Access to Capital Meeting

Access to Capital Meeting

June 4, 2013Denver, CO

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Agenda

• Welcome & Opening RemarksMark

• Demonstrating the NeedWendy

• Regional Meeting SummaryLinda

• Next Steps Mark• Path Ahead All

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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

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• 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

BALANCING CUSTOMER AND WESTERN’S NEEDS

Safety, Security,

Reliability Strategic/ Technical

Leadership

Regulatory Requirements

Customer Partnership

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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.

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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) 6

Demonstrating the Need

Wendy ShatfordComptroller

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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.

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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.9

Capital Construction NeedBased on revised regional capital plans as of March 2013

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Regional Meeting Summary

Linda KimberlingChief Financial Officer

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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

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Next Steps

Mark GabrielAdministrator

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On The Horizon

• Strategy & Roadmap

• Robust Asset Management Plan

• Customer & Stakeholder Engagement

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Paving the Path Ahead

• Open Discussion

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