Fiscal Year 2019 Budget Fiscal Year 2019 Project 3 Annual Budget Prepared 4/25/18 Project 3 Fiscal Year 2019 Table of Contents Table Page Summary 3 Summary of Costs Table 1 4 Summary of Full Time Equivalent Table 2 5 Positions Cost-to-Cash Reconciliation Table 3 6 Annual Budget/Statement Table 4 7 of Funding Requirements Monthly Statement of Funding Table 5 8 Requirements - Revenue Fund 2 Prepared 4/25/18 Project 3 Fiscal Year 2019 Summary Energy Northwest's Project 3 was terminated in June 1994. Transfer of the Project 3 site to the Satsop Redevelopment Project was completed during Fiscal Year 2000. This Project 3 Fiscal Year 2019 Annual Budget is prepared by Energy Northwest pursuant to the provisions and requirements of Board of Directors' Resolution No. 775 and the Net Billing Agreements. The Budget includes all costs and funding requirements associated with the debt on Project 3. No other costs are incurred on this project. The total cost for Fiscal Year 2019 is estimated to be $34,113,000 (Table 1). The total net funding requirements for Fiscal Year 2019 are $41,751,000 (Table 4). Bonneville Power Administration pays directly the funding requirements on a monthly basis under the provisions of the Direct Pay Agreements. This takes the net billing requirements to zero, for the statements which otherwise would be sent to participants in the project, and paid in accordance with the terms of the Net Billing Agreements. The Net Billing Agreements are still in place, but the direct cash payments from Bonneville Power Administration simply takes the participant payment amounts to zero. In the Direct Pay Agreements, Energy Northwest agreed to promptly bill each participant its share of the costs of the project under the Net Billing Agreements, if Bonneville fails to make a payment when due under the Direct Pay Agreements. 3 Prepared 4/25/18 Project 3 Fiscal Year 2019 Table 1 Summary of Costs (Dollars in Thousands) Original FY 2019 FY 2018 Description Budget Budget Variance Interest Expense (1)$ 44,260 $ 53,263 $ (9,003) Interest on Note (2) 0 634 (634) Amortized Financing Cost (3) (10,474) (10,695) 221 Investment Income (4) (99) (96) (3) Treasury Services (5) 426 425 1 Total $ 34,113 $ 43,531 $ (9,418) Assumptions (1) Budget assumes all $1.35 million in principal will be repaid in FY2019 and none will be extended. (2) Project 3 interest expense was funded by a line of credit in FY18 that enables the acceleration of Bonneville federal debt repayments as part of the regional cooperation debt initiative. (3) The amortized financing costs are driven by the amortization of the premiums on bonds. (4) Includes income on investment of monies held in the Interest and Principal accounts and the Reserve & Contingency Fund which are transferred periodically to the Revenue Fund. Investment income earnings rate is forecasted to average 1.25% (5) Includes all non-interest costs of banking, debt, internal labor and overheads. 4 Prepared 4/25/18 Project 3 Fiscal Year 2019 Table 2 Summary of Full Time Equivalent Positions * FY 2019 FY 2018 Description Budget Budget Variance Treasury Related 1 1 - * Includes Allocations of Corporate Full Time Equivalent Positions 5 Prepared 4/25/18 Project 3 Fiscal Year 2019 Table 3 Cost-to-Cash Reconciliation (Dollars in Thousands) FY 2019 FY 2019 Total Non-Cash Non-Cost Deferred Prior Year's Total Description Cost Items Items Cash Req'ts Commitments Cash Treasury Related Expenses Interest Expense $ 44,260 $ - $ - $ - $ - $ 44,260 Bond Retirement (1) - - 1,350 - - 1,350 Amortized Financing Cost (10,474) 10,474 - - - - Investment Income (99) - - - (99) Treasury Services 426 - - - - 426 Prior Year's R&C Surplus - - (4,186) - - (4,186) Subtotal Treasury Related$ 34,113 $ 10,474 $ (2,836) $ - $ - $ 41,751 Total Funding Requirements$ 34,113 $ 10,474 $ (2,836) $ - $ - $ 41,751 (1) Budget assumes all $1.35 million in prinicpal will be repaid in FY2019 and none will be extended. 6 Prepared 4/25/18 Project 3 Fiscal Year 2019 Table 4 Annual Budget Statement of Funding Requirements (Dollars in Thousands) Original FY 2019 FY 2018 Description Budget Budget Variance Treasury Related Expenses Interest Expense$ 44,260 $ 52,610 $ (8,350) Bond Retirement (1) 1,350 11,855 (10,505) Interest on Note (2) - 634 (634) Note Retirement - 51,000 (51,000) Reserve & Contingency Fund - 1,186 (1,186) Investment Income (Rev) (99) (96) (3) Prior Year's R&C Surplus (4,186) (1,731) (2,455) Treasury Services 426 425 1 Total Funding Requirements $ 41,751 $ 115,883 $ (74,132) Funding Sources Net Billing/BPA Direct Payments$ 41,751 $ 115,883 $ (74,132) Total Funding Sources $ 41,751 $ 115,883 $ (74,132) (1) Budget assumes all $1.35 million in prinicpal will be repaid in FY2019 and none will be extended. (2) A line of credit funded the FY18 Interest Expense in order to free up monies that enable the acceleration of Bonneville federal debt repayments as part of the regional cooperation debt initiative. 7 Prepared 4/25/18 Project 3 Fiscal Year 2019 Table 5 Monthly Statement of Funding Requirements - Revenue Fund (Dollars in Thousands) FY2019 Description Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Total Beginning Balance$ 3,000 $ 7,160 $ 7,134 $ 7,108 $ 7,082 $ 7,056 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 Receipts BPA Direct Payments (1)$ - $ - $ - $ - $ - $ 18,101 $ 28 $ 29 $ 29 $ 28 $ 28 $ 23,508 $ 41,751 Total Receipts$ - $ - $ - $ - $ - $ 18,101 $ 28 $ 29 $ 29 $ 28 $ 28 $ 23,508 $ 41,751 Disbursements Treasury Related Interest Expense$ - $ - $ - $ - $ - $ 22,130 $ - $ - $ - $ - $ - $ 22,130 $ 44,260 Bond Retirement (2) - - - - - - - - - - - 1,350 $ 1,350 Investment Income (8) (8) (8) (8) (8) (8) (8) (8) (8) (9) (9) (9) $ (99) Prior Year R&C Surplus (4,186) - - - - - - - - - - - $ (4,186) Treasury Services 34 34 34 34 34 35 36 37 37 37 37 37 $ 426 Total Disbursements$ (4,160) $ 26 $ 26 $ 26 $ 26 $ 22,157 $ 28 $ 29 $ 29 $ 28 $ 28 $ 23,508 $ 41,751 Ending Balance$ 7,160 $ 7,134 $ 7,108 $ 7,082 $ 7,056 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 (1) BPA is billed, through the Direct Payment Agreements, one month in advance for the following month's expenses. (2) Budget assumes all $1.35 million in prinicpal will be repaid in FY2019 and none will be extended. 8 Prepared 4/25/18 Project 3 Fiscal Year 2019 (Page left intentionally blank) 9 Prepared 4/25/18 Fiscal Year 2019 Project 1 Annual Budget Prepared 4/25/18 Project 1 Fiscal Year 2019 Table of Contents Table Page Summary 3 Summary of Costs Table 1 4 Treasury Related Expenses Table 2 5 Summary of Full Time Equivalent Table 3 6 Positions Cost-to-Cash Reconciliation Table 4 8 Annual Budget and Statement of Funding Table 5 9 Requirements Monthly Statement of Funding Requirements- Table 6 10 Revenue Fund 2 Prepared 4/25/18 Project 1 Fiscal Year 2019 Summary The Project 1 Fiscal Year 2019 Annual Budget is prepared by Energy Northwest pursuant to the provisions and requirements of Board of Directors' Resolution No. 769, the Project Agreement and the Net Billing Agreements. The budget includes all costs associated with the project for Fiscal Year 2019 including reuse funding, fixed and variable costs, and treasury related expenses. In addition, the budget includes all funding requirements identified for the project for Fiscal Year 2019. The total net cost for Fiscal Year 2019 is estimated to be $25,585,000 (Table 1). Total Funding Requirements of $44,101,000 (Table 5) less revenue from restoration/demolition and leasing totaling $2,663,000 will be direct billed to Bonneville Power Administration. Bonneville Power Administration pays directly the funding requirements on a monthly basis under the provisions of the Direct Pay Agreements. This takes the net billing requirements to zero, for the statements which otherwise would be sent to participants in the project, and paid in accordance with the terms of the Net Billing Agreements. The Net Billing Agreements are still in place, but the direct cash payments from Bonneville Power Administration simply takes the participant payment amounts to zero. In the Direct Pay Agreements, Energy Northwest agreed to promptly bill each participant its share of the costs of the project under the Net Billing Agreements, if Bonneville fails to make a payment when due under the Direct Pay Agreements. A comparison of the Fiscal Year 2019 budget is made to the original budget issued for Fiscal Year 2018. 3 Prepared 4/25/18 Project 1 Fiscal Year 2019 Table 1 Summary of Costs (Dollars in Thousands) Original FY 2019 FY 2018 Budget Budget Variance Revenue Restoration / Demolition (1)$ 2,657 $ 2,082 575 Fixed Costs 6 25 (19) Total Revenue$ 2,663 $ 2,107 $ 556 Costs Site Costs Restoration / Demolition$ 2,657 $ 2,082 575 Variable Costs 16 54 (38) Fixed Costs 405 391 14 Subtotal Site Costs $ 3,078 $ 2,527 $ 551 Other Treasury Related Expenses$ 24,873 $ 30,327 $ (5,454) Decommissioning 297 (631) 928 Subtotal Other Costs $ 25,170 $ 29,696 $ (4,526) Total Costs $ 28,248 $ 32,223 $ (3,975) Total Net Costs $ 25,585 $ 30,116 $ (4,531) (1) Restoration / Demolition receipts from the Bonneville Power Administration restoration trust fund will be used to offset all costs of this initiative. 4 Prepared 4/25/18 Project 1 Fiscal Year 2019 Table 2 Treasury Related Expenses (Dollars in Thousands) Original FY 2019 FY 2018 Description Budget Budget Variance Interest Expense (1) $ 39,375 $ 39,417 $ (42) Interest on Note (2) 0 547 (547) Amortized Financing Cost (3) (14,870) (10,018) (4,852) Investment Income (Rev.