Access to Capital Meeting June 4, 2013 Denver, CO
Agenda • Welcome & Opening Remarks Mark • Demonstrating the Need Wendy • Regional Meeting Summary Linda • Next Steps Mark • Path Ahead All
Opening Remarks • Recent Developments • Federal Outlook OMB Letter to Agency Heads, dated May 29, 2013 “Your 2015 budget submission to OMB should reflect a 5 percent reduction below the net discretionary total provided…in the 2014 Budget….and also include additional reductions…to bring your overall submission 1 0 percent below…the 2014 Budget.” Source: http://www.whitehouse.gov/sites/default/files/omb/memoranda/2013/m-13-14.pdf
Balancing customer and Western’s Needs Customer Partnership Providing access to hydro power at cost for preference customers Ensuring continued safe and reliable operations Meeting legislated and regulatory mandates Effective use of the transmission resource Safety, Security, Reliability Strategic/ Technical Leadership Regulatory Requirements 4
Human Capital ROI: What does it mean • Measures the effect of our organization’s human capital contribution to financial performance as a ‘return on capital invested in pay and benefits’ for all full-time labor.
Value-Added Performance • G&A: 5-Yr increase of 17%; 4.84% annually over 10 years • G&A averaged only ~8% of total operating costs • Revenue/FTE: averaged $638K (Note: As a public entity, one indicator of productivity is revenue relative to FTE; as opposed to a profit margin financial measure often used by private sector entities) • HC ROI: Increased 62% (FY-12, 186%; FY-08 124%) • Bottom Line Rate Impact: Reduced 6.5% (FY-12, $28.68 per/MWh; FY-08 $30.65 per/MWh)
Demonstrating the Need Wendy Shatford Comptroller
Capital Construction by Power ProjectBased on revised regional capital plans as of March 2013 Includes Construction and Rehabilitation Program (C&R) activities only. Does not include capitalized O&M or Program Direction expenses in Western’s CROM appropriation acct, Revolving Fund accounts (CRSP, Ft. Peck), or the Boulder Canyon Project.
Capital Construction Need by RegionBased on revised regional capital plans as of March 2013 Includes Construction and Rehabilitation Program (C&R) activities only. Does not include capitalized O&M or Program Direction expenses in Western’s CROM appropriation acct, Revolving Fund accounts (CRSP, Ft. Peck), or the Boulder Canyon Project.
Capital Construction NeedBased on revised regional capital plans as of March 2013
Regional Meeting Summary Linda Kimberling Chief Financial Officer
What We Heard • No proven “need” for additional capital • Existing funding mechanisms are sufficient • A Western-Wide solution is unnecessary • Adamantly opposed to new legislation • No workable Western-wide governance structure • Preference customers are being “taxed” to support the needs of the Open Access Transmission Tariff
Next Steps Mark Gabriel Administrator
On The Horizon • Strategy & Roadmap • Robust Asset Management Plan • Customer & Stakeholder Engagement
Paving the Path Ahead • Open Discussion