From the Chairman of the Board and General Manager
The future of Platte River looks bright as we continue to build on a strong foundation of operational, financial, and environmental excellence. Sustaining our success will require enhanced collaboration with the municipalities we serve so that Platte River continues to be the foundation upon which these communities can build their energy and innovation future.
Since its inception, Platte River has provided a reliable and low-cost supply of electricity to its owners. In the past, a simple strategy accomplished this result. Projecting municipal load growth, Platte River constructed generation facilities with capacity to meet future loads and leveraged the output of these facilities in the wholesale market until the municipal loads developed. The future will require a wider range of strategies. Opportunities and challenges include diverse community values, reduced surplus sales prices, substantial shifts in natural gas availability and pricing, lower costs for renewable resources, technological advancements, regulatory uncertainty, and changes in western regional markets.
Our 2016 successes reflect the expertise and commitment of our dedicated employees. Platte River leadership actively encourages employee development and training. Employee engagement is crucial in transforming our plans into reality. We thank them for what they do every day.
Platte River has taken positive steps to address challenges and leverage opportunities. During the past decade we have diversified our resource portfolio to include natural gas-fired combustion turbines, wind deliveries from multiple sites, and a new 30 MW solar facility. Coal generation and federal hydropower purchases round out the supply side of the current resource mix and provide essential baseload capacity. As new resources are added, we are also implementing a strategy to reduce supply from coal generation at the Craig Station. For 2016, carbon-free resources provided over 30 percent of the average electrical energy supply to the member municipalities. Our new renewable energy supply (wind and solar) has more than tripled since 2013.
Other highlights in the area of resource management include approval of Platte River’s first-ever comprehensive water policy, submission of our 2016 Integrated Resource Plan, approval of the Joint Dispatch Agreement by FERC, and expansion of the Laporte Substation, which will enhance resiliency of our transmission system.
Platte River’s financial position remained solid in 2016. All strategic financial plan targets were exceeded and net income came in at $18 million. Our AA rating was confirmed and we issued $147 million in Series JJ Bonds to fund production and transmission capital projects and to refund a portion of outstanding debt. The refunding provided net present value savings of $13.7 million. We continue engaging our teams in continuous improvement for work planning and budgeting by better aligning scope, schedules and available resources.
Platte River is among a group of seven regional utilities exploring potential participation with an existing regional transmission organization (RTO). Participation in a regional market may provide operational efficiencies through economies of scale and increased opportunities to bring more resources into our system, particularly wind and solar.
As we look to the future, “sustainability” is the brass ring that the electric industry is striving to grasp, but that term is often left to the eye of the beholder. Speaking as the leadership of Platte River, we consider the vital attributes of sustainability for our organization to be:
- Resilience – our infrastructure, our human capital and the bonds we share with our owner municipalities must be capable of absorbing unexpected events;
- Viability – our business model and financial position must continue to provide value to our owners;
- Reliability – more than ever, electricity is an indispensable component of our everyday lives, and we must strive to make it available continuously.
These attributes demonstrate the soundness of the strategy to diversify our resource portfolio. A diverse mix of resources—both on the supply and demand side—answers a need associated with each of the attributes.
Activities planned for 2017 support the sustainability of the organization. A key aspect of maintaining a viable business model for our organization is responsiveness to evolving needs of each individual community—with an eye towards managing system cost and risk. Work continues to evaluate customized resource options for the owner municipalities, with focus on modeling system level resource additions (particularly increased renewable and integration sources). Board direction and collaboration with the municipalities’ staff continue to guide this important effort.
Platte River Power Authority remains a customer-focused, sustainable, and innovative energy provider for our owner communities of Estes Park, Fort Collins, Longmont, and Loveland. We are committed to powering our sustainable future.
Our team is pleased to present Platte River’s 2016 Annual Report.