Tid annual report 2016

TURLOCK IRRIGATION DISTRICT

2016 ANNUAL REPORT www.tid.org

TID OVERVIEW Established in 1887, the Turlock Irrigation District (TID) was the first publicly owned irrigation district in the state and is one of only four in California today that also provides electric retail energy directly to homes, farms and businesses. Organized under the Wright Act, the District operates under the provisions of the California Water Code as a special district. TID is governed by a five-member, locally elected Board of Directors.

TID delivers irrigation water through 250 miles of a gravity-fed canal system that irrigates approximately 150,000 acres of farmland. In addition, TID owns and operates an integrated and diverse electric generation, transmission and distribution system that serves more than 100,000 customer accounts within a 662 square-mile area. TID is one of five California Balancing Authorities and operates independently within the Western United States power grid.

TID MISSION TID will provide reliable and competitively priced water and electric service, while being good stewards of our resources and providing a high level of customer satisfaction.

147,901

662

Irrigated Acres

307

Irrigation Service Area (in square miles)

39

Customers per Mile of Distribution Line

226

Customers per Mile of Transmission Line

2

2,190

Electric Service Area (in square miles)

Miles of Distribution Line

379

525

Miles of Transmission Line

Peak Demand (in megawatts)

455

Number of employees

101,857

Number of Electric Accounts (at year end)

FROM THE GENERAL MANAGER

T

hroughout 2016, TID found itself facing new challenges.

However, much as the District has done in the past, TID found a way to push ahead with prudent planning and innovation.

As TID found itself on the better side of the historic drought, new challenges and obstacles arose in the District’s ability to provide water to our customers. After years of waiting, the State Water Resources Control Board recirculated its Draft Substitute Environmental Document (SED) as part of Phase 1 of the Bay-Delta Plan in September 2016. Under the proposal, the District would be required to release 40 percent unimpaired flows to the Tuolumne River from Don Pedro Reservoir.

In response to the SED, TID partnered with Modesto Irrigation District and launched Worth Your Fight – a public awareness and advocacy campaign – to inform customers of the impacts of the proposal. We are incredibly thankful for the thousands of customers who put up signs, signed the petition, wrote letters or made comments at public hearings. While the comment period has come and gone, the District is continuing to work to protect the water our region relies on and improve upon our stewardship of the Tuolumne River.

There are always new opportunities when managing water and power resources. Following the passage of California’s SB 350 in 2015, which requires a utility’s Renewable Portfolio Standard be 50 percent renewable by 2030, TID has continued to leverage its resources in this area.

TID has positioned itself as a large, important member of the local community.

For years, TID has been the lifeblood for the area and with new emphasis in recent years is finding ways to give back to the community through events, sponsorships and presentations. As you read this publication, you will notice metrics that support this claim.

No matter the obstacle, TID has managed the resources entrusted to us and will continue to build a better balance between all our resources – water, power, and the communities we serve.

Casey Hashimoto, PE

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2016 Community Highlights More than 51 TID employees attended or participated in at least 76 community events

The TID Community Sponsorship Program sponsored local events and programs in

excess of $21,000

More than 400 TID customers attended the Public Power Week event at TID to exchange old light bulbs and learn about the importance of the public, not-for-profit power provided by TID.

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2 400

Pool Passes

were distributed to children as part of TID’s 2016 Pool Pass Program to encourage swimming in designated safe places instead of canals.

TID staff and equipment helped in a May cleanup effort on the Tuolumne River in Modesto, assisting in the removal of 79 abandoned tires, about 20 shopping carts and other trash and debris.

TID partnered with the Stanislaus County Fair to help provide a shaded rest area for 4-H and FFA students, offering free charging stations for mobile devices, as well as 250 mini cooling fans and 250 earbuds as giveaways for the students. All told, TID helped provide about 100 hours of shade for students working at the Fair.

TID 30-second water safety videos featuring Dexter Duck ran prior to films in the Turlock 14 Cinemas for a total of 12 weeks during

TID’s aquatic biologist taught more than 21 elementary school classes about the Chinook salmon life cycle and helped hundreds of children release salmonids to local rivers in the spring.

the summer.

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Worth Your Fight was an unprecedented joint Turlock Irrigation District-Modesto Irrigation District advocacy campaign devoted to informing TID and MID customers about the potential negative impacts associated with Phase 1 of the State Water Resources Control Board’s (SWRCB) Bay-Delta Water Quality Control Plan (Bay-Delta Plan).

KEY CAMPAIGN ELEMENTS Signage / Printed Materials / Print Advertising 400 large signs distributed by TID and 6,000 SED Fact Sheets developed for campaign use.

Website

Total Facebook reach of 678,276 people with 1,025,029 impressions.

Email Marketing

56,366 page views.

17 Worth Your Fight Weekly Update emails distributed during campaign.

E-petition

Radio Advertising

Total of 6,589 petitions submitted to the SWRCB on March 17, 2017.

Resolutions, Presentations and Meetings 5 cities/counties adopted formal resolutions opposing the SWRCB Phase 1 SED.

Earned Media More than 269 unique articles published related to the Phase 1 SED.

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Social Media / Facebook Advertising

Worth Your Fight 15-second traffic advertisements ran in fall and winter 1,235 total 15-second runs.

Paid Video

Two videos were developed to aid the Worth Your Fight campaign.

Employee Communication

Communicating to TID employees and growing them as outreach advocates was essential to the Worth Your Fight campaign.

2016 Energy Efficiency

$

In 2016

TID implemented (1) Non-Residential rebate & (6) Residential Programs

1,369

564

Residential customers exchanged incandescent bulbs for LEDs

residential customers

received rebates

An average of 66,305 residential customers received Home Energy Analysis reports

84 Non-Residential customers

44 Non-Residential customers took advantage

4,850,010 kWhs*

1,427,897 kWhs*

received rebates saving

of our LED direct install program, saving

Total savings for 2016 = 13,354,051 kWhs* * kWhs =kilowatt hours. A kilowatt hour is a measure of electrical energy equivalent to the power consumption of 1,000 watts for one hour 7

Financial Statistics HISTORICAL RESULTS OF OPERATIONS (UNAUDITED) 2016

2015

2014

2013

2012

$257,495

$262,657

$275,699

$252,162

$249,692

Electric energy - Wholesale

41,140

50,973

64,341

73,460

49,115

Wholesale Gas

5,041

2,898

17,061

12,391

5,121

Irrigation

13,023

14,311

7,758

8,438

7,606

($ IN THOUSANDS) OPERATING REVENUES: Electric energy - Retail

Other Total Operating Revenue

1,637

1,640

4,293

3,944

3,700

318,336

332,479

369,152

350,395

315,234

53,615

55,202

63,926

68,505

64,158

OPERATING EXPENSES: Power Supply: Purchased Power Generation and Fuel

76,808

97,656

121,951

107,391

94,948

Total Power Supply

130,423

152,858

185,877

175,896

159,106

Other Electric O&M

26,932

23,330

22,730

23,506

19,561

Irrigation O&M

13,336

11,294

11,828

12,623

11,943

Public Benefits

5,841

6,119

6,962

6,908

5,012

Administration and General

23,707

21,135

21,640

20,528

20,703

-

-

-

2,438

5,634

Loss of disposal of utility plant Depreciation and amortization

64,691

62,515

70,442

64,496

53,152

Total Operating Expenses

264,930

277,251

319,479

306,395

275,111

OPERATING INCOME

53,406

55,228

49,673

44,000

40,123

OTHER INCOME (EXPENSE): Interest/Derivative (loss)gain

2,056

3,668

1,271

562

2,548

Miscellaneous

10,512

13,851

9,357

9,119

8,267

Total Other Income

12,568

17,519

10,628

9,681

10,815

Long Term Debt

51,255

53,000

57,338

59,996

54,687

NET INCOME (LOSS)

14,719

19,747

2,963

(6,315)

(3,749)

BEGINNING OF YEAR

296,095

276,348 (1)

304,009

310,324

314,073

END OF YEAR

$310,814

$296,095

$306,972

$304,009

$310,324

2.91x

2.81x

2.35x

2.83x

2.42x

INTEREST EXPENSE:

NET POSITION:

DEBT SERVICE COVERAGE REVENUE BONDS - OVERALL (BOND RESOLUTION)(2)

(1) Government Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Report for Pensions, was a adopted in 2015 and as a result beginning of year Net Position was restated as of January 1, 2015. (2) Balance Available for Debt Service, divided by Total Debt Service.

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HISTORICAL OPERATING STATISTICS (UNAUDITED) 2016

2015

2014

2013

2012

Residential

73,029

72,772

72,909

72,366

72,033

Commercial

($ In thousands) AVERAGE CUSTOMERS AT END OF PERIOD:

7,148

7,086

7,090

7,065

6,983

Industrial

866

836

830

794

798

Other (1)

20,814

20,676

20,160

20,046

20,099

101,857

101,370

100,989

100,271

99,913

Residential

714,966

706,945

725,523

716,316

713,915

Commercial

128,568

131,135

130,606

128,154

126,608

Industrial

774,467

766,170

749,864

747,745

738,693

Total MWh SALES:

Other (1) Total Retail Interdepartmental meters

382,287

411,734

399,761

393,316

377,315

2,000,288

2,015,983

2,005,754

1,985,531

1,956,531

58,883

62,565

69,199

68,235

66,846

Wholesale Power

1,260,372

1,439,114

1,388,342

1,641,616

1,542,545

Total

3,319,543

3,517,662

3,463,295

3,695,382

3,565,922

1,954,296

2,267,333

2,257,182

2,214,620

2,305,959

SOURCES OF MWh: Generated by district Purchased

1,443,813

1,319,345

1,281,089

1,563,500

1,350,643

Subtotal

3,398,109

3,586,678

3,538,271

3,778,120

3,656,602

78,566

69,016

74,976

82,738

90,680

3,319,543

3,517,662

3,463,295

3,695,382

3,565,922

Residential

$114,519

$113,282

$114,169

$109,790

$106,946

Commercial

18,283

18,540

18,319

17,756

16,759

Industrial

92,721

91,521

87,318

85,711

80,006

System losses Total ELECTRIC ENERGY REVENUES: (IN THOUSANDS)

Other (1)

51,819

55,190

52,226

50,453

45,117

Power Supply Adjustment Recognized (Deferral)

(20,398)

(16,424)

3,093

(12,112)

425

Total Retail Energy

256,944

262,109

275,125

251,598

249,253

Electric Service Charges

473

470

497

488

358

Other Electric Revenue

78

78

77

76

81

Electric Energy Retail

257,495

262,657

275,699

252,162

249,692

Wholesale Power

41,140

50,973

64,341

73,460

49,115

$298,635

$313,630

$340,040

$325,622

$298,807

527

517

510

527

516

Total SYSTEM PEAK DEMAND (MW) AVERAGE MWh SALES PER CUSTOMER: Residential

9.790

9.715

9.951

9.899

9.911

Commercial

17.987

18.506

18.421

18.139

18.131

Industrial

894.304

916.471

903.451

941.744

925.680

Residential

$160.17

$160.24

$157.36

$153.27

$149.80

Commercial

$142.20

$141.38

$140.26

$138.55

$132.37

Industrial

$119.72

$119.45

$116.45

$114.63

$108.31

$0.066

$0.072

$0.080

$0.070

$0.073

AVERAGE REVENUE PER MWh:

AVERAGE COST OF POWER: PER KWh FOR RETAIL LOAD (2,3)

(1) Includes agricultural and municipal water pumping, street lighting, and interdepartmental meters. (2) Includes depletion and depreciation on generation assets, excludes debt service. (3) Added A2PP and A2PP pipeline depreciation.

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DON PEDRO LAKE XY

Y X

MODESTO

Y X

Y X

TUOLUMNE RIVER Y X Y X

X

X

Y X

CERES

Y X Y X

Y X

TURLOCK LAKE

Y X

X

Y X Y X

HUGHSON

Y X

Y X XY

KEYES

X Y X Y X

DENAIR TURLOCK

Y NT OU NTY SC U LAU ED CO S I N RC STA ME

N SA

DELHI BALLICO XY

RIV

5

N UI AQ JO

PATTERSON

ER

HILMAR XY X

Y X

Y X

Y X

Y X X

XY

RI CED MER Y X

Y X

Y X

Y X

XY

Y X

Y X

XY

STANISLAUS COUNTY SANTA CLARA COUNTY

VER

H IG

HW AY 99

ELECTRICAL SERVICE AREA IRRIGATION SERVICE AREA

BOARD OF DIRECTORS Michael Frantz Charles Fernandes (VP) Joe Alamo (President) Rob Santos Ron Macedo

Division 1 Division 2 Division 3 Division 4 Division 5

MANAGEMENT TEAM Casey Hashimoto Larry Gilbertson Brian LaFollette Joseph E. Malaski Tou Her Michelle Reimers

General Manager Assistant General Manager, Electrical Engineering & Operations Assistant General Manager, Power Supply Assistant General Manager, Financial Services (CFO) Assistant General Manager, Water Resources Assistant General Manager, External Affairs

ADVISORS

Griffith & Masuda General Counsel Orrick, Herrington & Sutcliffe LLP Bond Counsel PricewaterhouseCoopers LLP Independent Accountants Public Financial Management, Inc. Financial Advisor Leidos, Inc. Consulting Engineers

REVENUE BOND RATINGS Standard & Poor’s A+ Fitch A+ Moody’s A2

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THE ATTACHED DISC CONTAINS THE TURLOCK IRRIGATION DISTRICT’S 2016 FINANCIAL STATEMENTS.

This document is stored in Adobe Acrobat (PDF) format. To view the document you will need to have the Adobe Acrobat Reader® installed on your computer.

The PDF files are also available through the TID website at WWW.TID.ORG or by calling the TID business office at 209.883.8300

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