables 20,833 18,937 1,896 91%Rens - Other 22,917 12,000 10,917 52%Administrative 18,750 7,876 10,874 42%Total 125,000 109,772 15,228 88%

YEAR TO DATE

CURRENT MONTH

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

Jan-2016

Feb-2016

Mar-2016

Apr-2016

May-2016

Jun-2016

Jul-2

016

Aug-2016

Sep-2016

Oct-201

6

Nov-2016

Dec-201

6

KBT-Total

CUMMULATIVEBUDGET

CUMMULATIVEACTUAL

M-S-R PPAFlynn RCI Summary


Month of: May-2016



Positive Variance

Actual v. Budget %

Generation 0 0 0 0%Gen - Other 0 0 0 0%Transmission 0 0 0 0%Trans - Other 4,167 0 4,167 0%Renewables 0 0 0 0%Rens - Other 0 0 0 0%Administrative 0 0 0 0%Total 4,167 0 4,167 0%

Budget Year to Date

Actual Year to Date

Positive Variance

Actual v. Budget %

Generation 0 0 0 0%Gen - Other 0 0 0 0%Transmission 0 0 0 0%Trans - Other 20,833 3,330 17,503 16%Renewables 0 0 0 0%Rens - Other 0 0 0 0%Administrative 0 0 0 0%Total 20,833 3,330 17,503 16%

CURRENT MONTH

YEAR TO DATE

-

5,000

10,000

15,000

20,000

25,000

30,000

Jan-2016

Feb-2016

Mar-2016

Apr-2016

May-2016

Jun-2016

Jul-2

016

Aug-2016

Sep-2016

Oct-201

6

Nov-2016

Dec-201

6

FlynnRCI-Total

CUMMULATIVEBUDGET

CUMMULATIVEACTUAL

M-S-R PPAMisc Outside Services Summary


Month of: May-2016



Positive Variance

Actual v. Budget %

Generation 1,417 1,000 417 71%Gen - Other 0 0 0 0%Transmission 0 0 0 0%Trans - Other 0 0 0 0%Renewables 1,417 1,000 417 71%Rens - Other 0 0 0 0%Administrative 0 0 0 0%Total 2,833 2,000 833 71%

Budget Year to Date

Actual Year to Date

Positive Variance

Actual v. Budget %

Generation 7,083 9,355 (2,272) 132%Gen - Other 0 0 0 0%Transmission 0 0 0 0%Trans - Other 0 0 0 0%Renewables 7,083 9,355 (2,272) 132%Rens - Other 0 0 0 0%Administrative 0 0 0 0%Total 14,167 18,710 (4,543) 132%

YEAR TO DATE

CURRENT MONTH

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

Jan-2016

Feb-2016

Mar-2016

Apr-2016

May-2016

Jun-2016

Jul-2

016

Aug-2016

Sep-2016

Oct-201

6

Nov-2016

Dec-201

6

OutsideServices-Total

CUMMULATIVEBUDGET

CUMMULATIVEACTUAL

6/15/16 2016 Input 2016 Consulting and Outside Service Expenses.xlsx

Consultant Costs - 2015

2016 Budget Revised Budget

Task Orders Jan-2016 Feb-2016 Mar-2016 Apr-2016 May-2016 Jun-2016 Jul-2016 Aug-2016 Sep-2016 Oct-2016 Nov-2016 Dec-2016 Total Average Year-End Notes

8.33% 16.67% 25.00% 33.33% 41.67% 50.00% 58.33% 66.67% 75.00% 83.33% 91.67% 100.00% Projection

NavigantGeneration

General 5,000 5,000 - - - - - - - Transmission

SCE TO-6 et al 35,000 35,000 - 1,236 2,704 - 3,940 985 11,819 Other Trans

- - - - - - Renewables BPA 25,000 25,000 - - - - - - BPA Cohen

Administrative 10,000 10,000 986 739 846 913.33 3,484 871 10,453 75,000 75,000 986 1,975 3,550 913 - - - - - - - - 7,424 1,856 22,272

1.31% 3.95% 8.68% 9.90% 9.90% 9.90% 9.90% 9.90% 9.90% 9.90% 9.90% 9.90% 30%

KBTGeneration

General 95,000 95,000 15,705 9,120 11,020 14,782.79 50,628 12,657 151,884 Gen - Other

SJGS Disposition - - KBT 2016-xx - - - - - SJGS Restructuring Closing

- - - - Remaining -

TransmissionGeneral 30,000 30,000 2,470 6,270 6,080 5,510.00 20,330 5,083 60,990

Trans - OtherManagement 25,000 25,000 - - - - -

RenewablesGeneral 50,000 50,000 3,230 6,987 6,440 2,280.00 18,937 4,734 56,811

Rens - OtherBP-16 Rate Case 50,000 50,000 - BP-18 Rate Case

KBT 2016-01 9,600 2,240 5,520 7,760 3,880 7,760 Jan - FebKBT 2016-02 12,800 2,720 1,520.00 4,240 2,120 4,240 Mar - AprKBT 2016-xx - - - - - - May - JunKBT 2016-xx - - - - - - Jul - AugKBT 2016-xx - - - - - - Sep - OctKBT 2016-xx - - - - - - Nov - Dec

Sum 22,400 12,000 BPA - OMP/IRI Cases 5,000 5,000 BPA - OMP/IRI Cases

KBT 2016-01 - - - - - - Jan - FebKBT 2016-02 - - - - - - Mar - AprKBT 2016-xx - - - - - - May - JunKBT 2016-xx - - - - - - - Jul - AugKBT 2016-xx - - - - - - - Sep - OctKBT 2016-xx - - - - - - Nov - Dec

Sum - -

Administrative 45,000 45,000 2,302 1,151 2,481 1,943.20 7,876 1,969 23,629 300,000 300,000 25,947 29,048 28,741 26,035.99 - - - - - - - - 109,772 30,443 365,315

8.65% 18.33% 27.91% 36.59% 36.59% 36.59% 36.59% 36.59% 36.59% 36.59% 36.59% 36.59% 122%

Flynn RCIGeneration - - - -

Transmission - - - - Trans - Other

SWTP Negos 25,000 25,000 - 638 1,988 705 3,330 833 9,990 Renewables - - - - Rens - Other -

Administrative - - - 25,000 25,000 - 638 1,988 705 - - - - - - - - 3,330 833 9,990

0.00% 2.55% 10.50% 13.32% 13.32% 13.32% 13.32% 13.32% 13.32% 13.32% 13.32% 13.32% 40%

Misc (MID etc) - GenerationGen - Other - - - -

TransmissionTrans - Other - - - - - Renewables - - - - - - - - - - - - -

Administrative - - - - - - - - - - - - - 0 - - - - - - - - - - - - - - - -

0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% #DIV/0!109,772

SUBTOTAL 400,000 400,000 26,933 31,661 34,278 27,654 - - - - - - - - 120,526 33,131 397,577 6.73% 14.65% 23.22% 30.13% 30.13% 30.13% 30.13% 30.13% 30.13% 30.13% 30.13% 30.13% 99%

Outside Services Italics = EstimatesGeneration

Ferguson Group 5,000 5,000 - 878 2,479 18 - 3,374 675 8,097 Politico Group 12,000 12,000 1,000 1,187 1,065 1,730 1,000 5,981 1,196 14,355

TransmissionRenewables

Ferguson Group 5,000 5,000 - 878 2,479 18 - 3,374 675 8,097 Politico Group 12,000 12,000 1,000 1,187 1,065 1,730 1,000 5,981 1,196 14,355

Rens - OtherAdministrative - - - -

34,000 34,000 2,000 4,128 7,087 3,495 2,000 - - - - - - - 18,710 3,742 44,903 5.88% 18.02% 38.87% 49.15% 55.03% 55.03% 55.03% 55.03% 55.03% 55.03% 55.03% 55.03% 132%

GRAND TOTAL 434,000 434,000 28,933 35,789 41,365 31,149 2,000 - - - - - - - 139,235 36,873 442,480 6.67% 14.91% 24.44% 31.62% 32.08% 32.08% 32.08% 32.08% 32.08% 32.08% 32.08% 32.08% 102%

2016 Budget 2016 BudgetG 117,000 117,000 151,884 G - Other - - - T 65,000 65,000 72,809 T - Other 50,000 50,000 9,990 R 92,000 92,000 56,811 R - Other 55,000 55,000 12,000 A 55,000 55,000 34,082

434,000 434,000 337,577

50/35/15 287,000 Renew 147,000

o f 1


Date: June16,2016 From: MartinR.Hopper,GeneralManager To: M-S-RPPATechnicalCommittee Subject: June2016WREGISRECTransfersStatusReport In2013,theGeneralManagermetwithIberdrolaRenewables,IncregardingthestatusofitstransfersofWesternRenewableEnergyGenerationInformationSystem(WREGIS)RenewableEnergyCredits(RECs)fortheBigHornIandBigHornIIWindEnergyProjectstoM-S-RPPA.Ideally,theWREGIStimelineswouldallowtransfersofRECstoM-S-RPPAabout90-daysafterthecloseofareportingmonth.Atthetimeofthatmeeting,sometransferswereasmanyas215-daysoutstanding.IberdrolahassubsequentlyrevieweditsinternalproceduresandhasgenerallycompletedBigHornIandBigHornIItransfersinatimelymanner.However,transferofFebruary2016RECstotheMembersnowstandsat108daysduetodelaysinresolvingdatadiscrepancieswithIberdrola.TheM-S-RControllerexpectsthisissuestoberesolvedinthenextfewdaysandthetransferstotheMemberscanthenbecompleted.TheattachedchartillustratescurrentandhistoricstatusofRECtransfers.AsrequestedbytheCommission,thisreportwillbeupdatedandpresentedeveryothermonth.IrecommendtheCommissionnoteandfiletheJune2016WREGISRECTransfersStatusReport.

WREGIS Transfer Durations.xlsx 6/15/16

0

90

180

270

360

450

540

630

Jan-08 May-09 Oct-10 Feb-12 Jul-13 Nov-14 Apr-16

Elap

sedTime(Days)

Month

BigHornI&IIRECTransfers

BHIDuraDon

BHIIDuraDon

OpenTransfers

6/15/16 WREGIS Transfer Durations.xlsx

REC Transfer Timeliness

Month Ending

Date Transferred to Members

BH I DurationDate

Transferred to Members

BH II Duration Today's Date Open

Transfers

Jan-08 29-Jun-09 515Feb-08 29-Jun-09 486Mar-08 29-Jun-09 455Apr-08 29-Jun-09 425May-08 29-Jun-09 394Jun-08 29-Jun-09 364Jul-08 29-Jun-09 333Aug-08 8-Jun-09 281Sep-08 8-Jun-09 251Oct-08 29-Jun-09 241Nov-08 8-Jun-09 190Dec-08 8-Jun-09 159Jan-09 8-Jun-09 128Feb-09 29-Jun-09 121Mar-09 7-Jul-09 98Apr-09 2-Sep-09 125May-09 2-Sep-09 94Jun-09 5-Nov-09 128Jul-09 30-Nov-09 122Aug-09 15-Dec-09 106Sep-09 8-Jan-10 100Oct-09 8-Feb-10 100Nov-09 10-Mar-10 100Dec-09 9-Apr-10 99Jan-10 10-May-10 99Feb-10 10-Jun-10 102Mar-10 10-Aug-10 132Apr-10 10-Aug-10 102May-10 10-Sep-10 102Jun-10 13-Oct-10 105Jul-10 9-Nov-10 101Aug-10 10-Dec-10 101Sep-10 2-May-11 214Oct-10 2-May-11 183Nov-10 9-May-11 160 9-May-11 160Dec-10 3-Jun-11 154 3-Jun-11 154Jan-11 11-Jul-11 161 11-Jul-11 161Feb-11 11-Jul-11 133 11-Jul-11 133Mar-11 11-Jul-11 102 11-Jul-11 102Apr-11 29-Aug-11 121 31-Aug-11 123May-11 30-Aug-11 91 31-Aug-11 92Jun-11 8-Nov-11 131 8-Nov-11 131Jul-11 8-Nov-11 100 8-Nov-11 100Aug-11 30-Nov-11 91 30-Nov-11 91Sep-11 20-Jan-12 112 20-Jan-12 112Oct-11 15-Feb-12 107 15-Feb-12 107Nov-11 24-May-12 176 24-May-12 176Dec-11 24-May-12 145 24-May-12 145Jan-12 15-Aug-12 197 15-Aug-12 197Feb-12 15-Aug-12 168 15-Aug-12 168Mar-12 15-Aug-12 137 15-Aug-12 137Apr-12 15-Aug-12 107 15-Aug-12 107May-12 30-Aug-12 91 30-Aug-12 91Jun-12 1-Oct-12 93 1-Oct-12 93Jul-12 31-Oct-12 92 31-Oct-12 92Aug-12 30-Nov-12 91 30-Nov-12 91Sep-12 3-May-13 215 3-May-13 215Oct-12 3-May-13 184 3-May-13 184Nov-12 3-May-13 154 3-May-13 154Dec-12 3-May-13 123 3-May-13 123Jan-13 3-Jun-13 123 3-May-13 92Feb-13 3-Jun-13 95 3-Jun-13 95Mar-13 2-Jul-13 93 2-Jul-13 93Apr-13 31-Jul-13 92 31-Jul-13 92May-13 4-Sep-13 96 5-Sep-13 97Jun-13 1-Oct-13 93 1-Oct-13 93Jul-13 21-Nov-13 113 21-Nov-13 113Aug-13 5-Dec-13 96 5-Dec-13 96Sep-13 2-Jan-14 94 2-Jan-14 94Oct-13 3-Feb-14 95 3-Feb-14 95Nov-13 3-Mar-14 93 3-Mar-14 93Dec-13 3-Apr-14 93 4-Apr-14 94Jan-14 8-May-14 97 8-May-14 97Feb-14 3-Jun-14 95 3-Jun-14 95Mar-14 2-Jul-14 93 2-Jul-14 93Apr-14 31-Jul-14 92 31-Jul-14 92May-14 4-Sep-14 96 4-Sep-14 96Jun-14 20-Oct-14 112 20-Oct-14 112Jul-14 7-Nov-14 99 7-Nov-14 99Aug-14 2-Dec-14 93 2-Dec-14 93Sep-14 12-Jan-15 104 12-Jan-15 104Oct-14 23-Feb-15 115 23-Feb-15 115Nov-14 13-Apr-15 134 13-Apr-15 134 Note: Rec'd from IRI 3-Mar-15Dec-14 13-Apr-15 103 13-Apr-15 103 Note: Rec'd from IRI 1-Apr-15Jan-15 6-May-15 95 6-May-15 95Feb-15 2-Jun-15 94 2-Jun-15 94Mar-15 9-Jul-15 100 9-Jul-15 100Apr-15 5-Aug-15 97 5-Aug-15 97May-15 1-Sep-15 93 1-Sep-15 93Jun-15 2-Oct-15 94 2-Oct-15 94Jul-15 5-Nov-15 97 5-Nov-15 97Aug-15 2-Dec-15 93 2-Dec-15 93Sep-15 31-Dec-15 92 31-Dec-15 92Oct-15 12-Feb-16 104 12-Feb-16 104Nov-15 3-Mar-16 94 3-Mar-16 94Dec-15 4-Apr-16 95 4-Apr-16 95Jan-16 3-May-16 93 2-May-16 92Feb-16 15-Jun-16 108 Mar-16 15-Jun-16 77 Apr-16 15-Jun-16 47

Big Horn I Big Horn II

6/16/16

M-S-R PUBLIC POWER AGENCY SAN JUAN PROJECT

STATUS REPORT JUNE 2016

SAN JUAN UNIT 4 OPERATIONS March 2016 Unit Net Generation (MWh) 272,066 Net Capacity Factor (%) 72.1 April 2016 Unit Net Generation (MWh) 131,319 Net Capacity Factor (%) 36.0 May 2016 Unit Net Generation (MWh) 286,512 Net Capacity Factor (%) 76.0 San Juan Generating Station (San Juan) Unit 4 was forced from service twice during March for a total of 35.5 hours. In April, San Juan suffered two lengthy forced outages. First, the unit was off-line for 281 hours beginning on the 1st and returning on the 13th due to main steam block repairs. In addition, San Juan was off-line for 91 hours beginning on the 15th and returning on the 19th to repair boiler tube leaks in the secondary superheat section of the boiler. EQUIVALENT AVAILABILITY FACTOR (EAF) EAF is a key indicator that measures the ability of a generating unit to produce energy. Mathematically, the energy produced over a period of time is divided by the amount of time the generating unit is available to produce energy. EAF also factors in partial outages and times when the generating unit is continues to operate but the maximum capability is reduced. Though May, the San Juan Unit 4 EAF is 75.32%. This compares to a 2015 San Juan Unit 4 EAF of 63.02% which included a nearly two months for a major maintenance outage. Over the first five months of 2015, the San Juan Unit 4 EAF was 67.30%. Why this is important is that in 2015 San Juan failed to achieve minimum coal deliveries. Through the Restructuring Agreements, the cost risk for minimum coal deliveries is tempered by EAF and the risk to the Agency is somewhat mitigated.

6/16/16

M-S-R PUBLIC POWER AGENCY

SOUTHWEST TRANSMISSION PROJECTS STATUS REPORT

JUNE 2016 Project Transition

The sale of the Mead-Phoenix Transmission Project (Mead-Phoenix) and Mead-Adelanto Transmission Project (Mead-Adelanto) were completed on May 25, 2016 after operating to the benefit of the Agency for just one week over 20 years. There were no operational problems reported with the transition.

Southwest Transmission Project

With the completion of the sale of Mead-Phoenix and Mead-Adelanto to the Southern California Public Power Authority (SCPPA) and the termination of the transmission services contracts with the Los Angeles Department of Water and Power (LADWP) and previously with Southern California Edison Company (SCE), only one component of the Southwest Transmission Project remains intact The power exchange arrangement with Tucson Electric Power Company (TEP) which allows delivery from the San Juan Generating Station to the Palo Verde Switchyard remains effective.

6/16/16

M-S-R PUBLIC POWER AGENCY PACIFIC NORTHWEST PROJECT

STATUS REPORT JUNE 2016

BIG HORN I OPERATION MWH % of 5-Year Average April 2016 45,317 83.0 May 2016 50,194 107.0 2016 Total 316,582 92.1 Project Life (since October 2006) 4,964,292 92.5 BIG HORN II OPERATION MWH % of 5-Year Average March 2016 14,632 116.4 April 2016 9,378 74.2 May 2016 14,632 118.3 2016 Total 53,677 94.7 Project Life (since November 2010) 661,685 91.6 Energy curtailments for the four month period November 2015-February 2016 totaled only 55 MWH. Curtailments in March 2016 were 58 MWH during peak hours and 91 MWH during off peak hours while April 2016 were 22 MWH during peak hours and 80 MWH during peak hours. In May, the total curtailments fell to 15 MWH. Energy production for both projects in 2016 is close to historic averages (low 90’s). Although both projects have only met expectations in March and May, production in 2016 at Big Horn I almost exactly matches the historic averages as of the end of 2015 while production at Big Horn II is 0.3 percent above the end of 2015 figure.

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Date: June 16, 2016 From: Martin R. Hopper, General Manager To: M-S-R PPA Commission Subject: June 2016 General Manager’s Report Final FPPC Approval of M-S-R PPA Conflict of Interest Policy On June 6, 2016, the FPPC finally approved the Agency’s Conflict of Interest Code effective July 6, 2016. This version of the Code was previously presented to the Commission in 2012 and after a lengthy review by the FPPC was posted by M-S-R PPA for review pursuant to Commission direction on January 27, 2016. Upon the close of the Public Comment period on March 14, 2016 the Agency informed the FPPC that no comments were received. After the FPPC’s own notice proceedings, final approval was finally granted. The FPPC then informed the Agency on the following day that “The Political Reform Act requires every multi-county agency to review its conflict of interest code biennially and notify the Fair Political Practices Commission as to whether or not the agency’s code needs to be amended. The biennial notice must be submitted to the FPPC no later than October 3, 2016.” The General Manager and General Counsel intend to notify the FPPC that no amendments are needed at this time. Meeting With Avangrid (Iberdrola) Renewables On June 9, 2016 the General Manager, M-S-R Coordinator and members of MID Staff met with Avangrid Renewables to review operational issues and coordination regarding the Big Horn Wind Energy Projects and to discuss possible harmonization of positions during the upcoming BPA-18 Rate Case. Also discussed were various housekeeping matters regarding the form of the Agency’s agreements with Avangrid and its assorted subsidiaries.MacintoshHD:Users:martinhopper:MyLaptopDocuments:M-S-RPublicPowerAgency:Administrative:Director:June2016MSRPPAGeneralManager'sReport.doc

M-S-R Public Power Agency

Staff Report Date: June 16, 2016 From: Martin R. Hopper, General Manager To: M-S-R PPA Commission Subject: Discussion and Possible Action Regarding Resolution 2016 - 01

“Regarding Resolution Of The Commission Of The M-S-R Public Power Agency Approving The Defeasance Of All Or A Portion Of The Series 2008L Bonds, The Series 2008M Bonds, The Series 2008N Bonds And The Series 2011O Bonds With Certain Proceeds From The Sale Of Assets Relating To The Southwest Transmission Project; Approving The Application Of Certain Proceeds From Said Sale Of Assets To A Mine Reclamation Trust Fund And A Plant Decommissioning Trust Fund; Approving The Creation Of A Debt Service Coverage Revolving Fund And The Application Of Certain Available Moneys To Said Revolving Fund; Approving The Form And Authorizing The Execution And Delivery Of An Escrow Agreement; And Authorizing Certain Other Actions In Connection Therewith”

At its April 20, 2016 meeting, upon the recommendation of the General Manager and Financial Management Committee, the Commission directed the General Manager and Financial Advisor to prepare for the Commission’s further consideration implementing Resolutions and documents necessary to allow the Agency to take the following actions:

1. Making findings that the Southwest Transmission Project Sales Proceeds projected to be in an amount of approximately $60 million are surplus to the needs of the San Juan Project and may be used for the following purposes under the Indenture:

a. Payment of Debt Service b. Defeasement of Debt c. Establishment of Reserve or Revolving Funds, or d. Pre-Funding San Juan Project Expenses; and

2. Preparing of the necessary documents for the defeasance of the Series 2011 O

Bonds on or about July 1, 2016; and

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3. Preparing of a final defeasance plan based on Case 3 in the Staff Report (dated April 14, 2016 and attached hereto) whereby the entire $60 million proceeds, less the cost of defeasing the Series 2011 O Bonds and allocating approximately $8.1 million of proceeds to the Mine Reclamation and Plant Decommissioning Trusts, are used to defease other remaining debt; and

4. Creating of a Debt Service Coverage Revolving Fund sufficient to provide debt

service coverage for the net resulting annual debt service after the above described defeasances using moneys from the Agency’s Member Cash Call Reserve Account sub-fund contained in the Operating Fund; and

5. Using Sales Proceeds to fund the Mine Reclamation Trust Fund in 2016 by an

amount of about $5.9 million, and placement of an expected contribution of about $2.26 million for the Plant Decommissioning Trust into the Member Cash Call Reserve Account in 2016 and subject to further direction of the Commission subsequently transfer to the Plant Decommissioning Trust Fund as required under the Plant Decommissioning and Trust Funds Agreement.

The proposed Resolution 2016-01 “Regarding Resolution Of The Commission Of The M-S-R Public Power Agency Approving The Defeasance Of All Or A Portion Of The Series 2008L Bonds, The Series 2008M Bonds, The Series 2008N Bonds And The Series 2011O Bonds With Certain Proceeds From The Sale Of Assets Relating To The Southwest Transmission Project; Approving The Application Of Certain Proceeds From Said Sale Of Assets To A Mine Reclamation Trust Fund And A Plant Decommissioning Trust Fund; Approving The Creation Of A Debt Service Coverage Revolving Fund And The Application Of Certain Available Moneys To Said Revolving Fund; Approving The Form And Authorizing The Execution And Delivery Of An Escrow Agreement; And Authorizing Certain Other Actions In Connection Therewith” fully implements those directions. Attached for the Commissioner’s information is the report of Agency’s Financial Advisor, Montague DeRose and Associates, LLC. wherein they recommend the structure of the proposed defeasance and redemption of Bonds and payment of swap termination costs. Also attached is the form of Escrow Agreement as referenced in the Resolution. I recommend the Commission adopt Resolution 2016-01 as captioned above.

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RESOLUTION NO. 2016-____ Adopted on June 22, 2016

RESOLUTION OF THE COMMISSION OF THE M-S-R PUBLIC POWER AGENCY APPROVING THE DEFEASANCE OF ALL OR A PORTION OF THE SERIES 2008L BONDS, THE SERIES 2008M BONDS, THE SERIES 2008N BONDS AND THE SERIES 2011O BONDS WITH CERTAIN PROCEEDS FROM THE SALE OF ASSETS RELATING TO THE SOUTHWEST TRANSMISSION PROJECT; APPROVING THE APPLICATION OF CERTAIN PROCEEDS FROM SAID SALE OF ASSETS TO A MINE RECLAMATION TRUST FUND AND A PLANT DECOMMISSIONING TRUST FUND; APPROVING THE CREATION OF A DEBT SERVICE COVERAGE REVOLVING FUND AND THE APPLICATION OF CERTAIN AVAILABLE MONEYS TO SAID REVOLVING FUND; APPROVING THE FORM AND AUTHORIZING THE EXECUTION AND DELIVERY OF AN ESCROW AGREEMENT; AND AUTHORIZING CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH

___________________________

WHEREAS, the Modesto Irrigation District (the “District”), an irrigation district in the State of California, the City of Santa Clara (“Santa Clara”), a charter city and municipal corporation in the State of California, and the City of Redding (“Redding”), a general law city and municipal corporation in the State of California, have heretofore executed a Joint Exercise of Powers Agreement (the “Joint Powers Agreement”), dated as of April 28, 1980, as amended and restated as of November 17, 1982, as amended by Amendment Number 1 to the Amended and Restated Joint Exercise of Powers Agreement, dated June 26, 1990, and Amendment Number 2 to the Amended and Restated Joint Exercise of Powers Agreement, dated January 24, 2006, by and among the District, Santa Clara and Redding, which such Joint Powers Agreement creates and establishes the M-S-R Public Power Agency (the “Agency”); and

WHEREAS, pursuant to the Joint Powers Agreement and Article 4 of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the “Marks-Roos Local Bond Pooling Act of 1985” or the “Act”), the Agency is authorized to undertake a revenue bond financing for public capital improvements, working capital, liability and other insurance needs or projects whenever there are significant public benefits, as determined by the Agency; and

WHEREAS, pursuant to the Indenture of Trust, dated as of June 1, 1994, as amended and supplemented (the “Indenture”), between the Agency and U.S. Bank National Association, as trustee (the “Trustee”), the Agency has heretofore duly issued its M-S-R Public Power Agency San Juan Project Subordinate Lien Revenue Bonds, Series 2008L in the aggregate principal amount of $118,865,000 (the “Series 2008L Bonds”), $103,655,000 of which remain outstanding; and

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WHEREAS, pursuant to the Indenture, the Agency has heretofore duly issued its M-S-R Public Power Agency San Juan Project Subordinate Lien Revenue Bonds, Series 2008M in the aggregate principal amount of $62,500,000 (the “Series 2008M Bonds”), $62,500,000 of which remain outstanding; and

WHEREAS, pursuant to the Indenture, the Agency has heretofore duly issued its M-S-R Public Power Agency San Juan Project Subordinate Lien Revenue Bonds, Series 2008N in the aggregate principal amount of $17,000,000 (the “Series 2008N Bonds”), $17,000,000 of which remain outstanding; and

WHEREAS, pursuant to the Indenture, the Agency has heretofore duly issued its M-S-R Public Power Agency San Juan Project Subordinate Lien Revenue Bonds, Series 2011O in the aggregate principal amount of $34,050,000 (the “Series 2011O Bonds” and, together with the Series 2008L Bonds, the Series 2008M Bonds and the Series 2008N Bonds, the “Prior Bonds”), $11,970,000 of which remain outstanding; and

WHEREAS, in connection with the issuance of the Series 2008M Bonds, the Agency entered into an interest rate swap agreement with Morgan Guaranty Trust Company of New York in the original notional amount of $62,500,000 (the “2008M Swap Agreement”); and

WHEREAS, in connection with the issuance of the Series 2008N Bonds, the Agency entered into an interest rate swap agreement with Morgan Guaranty Trust Company of New York in the original notional amount of $17,000,000 (the “2008N Swap Agreement” and, together with the 2008M Swap Agreement, the “Swap Agreements”); and

WHEREAS, the Agency remarketed and reissued the Series 2008M Bonds and the Series 2008N Bonds to Wells Fargo Bank, National Association pursuant to a Continuing Covenant Agreement, dated June 15, 2011; and

WHEREAS, the Agency sold assets relating to the Southwest Transmission Project to the Southern California Public Power Authority on May 25, 2016, which resulted in cash proceeds to the Agency of approximately $60,000,000 (the “Sale Proceeds”); and

WHEREAS, the Agency has determined that the Sale Proceeds are surplus to the needs of the San Juan Project and may be used for the payment of debt service on outstanding Agency bonds (the “Bonds”), the defeasance of Bonds, the establishment of reserve or revolving funds, and/or the prefunding of San Juan Project expenses; and

WHEREAS, the Agency desires to use a portion of the Sale Proceeds and certain other moneys available for the purposes set forth in this Resolution, including the defeasance of all or a portion of the outstanding Series 2008L Bonds, the Series 2008M Bonds, the Series 2008N Bonds and the Series 2011O Bonds, and the financing of the swap termination payments relating to the termination of a portion of the Swap Agreements; and

WHEREAS, the Agency desires to use a portion of the Sale Proceeds to partially fund a plant decommissioning trust fund pursuant to the San Juan Decommissioning and Trust Funds Agreement, dated July 31, 2015 (the “Decommissioning Agreement”); and

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WHEREAS, the Agency desires to use a portion of the Sale Proceeds to partially fund a mine reclamation trust fund pursuant to the Amended and Restated Mine Reclamation and Trust Funds Agreement, dated July 31, 2015 (the “Mine Reclamation Agreement”); and

WHEREAS, the Agency desires to use certain other moneys from member contributions to fund a debt service coverage revolving fund (the “Debt Service Coverage Revolving Fund”) to provide debt service coverage for the net resulting annual debt service on the Bonds after the defeasance of all or a portion of the Prior Bonds; and

WHEREAS, the Agency desires to enter into an escrow agreement relating to the Series 2008L Bonds and the Series 2011O Bonds;

NOW, THEREFORE, BE IT RESOLVED by the Commission of the Agency as follows:

Section 1. The Commission hereby finds and determines that the matters set forth in the preambles to this Resolution are true and correct.

Section 2. The President or Vice President of the Commission or the General Manager of the Agency each are hereby authorized and directed to execute and deliver the Escrow Agreement in substantially the form presented to this meeting and which is hereby approved, subject to such additions thereto or changes therein as the President or Vice President of the Commission or the General Manager of the Agency may approve, such approval to be conclusively evidenced by the execution and delivery thereof.

Section 3. The President or Vice President of the Commission or the General Manager of the Agency each are hereby authorized and directed to terminate a portion of the Swap Agreements and to enter into and execute for and on behalf of the Agency such termination confirmations, termination agreements or other similar documents providing for the termination of portions of the swaps under the Swap Agreements (the “Swap Termination Documents”) as may be necessary or advisable in connection with the termination of the Swap Agreements as authorized hereby.

The Swap Termination Documents may include provision for the reinstatement of the respective Swap Agreement substantially in the form of the reinstatement provisions attached hereto as Exhibit A, with such changes as approved by the President or Vice President of the Commission or the General Manager of the Agency, which may include an adjustment in the fixed rate payable by the Agency under the respective Swap Agreement (or, at the Agency’s option, the payment of an equivalent amount thereto) to reflect intervening market movements between the trade date of such termination and the date of reinstatement, in the unlikely event the Sale Proceeds are not delivered for any reason.

Section 4. The officers of the Agency are hereby authorized to use a portion of the Sale Proceeds to (i) fund a deposit to the plant decommissioning trust fund in an amount not to exceed $2,300,000 pursuant to the Decommissioning Agreement, and (ii) fund a deposit to the mine reclamation trust fund in an amount not to exceed $5,900,000 pursuant to the Mine Reclamation Agreement.

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Section 5. There is hereby established the Debt Service Coverage Revolving Fund, to be held by the Agency. The officers of the Agency are hereby authorized to use certain other moneys from member contributions to fund the Debt Service Coverage Revolving Fund in the amount of 10% of the maximum annual debt service on outstanding Bonds, rounded up to the nearest hundred thousand, to be determined from time to time.

Section 6. The officers of the Agency are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents (including without limitation a tax certificate), certificates, notices, instructions, requests or other instruments which they deem necessary or advisable in order to consummate the defeasance of the Prior Bonds, the payment of the swap termination payments relating to the termination of a portion of the Swap Agreements, the application of a portion of the Sale Proceeds to a mine reclamation trust fund and/or a plant decommissioning trust fund, the creation of the Debt Service Coverage Revolving Fund, and to implement the documents approved hereby, and otherwise to effectuate the purposes of this Resolution and the transactions contemplated hereby.

Section 7. This Resolution shall take effect immediately upon its adoption.

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PASSED AND ADOPTED by the Commission of the M-S-R Public Power Agency this 22nd day of June, 2016.

AYES: NOES: ABSENT:

APPROVED: By

President of M-S-R Public Power Agency

ATTEST: By Secretary of M-S-R Public Power Agency

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EXHIBIT A

FORM OF REINSTATEMENT PROVISIONS

[(X). Reinstatement of Original Transaction

(i) This Confirmation shall have no force or effect (other than with respect to the terms of this Paragraph X) unless the Counterparty’s San Juan Project Subordinate Lien Revenue Bonds, Series 2008M and San Juan Project Subordinate Lien Revenue Bonds, Series 2008N (collectively, the “Prior Bonds”) are redeemed on July 1, 2016 (the “Expected Redemption Date”). In the event that the Prior Bonds are not redeemed on the Expected Redemption Date, the terms of the Original Transaction shall remain in effect and JPMorgan, in its sole discretion, will determine, in good faith on the Expected Redemption Date, the Reinstatement Value, if any, in connection with reinstating the terms of the Original Transaction as set forth in the Confirmation dated November 4, 1998 (the “Original Confirmation”). JPMorgan shall use its best efforts to notify the Counterparty of the Reinstatement Value by 12:00 noon, New York time, one (1) Business Day following the Expected Redemption Date (the “Reinstatement Election Date”). By 5:00 p.m., New York time, on the Reinstatement Election Date, the Counterparty shall notify JPMorgan of whether it elects for the Reinstatement Value to be paid by: (A) the payment of a lump sum (“Option 1”); or (B) an adjustment of the Fixed Rate of the Original Transaction (“Option 2”).

(ii) If the Counterparty elects Option 1, then: (A) if the Reinstatement Value is a positive number, an amount equal to the Reinstatement Value will be payable by JPMorgan to the Counterparty on the Reinstatement Value Payment Date; and (B) if the Reinstatement Value is a negative number, an amount equal to the absolute value of the Reinstatement Value will be payable by the Counterparty to JPMorgan on the Reinstatement Value Payment Date. Promptly following the Expected Redemption Date, JPMorgan shall deliver an amended and restated Confirmation to the Counterparty reflecting the payment of the Reinstatement Value and the Counterparty shall execute and return such Confirmation to JPMorgan or request correction of any error within five Business Days of receipt. Each of the parties hereby agrees to deliver to the other party all documentation related to such revised Confirmation as reasonably requested by the other party, including, but not limited to, opinions of counsel.

(iii) If the Counterparty elects Option 2, then the Fixed Rate payable by the Counterparty to JPMorgan under the Original Transaction shall be increased (in the event that the Reinstatement Value is a negative number) or decreased (in the event that the Reinstatement Value is a positive number) in an amount determined by JPMorgan in its sole discretion to reflect the Reinstatement Value for the period from and including the Expected Redemption Date to but excluding the Termination Date (the Original Transaction, as modified by an adjustment to the Fixed Rate as described in this Section X(iii), the “Adjusted Transaction”). Promptly following the Expected Redemption Date, JPMorgan shall deliver an amended and restated Confirmation to the Counterparty reflecting the adjusted Fixed Rate and the terms of the Adjusted Transaction and the Counterparty shall execute and return such Confirmation to JPMorgan or request correction of any error within five Business Days of receipt. Each of the parties hereby agrees to

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OHSUSA:765194790.7

deliver to the other party all documentation related to such revised Confirmation as reasonably requested by the other party, including, but not limited to, opinions of counsel.

(iv) As used in this Section X:

(i) “Reinstatement Value” shall mean an amount that JPMorgan reasonably determines in good faith, in its sole discretion, to be its total losses and costs (expressed as a negative number) or gain (expressed as a positive number) in connection with continuing the terms of the Original Transaction evidenced by the Original Confirmation, including any loss of bargain, cost of funding or, at the election of JPMorgan but without duplication, loss or cost (including without limitation reasonable attorney's fees) incurred by JPMorgan as a result of its terminating, liquidating, obtaining or reestablishing any hedge or related trading position (or any gain resulting therefrom).

(ii) “Reinstatement Value Payment Date” shall mean the second (2nd) Business Day following the Expected Redemption Date.

(v) The parties agree that the failure of either party to perform any of its obligations in this Section X shall be deemed to be an Event of Default under the Agreement with respect to such party as the Defaulting Party.]

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OHSUSA:765194790.7

SECRETARY’S CERTIFICATE

I, Steven C. Gross, Secretary of the M-S-R Public Power Agency, hereby certify that the foregoing is a full, true and correct copy of a resolution duly adopted at a regular meeting of the Commission of said Agency duly and regularly held at Folsom, California on the 22nd day of June, 2016, at which meeting all of the members of said Commission had due notice and at which a majority thereof were present, and that at said meeting said resolution was adopted by the following vote:

Ayes:

Noes:

Absent:

I further certify that I have carefully compared the same with the original minutes of said meeting on file and of record in my office; that said resolution is a full, true and correct copy of the original resolution adopted at said meeting and entered in said minutes; and that said resolution has not been amended, modified or rescinded since the date of its adoption, and is not in full force and effect.

WITNESS, my hand and the seal of the M-S-R Public Power Agency this ___ day of ___________, 2016.

Secretary of the M-S-R Public Power Agency

[SEAL]

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OHSUSA:754358994.4

______________________________________________________________________________

ESCROW AGREEMENT

by and between the


and

U.S. BANK NATIONAL ASSOCIATION, as Escrow Agent

Dated as of [July] 1, 2016

RELATING TO THE

M-S-R Public Power Agency San Juan Project Subordinate Lien Revenue Bonds, Series 2008L San Juan Project Subordinate Lien Revenue Bonds, Series 2011O

______________________________________________________________________________

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ESCROW AGREEMENT

This Escrow Agreement (the “Escrow Agreement”), dated as of [July] 1, 2016, by and between the M-S-R PUBLIC POWER AGENCY, a joint exercise of powers authority duly organized and existing under and by virtue of the laws of the State of California (the “Agency”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association duly organized and existing under and by virtue of the laws of the United States of America and having a corporate trust office in San Francisco, California (the “Trustee”), as Trustee under and pursuant to that certain Indenture of Trust, dated as of June 1, 1994, as amended and supplemented (the “Indenture”), between the Agency and the Trustee, and as escrow agent (the “Escrow Agent”) under this Escrow Agreement;

WITNESSETH:

WHEREAS, pursuant to the Indenture, the Agency has heretofore duly issued $118,865,000 of its San Juan Project Subordinate Lien Revenue Bonds, Series 2008L (the “Series 2008L Bonds”), $103,655,000 of which remain outstanding, and $34,050,000 of its San Juan Project Subordinate Lien Revenue Bonds, Series 2011O (the “Series 2011O Bonds” and, together with the Series 2008L Bonds, the “Prior Bonds”), $11,970,000 of which remain outstanding; and

WHEREAS, the Agency has determined that it is in the best interests of the Agency to defease a portion of the outstanding Prior Bonds (such portion, the “Defeased Bonds”), as shown in Schedule B attached hereto; and

WHEREAS, in order to implement the foregoing, the Agency has taken action to cause to be delivered to the Escrow Agent, for deposit in the Escrow Fund hereinafter referred to, the sum of $[_____], which will be used by the Trustee to purchase those certain United States Treasury obligations (the “Escrow Securities”) listed in Schedule A attached hereto and made a part hereof, the interest on and principal of which Escrow Securities, together with the unexpended money from such initial deposit into the Escrow Fund, will be sufficient to provide for the payment on such dates and in such amounts as set forth in Schedule C hereto, of the principal of and interest on the Defeased Bonds becoming due and payable on the redemption date or maturity date, as applicable, of such Defeased Bonds;

NOW, THEREFORE, the Agency, the Escrow Agent and the Trustee hereby agree as follows:

Section 1. Establishment and Maintenance of Escrow Fund. The Escrow Agent agrees to establish and maintain the Escrow Fund (the “Escrow Fund”) and within such Escrow Fund, an escrow account designated as the “Series 2008L Escrow Account” (the “Series 2008L Escrow Account”) and an escrow account designated as the “Series 2011O Escrow Account” (the “Series 2011O Escrow Account”) until all Defeased Bonds have been paid as provided in Section 2 hereof, and to purchase and hold the Escrow Securities set forth in Schedule A hereto and hold the money (whether constituting the initial deposit in the Escrow Fund or constituting receipts on the Escrow Securities) in the Escrow Fund at all times as a separate escrow account wholly segregated from all other securities, investments or money held by it. All Escrow

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Securities and money in the Escrow Fund are hereby irrevocably pledged to secure the payment of the principal of and interest on the Defeased Bonds as provided in Section 2 hereof; provided, that any money held in the Escrow Fund that is not used for the payment of the principal of and interest on the Defeased Bonds as provided in Section 2 hereof shall be repaid to the Agency free from the trust created hereby.

Section 2. Payment from the Escrow Fund. The Escrow Agent is hereby irrevocably instructed to, and the Escrow Agent hereby agrees to, collect and deposit in the Escrow Fund the interest on and principal of all Escrow Securities set forth in Schedule A hereto held in the Escrow Fund promptly as such interest become due, and to use such interest, together with any other money deposited in the Escrow Fund, to provide for the payment of principal of and interest on the Defeased Bonds becoming due and payable on the redemption date or maturity date, as applicable, of such Defeased Bonds, as shown in Schedule C attached hereto.

Section 3. Notice of Defeasance and Notice of Redemption. The Trustee hereby agrees to give notice of defeasance of the Defeased Bonds in accordance with the Indenture, in the form attached hereto as Exhibit A, and notice of redemption of the Series 2008L Bonds in accordance with the Indenture, in the form attached hereto as Exhibit B.

Section 4. Deficiencies in the Escrow Fund. If at any time it shall appear to the Escrow Agent that the money in the Escrow Fund, including the anticipated proceeds of the Escrow Securities, will not be sufficient to make all payments required by Section 2 hereof, the Escrow Agent shall notify the Agency in writing as soon as reasonably practicable of such fact, stating the amount of such deficiency, and the Agency shall use its best efforts to obtain and deposit with the Escrow Agent for deposit in the Escrow Fund, from any legally available money, such additional money as may be required to provide for the making of all such payments; provided, that the Escrow Agent shall in no event or manner be responsible for the failure of the Agency to make any such deposit with it.

Section 5. Compensation and Indemnification of the Escrow Agent.

(a) The Agency shall pay the Escrow Agent from time to time reasonable compensation for its services hereunder and shall reimburse the Escrow Agent for its reasonable out-of-pocket expenses hereunder (including but not limited to the reasonable fees and expenses, if any, of its counsel or accountants) incurred by the Escrow Agent in connection with these services, all as more particularly agreed upon by the Agency and the Escrow Agent; provided, that such fees and expenses shall in no event be deducted from the Escrow Fund.

(b) The Agency agrees to indemnify the Escrow Agent and its agents, directors, officers and employees for, and hold the Escrow Agent and its agents, directors, officers and employees harmless from, all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any kind (including, without limitation, reasonable fees and disbursements of counsel or accountants for the Escrow Agent) which may be imposed on, incurred by, or asserted against the Escrow Agent or such other party at any time by reason of its performance of Escrow Agent’s services, in any transaction arising out of the Escrow Agreement or any of the transactions contemplated herein,

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3 OHSUSA:754358994.4

unless due to the negligence or willful misconduct of the particular indemnified party. The provisions of this section shall survive the removal or resignation of the Escrow Agent.

Section 6. Functions of the Escrow Agent.

(a) The Escrow Agent undertakes to perform only such duties as are expressly and specifically set forth herein and no implied duties or obligations shall be read herein against the Escrow Agent.

(b) The Escrow Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, and shall be protected and indemnified as stated herein, in acting, or refraining from acting, upon any written notice, instruction, request, certificate, document, report or opinion furnished to the Escrow Agent and believed by the Escrow Agent to have been signed or presented by the proper party, and it need not investigate any fact or matter stated in such notice, instruction, request, certificate, document, report or opinion.

(c) The Escrow Agent shall not have any liability hereunder except to the extent of its own negligence or willful misconduct, and in no event shall the Escrow Agent be liable for any special, indirect or consequential damages, even if parties know of the possibility of such damages. The Escrow Agent shall have no duty or responsibility hereunder in the case of any default in the performance of agreements or covenants contained in the Trust Agreement or in the case of the receipt of any written demand with respect to such default. The Escrow Agent is not required to resolve conflicting demands to money or property in its possession hereunder.

(d) The Escrow Agent may consult with counsel of its own choice (which may be counsel to the Agency) and the opinion of such counsel shall be full and complete authorization to take or suffer in good faith any action in accordance with such opinion of counsel.

(e) The Escrow Agent shall not be responsible for any of the recitals or representations contained herein, and shall not be liable for any action or omission of the Agency hereunder.

(f) The Escrow Agent shall not be liable for the accuracy of the calculations as to the sufficiency of the Escrow Securities and money in the Escrow Fund to pay or redeem the Refunded Bonds as provided in Section 2 hereof.

(g) Whenever in the administration of the trust hereof the Escrow Agent shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may in the absence of negligence or willful misconduct on the part of the Escrow Agent, be deemed to be conclusively proved and established by a certificate of the Agency, and such certificate shall, in the absence of negligence or willful misconduct on the part of the Escrow Agent, be full warrant to the Escrow Agent for any action taken or suffered by it under the provisions hereof upon the faith thereof.

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Section 7. Notices. All notices and communications hereunder shall be in writing and shall be deemed to be duly given if received or sent by first class mail, as follows:

If to the Agency:

M-S-R Public Power Agency c/o Modesto Irrigation District 1231 Eleventh Street Modesto, CA 95354 Attention: General Manager

If to the Trustee and Escrow Agent:

U.S. Bank National Association One California Street, Suite 1000 San Francisco, CA 94111 Attention: Global Corporate Trust Services

Section 8. Severability. If any section, paragraph, sentence, clause or provision hereof shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, sentence, clause or provision shall not affect any of the remaining provisions hereof.

Section 9. Execution. The Escrow Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all together shall constitute but one and the same agreement.

Section 10. Governing Law. The Escrow Agreement shall be construed and governed in accordance with the laws of the State of California.

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IN WITNESS WHEREOF, the Agency, the Escrow Agent and the Trustee have caused the Escrow Agreement to be executed each on its behalf as of the day and year first above written.


By____________________________________ General Manager

U.S. BANK NATIONAL ASSOCIATION, as Trustee

By____________________________________ Authorized Officer

U.S. BANK NATIONAL ASSOCIATION, as Escrow Agent

By____________________________________ Authorized Officer

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SCHEDULE A

DESCRIPTION OF ESCROW SECURITIES

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SCHEDULE B

DEFEASED BONDS

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SCHEDULE C

ESCROW REQUIREMENTS

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EXHIBIT A

[FORM OF] NOTICE OF PARTIAL DEFEASANCE

M-S-R Public Power Agency San Juan Project Subordinate Lien Revenue Bonds, Series 2008L

Redemption Date: July 1, 2018 Redemption Price: 100%

Maturity Date

(July 1) Interest

Rate Original CUSIP*

Principal Amount

Outstanding Defeased CUSIP*

Principal Amount Defeased

Undefeased CUSIP*

Principal Amount

Undefeased 2019 5.0% 553751 KM9 $[28,555,000] 553751 LL0 $[2,640,000] 553751 LM8 $[25,915,000]

NOTICE IS HEREBY GIVEN to the owners of the above-referenced bonds, issued by the M-S-R Public Power Agency (the “Agency”) pursuant to the Indenture of Trust, dated as of June 1, 1994, as amended and supplemented (the “Indenture”), between the Agency and U.S. Bank National Association, as trustee, that there have been deposited in escrow with U.S. Bank National Association, as escrow agent (the “Escrow Agent”), defeasance securities, the principal of and the interest on which when due shall provide moneys which shall be sufficient to pay when due the redemption price of the above-referenced bonds to be defeased (the “Defeased Bonds”) and the interest due and to become due on such Defeased Bonds on and prior to the redemption date (the “Redemption Date”), and such Defeased Bonds are deemed to have been paid in accordance with the Indenture.

The Defeased Bonds have been defeased pursuant to an Escrow Agreement, dated as of [July] 1, 2016 (the “Escrow Agreement”), between the Agency and U.S. Bank National Association, as escrow agent. Prior to the Redemption Date, interest on the Defeased Bonds will be paid in accordance with the provisions of the Indenture from the respective escrow account established pursuant to the Escrow Agreement.

Dated: _______________, 20____ U.S. BANK NATIONAL ASSOCIATION, as Trustee

* CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed by Standard & Poor’s Financial Services LLC on behalf of The American Bankers Association. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services. Neither the Agency nor the Trustee is responsible for the selection or correctness of the CUSIP numbers set forth herein.

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[FORM OF] NOTICE OF DEFEASANCE

M-S-R Public Power Agency San Juan Project Subordinate Lien Revenue Bonds, Series 2011O

Maturity Date (July 1)

Interest Rate

Principal Amount CUSIP*

2017 5.00% $3,600,000 553751 LA4 2018 5.00 4,910,000 553751 LB2

NOTICE IS HEREBY GIVEN to the owners of the above-referenced bonds, issued by the M-S-R Public Power Agency (the “Agency”) pursuant to the Indenture of Trust, dated as of June 1, 1994, as amended and supplemented (the “Indenture”), between the Agency and U.S. Bank National Association, as trustee, that there have been deposited in escrow with U.S. Bank National Association, as escrow agent (the “Escrow Agent”), defeasance securities, the principal of and the interest on which when due shall provide moneys which, together with the other moneys deposited with the Escrow Agent, shall be sufficient to pay when due the principal of the above-referenced bonds to be defeased (the “Defeased Bonds”) and the interest due and to become due on such Defeased Bonds on and prior to the maturity date (the “Maturity Date”), and such Defeased Bonds are deemed to have been paid in accordance with the Indenture.

The Defeased Bonds have been defeased pursuant to an Escrow Agreement, dated as of [July] 1, 2016 (the “Escrow Agreement”), between the Agency and U.S. Bank National Association, as escrow agent. Prior to the Maturity Date, interest on the Defeased Bonds will be paid in accordance with the provisions of the Indenture from the respective escrow account established pursuant to the Escrow Agreement.


* CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed by Standard & Poor’s Financial Services LLC on behalf of The American Bankers Association. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services. Neither the Agency nor the Trustee is responsible for the selection or correctness of the CUSIP numbers set forth herein.

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EXHIBIT B

[FORM OF] NOTICE OF OPTIONAL REDEMPTION

M-S-R Public Power Agency San Juan Project Subordinate Lien Revenue Bonds, Series 2008L

Issue Date: July 24, 2008

Maturity Date (July 1)

Redeemed Principal Amount Interest Rate CUSIP‡

2019 $[2,640,000] 5.00% [_____]

NOTICE IS HEREBY GIVEN, pursuant to the Indenture of Trust, dated as of June 1, 1994, as amended and supplemented (the “Indenture”), between the M-S-R Public Power Agency (the “Agency”) and U.S. Bank National Association, as trustee (the “Trustee”), that the Agency has called for redemption of the above-referenced bonds (collectively, the “Bonds”) on July 1, 2018 (the “Redemption Date”) at a redemption price equal to the principal amount of the Bonds, together with accrued interest to the date fixed for redemption, without premium (the “Redemption Price”).

The Bonds shall become due and payable on the Redemption Date at the Redemption Price. From and after the Redemption Date, interest shall cease to accrue and be payable on the Bonds and such Bonds shall be surrendered. Payment of the Redemption Price on the Bonds called for redemption will be paid only upon presentation and surrender of the Bonds at the address listed below (if delivery is by mail, registered mail with return receipt requested is recommended):

Delivery Instructions: U.S. Bank National Association Global Corporate Trust Services

111 Fillmore Avenue E St. Paul, MN 55107

1-800-934-6802

Capitalized terms used herein but not otherwise defined shall have the meanings ascribed thereto in the Indenture.

‡ CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed by Standard & Poor’s Financial Services LLC on behalf of The American Bankers Association. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services. Neither the Agency nor the Trustee is responsible for the selection or correctness of the CUSIP numbers set forth herein.

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IMPORTANT NOTICE

Withholding of 28% of gross redemption proceeds of any payment made within the United States may be required by the Jobs and Growth Tax Relief Reconciliation Act of 2003 (the “Act”), unless the Trustee has the correct taxpayer identification number (social security or employer identification number) or exemption certificate of the payee. Please furnish a properly completed Form W-9 or exemption certificate or equivalent when presenting your securities.


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Memorandum To: M‐S‐R Public Power Agency From: Montague DeRose and Associates, LLC Date: June 15, 2016 Subject: Recommendation for Southwest Transmission Project Sales Proceeds Purpose of Memo The purpose of this memo is to summarize Montague DeRose and Associates’ (“MDA”) analysis and final recommendation of certain uses of the proceeds generated by the sale by the M‐S‐R Public Power Agency (the “Agency”) of the Southwest Transmission Assets (the “Transmission Assets”) to Southern California Public Power Authority (“SCPPA” and the “Sale Proceeds”). Background The Agency has received approximately $60 million from SCPPA pursuant to the sale of the Transmission Assets in May 2016. An analysis by the Agency’s bond counsel concluded that the proceeds will be treated as Revenues under the Indenture of Trust dated June 1, 1994 (the “Indenture”) and that, absent unexpected costs or expenses, the full amount will ultimately be deposited in the Operating Fund and may be used and withdrawn by the Agency for “any lawful purpose related to the Improvements or the production of Revenues.” MDA, in concert with the Financial Management Committee, analyzed five general uses to which the Sale Proceeds could be applied. It has also estimated risk adjusted internal rates of return (“IRRs”), or ranges of IRRs, that each of these uses could generate. The potential uses that were analyzed included: Long‐term Investment of the Sale Proceeds

Transfer Sale Proceeds to Rate Payers

Use Sale Proceeds to Fund Capital Expenditures

Use Sale Proceeds to Defease or Retire Outstanding Debt

Use Sale Proceeds to Fund Termination Payments and Terminate Swaps

After discussing the analysis with the General Manager and Financial Management Committee, MDA focused its analysis on a hybrid strategy of (1) defeasance of the Series 2011 O Bonds (bonds associated with the Transmission Assets), (2) restructuring to create substantially level debt service on the other remaining debt, (3) to set aside approximately $8.1 million of proceeds to the Mine Reclamation and Plant Decommissioning Trust, and (4) to establish a Debt Service Coverage Revolving Fund sufficient to provide debt service coverage for the net resulting annual debt service1.

1 Funded through amounts currently held in the Member’s Cash Call Account

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M-S-R Public Power Agency Use of Proceeds Recommendation This hybrid strategy produces a positive IRR and indirectly returns amounts to ratepayers in the Member’s service area by reducing required rates by lowering debt service to approximately $31.5 million annually. Rate effects are further reduced by the funding of the Mine and Plant Trusts and the Debt Service Coverage Revolving Fund. Analysis MDA analyzed a number of scenarios whereby the Agency could implement the hybrid strategy of defeasing debt, redeeming bonds, or terminating all or a portion of the Swaps associated with the Series 2008M and 2008N Bonds to smooth and reduce future debt service requirements. These analyses were prepared on the basis of proportionate participation by all three Members. Defeasance of the Series 2011 O Bonds was assumed to occur in all cases. The Present Value (PV) Costs summarized below represent debt service savings less defeasance costs and earnings and the cost of terminating the swaps at rates as of April 13, 2016. Each scenario has a positive PV when considering the interest earnings on the funds set aside for deposit into the Trusts and the effect of lowering the ratepayer’s cost of debt service.

Case Proceeds Used Average Debt Service

PV Cost

Status Quo – Note: Maximum Debt Service in 2021: $51.5 million

N/A $40.3 million N/A

Case 1 – Debt Service levelized at ~$33 million and Includes $3.3 million D/S Revolving Fund

$49 million $32.5 million $108,000

Case 2 – Debt Service levelized with full $60 million


Case 2a – Debt Service levelized with full $60 million and Includes $3.2 million D/S Revolving Fund


Case 3 – Debt Service levelized with full $60 million and Prefund Mine and Plant Trusts


Case 3a – Debt Service levelized with full $60 million and Prefund Trusts and Includes $3.3 million D/S Revolving Fund


The PV cost of each case is projected using a discount rate of 1.25% which is approximately the Agency’s estimated cost of borrowing for a tax‐exempt financing with the same average life as the average life of the debt that is being restructured. The analysis also projects that the Agency will renew its direct purchases with Wells Fargo, which expire on 6/14/2017, at the current spreads for the remaining 2008M and 2008N bonds. MDA reached out to Wells Fargo for indicative pricing and the agreements are likely to be renewed at the current spreads or modestly lower spreads. After considering these factors, it is MDA’s recommendation that the Agency implement Case 3 above whereby the entire $60 million proceeds is used to defease debt and to allocate approximately $8.1 million of proceeds for future Mine Reclamation and Plant Decommissioning Trust deposits as best balancing the reduction of debt service, costs and expenses, and other uses of Sales Proceeds.

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M-S-R Public Power Agency Use of Proceeds Recommendation Recommended Restructuring Utilizing rates as of June 8, 2016 under the recommended Case 3 scenario above would result in remaining average annual debt service of $31.5 million for 2017 through 2022. A total of $45.66 million in 2008L, 2008M, 2008N and 2011O bonds would be called or defeased, and $34.5 million in swaps associated with the 2008M and N bonds would be terminated. The existing reserve fund associated with Series 2011O in the amount of $1.5 million would be liquidated and contributed towards the defeasance escrow. The defeasance and swap termination costs would total $53.3 million. The deposits to the Trusts would total $8.1 million.

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Date: June16,2016From: MartinR.Hopper,GeneralManagerTo: M-S-RPPACommissionSubject: DiscussionandPossibleActionRegardingAmendmentNo.1to

AmendedandRestatedMineReclamationandTrustFundsAgreement

OnJuly22,2015,theM-S-RPPACommissionadoptedResolution2015-02ApprovingSanJuanProjectDivestitureAgreementsincludingtheSanJuanProjectRestructuringAgreement,AmendedandRestatedMineReclamationandTrustFundsAgreement,SanJuanDecommissioningandTrustFundsAgreement,RestructuringAmendmenttoAmendedandRestatedSanJuanProjectParticipationAgreement,andSanJuanProjectParticipationAgreementExitAgreement.TheAmendedandRestatedMineReclamationandTrustFundsAgreementwhichwentintoeffectJanuary31,2016,providesthattheParticipants,whichincludesExitingParticipantssuchasM-S-RPPA,canelecttobecome“Opt-OutParticipants”wherebyuponfullfundingoftheirTrustsbyDecember31,2017,willhavenocross-defaultliabilitythereafter.M-S-RPPAhaselected“Opt-Out”status-ashaveallotherParticipantsotherthanPublicServiceCompanyofNewMexico(whichbytermsoftheagreementwillalwaysbean“Opt-InParticipant”andretainultimateliability)andTucsonElectricPower(TEP).TheproposedAmendmentNo.1toAmendedandRestatedMineReclamationandTrustFundsAgreementwouldallowTEPtoelecttobecomean“Opt-OutParticipant”inthefutureifitchoosestoterminateitsactiveparticipationintheSanJuanGeneratingStation.Atsuchtime,TEPwouldberequiredtofullyfunditsMineReclamationTrustsinthesamemanneraspreviouslyrequiredforM-S-RPPAandother“Opt-OutParticipants.”Therefore,thereisnocostorrisktoM-S-RPPAinapprovingthisAmendment. IrecommendtheCommissionapprovetheproposedAmendmentNo.1toAmendedandRestatedMineReclamationandTrustFundsAgreement.

EXECUTION VERSION

i

AMENDMENT NO. 1 TO

AMENDED AND RESTATED

MINE RECLAMATION AND

TRUST FUNDS AGREEMENT

AMONG

PUBLIC SERVICE COMPANY OF NEW MEXICO

TUCSON ELECTRIC POWER COMPANY

THE CITY OF FARMINGTON, NEW MEXICO


THE INCORPORATED COUNTY OF LOS ALAMOS, NEW MEXICO

SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY

CITY OF ANAHEIM

UTAH ASSOCIATED MUNICIPAL POWER SYSTEMS

TRI-STATE GENERATION AND TRANSMISSION ASSOCIATION, INC.

PNMR DEVELOPMENT AND MANAGEMENT CORPORATION

_______, 2016

EXECUTION VERSION

AMENDMENT NO. 1 TO AMENDED AND RESTATED

MINE RECLAMATION AND TRUST FUNDS AGREEMENT

This AMENDMENT NO. 1 TO AMENDED AND RESTATED MINE RECLAMATION AND TRUST FUNDS AGREEMENT (“Amendment No. 1”), is executed as of _______, 2016 (“Execution Date”), among PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico corporation (“PNM”); TUCSON ELECTRIC POWER COMPANY, an Arizona corporation (“TEP”); THE CITY OF FARMINGTON, NEW MEXICO, an incorporated municipality and a body politic and corporate, existing as a political subdivision under the constitution and laws of the State of New Mexico (“Farmington”); M-S-R PUBLIC POWER AGENCY, a joint exercise of powers agency organized under the laws of the State of California (“M-S-R”); THE INCORPORATED COUNTY OF LOS ALAMOS, NEW MEXICO, a body politic and corporate, existing as a political subdivision under the constitution and laws of the State of New Mexico (“Los Alamos”); SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY, a joint exercise of powers agency organized under the laws of the State of California (“SCPPA”); CITY OF ANAHEIM, a municipal corporation organized under the laws of the State of California (“Anaheim”); UTAH ASSOCIATED MUNICIPAL POWER SYSTEMS, a political subdivision of the State of Utah (“UAMPS”); TRI-STATE GENERATION AND TRANSMISSION ASSOCIATION, INC., a Colorado cooperative corporation (“Tri-State”) and PNMR DEVELOPMENT AND MANAGEMENT CORPORATION, a New Mexico corporation (“PNMR-D”). PNM, TEP, Farmington, M-S-R, Los Alamos, SCPPA, Anaheim, UAMPS, Tri-State and PNMR-D are hereinafter sometimes referred to individually as a “Party” and collectively as “Parties.”

RECITALS

This Amendment No. 1 is made with reference to the following facts, among others:

A. The San Juan Project is a four-unit, coal-fired electric generation plant located in San Juan County, near Farmington, New Mexico, also known as the San Juan Generating Station (“SJGS” or the “Project”). On the Execution Date, the owners of the Project are: PNM, TEP, Farmington, M-S-R, Los Alamos, SCPPA, Anaheim, UAMPS and Tri-State.

B. On July 31, 2015, the Parties entered into a series of agreements to effectuate the

restructuring of the ownership of SJGS and to accommodate the exit of certain Parties from active involvement in the operation of SJGS (“Exiting Participants”). The Parties not exiting the Project are the “Remaining Participants.” One of these restructuring-related agreements was the Amended and Restated Mine Reclamation and Trust Funds Agreement (“Mine Reclamation Agreement”). The Mine Reclamation Agreement sets out the Parties’ responsibilities for the establishment and funding of certain irrevocable reclamation trusts to satisfy their respective responsibilities to pay reclamation costs for the reclamation of areas mined for the supply of coal to the Project.

EXECUTION VERSION


MINE RECLAMATION AND TRUST FUNDS AGREEMENT 2

C. The Parties desire to amend the Mine Reclamation Agreement to set out certain rights of a Remaining Participant that is a “Disapprover” or “Non-Extender” (as those terms are defined in the Exit Date Amendment and in this Amendment No. 1) to elect the status of an “Opt-in Participant” or an “Opt-out Participant” (as those terms are defined in the Mine Reclamation Agreement).

AGREEMENT

The Parties, for and in consideration of the mutual covenants to be by them kept and performed, agree as follows.

1.0 TERM AND TERMINATION

1.1 Effective Date. This Amendment No. 1 will become effective on the date as of which all of the Parties have executed this Amendment No. 1.

1.2 Termination. This Amendment No. 1 will terminate on the same date that the

Mine Reclamation Agreement terminates. 2.0 DEFINITIONS

Section 2.1 of the Mine Reclamation Agreement is hereby amended by the addition of the following definitions:

2.1.18A Disapprover means a Party that has voted against approval of a

large capital project, as defined in Section 40A.2 of the Exit Date Amendment.

2.1.23A Exit Date Amendment means the Exit Date Amendment Amending and Restating the Amended and Restated San Juan Project Participation Agreement, dated July 31, 2015.

2.1.32A Non-Extender means a Party that has provided notice that it does

not wish to extend the CSA, as defined in Section 40B.1 of the Exit Date Amendment.

3.0 AMENDMENT OF SECTION 9 OF MINE RECLAMATION AGREEMENT

Section 9 of the Mine Reclamation Agreement is hereby amended by the addition of new Sections 9.3 and 9.4, to read in their entirety as follows:

9.3. Disapprover Opt-out Right. Notwithstanding any Remaining Participant’s

election to become an Opt-in Participant under Section 9.2, any Remaining Participant that is a Disapprover (as defined in the Exit Date Amendment) and that has entered into a binding agreement to sell or transfer its rights, titles and interests in the San Juan Project in accordance with Section 40.A.0 of the Exit Date Amendment, must, at the time it enters into such agreement, elect to remain an Opt-in Participant or become an Opt-out Participant after such sale or transfer. Any such

EXECUTION VERSION



election to remain an Opt-in Participant or become an Opt-out Participant will be made by providing written notice of such election to the Reclamation Trust Funds Operating Agent and to the other Parties, and will become effective on the date the Disapprover sells or transfers its interest in the San Juan Project as provided in Section 40A.0 of the Exit Date Amendment. A Remaining Participant electing under this Section 9.3 to become an Opt-out Participant must, on or before the date it sells or transfers its interest in the San Juan Project, have: (i) fully funded its Principal Reclamation Trust Fund to the applicable Reclamation Funding Target Amount as an Opt-out Participant; and (ii) fully funded any Make-up Reclamation Trust Fund to the applicable Make-up Funding Curve.

9.4. Non-Extender Opt-out Right. Notwithstanding any Remaining

Participant’s election to become an Opt-in Participant under Section 9.2, any Remaining Participant that is a Non-Extender (as defined in the Exit Date Amendment), must, at the time it provides notification of its desire to not extend the CSA and become a Non-Extender under Section 40B.1 of the Exit Date Amendment, elect to remain an Opt-in Participant or become an Opt-out Participant after the Non-Extender’s sale or transfer of its interest in the San Juan Project. Any such election to remain an Opt-in Participant or become an Opt-out Participant will be made by providing written notice of such election to the Reclamation Trust Funds Operating Agent and to the other Parties, and will become effective on the date the Non-Extender sells or transfers its interest in the San Juan Project as provided in Section 40B.0 of the Exit Date Amendment. A Remaining Participant electing under this Section 9.4 to become an Opt-out Participant must, on or before the date it sells or transfers its interest in the San Juan Project, have: (i) fully funded its Principal Reclamation Trust Fund to the applicable Reclamation Funding Target Amount as an Opt-out Participant; and (ii) fully funded any Make-up Reclamation Trust Fund to the applicable Make-up Funding Curve.

4.0 AMENDMENT OF SECTION 27.2 OF MINE RECLAMATION AGREEMENT

Section 27.2.1 of the Mine Reclamation Agreement is hereby amended by changing the notice information for San Juan Coal Company, as follows:

San Juan Coal Company 9540 South Maroon Circle, Suite 200 Englewood, CO 80112 Attn: President With a copy addressed to:

EXECUTION VERSION



San Juan Coal Company P.O. Box 561 Waterflow, NM 87421 Attn: San Juan Mine Manager

5.0 MISCELLANEOUS PROVISIONS

5.1 Typographical Error Corrected. In the third line of Section 31.2 of the Mine Reclamation Agreement, the word “disposed” is hereby corrected to read “disclosed.”

5.2 Full Force and Effect. All other provisions of the Mine Reclamation Agreement

not specifically amended by this Amendment No. 1 remain in full force and effect. 5.3 Execution in Counterparts. This Amendment No. 1 may be executed in any

number of counterparts, and each executed counterpart will have the same force and effect as an original instrument as if all the Parties to the aggregated counterparts had signed the same instrument. Any signature page of this Amendment No. 1 may be detached from any counterpart thereof without impairing the legal effect of any signatures thereon and may be attached to any other counterpart of this Amendment No. 1 identical in form thereto but having attached to it one or more additional pages. Electronic or pdf signatures will have the same effect as an original signature.

IN WITNESS WHEREOF, the Parties have caused this Amendment No. 1 to be executed on their behalf, and the signatories hereto represent that they have been duly authorized to enter into this Amendment No. 1 on behalf of the Party for whom they signed.

[Signatures appear on the following pages.]

EXECUTION VERSION



PUBLIC SERVICE COMPANY OF NEW MEXICO By: ___________________________ Its: ___________________________ Dated: ________________________ TUCSON ELECTRIC POWER COMPANY By: ___________________________ Its: ___________________________ Dated: ________________________ THE CITY OF FARMINGTON, NEW MEXICO By: ___________________________ Its: ___________________________ Dated: ________________________ M-S-R PUBLIC POWER AGENCY By: __________________________ Its: __________________________ Dated: _______________________ THE INCORPORATED COUNTY OF LOS ALAMOS, NEW MEXICO By: __________________________ Its: __________________________ Dated: _______________________ SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY By: __________________________ Its: __________________________ Dated: _______________________

EXECUTION VERSION



CITY OF ANAHEIM By: __________________________ Its: __________________________ Dated: _______________________ UTAH ASSOCIATED MUNICIPAL POWER SYSTEMS By: __________________________ Its: __________________________ Dated: _______________________ TRI-STATE GENERATION AND TRANSMISSION ASSOCIATION, INC. By: _________________________ Its: _________________________ Dated: ______________________ PNMR DEVELOPMENT AND MANAGEMENT CORPORATION By: _________________________ Its: _________________________ Dated: _______________________