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HomeMy WebLinkAbout2014-10-02 RMLD Board of Commissioners MinutesReading Municipal Light Board of Commissioners Regular Session 230 Ash Street Reading, MA 01867 t� E C E I V E D art Time of Regular Session: 7:30 p.m. October 2, 2014 F C W N CLERK " ,� d Time of Regular Session: 9:35 p.m. ` C I N G . ri S S Commissioners: 2011 MAR - 2 A 0 21 David Talbot, Chairman Philip B. Pacino, Vice Chair John Stempeck, Commissioner - Absent Thomas O'Rourke, Secretary Pro Tem Staff: Coleen O'Brien General Manager Jeanne Foti, Executive Assistant Robert Fournier, Accounting/Business Manager Hamid Jaffari, Director of Engineering and Operations Jane Parenteau, Director of Integrated Resources William Seldon, Assistant Director of Integrated Resources Melanson Heath & PC Frank Biron and Karen Snow Citizens' Advisory Board (CAB): George Hooper, Vice Chairman Town of Reading Finance Committee Mark Dockser, Chair Steve Herrick, Member Call Meeting to Order Chairman Talbot called the meeting to order and stated that the meeting was being videotaped; it is live in Reading only. Opening Remarks ^.hairman Talbot read the RMLD Board of Commissioners Code of Conduct. introductions Chairman Talbot acknowledged Mark Dockser from the Finance Committee, Frank Biron and Karen Snow of Melanson Heath. Chairman Talbot reported that Commissioner Stempeck will not be in attendance at the meeting this evening. Commissioner O'Rourke will be the Secretary this evening. Public Comment There was no public comment. Presentation (Attachment 1) Presentation of Fiscal Year 2014 Audit — Melanson Heath & PC — Mr. Frank Biron and Ms. Snow Ms. Snow reported that she is the audit manager for Reading Municipal Light Department's Fiscal Year (FY) 2014 audit. Found on page one of the Financial Statements is the Independent Auditors Report. This is essentially what they were hired to do. It is an opinion on whether RMLD's Financial Statements are fairly stated and materially correct in accordance with generally accepted accounting principles. As in year's past, this year's audit is an unqualified opinion. It is a clean opinion and their opinion, is found on page two. RMLD's financial statements are materially correct and stated in accordance with generally accepted accounting principles. Ms. Snow said that total assets went up 4% most of that increase was in Restricted Cash and Short-Term Investments, which increased approximately $1.2 million. The biggest increase was in RMLD's Depreciation Fund, which went up about $1.4 million and the Deferred Fuel Reserve, increased by approximately $1.5 million. Ms. Snow pointed out that for the Liabilities there is a fairly large liability due to the Pension Trust. The reason for this is that the FY2014 contribution from RMLD to its Pension Trust was not paid out before June 30. Ms. Snow mentioned that in FY2014, the RMLD contributed a little over $300,000 to the OPEB Trust. This represents a fully funded contribution for FY2014 therefore there is no liability for the OPEB Trust on these Financial Statements. In FY2015, the RMLD will be required to recognize, per GASB 67 and ASB 68, RMLD's portion of the Town's retirement system, the Town's pension. The RMLD will be required to recognize its %portion of that unfunded liability which at June 30, 2014 is approximately $7.8 million. In FY2018, OPEB will also be on these Financial Statements. Within the next couple of fiscal years this will result in some fairly significant liabilities on the statements of net position. Ms. Snow then addressed the statement of revenues, expenses and changes in net position, which is the Income Statement for the year. The RMLD had a minor decrease in sales. The kilowatt -hour sales were down about 2% for the year. RMLD's Electric Sales were down about 1% for the year. Regular Session Meeting Minutes October 2, 2014 Presentation (Attachment 1) Presentation of Fiscal Year 2014 Audit — Melanson Heath & PC — Mr. Frank Biron and Ms. Snow Ms. Snow commented that the RMLD had some temporary over collections for the Fuel Charge Adjustment and its Purchase Po Adjustment, those represent temporary fluctuations. Some years they will be positive, some years will be negative depending timing issues of when RMLD collects that money, what the RMLD is charging and what RMLD's Fuel Expenses, Capacity and Transmission Expenses are. Overall, RMLD's Operating Revenues were up about 3% for the year. RMLD's Operating Expenses remained relatively stable, only up approximately $240,000, which is relatively stable on the Operating Expense side. RMLD's biggest increase in Operating Expenses was for Pensions and Benefits, which was up about $658,000, then Non - Operating Revenues and Expenses. The largest piece of the Non - Operating Revenues and Expenses is RMLD's Return on Investment to the Town of Reading, which was $2.3 million in FY2014. There is an agreement where that is indexed to inflation and the consumer price index, it is up about 2% from the prior year. Overall, RMLD's change in net position was a positive $3.5 million, which is about 6% return. RMLD is capped at 8% therefore, the RMLD is right there in the middle. RMLD had a nice healthy Net Income for the year. Ms. Snow then addressed the Fiduciary Funds which consists of RMLD's Pension Trust and OPEB Trust. The RMLD contributed the amount that was actuarially determined for FY2014 to both of these funds. This represents a little over $1.3 million in the Pension Trust and just over $343,000 to the OPEB Trust, then the RMLD also paid out of its Pension Trust $1.3 million to the Town of Reading for the FY2014 retirement assessment. Mr. Hooper asked to be recognized. Mr. Talbot, first apologized for not acknowledging George Hooper, CAB Vice Chairman, at the beginning of the meeting. Mr. Hooper then noted that some people watching at home, when we say OPEB, they might not understand. Ms. Snow clarified that Other Post Employment Benefits, which is health insurance primarily. It has nothing to do with the pension. It is "other" post employment benefits. The RMLD pays a portion of the cost of health insurance benefits for its retirees and this recognizes the obligation not only to your current retirees, but your future retirees as well. Mr. Herrick clarified that if you are talking about the OPEB and how that is recognized, you said the current retirees as well. How are the payments that are actually made in support of those current retirees acknowledged in that liability? Ms. Snow responded, they are not acknowledged in the liability. They are actually expensed in the year you pay them, and they are called "pay as you go." The liability is in essence recognizing the liability we have for people that are retiring now and what you are going to have to pay them over the next however many years, plus the people that are working for you now and who will eventually retire and receive th4 benefits. Report of the Committee — Audit Committee — Vice Chair Pacino Mr. Pacino reported that the RMLD Subcommittee met before this meeting along with the Town of Reading Subcommittee as a joint meeting between the two boards /groups. It was the recommendation of both the Audit Subcommittee of the Board and the Town of Reading Audit Committee that the Board/Commission accept the audit as presented. Mr. Pacino commented that Mr. Herrick is here and asked him if he had any specific questions, Mr. Herrick did not. Mr. Pacino said that it was the unanimous vote of both groups to recommend to this Board that we accept the Audit. Mr. Pacino made a motion seconded by Mr. O'Rourke that the RMLD Board of Commissioners accept the Town of Reading, Reading Municipal Light Department annual financial statements, which are audited that we accept them as presented. Motion carried 3:0:0. Mr. Pacino added just one item. It was mentioned that he did ask the auditors if there was a management letter detailing any particular control issue. He was told that there will be no management letter issued, that there is no material weaknesses and no significant deficiencies. Chairman Talbot stated that Town Meeting Monday night voted 68 -45 to ask FinCom to help us look at our procurement issues and we want to welcome Mark Dockser the Chairman of the FinCom. Chairman Talbot commented that he did not want to put Mr. Dockser on the spot, but is there anything he can say here at the meeting about what you would like to try and accomplish or we can take it off line and do it at the next meeting. Mr. Dockser thanked Chairman Talbot. Mr. Dockser said that he did not have specific comments. The FinCom has created a subcommittee, which will look into what is the best way to approach looking at the Town Boards, the RMLD and the Schools. Procurement is obviously the focus area at this point. We will be meeting next week and then we can start to have some discussions from there in terms of what information we would like to have. Mr. Dockser said that he appreciates the offer of information that has already been provided or shared. Chairman Talbot commented that on this specific matter of these surplus trucks and that we have been over it a number of times, Chairman Talbot knows that information has already been pulled together and all we have to do is make sure that it gets to you. There is quite a lot of it photographs and maintenance records and oil changes and so forth. That is all out there, if that needs to be revisited. Regular Session Meeting Minutes October 2, 2014 Report of the Committee — Audit Committee — Vice Chair Pacino Ms. O'Brien stated that whatever documents you need will be provided. We will need a clarification from you, if you are going to go ough me or Chairman Talbot in order that all documents are accumulated in an expeditious manner. Ms. O'Brien said that we are filling to accommodate the request, but need to be mindful of the operations. Ms. O'Brien stated that she is looking forward to knowing what the process is so that we can start to help you. Mr. Dockser said that he appreciates the support for our plan. The reason he is not saying much tonight is he would rather have us very focused on how we will approach it, then share that information. Mr. O'Rourke said that he echoes as a Board we certainly support and want to endorse the work. His main concern would be fresh off the audit is wanting to maintain the profitability of the RMLD for the benefit of our rate payers, but also for the Town of Reading which is a concern to us. So the speed and timeliness of audits in my own business always reminds me of the need to make sure it is not so invasive as to have a negative impact on productivity. It is just the nature of audits, he is sure that will be Ms. O'Brien's concern. Mr. O'Rourke would just add that sensitivity, that the goal is to continue to operate profitably and that both can be accomplished. If something has to be done in 24 hours that is a different aspect than if its spread over some reasonable period of time. Mr. Dockser commented, well understood. Town Meeting asked that the FinCom report back to them at November Town Meeting. What we anticipate is that it will be part of the report. That said, let us put together a plan and we will come back absolutely. Chairman Talbot said that he does not know quite how to address it, but it just seemed like there was ill feeling in the room at Town Meeting. He regrets that. It did seem unnecessary knowing that we can all work together. To the extent he is responsible for that, he regrets anything that he said that would add to that. He thinks also this board needs to look again at the vote we took last month in regard to charging someone for the costs. He thinks what he would like to do is look at the matter that we took up. If there are costs, he would like to look at the impact of what we did and basically go forward in a spirit of cooperation and perhaps revisit that vote at our next meeting after examining a little bit more. And, on balance that the expertise of FinCom is welcome and whatever time it takes, he would imagine it is going to be worth it and it will be a positive result. Chairman Talbot thanked Mr. Dockser for being present at the meeting. Mr. Pacino said that since he made that vote that was discussed for some time. The only thing that he would hope and the biggest thing that he took objection to is the fact that there was not communication beforehand to this commission. There were several members that got up particularly Mr. Berman who spoke and said he hopes that we all get together and have discussion. He hopes that (.�e.all follow -up that Mr. Pacino commented that Mr. Berman's suggestion about the Finance Committee Chairman was an excellent We all kind of sit together and talk to each other. Mr. Pacino said that the other thing is he would hope that since the instructions were to Finance Committee, that they do not get influenced by other outside forces. It is a Finance Committee project he got that very clearly from Town Meeting. Mr. Dockser added that we (Finance Committee) report to Town Meeting. Mr. Pacino hopes we do not try to influence you from this commission or any other outside force. Mr. Dockser stated that we report to Town Meeting and Town Meeting has asked for us to do the charter which outlines that there are some expectations on FinCom to do things or not. So, your point is taken. Mr. Dockser said that he thinks this is the way the article went through and clearly the board will be involved. Mr. Pacino said that even though it said investigation, he got the very clear message from Town Meeting that it was the procurement process that they wanted to look at and not go beyond that. Mr. Dockser commented that our focus is on the procurement' process and our hope is that pulling everything together that we identify what issues there are, if any, and deal with those. At the end of the day, where things lead us is where we need to follow. Mr. Pacino had one last suggestion as a former Finance Committee Chairman. He always made it a point, anytime anything was discussed that effected a committee that that committee received an invitation. Word of advice. Chairman Talbot said that he thinks that was a prelude to any feeling of ill will. Why wouldn't we be at your meeting when you are voting on the Article and why would not the Selectmen come here or invite us there? It is all water under the bridge now. Mr. O'Rourke commented, he is sort of anticipating with November that this will be brought to Town Meeting. Since a number of us all here are on Town Meeting as well, he does not have the answer because he is not sure of how it is supposed to work being relatively new to the Board. He thinks that if we could have a part of the process include us, and certainly Ms. O'Brien would be included because she is the General Manger, but if there is a way to make sure there is dialogue with the Board of Commissioners. When we go into Town Meeting we can all reinforce the work as opposed to see something for the first time. It is not about doing anything ahead of time, but its more just be part of the process so we can be supportive both at Town Meeting and beyond. He guesses that it speaks to the points made by Chairman Talbot and Mr. Pacino around the collaboration piece. If you have a status report, if you know what the progress is, what is going on, if there are obstacles with getting information, we would like to help. He thinks it would just be useful as a commissioner. He knows he would feel better knowing he is part of the process as opposed to %tting an update real time as a Town Meeting member. Mr. Dockser said that since the Article was written he thinks we can owccommodate reporting to Town Meeting and the appropriate boards. He anticipates a progress report at November not a final. Regular Session Meeting Minutes 4 October 2, 2014 Formation of General Manager Review Committee Chairman Talbot said that three commission members need to sit on the General Manager Review Committee. Mr. Pacino stated as senior member, he would be happy to serve. Mr. Pacino added that Commissioner John Stempeck would be excellent where he led 1 Search Committee. Mr. Pacino, made a motion seconded by Mr. O'Rourke that the Commission appoint a subcommittee made up of Chairman Talbot, Mr. Pacino and Mr. Stempeck for the purpose of the General Manager review. Motion carried 3:0:0. Mr. Hooper asked have we not had a Review Committee, how long has it been. Chairman Talbot responded that Ms. O'Brien has been on the job since July 2013. Mr. Hooper said that there has not been one in place. Mr. Pacino commented that there has not been a committee in place this current fiscal year. Update on the Adfloc Charter Review Committee Mr. Pacino reported that the Board/Commission recommendation was presented to the AdHoc Committee a week ago Monday. At this point, this has been referred to the town counsel. Originally, this was supposed to be the Rubin and Rudman opinion that we had sent over to the town counsel, but apparently had not been sent. We attended a meeting that evening, and Rubin and Rudman's opinion it has been presented. There will be a report in October from town counsel. There are some members of the Charter Commission who are arguing that the Town Charter supersedes Chapter 164. Town counsel has been asked to look at that issue and make some sort of ruling. Mr. Pacino asked the Department if Reading town counsel wishes to ask questions of Rubin and Rudman, that the department would make Rubin and Rudman available for this. That is the current status of the Charter Review. Mr. Pacino said that he does not know where this is proceeding, there are some supporters, and there are some detractors. Mr. Pacino said that he does not know whether the changes that are in the Charter will take place or not. We will have to look at going forward if the changes don't get made, what RMLD's next step would be at that point. Approval of Board Minutes -March 27, 2014 Mr. Pacino made a motion seconded by Mr. O'Rourke to approve the Regular Session meeting minutes of March 27, 2014 as presented. Motion carried 3:0:0. General Manager's Report — Ms. O'Brien — General Manager Ms. O'Brien reported on National Public Power week. Ms. O'Brien explained that it is the week where the nation recognizes the benefits of public power. Ms. O'Brien invited everyone to our open house on Thursday, October 9, 2014 at RMLD from 2:00 pm to 5:00 pm held in the garage. It was quite a success last year. Ms. O'Brien stated that in accordance with the revised Policy #2 on Surplus Material she needs to report on Surplus Material. At this time, we are seeking fair market value for the disposal o£ three surplus vehicles, the three trucks that were brought back to RMLD. Other surplus the RMLD is seeking fair market value include two Station 1 Transformers from the old Station 1 next door and scrap wire both aluminum and copper. Chairman Talbot stated that perhaps you can explain to the public what that consists of. Ms. O'Brien stated that in seeking fair market value for bucket trucks can be quite subjective. RMLD is seeking a number of companies that sell the trucks, that we can get trade - ins. There are not a lot of private companies that will come out and do it for free. Therefore, in accordance with the policy, you need to offset that price with what the truck might be worth. The RMLD is in the process of doing that now. The Policy calls for a minimum of two or at least two fair market values. And then we are starting the process from scratch with the new policy which means that it will then be put on the website for thirty days, it will go into trade publications, it will be offered to each of the towns at the fair market value and then most likely because it would be considered moderate value, which is above $500, but less than $10,000 it will probably go to public auction. And carry it on the public auction websites as well. Ms. O'Brien reported that the old Station 1 transformers are about 40,000 pounds minus 10,000 pounds of oil. The station is retired and the transformers will most likely be just scrap metal so we have to get market prices on scrap metal for those transformers. Typically, what we would do is have the people who bid on that be responsible for taking the oil out of the drums. RMLD is seeking prices on those. RMLD has scrap wire bins that are both aluminum and copper. RMLD would get prices for who is trading at the highest for that day when the bins get full. Power Supply Report — June 2014 — Ms. Parenteau (Attachment 2) Ms. Parenteau reported that RMLD's load for June was approximately 61.5 million kilowatt hours, which is approximately a decrease compared to June of 2013. RMLD's energy costs for the month were approximately $2.5 million, equivalent to a little over $0.04 per kilowatt -hour. The June Fuel Charge Adjustment was set at $0.065 per kilowatt -hour and RMLD sales totaled 55. 2 million kilowatt hours. Ms. Parenteau said that prior to fiscal year adjustments, RMLD over collected by approximately $1 million. Regular Session Meeting Minutes October 2, 2014 Power Supply Report — June 2014 — Ms. Parenteau (Attachment 2) Ms. Parenteau commented that following the fiscal year end adjustment of approximately $800,000, the Deferred Fuel Cash Reserve �lance is currently up $4.1 million. The Fuel Charge was reduced in July, August and October. The current October Fuel Charge is Wt at $0.045. The Deferred Fuel Cash Reserve is slightly higher than where it typically is. However, given the upcoming winter period and last years' experience with natural gas constraints and the exposure on the fuel market, it is anticipated that that will be going down during the November through February timeframe. RMLD purchased 19% of its energy requirement on the ISO spot market at an average cost of $44 per megawatt hours. On the capacity side, our peak demand for June occurred on June 25 at 4:00 pm and it was 143 megawatts. This compares to a peak of 162 megawatts. Our monthly requirement for capacity was set at 208 megawatts and our total capacity dollars for the month of June came in at $1.43 million, which is equivalent to a little less than $7 per kilowatt month. Table 4 shows both the capacity and energy costs as well as the amount of energy generated by resource. RMLD's June costs for Capacity and Energy came in at about $0.065 and for the month of June, 6.43% of our energy was purchased from hydro generation. As of June 30, 2014, RMLD has a little less than 9,900 Renewable Energy Certificates (RECs) and the current estimated market value of that is about $433,000. RMLD's cost for transmission for the month of June came in at about $824,000 which is approximately a 31% increase when we compare that to May's figure. The final two tables in the report are the energy efficiency tables. For the month of June, RMLD processed four commercial rebates totaling just a little over $17,000 and that brought the Fiscal Year 2014 total to $277,000. RMLD calculates the savings of approximately 976 kilowatts of capacity in a little over 2,600 megawatt hours in energy savings. On the residential side, RMLD calculates a savings of about 257 kilowatts in capacity and 123 megawatt hours of energy savings. For the fiscal year ending June 2014, RMLD processed 1,215 residential rebates totaling a little over $77,000 and also 363 residential customers received audits from the RMLD with a cost for a little over $72,000. Mr. Hooper asked how the RECs compare to the previous years. Ms. Parenteau responded that the market has been pretty static. RECs are coming in at around $52. Each class of REC has a different market. The projects that we have entitlements in qualify for both Connecticut and Rhode Island primarily and there are some Massachusetts Class I RECs, but that REC market has been pretty ,table over the last two years. �hairman Talbot asked about the rebate program. There was a study performed by MAPC, with suggestions and then we have a study that we are looking at this evening. Are we comfortable with how these are working in terms of the cost benefit? Ms. Parenteau responded that she is currently short staffed in her department. The position that really manages this we .are looking to fill that position, unfortunately we currently do not have the manpower to really fine tune this. We are working with what we have with the hopes of adding new programs and making modifications. Mr. Talbot said that in the meantime, we are mirroring what NSTAR does if they are tweaking what they do, RMLD tweaks in response. Ms. Parenteau responded not as quickly as we could and again we need the manpower to do that. We can outsource that. Currently, RMLD is outsourcing assistance with commercial audits. Chairman Talbot mentioned that perhaps it is worth to take a quick look at the next meeting to see if these are indeed aligned with what NSTAR is doing. We can take action potentially on something. Chairman Talbot stated that hypothetically, let's say that we are giving away money for ACs that everyone is buying anyway because they don't make the low CU ones any more, something like that we could fix if there was something like that. Ms. Parenteau responded she would be happy to report back on that. Charging Stations Ms. Parenteau then reported on the electric charging program that the RMLD developed. The current application is on the RMLD website. The RMLD has developed a rebate of up to 50% of the cost of the charger as well as the cost of installation which is capped at $1,500 because it addresses both residential and commercial. Ms. Parenteau said that the RMLD has performed two of these, two customers in Reading own electric vehicles. Ms. Parenteau said that once they fill out the application, we perform a visit with an employee from engineering to look at the charging station and continue to monitor their usage. One of the benefits of having a charging station is that they charge at night. These two customers are on the Time of Use rate, RMLD's off -peak rate is considerably less than our on -peak rate. One customer uses almost 90% of his power off peak with the addition of his electric water heater and the electric vehicle. The RMLD offers some very advantageous programs here for this. Mr. O'Rourke inquired what does a charge cost typically. Ms. Parenteau responded that the two that we have rebated are in the $500- 700 range. There are other costs associated with this such as the installation, you have to pull a permit and get an electrician which Auld be a couple of hundred dollars. The two rebates that have received have been in the $600 -$800 range for the completely ,stalled charger which the RMLD rebated 50% of that. Regular Session Meeting Minutes October 2, 2014 Power Supply Report — June 2014 — Ms. Parenteau (Attachment 2) Charging Stations Ms. Parenteau explained that it has to be a Level 2 charging station, 240 volts. This program is for both residential and commercial plug in vehicles. Typically, the commercial charging stations are much more expensive than the residential ones. We are worki with a customer in Wilmington and each situation could be different. Ms. Parenteau added that some of the Ninety -Nines have charging stations and they market that as a value added service. So that becomes part of their electrical service that they have. There are other applications where if they were in a public place the RMLD would own that charging station. We are working with a commercial customer where we are actually owning the charging station and they are allowing their employees to charge while they are working. Tirzah Shakespeare who works in her group was working with the Mass DEP and she was successful in obtaining a $9,800 grant toward the cost of those charging stations. All the agreements have been signed and those should be installed by the end of the year. Mr. O'Rourke asked for a homeowner vehicle how long would the charging process take. Ms. Parenteau said that it depends on the size of the battery, but typically it takes anywhere between 5 and 8 hours to get a full charge. The way that people are going to be using these things, it is going to be very different than a gas vehicle, where you typically charge it on the way to work or on the way home or while your shopping. These vehicles you are really charging them at night and you are just topping them off during the day. Unless you have a very far distance to travel or its winter time and you're running the heater which is draining your battery additionally, you're typically going to be just topping off your battery whether you are shopping or at work. Mr. Hooper clarified, public buildings which are key for us in Wilmington. Mr. Hooper asked would the RMLD own them. Ms. Parenteau responded we would work with you. There are various options, some customers want to own them and they want to provide this free. If a particular application was one where you wanted charge the customer for using it, then most likely RMLD would own it and it would be a pay as you go situation where as customers come up they would swipe and they would to pay for it. Mr. Hooper said that he is thinking along the lines of schools especially our new high school we would want to promote that some of our other facilities, Town Hall, public safety. Ms. Parenteau said that she would love to meet with you and your group to decide what the appropriate application is. Relative to the grant from the DEP, it is a first come first serve she is not sure how much money is left over. We would be happy to work with any of our customers in that regard. Chairman Talbot asked about the RMLD campus. Are there any charges? Ms. Parenteau responded that it may be part of the mastp plan, there are all different applications, and it is something that we are really excited about. Chairman. Talbot said that this is future. There is a Tesla building a $5 million battery factory in Nevada, perhaps the biggest battery factory in the world. They are coming out with a mass - market car. Mr. Hooper added Tesla has been approved in Massachusetts to sell. RFP — Wholesale Power Supply 2015 -18 Ms. Parenteau reported that the RMLD has been utilizing a laddering and layering approach over the last seven years in terms of looking out four years and procuring a portion of each of those four years' power supply. This approach has worked very well which has allowed the RMLD to take advantage of some significantly low costs. It is one of those things where you are never going to hit the market perfectly, but you pick up a piece in order stabilize your prices. Ms. Parenteau then addressed the timelines and what the RMLD is looking to procure with this RFP. Factors that come into this are if the RMLD were to invest in any type of renewable generation or fossil fuel generation. Using that, we are able to take advantage of some low prices, particularly during the off peak periods and that has been beneficial to our overall wholesale power supply costs. This was presented to the Citizens' Advisory Board at their meeting on August 13. Two members were absent, but based on the presentation it was unanimously voted 3 to 0 for the RMLD to move forward with this plan. The maximum amount of energy over the four -year period would be approximately 463,000 megawatt hours. As of August 13 when this memo was drafted, the average cost was approximately $56 per megawatt hour and that equated to around $26 million. Mr. Hooper asked about photovoltaic panels solar power with the town, especially in some of our schools we have the square footage perfect south facing sky. Mr. Hooper said that he knows that the RMLD would be interested in some generation. The town would have some perfect location and have a bunch of new roofs out there. Ms. Parenteau said that she would love to meet with Mr. Hooper and members of the town. Mr. Hooper said that the Board of Selectmen have shown some interest in this and this is something that we have been working towards. Mr. Hooper commented that we have capital projects in place. Chairman Talbot thanked Mr. Hooper. Mr. Talbot asked what the scope of the project was. Ms. Parenteau responded that they were looking at various buildings within the town of Reading to see what would be applicable. Ms. Parenteau explained that the buildings have to be structurally sound in order to support the solar and has to be southerly facing. Mr. Talbot clarified was this project the town and schools. Ms. Parenteau commented that this was the town and schools. Mr. Talbot mentioned that the person you were dealing with was representing both sides. Ms. Parenteau explained that RMLD met with Jessie Wilson from the planning department, Mary DeLai at the school department who was at the school at that point. Regular Session Meeting Minutes October 2, 2014 Power Supply Report — June 2014 — Ms. Parenteau (Attachment 2) RFP — Wholesale Power Supply 2015 -18 tairman Talbot mentioned the Lincoln Sudbury schools solar project to Mr. Hooper. Mr. Hooper said they did take that project into nsideration, but it does not meet the scheme. Mr. Pacino made a motion seconded by Mr. O'Rourke the RMLD Board of Commissioners authorize the General Manager to execute one or more Power Supply Agreements in accordance with RMLD's Wholesale Power Supply Plan for power supply purchases for a period not to exceed 2015 through 2018 and in amounts not to exceed 29 Megawatts in 2015, 27 Megawatts in 2016, 24 Megawatts in 2017 and 23 Megawatts in 2018, as presented by the Director of Integrated Resources and on the recommendation of the Citizens' Advisory Board and the General Manager. Motion carried 3:0:0. Engineering and Operations Report — June 2014 — Mr. Jaffari (Attachment 3) Mr. Jaffari reported on the Engineering and Operations Report for the month of June. The total annual budget was $6 million, approximately $3.9 million was spent with a remaining balance $2.2 million. The capital improvement projects, Projects 101, 106 and 107 are in progress. Project 101 is 5W9 reconductoring Ballardvale area which is 50% completed. A number of URDSs were completed in all towns, which brings the total spending to date to $5,613. Project 106 — Heritage Way in North Reading, Wildwood Street in North Reading, and Summit Ave in Reading. Project 107 — Step - down areas upgrades in Reading, Bond Street, Vine Street and Hunt Street, these are all completed. New customer services (installations) spendings were, $10,047 for residential customers and $233 for the commercial customers. Routine construction/Capital Improvements for the month of June was $74,528 with year to date spending of $1,681,729. The highlights include pole setting /transfers, overhead/underground installation with a number of projects completed in all Towns. These projects included North Reading High School for municipal driveway widening. Haverhill Street, North Reading pole relocation. West Street — two new services, St Agnes Parish — Woburn Street, Reading and Avalon Oaks West in Wilmington. There were four damaged poles that were repaired in all communities. Porcelain cutout replacement., we spent approximately $2,009 in this category. New Underground Constructions: In North Reading, McGrane Road a new underground subdivision was completed, Amherst Road, 'Jjilmington — three new lots, Duane Drive in North Reading is completed also, and installed some animal guards. preventative maintenance program: we have completed a number of projects. Aged /overloaded transformer replacement: we replaced four transformers — two single -phase pad mount and two three phase pad mount transformers. Single-phase pad mount transformers replacement: we replaced Wildwood Street, and Heritage Way, North Reading. Three phase transformers we replaced at Ballardvale Avenue and Research Drive, Wilmington. Pole testing program system wide: we have identified 670 poles approximately that are going to be tested. The contract was awarded to MPower Technologies. They will commence work in October per USDA mandate, which requires RMLD to test 10% of its poles in all the communities. In October the testing will begin and will receive a report on the status of those poles. 13.8kv/35kV Feeders quarterly inspections: The inspection of 3W8, 3W18, 5W4, 5W8 and 5W9 feeders have been completed. Manhole Inspection Program: The manhole inspection program is pending. We are still developing this program to inspect all the manholes in all four communities for the integrity check and making sure that the cables and all other assets located underground are in sound condition. Porcelain Cutout Replacements Program: in the month of June, we have replaced ten of those which three were changed out and an additional seven were replaced because they were damaged due to various reasons. To date we have completed approximately 87% of those. Preventative Maintenance and Substations: we have completed the infrared scanning for the month of June for Substitutions Three, Four and Five. We have not found any hot spots or any particular problems. Substation Maintenance Program: We have a three year cyclic maintenance program, and we have identified some equipment in need of maintenance or replacement, which is being scheduled for replacement/repairs. Approximately 80% of that project to date is completed with an anticipated completion by November 2014. System reliability Indices: Mr. Jaffari reported that under system reliability, the two indices that we are monitoring for the health of the system, or evaluation the health of the system, duration and frequency of outages are all under the regional and national average benchmarking values, therefore our reliability is good. The system average interruption duration for the past five years has been good. )r the month of June, we had 8.82 minutes for the system average interruption duration, which is well below 62.35 for the regional Nowerage and 85.75 for the national average. Regular Session Meeting Minutes October 2, 2014 Engineering and Operations Report — June 2014 — Mr. Jaffari (Attachment 3) Mr. Jaffari noted that for the system average interruption frequency index for the same period, you can see that its 0.22 which is belo the regional average of 0.55 and the national average of 0.83. Customer Average Interruption Duration is 39.77 minutes which is w below the national and regional averages. The majority of the outage causes were equipment damage, trees and wildlife. Most of these equipment issues are the porcelain cutouts that have been identified and being replaced as part of the ongoing program. For the trees, we have developed a tree trimming program, which is a three to five year cyclic program. We have met and discussed plans with all the communities, including DPW directors and tree wardens. Town Mangers and Administrators have been notified about the new tree - trimming program. We're going to be sending notifications to the town administrators and managers with a package regarding the tree trimming program that was developed to address these outages which are caused by hazardous trees. M.G.L. Chapter 30B Bids (Attachment 4) Lynnfield Excavation — IFB 2015 -01 Mr. Jaffari reported that this bid is for the Lynnfield URD excavation project for FY2014. The invitation to bid was emailed to thirty four construction companies. There were four bids received. Mr. Pacino made a motion seconded by Mr. O'Rourke that bid 2015 -1 for the Lynnfield URD Excavation Project 2015 be awarded to Tim Zanelli Excavation, LLC for $217,300 as the lowest qualified bidder on the recommendation of the General Manager. Motion carried 3:0:0. Mr. Pacino asked why the other bids were so much higher it looked like almost double. Mr. Jaffari responded that all potential bidders received the same specifications. It could be just the timing, some contractors have so many jobs that they bid high. Mr. Hooper added that with the bids some companies own equipment whereas others do not which is reflective in the bottom line. Mr. Talbot asked when we do excavation do we coordinate with the respective towns. Ms. O'Brien replied yes. Mr. Jaffari explained that the towns notify via email this information to the chief engineer and me. Mr. Talbot asked is it standard practice to just put some 4 -inch conduit down there for future pulling wire or pulling fiber should it > needed. Mr. Jaffari replied that it is really dependent upon which area it is if it is underground. Chairman Talbot commented t certainly if it's on a cul -de -sac you would not do it, but if it is on a busy street and you're in there. Chairman Talbot added that he has been told it is good practice to put the empty conduit in there in case it is needed because it really doesn't add anything to the cost. Mr. Jaffari said that it is very costly to do that. We are waiting for the organizational and reliability study to tell us exactly where we need extend the feeders so as part of that plan, moving forward if that's within the plan and its calling for it then we can do it, otherwise the cost of the construction is going to go up. Chairman Talbot added that it would make common sense and can apply as well if you happen to be opening up Main street on Route 28 from Calareso's to the school system, it would make sense to add a piece of conduit for future stringing of fiber or wire if you had a chance, it is said to be good practice for future use. Organizational and Reliability Studies — RFP 2014 -21 Ms. O'Brien reported that on Monday, April 14, 2014, a Request For Proposal notice was published in the Commonwealth of Massachusetts Goods and Services Bulletin and on Wednesday, April 16 a Request for Proposal was published as a legal notice in the Daily Times Chronical, Middlesex East section, to conduct two compressive and integrated studies for the RMLD, an Organizational Study and an Electrical Reliability Study. The RFPs were sent to sixteen firms as well. There was an RFP review committee which consisted of myself and Hamid Jaffari the Director of Engineering and Operations. The committee performed a formal RFP review of qualifications of all four proposals received, which was from ESC, Booth and Associates, Lummis, and Leidos. The committee reviewed, analyzed and evaluated the proposals using comparative criteria and developed a composite rating for each of the firms. The firms with the most advantageous proposals based on the ratings and pricing were Leidos to perform the organizational study and Booth and Associates to perform the electrical system study. Mr. Jaffari reported that on the organizational study highlights, they are basically assessing the current organizational and operational structure then they will perform a gap analysis to in order to make recommendations for the organizational study. In addition, they are going to evaluate the engineering /operations safety practices and identify potential deficiencies. They are going evaluate energy efficiency programs and make recommendations for demand side management, distribution generations and where we can bring more savings for RMLD. They are going to provide an efficient business model to best utilize RMLD's fiber loop. The study will look developing strategies for risk management, major emergency plan of operations, career development and succession planning to m future requirements. The highlights of the reliability study are we would like to develop short range and long range system planning, evaluate substation capacity, feeder capacity and minimizing the losses. Regular Session Meeting Minutes October 2, 2014 Organizational and Reliability Studies — REP 2014 -21 Mr. Jaffari stated that the RMLD would like to provide energy efficiency DSM and peak shaving program recommendations in order bring more savings for the ratepayers, provide the road map to improve and sustain reliability, provide asset management commendations and perform comprehensive system protection coordination evaluation. This is very important for the reliability to make sure all the protective devices on the feeders trip out in the sequence in case there is fault. The RMLD is going to develop a smart grid road map. As of now, we have partially developed a roadmap, however, depending on the outcome of the study it will determine how many remote switches are necessary operated from the SCADA and how it will tie into the technology that will be employed to reach the future goals that will assist to minimize the duration and the frequency of the outages which leads to improved reliability. A GIS gap analysis will be performed with potential recommendations. The GIS data has not been maintained for quite a few years therefore, need to bring that model up to date. Once the model is updated that will push out into an engineering model — Milsoft. There will be an engineering analysis for future recommendations for the construction as well as addressing the capacity for the feeder and the substations. This information will be shared with the Outage Management System to be able to identify the outages and restore the outages. Another package that will be added Fault Detection Isolation Administration which is all under the umbrella of the distribution management system that is operated from the real -time system SCADA. SCADA will be managing all of distribution feeders, activities and monitors outages. It allows us to make decisions in the future how to re -route the circuits in order to minimize the losses and also restoring the outages in the most expeditious manner. All of these are coming hopefully after we do the gap analysis to know where the future lies and which direction we should be making the investments. Ms. O'Brien said that based on the evaluation process and in accordance with the memorandum from myself to the RMLD Board of Commissioners dated September 15, 2014, and based on the evaluation process it is in the best interest of RMLD to award the organizational study to Leidos and the system reliability study to Booth and Associates. Both firms are considered qualified at developing comprehensive electrical organization reliability studies, However, Booth and Associates presented a more structured format with a better understanding and ability to execute reliability scope at the level commensurate with RMLD's intent. Chairman Talbot indicated that there are some estimates out there that there will be 20 -30% photovoltaics on grids in the next thirty to forty years. It is going to happen whether we want it to happen or not. So, will this give us a grid that can support 20 -30% PV? Is at something that these organizations are looking at that is the future and we will have the engineering and operations to be in that mess. Mr. Jaffari responded that definitely is going to provide the roadmap, yes. As far as the system, capacity wise yes we do ave that. Currently, the RMLD could handle the photovoltaics. What this study is going to provide us basically is where we should make investments as well as the capacity concerns, what is the substation capacity. At this point we know we need a new substation where the load is concentrated in Wilmington area. We have also identified the area that the load centers are in the other communities as well. This study basically is going to provide us the roadmap where we should make the most investment and when we need to increase the capacity for future needs. All the new energy resources, renewable resources that will help support that structure. Chairman Talbot clarified that is from an engineering point of view. Mr. Jaffari replied, yes. Chairman Talbot asked from a business point of view that RMLD can be in the business of putting up a photovoltaic generation station in Wilmington for example. Will that help us define how we would go into that business. Mr. Jaffari responded that we had a meeting this morning with Tangent which this was discussed. The other opportunities at the substations we could install distributed generation. We are reviewing and studying those options for their practicality. Also, in some instances it makes sense to incorporate customers in order that they have distributed generation on their property. Chairman Talbot asked that we would own or that they would own. Mr. Jaffari replied that it works both ways with pros and cons for each. That is something that needs to be studied. Ms. Parenteau explained that the RMLD is looking into photovoltaics and it becomes part the strategic plan of the organization, how those things fit financially. Ms. Parenteau stated that the strategic plan along with the Organization Study the Reliability Study, all pulls this together. Ms. O'Brien added that the study will look at the projected load growths, but they'll also look at the impact of photovoltaics, business opportunity of which ones will have partnerships in. Also, it will look at the capacity that is already existing versus what we might need or areas where we might not need to improve because the photovoltaics will offset it. They are supposed to look at all of those things as you go into twenty years. There will be projections as well that will give you the best indication of where we need to focus our capital improvements over twenty years. Mr. O'Rourke clarified, just process, how does the out of scope work get managed? He assumes that this is a fixed bid so it is not liable hours that approximate this so the work is provided for the amount approved. But if there are other opportunities on accession planning or other things, so is that just handled as a request for additional services if we decide that we even want to do that? Ms. O'Brien responded that if there are transition projects that come out of this generally, what they will do is lay out what the recommendations are in a timeline, prioritize them and then make recommendations of what would be the most cost beneficial. Then we would proceed from there with the types of projects that we want to undertake. Regular Session Meeting Minutes 10 October 2, 2014 Organizational and Reliability Studies — RFP 2014 -21 Ms. O'Brien explained that there will be some that will be immediate that will not be costly like process improvements or intern, business improvements whereas there will be others that are more like capital projects. The skill sets and career development of st to be sure we are properly staffed and we have the right skill sets for not only now, but for the future. Because as you go into future, technology is going to change and you want to make sure that you keep your staff skilled to be commensurate with the system that you are operating. The flexibility of the system that we will get out of this as well will also demonstrate to speak to our ability to manage our peak because the more flexible that we can control the system the better off we will be. Efficiency wise, we need system efficiency and the flexibility to almost load profile especially if we develop other types of rates in the future. Chairman Talbot asked when do these contractors get paid and do we have the ability when we get drafts in to ask them follow up questions and have them maybe study on another level on something that we were not satisfied with the answer they provided. Ms. O'Brien explained that the first thing which will happen is a kickoff meeting were they will come in and give an actual presentation to the Board of Commissioners. In their presentations they will explain what their approach is, what they are going to be looking at, what they will be doing and their timeline. Then they will come back with a presentation of their findings and their recommendations. And, certainly they will be meeting with staff as well, but if at any time we do not feel like they have met the level of scope, this will be identified along the way. Ms. O'Brien reported that the way that Hamid and I looked at these evaluations was that certain companies will perform a 20,000 foot evaluation and we wanted a little bit more detail so that we were really able to capture specifics. Chairman Talbot commented that is what he means, is it possible to write a report that sounds good, but really provide that much meat in there? And you want better answers. Chairman Talbot asked whether we as the board have the ability to say, "look we need a better cut at this." Ms. O'Brien responded that the level that we are getting here is typical of organizational studies and reliability studies that will be able to give us the detail between one and five years and then ten years and then twenty years with the recommended changes. Chairman Talbot asked when is the moment that we are satisfied with what they have provided and they receive payment, when is that moment. Is that tonight, do they get paid in advance, when they deliver, they get paid when they deliver and you're happy with it. Ms. O'Brien responded that they get paid in milestones. Chairman Talbot asked when the last payment is. Mr. Jaffari responded that when they provide us the final report. They are supposed to give us a presentation to the management, the staff as well as the report. Chairman Talbot commented that it would be nice to get the presentation of their findings, but we need to be feeling like we got what we paid for and that last payment does not come until we have had that presentation and we feel like we have gotten what we've paid for. Ms. O'Brien added absolutely, that is generally how RFP's word Chairman Talbot said that he would like to have it be working that way, they come and they have not already received their fi payment before we have heard what they have had to say, we have read their report and we are satisfied. Mr. Pacino made a motion seconded by Mr. O'Rourke that the Board of Commissioners vote to accept Leidos to perform the Organizational Study at a cost of $99,000, and Booth & Associates to perform the Electrical System Reliability Study at a cost of $161,090, for the RMLD based on recommendation of the General Manager for a total cost of $260,090. Motion carried 3:0:0. General Discussion Chairman Talbot polled those in attendance to see if there was any further discussion. Mr. Pacino asked if Chairman Talbot is making the presentation at town meeting. Chairman Talbot said that Ms. O'Brien will be making the presentation and he might want to say a few words as well if they let us. Mr. Pacino asked if Chairman Talbot wanted to present his flip chart at that meeting on the financial structure of the department this was discussed at one point. Chairman Talbot stated that it is important that Town Meeting knows what the RMLD is doing and how transformational many of the things we are working on really are, and that it gets communicated to them because most people don't really understand what a utility is, what the challenges are and why these things are important from LEDs to charging stations, smart grid, and photovoltaics. This stuff is really important, is exciting and the presentations need to explain these things. Whether it is Coleen or me, or both of us that is what the presenters need to be focused on. Mr. Pacino commented that Town Meeting continues to change over, there are not any "old dogs" like me around. It would be good time to bring that out and show the department how we go from the rates to the bottom line, it would be only a short presentation. A meeting for a General Manager Review Committee needs to be arranged. BOARD MATERIAL AVAILABLE BUT NOT DISCUSSED E -Mail responses to Account Payable/Payroll Questions RMLD Board Meetings Wednesday, November 12, 2014 and Thursday, December 112014 Regular Session Meeting Minutes October 2, 2014 11 Executive Session At 9:05 p.m. Mr. Pacino made a motion seconded by Mr. O'Rourke that the Board go into Executive Session to approve the Executive ssion meeting minutes of March 27, 2014 and to discuss mediation and union negotiations update, and return to Regular Session for (*M�e sole purpose of adjournment. Motion carried 3:0:0. Chairman Talbot called for a poll of the vote: Mr. Pacino, Aye; Chairman Talbot, Aye; and Mr. O'Rourke, Aye. Motion carried 3:0:0. Adjournment At 9:35 p.m. Mr. Pacino made a motion seconded by Mr. O'Rourke to adjourn the Regular Session. Motion carried 3:0:0. A true copy of the RMLD Board of Commissioners minutes as approved by a majority of the Commission. Thomas O'Rourke, Secretary Pro Tern RMLD Board of Commissioners A �w �D TOWN OF READING, MASSACHUSETTS READING MUNICIPAL LIGHT DEPARTMENT Annual Financial Statements For the Year Ended June 30 ATTACHMENT 1 Reading Municipal Light Department TABLE OF CONTENTS PAGE INDEPENDENT AUDITORS' REPORT 1 MANAGEMENT'S DISCUSSION AND ANALYSIS 3 BASIC FINANCIAL STATEMENTS: Fiduciary funds: Statements of Fiduciary Net Position 7 1 Statements of Changes in Fiduciary Net Position 10 Notes to Financial Statements 11 REQUIRED SUPPLEMENTARY INFORMATION Schedule of Funding Progress 29 F] E F] INDEPENDENT AUDITORS' REPORT To the Municipal Light Board Town of Reading Municipal Light Department Report on the Financial Statements We have audited the accompanying financial statements of the business -type activities and the aggregate remaining fund information of the Town ading Municipal Light Department ( "the Department ") (an enter d of the Towrr of Reading, Massachusetts), as of and for the year ed Ju 14 aid the related notes to the financial state which Ile ivel compri e the Department's basic financial stateme is as Ii ted in the e f Cont nts. Mana nt's espnbilit for he�Fi�an 'aI State ents he rtm nt' manage nt is respo ' le fo t paration and fair presents- ion f th se fi a cial teme is n a cords with accounting principles generally cc ted in t nite St tes o rica; this includes the design, implementation, and ten nc of i terna control relevant to the preparation and fair presentation f financi tate ents that are free from material misstatement, whether due to r r error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial state- ments are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assess- ments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by manage- ment, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the business -type activities and the aggregate remaining fund information of the Town of Reading Municipal Light Department as of June 30, 2014, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Report on Summarized Comparative Information We have previously audited the Department's fiscal year j ancial st nts, and we expressed an unmodified audit opinion on t se a ial atements in our report dated September 25, 201 ur opi ion, mariz d mparative information presented herein as of an forth fisca yea June 0, 13 is consistent, in all resp ts, w th e a ited fina teme s fr m which it has be erive D F M ws- R�.��4w r ccounti principles generally accepted in the United States of America require nagement's Discussion and Analysis and Schedule of Funding Progress be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of manage- ment about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the infor- mation because the limited procedures do not provide us with evidence sufficient to express an opinion or provide any assurance. 2014 2 I(iiiw MANAGEMENT'S DISCUSSION AND ANALYSIS Within this section of the Town of Reading Municipal Light Department's ( "the Department ") annual financial report, management provides a narrative discussion and analysis of the Department's financial activities for the year ended June 30, 2014. The Department's performance is discussed and analyzed within the context of the accompanying financial statements and disclosures following this section. A. OVERVIEW OF THE FINANCIAL STATEMENTS The basic financial statements include (1) the Proprietary Fund Statements of Net Position, (2) the Proprietary Fund Statements of Revenues, Expenses and Changes in Net Position, (3) the Proprietary Fund Statements of Cash Flows, (4) the Fiduciary Funds Statements of Fiduciary Net Position, (5) the Fiduciary Funds Statements of Changes in Fiduciary Net Position, and (6) Notes to Financial Statements. The Proprietary Fund Statements of Net Positio=degrga—rio o i ica t our financial position at a specific point in ti e. At J , i sh ws ur net worth of $101,873,334 which com ses 70,19 ,10 i ed in pita assets, $4,130,585 restrictesLfer *preci ion�fun and $27,548 4 unre trict d. T riet Ft�tate en of/RAven es, ExJi nses and Ch&K in Net Position s m ariz r o erati g r ults an r eow much, if any, of a profit as me f r the ear. di cus mor elow, our net profit for the V ar nde J ne 0 , '014 $3 556,1 Tiro ieta y Find Statements of Cash Flows provide information about cash recei , cash payments, investing, and financing activities during the accounting riod. A review of our Statements of Cash Flows indicates that cash receipts from operating activities adequately covered our operating expenses in fiscal year 2014. The following is a summary of the Department's financial data for the current and prior fiscal years. Current assets Noncurrent assets Total assets Current liabilities Noncurrent liabilities Total liabilities Summary of Net Position 3 2014 2013 $ 21,584,528 $ 19,793,703 90,733,116 88,266,629 $ 112,317,644 $ 108,060,332 $ 7,721,376 $ 6,996,149 2,722,934 2,747,004 10,444,310 9,743,153 (continued) (continued) Net position: Net investment in capital assets Restricted for depreciation fund Unrestricted Total net position Total liabilities and net position 70,194,105 70,194,418 4,130,585 2,733,147 27,548,644 25,389,614 101,873,334 98,317,179 $ 112,317,644 $ 108,060,332 Summary of Changes in Net Position 2014 2013 Operating revenues $ 84,364,480 $ 82,294,531 Operating expenses (79,294,372) (79,045,634 Operating income 5,070,108 Non - operating revenues (ex7'J9 Change in net position Beginnin sition g n t po itio 34 ;248,897 ,465 778 ,783 119 9(,534060 $ 9 ,179 Be do lesKAet`bf discounts) were $79,689,061 in fiscal year 2014, a decrease p.0ff o from the prior year. In fiscal year 2014, kilowatt hours sold decreased by to 688,104,698, compared to 701,896,340 in fiscal year 2013. In fiscal year 2014, customers were charged $1,523,208 in fuel charge adjustments, compared to charges of $339,810 in fiscal year 2013. In fiscal year 2014, customers were charged purchase power adjustments of $3,152,211, compared to charges of $1,138,194 in fiscal year 2013. Operating expenses were $79,294,372 in fiscal year 2014, an overall increase of 0.3% from fiscal year 2013. The largest portion of this total, $60,823,626, was for purchase power expenses. Other operating expenses included $13,293,841 for general operating and maintenance costs, $1,397,270 for voluntary payments to Towns, and depreciation expense of $3,779,635. In fiscal year 2014, the depre- ciation rate was 3.0 %. In fiscal year 2014, the Department contributed $1,374,538 to the Reading Municipal Light Department Employees' Pension Trust (the "Pension Trust ") and the Pension Trust contributed $1,346,039 to the Town of Reading Contributory Retirement System on behalf of the Department's employees. 4 PC P] PC In fiscal year 2014, the Department contributed $343,095 to the Other Post - Employment Benefits Trust (the "OPEB Trust "), which was equal to its actuarially determined liability at June 30, 2014. As a result, the Department had no unfunded OPEB liability at June 30, 2014. Additional information on the Department's OPEB contributions can be found in Note 15 on pages 20 -23 of this report. C. CAPITAL ASSET AND DEBT ADMINISTRATION Capital assets. Total investment in land at year end amounted to $1,265,842; there was no change from the prior year. Total investment in depreciable capital assets at year end amounted to $68,928,263 (net of accumulated depreciation), a decrease of $312 from the prior year. This investment in depreciable capital assets includes structures and improvements, equipment and furnishings, and infrastructure assets. Long -term debt. At the end of the current fiscal year, the Depa outstanding bonded debt. Additional information on capital Notes to Financial Statements. 701P 'REQUESTS FOR INFORMATION C >e nd Ion -ter can in the This financial report is designed to provide a general overview of the Town of Reading Municipal Light Department's finances for all those with an interest in the Department's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to: Accounting /Business Manager Town of Reading Municipal Light Department 230 Ash Street Reading, Massachusetts 01867 5 TOWN OF READING, MASSACHUSETTS MUNICIPAL LIGHT DEPARTMENT BUSINESS -TYPE PROPRIETARY FUND STATEMENTS OF NET POSITION JUNE 30, 2014 AND 2013 2014 2013 ASSETS Current: Unrestricted cash and short-term investments $ 11,533,212 $ 9,151,851 Receivables, net of allowance for uncollectable 7,871,050 8,381,377 Prepaid expenses 772,766 691,445 Inventory 1,407,500 1,569,030 Total current assets 21,584,528 19,793,703 Noncurrent: Restricted cash and short-term investments 19,219,111 38 Restricted investments 1,292,906 - Investment in associated companies 6,774 Land F,263 ,265,842 Capital assets, net of accumulated depreciati ,928,575 Total noncurrent assets ,266,629 TOTAL ASSETS D 060,332 LIABILITIES Curr nt: A ount pay le 4,407,535 4,978,818 A rue liabili es 592,810 527,638 C s er d osit 749,900 700,021 Custome dvances for construction 400,656 405,154 o pension trust 1,374,538 - Current portion of long -term liabilities: Accrued employee compensated absences 195,937 384,518 Total current liabilities 7,721,376 6,996,149 Noncurrent: Accrued employee compensated absences 2,722,934 2,747,004 Total noncurrent liabilities 2,722,934 2,747,004 TOTAL LIABILITIES 10,444,310 9,743,153 NET POSITION Net investment in capital assets 70,194,105 70,194,418 Restricted for depreciation fund 4,130,585 2,733,147 Unrestricted 27,548,644 25,389,614 TOTAL NET POSITION $ 101,873,334 $ 98,317,179 The accompanying notes are an integral part of these financial statements. P] TOWN OF READING, MASSACHUSETTS MUNICIPAL LIGHT DEPARTMENT BUSINESS -TYPE PROPRIETARY FUND STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION FOR THE YEARS ENDED JUNE 30, 2014 AND 2013 2014 2013 Operating Revenues: Electric sales, net of discounts of $4,475,920 and $4,380,927, respectively $ 79,689,061 $ 80,816,527 Purchase power and fuel charge adjustments: Fuel charge adjustment 1,523,208 339,810 Purchase power adjustment 3,152,211 , 94 Total Operating Revenues 84,364,4aQ_-1 82,294,31 Operating Expenses: Purchase power 60,8 6 ,423,332 Operating 11,002,99 11,325,061 Maintenance 2,2 843 ,255,706 3,7 ,635 3,665,630 2Nonopera e is to [�S) 1,3 270 1,375,900 Total in Exp s 79,294,372 79,045,634 co a 5,070,108 3,248,897 e enues (Expenses): e 120,832 24, 435 Contributions in aid of construction 24,117 30,965 MMWEC surplus 391,726 445,278 Purchased power refunds - 327,297 Intergovernmental grants - 53,074 Return on investment to Town of Reading (2,301,221) (2,265,427) Loss on disposal of capital assets (114,960) (385,199) Other 365,553 303,799 Total Nonoperating Revenues (Expenses), Net (1,513,953) (1,465,778) Change in Net Position 3,556,155 1,783,119 Net Position at Beginning of Year 98,317,179 96,534,060 Net Position at End of Year $ 101,873,334 $ 98,317,179 The accompanying notes are an integral part of these financial statements. 7 TOWN OF READING, MASSACHUSETTS MUNICIPAL LIGHT DEPARTMENT BUSINESS -TYPE PROPRIETARY FUND STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED JUNE 30, 2014 AND 2013 Cash Flows From Operating Activities: Receipts from customers and users Payments to vendors and employees Customer purchase power and fuel charge adjustments Net Cash Provided By (Used For) Operating Activities Cash Flows From Noncapital Financing Activities: Return on investment to Town of Reading MMWEC surplus Intergovernmental revenues Other Net Cash Provided By (Used For) Noncapital Financing Activities Acquisition and con; Contributions in aid Prow d By (In ease decr se rin re st 'cte cash arl ' es(ments Net C rovid d By s For) Investing Activities Net C ae in Cash and Short-Term Investments Unrestricted Cash and Short Term Investments, Beginning of Year Unrestricted Cash and Short Term Investments, End of Year Reconciliation of Operating Income to Net Cash: Operating income Adjustments to reconcile operating income to net cash provided by (used for) operating activities: Depreciation expense (Increase) decrease in: Accounts receivable Prepaid and other assets Inventory Accounts payable and accrued liabilities Due to pension trust Other post - employment benefits Other liabilities Net Cash Provided By (Used For) Operating Activities The accompanying notes are an integral part of these financial statements. 0 2014 2013 $ 80,249,266 $ 80,619,625 (74,778,752) (77,467,006) 4,675,419 1,478, 004 10,145,933 4,630,623 (2,301,221) (2,265,427) 391,726 45,278 - 53,074 3 ,553 31,096 4 , 2) (1,135,979) !;3,894,282) (5,574,329) 19,619 72,660 (3,874,663) (5,501,669) 120,832 (2,466,799) 24,435 1,176,481 (2,345,967) 1,200,916 2,381,361 (806,109) 9,151,851 9,957,960 $ 11,533,212 $ 9,151,851 $ 5,070,108 $ 3,248,897 3,779,635 510,327 (81,321) 161,530 (718,762) 1,374,538 49,878 $ 10,145,933 3,665,630 (265,655) 71,485 (73,693) 250,295 (1,000,000) (1,335,089) 68,753 $ 4,630,623 P] F] Pi N TOWN OF READING, MASSACHUSETTS MUNICIPAL LIGHT DEPARTMENT FIDUCIARY FUNDS STATEMENTS OF FIDUCIARY NET POSITION JUNE 30, 2014 AND 2013 Pension Trust 2014 2013 ASSETS Cash and short-term investments $ 2,632,367 $ 5,197,092 Investments 1,292,906 - Due from proprietary fund 1,374 - TOTAL ASSETS ------- 5,29J,811 5,1 7,092 w in trust OPEB Trust 2014 2013 $ 1,846,042 $ 495,511 1,846, 2 1,495,511 11 $ 5,197,092 $ 1,846,042 $ 1,495,511 The accompanying notes are an integral part of these financial statements. 0) e) I TOWN OF READING, MASSACHUSETTS MUNICIPAL LIGHT DEPARTMENT FIDUCIARY FUNDS STATEMENTS OF CHANGES IN FIDUCIARY NET POSITION FOR THE YEARS ENDED JUNE 30, 2014 AND 2013 Additions: Contributions from Reading Municipal Light Department $ Interest and dividend income Total additions n Deductions: Paid to Reading Total deductioi Net increase (decrease) in net position Net position: Net Position, Beginning of Year Net Position, End of Year Pension Trust 2014 2 37 538 $ ,OOC 74, 20 ,391 8,7 1,008,391 OPEB Trust :12014 2013 343,095 $ 1,483,007 7,436 12,504 350,531 1,495,511 1,346,039 1,288,076 - - 1,346,039 1,288,076 - - 102,719 (279,685) 350,531 1,495,511 5,197,092 5,476,777 1,495,511 - $ 5,299,811 $ 5,197,092 $ 1,846,042 $ 1,495,511 The accompanying notes are an integral part of these financial statements. 10 Town of Reading, Massachusetts Municipal Light Department Notes to Financial Statements 1. Summary of Significant Accounting Policies The significant accounting policies of the Town of Reading Municipal Light Department ( "the Department ") (an enterprise fund of the Town of Reading, Massachusetts) are as follows: A. Business Activity - The Department purchases electricity for distribution to more than 25,000 customers within the towns of Reading, North Reading, Wilmington, and Lynnfield. B. Regulation and Basis of Accounting - Under Massachusetts a aws, the Department's electric rates are set by the Muni ' ight Boar lectrii rates, excIdding the fuel charge, cannot t nged r an c nce every three months. Rate schedules filed wt th assachus tts Department of Public Utilities (DPU). W le the PU Exerc neral per isory authority o e partm nt, the epa ment' s are t s bject to DPU a prov he epa me s po 'cy i to repare its fin ncia state - m is n co for ity ith en y ac ep ed accounting principles. Pro ri tary ds di tin uis oper evenues and expenses from non - ope of g it m Ope i evenues and expenses generally result from pr idi g s rvic nd producing and delivering goods in connection with rop ' ry fund's principal ongoing operations. The principal operating revenues of the Department's enterprise fund are charges to customers for electric sales and services. Operating expenses for the Department's enterprise fund include the cost of sales and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non - operating revenues and expenses. C. Concentrations - The Department operates within the electric utility industry. In 1998, the Commonwealth of Massachusetts enacted energy deregulation legislation that restructured the Commonwealth's electricity industry to foster competition and promote reduced electric rates. Energy deregulation created a separation between the supply and delivery por- tions of electricity service and enabled consumers to purchase their energy from a retail supplier of their choice. Municipal electric utilities are not currently subject to this legislation. D. Retirement Trust - The Reading Municipal Light Department Employees' Pension Trust (the "Pension Trust ") was established on December 30, 1966, 11 by the Reading Municipal Light Board pursuant to Chapter 64 of the General Laws of the Commonwealth of Massachusetts. The Pension Trust constitutes the principal instrument of a plan estab- lished by the Municipal Light Board to fund the Department's annual required contribution to the Town of Reading Contributory Retirement System (the System), a cost sharing, multi - employer public employee retirement system. E. Other Post - Employment Benefits Trust - The Other Post - Employment Benefits Liability Trust Fund (the "OPEB Trust ") was established by the Reading Municipal Light Board pursuant to Chapter 32B, Section 20 of the General Laws of the Commonwealth of Massachusetts. The OPEB Trust constitutes the principal instrument of a plan established by the Municipal Light Board to fund the Department's annual actu ' Ily determined OPEB contribution for future retirees. F. Revenues - Revenues are based on rate stablis De artment and filed with the DPUAestmenta- rom s les electricity a e re orded on the basis of bills rende thly ete adi gs tak n o a cycle basis rnd state . Re gn' ' is given th amount f sal c�stgmer bi ed t th end of the fi eriod. Ca ShoVrt -t I Fo t rposes of the Statement of Cas low , e De rs both restricted and unrestricted cas o de osi with asurer to be cash or short -term invest - m ts. For urpose of the Statement of Net Position, the proprietary funds nsider investments with original maturities of three months or less to be short-term investments. H. Investments - State and local statutes place certain limitations on the nature of deposits and investments available. Deposits in any financial institution may not exceed certain levels within the financial institution. Non - fiduciary fund investments can be made in securities issued or unconditionally guaranteed by the U.S. Government or agencies that have a maturity of one year or less from the date of purchase and repurchase agreements guaranteed by such securities with maturity dates of no more than 90 days from date of purchase. Investments for the Department and the Pension Trust consist of domestic and foreign fixed income bonds which the department intends to hold to maturity. These investments are reported at fair market value in the propri- etary fund and fiduciary fund financial statements. I. Inventory - Inventory consists of parts and accessories purchased for use in the utility business for construction, operation, and maintenance pur- 11a (Iiiw poses and is stated at average cost. Meters and transformers are capi- talized when purchased. J. Capital Assets and Depreciation - Capital assets, which include property, plant, equipment, and utility plant infrastructure, are recorded at historical cost or estimated historical cost when purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of the donation. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Major outlays for capital assets and improvements are capitalized as they are acquired or constructed. Interest incurred during the construction phase of proprietary fund capital assets is included as part of the capitalized value of the constructed asset. When capital assets are retired, the cost o e retired asset, less accumulated depreciation, salvage val any ash proceeds, is charged to the Department's unre et asset ount. Massachusetts General La ire util ty pl nt in ervice o b depre- ciated at an annual rate of %. To hang thi e, he De artm ant must obtain al fro the D U. ha ges n an eprecia ion rates may e made fo ncia fact rs r I ting o Oesti w for plant sion, ra er than a ng f cto latin t ates o f useful lives. K. Acc u C ensa d Abs nces mployee vacation leave is vested ann ally but onl arried forward to the succeeding year with su ery sor pproval and, if appropriate, within the terms of the applicable epartment policy or union contract. Generally, sick leave may accumu- late according to union and Department contracts and policy, and is paid upon normal termination at the current rate of pay. The Department's policy is to recognize vacation costs at the time payments are made. The Department records accumulated, unused, vested sick pay as a liability. The amount recorded is the amount to be paid at termination at the current rate of pay. L. Long -Term Obligations - The proprietary fund financial statements report long -term debt and other long -term obligations as liabilities in the Propri- etary Fund Statement of Net Position. M. Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures for contingent assets and liabilities at the date of the financial statements, and the reported amounts of the revenues and expenses during the fiscal year. Actual results could vary from estimates that were used. 13 2. N. Rate of Return - The Department's rates must be set such that earnings attributable to electric operations do not exceed eight percent of the net cost of plant. The audited financial statements are prepared in accordance with auditing standards generally accepted in the United States of America. To determine the net income subject to the rate of return, the Department performs the following calculation. Using the net income per the audited financials, the return on investment to the Town of Reading is added back, the fuel charge adjustment is added or deducted, and miscellaneous debits /credits (i.e., gain /loss on disposal of fixed assets, etc.) are added or deducted, leaving an adjusted net income figure for rate of return purposes. Investment interest income and bond principal payments are then deducted from this figure to determine the net income subject to the rate of return. The net income subject to the rate of return is then subtracted from the allowable eight percent rate of return, which is calculated by adding the book value of net plant and the investment in associated companies less the contributions in aid of construction ti- plied by eight percent. From this calculation, the Municip oar will determine what cash transfers need to be madam at-v� end. 0. Comparative Financial Infor a#i - The inan ial st temen s inc ude certain prior -year comparat' a info atio . Su inf rmatio do not include lent de it to on tute pr sent m confo ity ith ener Ily a ed a cou tin nnci les Accordingly, suc i mation sh uld be rn c jun do h the D pa ent's financial statements forte ear ende une 0, 2 fro he summarized information was d rived. Total cash and investments as of June 30, 2014 are classified in the accompanying financial statements as follows: Proprietary Fund: Unrestricted cash and short-term investments Restricted cash and short -term investments Restricted investments Fiduciary Funds: Cash and short-term investments - Pension Trust Cash and short-term investments - OPEB Trust Investments - Pension Trust Total cash and investments 14 $ 11,533,212 19,219,111 1,292,906 2,632,367 1,846,042 1,292,906 $ 37,816,544 PC 1E P] Total cash and investments at June 30, 2014 consist of the following: Cash on hand $ 3,000 Deposits with financial institutions 37,813,544 Total cash and investments $ 37,816,544 Disclosures Relating to Interest Rate Risk Interest rate risk is the risk that the fair value of an investment will be adversely affected by changes in market interest rates. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The Department manages its exposure to interest rate risk by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to vide the cash flow and liquidity needed for operations. As of June 30, 2014, the Department (includ Trust) held cash and short -term ' ments Massachusetts Mun' ' al Dep sitory ust (I accounts, -day IC -i ur ba k ce the<1mm iatq- kg,dity nd/ r s o -ter m as ca N to bb exD9sed to ii st a d OPEB vesnts ju Trust held investments ith the C -ins ed vings JeD Be ause of , these fundlare- blassified anying financial statements t interest rate risk. of JP4 J 4 30, F011,,Ih artment and Pension Trust held investments in me tic +5gjbreign fixed income bonds with varying maturity dates as follows: Restricted Pension Maturity Investments Trust Date Corporate bonds AT &T Inc $ 212,158 $ 212,158 12/01/22 General Electric Cap Corp 206,472 206,472 01/09/23 Wells Fargo & Co 208,098 208,098 08/15/23 Rabobank Nederland Bank 254,085 254,085 11/09/22 Teva Pharmaceut Fin BV 207,109 207,109 12/18/22 BNP Paribas 204,984 204,984 03/03/23 Total $ 1,292,906 $ 1,292,906 Disclosures Relating to Credit Risk Generally, credit risk is the risk that the issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assign- ing of a rating by a nationally recognized statistical rating organization. As of 15 June 30, 2014, the Department and Pension Trust held investments in domestic and foreign fixed income bonds with varying ratings as follows: Restricted Pension Moody's Investment Type Investments Trust Ratinq Corporate bonds: AT &T Inc $ 212,158 $ 212,158 A3 General Electric Cap Corp 206,472 206,472 Al Wells Fargo & Co 208,098 208,098 A3 Rabobank Nederland Bank 254,085 254,085 A2 Teva Pharmaceut Fin BV 207,109 207,109 A3 BNP Paribas 204,984 204,984 Al Total $ 1,292,906 $ 1,292,906 Concentration of Credit Risk The Department follows the Town of Readin s inves n i y, ich does not limit the amount that can be ' e el in ny o e is er bey nd t at stipu- lated by Massachu s Gener I Laws At J ne 3 , 201 , the epa ment and Pension T vesture is w e Id i dour stic oreign fi ed i come s, as Beta th sec on a ove Fi of he bonds ea ividually repres nt ppr ate 16 °0 of Dep ent' and System's total invest - r nts, le the inv en in R3 b ank nd Bank represents approx- it 'Custodial Credit Risk for deposits is the risk that, in the event of the failure of a depository financial institution, the Department will not be able to recover its deposits or will not be able to recover collateral securities that are in the pos- session of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker - dealer) to a transaction, the Department will not be able to recover the value of its investments or collateral securities that are in the possession of another party. Massachusetts General Laws, Chapter 44, Section 55, limits deposits "in a bank or trust company or banking company to an amount not exceeding sixty per cent of the capital and surplus of such bank or trust company or banking company, unless satisfactory security is given to it by such bank or trust company or banking company for such excess." The Department follows the Massachusetts statute as written, as well as the Town of Reading's deposit policy for custodial credit risk. Because the Department pools its cash with the Town of Reading, the spe- cific custodial credit risk of the Department's deposits could not be readily determined at June 30, 2014. 16 7 As of June 30, 2014, none of the Department's (including Pension Trust and OPEB Trust) short-term investments were exposed to custodial credit risk. As of June 30, 2014, none of the Department or Pension Trust investments were exposed to custodial credit risk because the related securities are registered in the Department's name. 3. Restricted Cash and Investments The Department's proprietary fund restricted cash and investment balances represent the following reserves at June 30, 2014: Depreciation fund Construction fund Deferred fuel reserve Deferred energy conservation reserve Rate stabilization Reserve for uncollectible acco nts Sick leave s Hazardo s w and de Cu m To al e D pa Cash Investments $ 4,130,585 $ - iy,z IU, i 1 1 4) i,zaz,au6 s the following reserves: - Depreciation fund - The Department is normally required to reserve 3.0% of capital assets each year to fund capital improvements. - Construction fund — This represents additional funds set aside to fund capital expenditures. - Deferred fuel reserve - The Department transfers the difference between the customers' monthly fuel charge adjustment and actual fuel costs into this account to be used in the event of a sudden increase in fuel costs. - Deferred energy conservation reserve - This account is used to reserve monies collected from a special energy charge added to customer bills. Customers who undertake measures to conserve and improve energy efficiency can apply for rebates that are paid from this account. - Rate stabilization - This represents amounts set aside to help stabilize cost increases resulting from fluctuations in purchase power costs. - Reserve for uncollectible accounts - This account was set up to offset a portion of the Department's bad debt reserve. `VA 4. 5. a - Sick leave benefits - This account is used to offset the Department's actuarially determined compensated absence liability. - Hazardous waste fund -This reserve was set up by the Board of Commissioners to cover the Department's insurance deductible in the event of a major hazardous materials incident. - Customer deposits - Customer deposits that are held in escrow. Accounts Receivable Accounts receivable consists of the following at June 30, 2014: Customer Accounts: Billed Less allowances: Uncollectible accounts Sales discounts Total billed Unbilled, net TotalQ4sWmer ao�cc MWtU su s Lions c, Nnother. t counts otal net receivables Prepaid Expenses $ 2,227,603 Prepaid expenses consist of the following: Insurance and other Purchase power NYPA prepayment fund WC Fuel - Watson Total Inventory (200,000) (231,632) __9 34,746 L--39),088 27,976 795, 71 5,622,269 7.41844C 4C 452,810 $ 7,871,050 $ 269,616 24,964 259,957 218,229 $ 772,766 Inventory is comprised of supplies and materials at June 30, 2014, and is valued using the average cost method. 18 R-1 P] M 7. Investment in Associated Companies Under agreements with the New England Hydro- Transmission Electric Com- pany, Inc. (NEH) and the New England Hydro- Transmission Corporation (NHH), the Department has made the following advances to fund its equity requirements for the Hydro - Quebec Phase II interconnection. The Depart- ment is carrying its investment at cost, reduced by shares repurchased. The Department's equity position in the Project is less than one -half of one percent. Investment in associated companies consists of the following, at June 30, 2014: New England Hydro- Transmission (NEH & NHH) $ 26,994 8. Capital Assets The following is a summary of fiscal year 2014 activity in ca sets (i thousands): Be inning Ending B lanc In eases ecre es Balance Business -Type Activities: Capital ass e . g deprec ted: Structure and i emen s $ 4,17 $ 4 $ - $ 14,183 Equ me and umi ing 1,35 867 (439) 31,787 Infras c re 0 3,023 (733) 82,739 otal pi al as t being p eciat d 125,987 3,894 (1,172) 128,709 ss a cu ulate dep or: S ture provements (7,748) (388) - (8,136) uipment and furnishings (18,959) (970) 439 (19,490) Infrastructure 3( 0,352) (2,422) 619 32,155 Total accumulated depreciation 57,059 (3,780) 1,058 59,781 Total capital assets, being depreciated, net 68,928 114 (114) 68,928 Capital assets, not being depreciated: Land 1,266 - - 1,266 Total capital assets, not being depreciated 1,266 - - 1,266 Capital assets, net $ 70,194 $ 114 $ (114 $ 70,194 9. Accounts Payable Accounts payable represent fiscal 2014 expenses that were paid after June 30, 2014. `p] 10. 11. 12. 4 15. Accrued Liabilities j Accrued liabilities consist of the following at June 30, 2014: Accrued payroll $ 304,089 Accrued sales tax 235,908 Other 52,813 Total $ 592,810 Customer Deposits This balance represents deposits received from customers that are held in escrow. Customer Advances for Construction This balance represents deposits received f m ve iradv nce for work to be performed by the Derhrtme h Depa me t r nizes es deposits as revenue aftMI as ee co plet d. Accr d Em o en ed A s nc s D part e t e p yees r gr ted s c eave in varying amounts. Upon re rem n to ina 'on h, employees are compensated for unused k I ve (su ect to certain limitations) at their then current rates of pay. Restricted Net Assets The proprietary fund financial statements report restricted net assets when external constraints are placed on net assets. Specifically, restricted net assets represent depreciation fund reserves, which are restricted for future capital costs. Post - Employment Health Care and Life Insurance Benefits Other Post - Employment Benefits The Department follows GASB Statement 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. Statement 45 requires governments to account for other post - employment benefits (OPEB), primarily healthcare, on an accrual basis rather than on a pay -as- you -go basis. The effect is the recognition of an actuarially required contribution as an expense on the Statements of Revenues, Expenses, and 20 Changes in Net Position when a future retiree earns their post - employment benefits, rather than when they use their post - employment benefit. To the extent that an entity does not fund their actuarially required contribution, a post - employment benefit liability is recognized on the Statements of Net Position over time. A. Plan Description In addition to providing the pension benefits described in Note 16, the Department provides post - employment health and life insurance benefits for retired employees through the Town of Reading's Massachusetts Inter - local Insurance Association (MIIA) Health Benefits Trust. Benefits, benefit levels, employee contributions and employer contributions are governed by Chapter 32 of the Massachusetts General Laws. As of June 30, 2013, the actuarial valuation date, approximately 84 retirees and 52 active employees meet the eligibility requirements. The plan does not issue a separate financial report. B. Benefits Provided The Department provides p st -e loym nt m ' prescr ptio drug, and life insur nefits o a I eli ible r tirees a theirs rvivi g spous All active a plo ee ho tire from a Department nt a d JAsfibil c ' eri will a eligi le ri e ive these b its. ne a actuarial valuation date, retirees were ontribute 29% of the cost of the medical and prescription s determined by the MIIA Health Benefits Trust. Retirees also contribute 50% of the premium for a $5,000 life insurance benefit. The Department contributes the remainder of the medical, prescription drug, and life insurance plan costs on a pay -as- you -go basis. D. Annual OPEB Costs and Net OPEB Obligation The Department's fiscal 2014 annual OPEB expense is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB State- ment No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost per year and amortize the unfunded actuarial liability over a period of twenty years. The following table shows the components of the Department's annual OPEB cost for the year ending June 30, 2014, the amount actually contributed to the plan, and the change in the Department's net OPEB obligation based on an actuarial valuation as of June 30, 2013. 21 Annual Required Contribution (ARC) $ 538,576 Interest on net OPEB obligation 229,802 Annual OPEB cost 768,378 Projected benefit payments 425,283 Increase in net OPEB obligation 343,095 Net OPEB obligation - beginning of year - Contributions to OPEB Trust 343,095 Net OPEB obligation - end of year $ - (') See Part E for additional information The Department's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for fiscal 2014 and the two preceding fiscal years were as follows: Annual P entage 0 O et O EB Fiscal Year E ed ost Cot Co nbut d bli tion 201 76 78 100 0% $ - 2 13 60 7 100 00% $ - 2 2 $587, 94 7 5% $ 1,335,089 RE]. Fun a St us nd Pro ress e fu status of the plan as of June 30, 2013, the date of the most ecent actuarial valuation was as follows: Actuarial accrued liability (AAL) $ 7,588,993 Actuarial value of plan assets 1,495,511 Unfunded actuarial accrued liability (UAAL) $ 6,093,482 Funded ratio (actuarial value of plan assets /AAL) 19.7% Covered payroll (active plan members) N/A UAAL as a percentage of covered payroll N/A In 2010, the Department's Board of Commissioners voted to accept the provisions of Massachusetts General Law Chapter 32B §20, to create an Other Post - Employment Benefits Liability Trust Fund as a mechanism to set aside monies to fund its OPEB liability. In 2013, the Commissioners voted to create an OPEB trust instrument in alignment with the Town of Reading. In fiscal year 2014, the Department contributed $343,095 to this trust, which was equal to all of its actuarially determined annual contribu- 22 tions through June 30, 2014. The assets and net position of this trust are reported in the Department's Statement of Fiduciary Net Position. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary infor- mation following the notes to the financial statements, presents multi -year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. F. Actuarial Methods and Assumptions Projections of benefits for financial report' =Urpose se on the plan as understood by the De ent a n memb s a d include the types of benefits provid d at th time of e a uation nd a histor- ical patter an of b nef co s be een epart nt nd plan memb rs t poi . Th a vial et ods and assumpti ns sed in ud tec ni es at a e d ned o r duc short -term vo atility in act an I accrued abiliti s and t act a ial lue of assets, consistent with th Ion - rm p rs ecti a of t culations. In a une 0, actuarial valuation, the Projected Unit Credit actuarial st m od was used. The Department's actuarial value of assets was $1,495,511. The actuarial assumptions included a 7.75% investment rate of return and an initial annual health care cost trend rate of 8.5% which decreases to a 5.0% long -term rate for all health care benefits after eight years. The amortization costs for the initial UAAL is a level percentage of payroll amortization, with amortization payments increasing at 2.5% per year for a period of 18 years. 16. Pension Plan The Department follows the provisions of GASB Statement No. 27, (as amended by GASB 50) Accounting for Pensions for State and Local Government Employees, with respect to the employees' retirement funds. Chapter 32 of the Massachusetts General Laws assigns the System the authority to establish and amend benefit provisions of the plan, and the State legislature has the authority to grant cost -of- living increases. The System issues a publicly available financial report which can be obtained through the Town of Reading Contributory Retirement system at Town Hall, Reading, MA. 23 A. Plan Description The Department contributes to the Town of Reading Contributory Retire- ment System (the System), a cost - sharing, multiple - employer, defined benefit pension plan administered by a Town Retirement Board. The System provides retirement, disability and death benefits to plan mem- bers and beneficiaries. Chapter 32 of the Massachusetts General Laws assigns the System the authority to establish and amend benefit provi- sions of the plan, and grant cost -of- living increases. B. Fundinq Policy Plan members are required to contribute to the System at rates ranging from 5% to 11 % of annual covered compensation. The Department is required to pay into the System its share of the remaining system wide actuarially determined contribution plus administration costs which are apportioned among the employers based on active covered e contributions of plan members and the Department verned b Chapter 32 of the Massachusetts Genera . The a me is con- tributions to the System for the rs en td J , 2014, 2013, and 2012 were $1,346,039, $1,48,074, and 1,3 respe tivel , which were equallai#s-aTtRual reouirRd cdptribotions focadch of P] T n of R adi)V acting through its Light Department, is a Participant in 1 Pr ' of the Massachusetts Municipal Wholesale Electric Company WEC). . MMWEC is a public corporation and a political subdivision of the Common- wealth of Massachusetts, created as a means to develop a bulk power supply for its Members and other utilities. MMWEC is authorized to construct, own, or purchase ownership interests in, and to issue revenue bonds to finance, electric facilities (Projects). MMWEC has acquired ownership interests in electric facilities operated by other entities and also owns and operates its own electric facilities. MMWEC sells all of the capability (Project Capability) of each of its Projects to its Members and other utilities (Project Participants) under Power Sales Agreements (PSAs). Among other things, the PSAs require each Project Participant to pay its pro rata share of MMWEC's costs related to the Project, which costs include debt service on the revenue bonds issued by MMWEC to finance the Project, plus 10% of MMWEC's debt ser- vice to be paid into a Reserve and Contingency Fund. In addition, should a Project Participant fail to make any payment when due, other Project Partici- pants of that Project may be required to increase (step -up) their payments and correspondingly their Participant's share of that Project's Project Capa- bility to an additional amount not to exceed 25% of their original Participant's 24 share of that Project's Project Capability. Project Participants have cove- nanted to fix, revise, and collect rates at least sufficient to meet their obliga- tions under the PSAs. MMWEC has issued separate issues of revenue bonds for each of its eight Projects, which are payable solely from, and secured solely by, the revenues derived from the Project to which the bonds relate, plus available funds pledged under MMWEC's Amended and Restated General Bond Resolution (GBR) with respect to the bonds of that Project. The MMWEC revenues derived from each Project are used solely to provide for the payment of the bonds of any bond issue relating to such Project and to pay MMWEC's cost of owning and operating such Project and are not used to provide for the payment of the bonds of any bond issue relating to any other Project. MMWEC operates the Stony Brook Intermediate Project and the Stony Brook Peaking Project, both fossil - fueled power plants. MMWEC has a 3.7% ' resi in the W. F. Wyman Unit No. 4 plant, which is operated and y its majority owner, FPL Energy Wyman IV, LLC, a su of NextEr ergy Resources LLC, and a 4.8% ownership inter in the I Unit 3 nuclear unit, operated by Dominion Nuc onnec cut, c. DNCI), t e majority owner and an indirect subsidia of D info Re rc , Inc. NCI also owns and es the ills to a it 2 ucl ar u ' . e opera ing license f e Mil ston t 3 cle r u it xte ds November 25, 2 ubs n ial portion MM EC, nt in nt and financing program is an 11.6 /o wn r ip in t r tin the S rook Station nuclear generating unit op rat d y N xt En eabrook, LLC (NextEra Seabrook) the majority ner an an ' direc subsidiary of NextEra Energy Resources, LLC. The op ting icense for Seabrook Station extends to March 15, 2030. NextEra eabrook has submitted an application to extend the Seabrook Station operating license for an additional 20 years. Pursuant to the PSAs, the MMWEC Seabrook and Millstone Project Partici- pants are liable for their proportionate share of the costs associated with decommissioning the plants, which costs are being funded through monthly Project billings. Also, the Project Participants are liable for their proportionate share of the uninsured costs of a nuclear incident that might be imposed under the Price - Anderson Act (Act). Originally enacted in 1957, the Act has been renewed several times. In July 2005, as part of the Energy Policy Act of 2005, Congress extended the Act until the end of 2025. Reading Municipal Light Department has entered into PSAs and Power Purchase Agreements (PPAs) with MMWEC. Under both the PSAs and PPAs, the Department is required to make certain payments to MMWEC payable solely from Department revenues. Under the PSAs, each Participant is uncon- ditionally obligated to make all payments due to MMWEC, whether or not the Project(s) is completed or operating, and notwithstanding the suspension or interruption of the output of the Project(s). 25 MMWEC is involved in various legal actions. In the opinion of MMWEC management, the outcome of such actions will not have a material adverse effect on the financial position of the company. Total capital expenditures for MMWEC's Projects amounted to $1,609,213,000, of which $115,506,000 represents the amount associated with the Depart- ment's share of Project Capability of the Projects in which it participates, although such amount is not allocated to the Department. MMWEC's debt outstanding for the Projects includes Power Supply Project Revenue Bonds totaling $225,280,000, of which $9,478,000 is associated with the Department's share of Project Capability of the Projects in which it participates, although such amount is not allocated to the Department. After the July 1, 2014 principal pay- ment MMWEC's total future debt service requirement on outstanding bonds issued for the Projects is $184,003,000, of which $6,937,000 is anticipated to be billed to the Department in the future. The estimated aggregate amount of Reading Municipal Lig men 's required payments under the PSAs and PPAs, exc e R es ar Contingency Fund billings, to MMWEC at Jurl0, 20 tim ed for future years is shown below. /\ r rs en ed ne 015 $ 2,574,00 2 16 J 2,700,00 20 7 1,472,000 8 190,000 2019 - 2020 1,000 Total $ 6,937,000 In addition, under the PSAs, the Department is required to pay to MMWEC its share of the Operation and Maintenance (O& M) costs of the Projects in which it participates. The Department's total O& M costs including debt service under the PSAs were $14,021,000 and $12,353,000 for the years ended June 30, 2014 and 2013, respectively. Renewable Eneray Certificates In 2003, the Massachusetts Department of Energy and Environmental Affairs adopted the Massachusetts Renewable Energy Portfolio Standard (RPS), a regulation that requires Investor Owned Utilities (IOUs) to purchase mandated amounts of energy generated by renewable resources (Green Energy) as a percentage of their overall electricity sales. The Massachusetts RPS applies only to IOUs, so the Department is currently exempt from this mandate. 26 W K (Illlw Energy suppliers meet their annual RPS obligations by acquiring a sufficient quantity of RPS - qualified renewable energy certificates (RECs) that are created and recorded at the New England Power Pool ( NEPOOL) Generation Information System (GIS). Suppliers can purchase RECs from electricity generators or from other utilities that have acquired RECs. As part of its ongoing commitment to Green Energy, the Department has entered into Purchase Power Agreements (PPAs) with Swift River Hydro LLC and Con- cord Steam Corporation to purchase power generated from renewable energy resources. These PPAs include the Department taking title to RECs, which certify that the energy produced was the product of a renewable resource. Because the Department is exempt from the RPS provisions, it has the option of holding these RECs until they expire or selling them through the NEPOOL GIS. Information regarding the Department's fiscal year 2014 REC activity and balances is as follows: REC Sales During Fiscal 2014 [OR us 107 70 848 Vario s 1, 09 96,782 [::�ano s 7 18,988 us 93 59,094 Vari s 107,100 anou 3,533 189,899 ous 1,142 29,121 Various 2,432 155,040 Various 245 15,300 Various 618 33,187 Various 166 4,316 Various 291 15,336 Various 98 2,421 14,811 $ 797,430 Sale proceeds netted against fiscal year 2014 purchased power REC Holdings at June 30, 2014 Banked Projected Total Estimated Certificates Certificates Certificates Value CT Class 1 - 4,890 4,890 $ 283,620 MA Class VII - 3,631 3,631 149,940 Total - 8,521 8,521 $ 433,560 27 Because there are currently no clear accounting guidelines under GAAP or IFRS for RECs and the Department does not have a formal policy for the future disposition of RECs, the estimated fair value of the Department's REC holdings at June 30, 2014 are not recognized as an asset on the Proprietary Fund Statements of Net Position. 19. Leases Related Party Transaction - Property Sub -Lease The Department is sub - leasing facilities to the Reading Town Employees Federal Credit Union. The original sub -lease agreement commenced in December 2000 and was extended by various amendments through November 30, 2011. An additional amendment, effective December 1, 2011, extends the lease through November 30, 2014. The following is the future minimum rental income for the years ending June 30: ----1 2015 $ Total 20. Imnle Vs'finar e mental oun ng Sta rds c�t�d -has issued Statement No. 68, in an nanc 1 ep ing f ensions, which the Department is t imp em nt ji'ny,�'G�ear 2015. Management's current assessment is pro oun ment will have a significant impact on the Department's ial statements by requiring the Departm ent to recognize, as a lia- expense, its applicable portion of the Town of Reading Contributory Retirement System's (System) actuarially accrued unfunded pension liability. As of January 1, 2014, the date of the most recent actuarial valuation, the Department's portion of the System's unfunded actuarially accrued liability was $9,176,022. As of June 30, 2014, the Department had accumulated total assets of $5,299,811 in the Pension Trust to partially offset this liability. 28 K TOWN OF READING, MASSACHUSETTS, MUNICIPAL LIGHT DEPARTMENT SCHEDULE OF FUNDING PROGRESS REQUIRED SUPPLEMENTARY INFORMATION June 30, 2014 (Unaudited) Employees' Retirement System D )therkost-mployrn Actuarial UAAL as A uar' I Accrued UAAL as a Percent - Ac d Actuarial Liability Unfunded a Percent - ctu vial jActuD' age of Actuarial Value of (AAL) - AAL Funded Covered Covered Valuation Assets Entry Age (UAAL) Ratio Payroll ayroll Date (a) (b� b -a a/b N/A b -a /c 01/01/14 $ 40,511,889 $ 49,687,911 $ 9,176,022 .5% N/A 161.5% 01/01/12 01/01/10 $ 33,693,088 $ 32,274,593 $ 46,081,344 $ 388,25 $ 41,832,574 $ 557,98 N/A 0 7 ° q5,623 356 366 217.8% 162.2% 01/01/08 $ 40,022,466$- 37,123,945 (2, 98,52) 107.8% 993 - 50.5% D )therkost-mployrn t Elenefils A uar' I UAAL as Ac d a Percent - ctu vial jActuD' i y Unfunded age of al (AAL) - A AL Funded Covered Covered Assets (a) Entry Age (UAAL) (b (b-a) Ratio (a/b) Payroll u Payroll b -a /c 06/30/13 $ 1,495,511 $ 7,588,993 $ 6,093,482 19.7% N/A N/A 06/30/11 $ 1,167,161 $ 8,643,438 $ 7,476,277 13.5% N/A N/A 06/30/08 $ - $ 8,085,388 $ 8,085,388 0.0% N/A N/A See Independent Auditors' Report. 29 (liiiw To: Coleen O'Brien From:(PP '4aureen McHugh, Jane Parenteau Cf Date: August 11, 2014 Subject: Purchase Power Summary — June, 2014 Energy Services Division (ESD) has completed the Purchase Power Summary for the month of June, 2014. ENERGY The RMLD's total metered load for the month was 61,510,173 kWh, which is an 5.19% decrease from the June, 2013 figures. Table 1 is a breakdown by source of the energy purchases. ATTACHMENT 2 Table 1 (liliw Amount of Cost of % of Total Total $ $ as a Resource Energy Energy Energy Costs % (kWh) ($ /Mwh) Millstone #3 3,263,634 $6.41 5.32% $20,925 0.83% Seabrook 5,704,030 $7.23 9.31% $41,251 1.63% Stonybrook Intermediate 678,422 $87.36 1.11% $59,267 2.35% JP Morgan 7,713,600 $62.95 12.59% $485,560 19.24% NextEra 9,686,000 $50.21 15.80% $486,336 19.28% NYPA 1,818,013 $4.92 2.97% $8,945 0.35% ISO Interchange 11,807,562 $44.42 19.27% $524,479 20.79% NEMA Congestion 0 $0.00 0.00% - $118,700 - 4.70% Coop Resales 24,899 $152.01 0.04% $3,785 0.15% BP Energy 9,550,800 $48.27 15.58% $461,017 18.27% Summit Hydro /Collins/Pioneer 829,275 $63.75 1.35% $52,866 2.10% Braintree Watson Unit 616,063 $56.81 1.01% $34,998 1.39% Swift River Projects 1,296,266 $99.35 2.12% $128,784 5.10% Exelon 8,282,400 $39.91 13.51% $330,591 13.10% Stonybrook Peaking 17,955 $165.51 0.03% $2,972 0.12% Monthly Total 61,288,919 $41.17 100.00% $2,523,075 100.00% ATTACHMENT 2 Table 2 breaks down the ISO interchange between the DA LMP Settlement and the RT Net Energy for the month of June 2014. Table 2 Amount Cost % of Total Resource of Energy of Energy Energy (kWh) ($ /Mwh) ISO DA LMP * 12,592,406 43.52 20.80% Settlement RT Net Energy ** - 784,844 21.26 -1.30% Settlement ISO Interchange 11,807,562 44.42 19.51% (subtotal) Independent System Operator Day -Ahead Locational Marginal Price Real Time Net Energy JUNE 2014 ENERGY BY RESOURCE Swift River Projects, 2.1% 8, a;rtree Watson Unit, 1.0% Summit Hydro, L, NYPA, 3.0% I wybrook mediate, 1.1% ■ MMstone #3 • Seabrook • Stonyb rook mltemwdlate • R Morgan • Nowdra • NYPA • DSO tMercbange • BP Energy • Summit xyoro • Brantree Watson Unr • Swf t River Prolec -s « Exelon * Stonybrook Pealang CAPACITY The RMLD hit a demand of 142,696 M, which occurred on June 25, at 4 pm. The RMLD's monthly UCAP requirement for June, 2014 was 208,440 Ms. Table 3 shows the sources of capacity that the RMLD utilized to meet its requirements. Table 3 Source Amount (kWs) Cost ($/kW- month) Total Cost $ % of Total Cost Millstone #3 4,950 43.09 $213,310 14.93% Seabrook 7,919 45.01 $356,418 24.94% Stonybrook Peaking 24,981 1.93 $48,263 3.38% Stonybrook CC 42,925 3.55 $152,547 10.68% NYPA 4,019 4.19 $16,834 1.18% Hydro Quebec 4,673 3.83 $17,918 1.25% Nextera 60,000 5.65 $339,000 23.72% Braintree Watson Unit 10,520 11.36 $119,502 8.36% ISO-NE Supply Auction 48,453 3.41 $165,151 11.56% Total 208,440 $6.86 $1,428,943 100.00% Table 4 shows the dollar amounts for energy and capacity per source. Monthly Total $2,523,075 $1,428,943 $3,952,018 100.00% 61,288,919 0.0645 * Renewable Resources 6.43% Table 4 Cost of % of Amt of Energy Power Resource Energy Capacity Total cost Total Cost (kWh) ($/kWh) Millstone #3 $20,925 $213,310 $234,235 5.93% 3,263,634 0.0718 Seabrook $41,251 $356,418 $397,669 10.06% 5,704,030 0.0697 Stonybrook Intermediate $59,267 $152,547 $211,814 5.36% 678,422 0.3122 Hydro Quebec $0 $17,918 $17,918 0.45% - 0.0000 JP Morgan $485,560 $0 $485,560 12.29% 7,713,600 0.0629 Nextera $486,336 $339,000 $825,336 20.88% 9,686,000 0.0852 * NYPA $8,945 $16,834 $25,778 0.65% 1,818,013 0.0142 ISO Interchange $524,479 $165,151 $689,630 17.45% 11,807,562 0.0584 Nema Congestion - $118,700 $0 - $118,700 -3.00% - 0.0000 BP Energy $461,017 $0 $461,017 11.67% 9,550,800 0.0483 * Summit Hydro /Collins /Pioneer $52,866 $0 $52,866 1.34% 829,275 0.0637 Braintree Watson Unit $34,998 $119,502 $154,500 3.91% 616,063 0.2508 Swift River Projects $128,784 $0 $128,784 3.26% 1,296,266 0.0994 Coop Resales $3,785 $0 $3,785 0.10% 24,899 0.1520 Constellation Energy $330,591 $0 $330,591 8.37% 8,282,400 0.0399 Stonybrook Peaking $2,972 $48,263 $51,235 1.30% 17,955 2.8535 Monthly Total $2,523,075 $1,428,943 $3,952,018 100.00% 61,288,919 0.0645 * Renewable Resources 6.43% RENEWABLE ENERGY CERTIFICATES (RECO Table 5 shows the amount of banked and projected RECs for the Swift River Hydro Projects through June, 2014, as well as their estimated market value. TRANSMISSION The RMLD's total transmission costs for the month of June, 2014 were $824,454. This is an increase of 31.11% from the May transmission cost of $628,818. In June, 2013 the transmission costs were $1,030,696. Table 6 Current Month Table 5 Last Year Peak Demand (kW) 142,696 Swift River RECs Summary 162,059 Energy (kWh) 60,533,499 Period - January 2014 - June 2014 64,889,690 Energy ($) Banked Projected Total Est. Capacity ($) RECs RECs RECs Dollars Woronoco 0 3,613 3,613 $149,940 Pepperell 0 3,179 3,179 $184,382 Indian River 0 1,711 1,711 $99,238 Turners Falls 0 1,389 1,389 $0 RECs Sold 0 $0 Grand Total 0 9,892 9,892 $433,560 TRANSMISSION The RMLD's total transmission costs for the month of June, 2014 were $824,454. This is an increase of 31.11% from the May transmission cost of $628,818. In June, 2013 the transmission costs were $1,030,696. Table 6 K� Current Month Last Month Last Year Peak Demand (kW) 142,696 100,172 162,059 Energy (kWh) 60,533,499 54,474,357 64,889,690 Energy ($) $2,523,075 $1,729,892 $2,465,567 Capacity ($) $1,428,943 $1,374,862 $1,472,596 Transmission($) $824,454 $628,818 $1,030,696 Total $4,776,472 $3,733,573 $4,968,858 K� Ad r r ENERGY EFFICIENCY Table 7 shows the comprehensive results from the Energy Conservation program. The amount of savings is broken down by both demand and energy for the Commercial and Residential sectors. Table 7 Total $ Washing Machine Total Dishwasher Total $ Central A/C Commercial Year Capacity Saved (kW) I Energy Saved (kwh) Capacity $/kW Energy $/kWh Rebate Rebate /kWh Rebate /kW ICostBenefit Total to date FY07 -13 11,3461 46,338,741 $ 1,053,256 Dollars 2,592,993 Dollars $ 1,455,819 $ 0.03 $ 128.31 $ 2,190,431 Current FY14 9761 2,653,428 $ 134,057 $11.45 132,671 $ 0.05 $ 276,567 $ 0.10 $ 283.46 1 $ (9,838) Residential Total to date FY07 -13 1,7951 1,593,0661 $ 168,7901 1 83,191 1 1 $ 568,591 1 $ 0.36 $ 316.791 $ (316,610) Current FY14 2571 122,9741 $ 35,2601 $11.451 6,1491 $ 0.05 $ 149,940 1 $ 1.22 $ 584.28 $ (108,531) Total Total to date FY07 -13 13,141 47,931,807 $ 1,222,046 $ 175 1 2,676,1841 $ 1,700 1 $ 2,049,4101 $ 0.04 $ 155.961 $ 1,848,820.24 Current FY14 1,2321 2,776,402 $ 169,3171 $11.451 138,8201 $ 0.05 $ 426,5071 $ 0.15 $ 346.11 $ (118,370) Table 8 shows the breakdown for residential appliance rebates by type and year. Table 8 Washing Machine Refrigerator Dishwasher Dehumidifier Central A/C Window A/C Thermostat Audits Renewable Air Source Heat PumF HP Water Heater Fan Year JQTY IDollars QTY Dollars QTY Dollars QTY Dollars QTY Dollars QTY I Dollars QTY Dollars QTY Dollars QTY Dollars QTY Dollars QTY Dollars QTY Dollars 2007 20081 86 $ 4,300 47 $ 2,350 55 $ 2,750 7 $ 175 17 $ 1,700 101$ 250 23 $ 230 107 $ 14,940 2009 406 $ 20,300 259 $ 12,950 235 $ 11,750 401$ 1,000 41 $ 4,100 50 $ 1,250 114 $ 1,140 107 $ 14,940 2010 519 $ 25,950 371 $ 18,550 382 $ 19,100 37 $ 925 64 $ 6,400 49 $ 1,225 127 $ 1,270 64 $ 8,960 6 $ 20,700 2011 425 $ 21,250 383 $ 19,150 313 $ 15,650 47 $ 1,175 57 $ 5,700 65 $ 1,625 118 $ 1,180 180 $ 26,960 4 $ 18,000 2012 339 $ 16,950 354 $ 17,700 289 $ 14,450 38 $ 950 44 $ 4,400 56 $ 1,400 105 $ 1,050 219 $ 32,731 3 $ 14,000 9 $ 2,250 3 $ 30 2013 285 $ 14,250 336 $ 16,800 311 $ 15,550 29 $ 725 24 $ 2,400 54 $ 1,350 57 $ 570 375 $ 75,000 3 $ 15,000 S 19 $ 1,900 4 $ 1,000 5 $ 50 2014 322 $ 16,100 333 $ 16,650 2981$ 14,900 27 $ 675 36 $ 3,800 1 76 S 1,900 83 S 1,245 363 $ 72,600 4 $ 17,250 $ 20 $ 2,000 11 $ 2,750 7 $ 70 Total 2382 $ 119,100 2083 $ 104,150 1883 $ 94,150 225 $ 5,625 285 $ 28,500 360 $ 9,000 627 $ 6,685 1415 $ 246,131 20 $ 84,950 39 $ 3,900 24 $ 6,000 15 $ 150 READING MUNICIPAL LIGHT DEPARTMENT To: Coleen O'Brien From: Jane Parenteau William Seldon Date: September 25, 2014 Subject: Update to 2014 Request For Proposals (RFP) Wholesale Power Supply The attached memo was distributed to the Citizens Advisory Board (CAB) and was reviewed by the CAB at the August 13, 2014 CAB meeting. There were three CAB members present at the meeting, Mr. Hooper, Mr. Kelly and Mr. Mancuso. Mr. Norton and Mr. Nelson were not present. Mr. Talbot represented the RMLB. The CAB members present at the meeting voted unanimously to recommend the the RMLB to authorize the General Manager to persue power supply procurement as outlined in the Wholesale Power Supply Plan memo (attached). 1 READING MUNICIPAL LIGHT DEPARTMENT To: Coleen O'Brien Date: August 7, 2014 From: Jane Parenteau William Seldon Subject: 2014 Request For Proposals (RFP) Wholesale Power SuIply Reading Municipal Light Department (RMLD) will be going out with an RPP for Power Supply for the period January 2015 - December 2018. The attached table shows the monthly maximum amounts of energy, in kW, the RMLD is planning to purchase for 2015 through 2018. This table reflects a laddering and layering approach that the RMLD is utilizing. Using this approach, RMLD purchases 25% of the projected energy requirement on a monthly basis for the next four years. The first two lines show the year and month in the planning period. Lines labeled (1) reflect the On Peak Energy Entitlements (kW) and Off Peak Energy Entitlements (kW) that were purchased from Nextera, Exelon, and BP Energy in the 2011, 2012 and 2013 RFPs. Lines labeled (2) show the maximum amount of monthly kWs that the RMLD is planning to purchase in the 2014 RFP. These amounts are the hourly amount of energy which translate into kWhs by summing the On Peak periods (Hours 08 - Hours 23) and Off Peak periods (Hours 01 -07, 24, including all day Saturday and Sunday). Lines labeled (3) indicate the Future On Peak and Off Peak Purchase which will be included in future RFPs. Lines labeled (4) show the Total Requirement On Peak and Off Peak which sums the amount of power supply either purchased, proposed to be purchased before the end of 2014, and possible future procurements. It should also be noted that the Total Requirement assumes approximately a 20% annual open position in the ISO -NE Spot Market. The total amount of energy for the 48 month period from January 2015 through December 2018 represents approximately 463,000 Mwhs and, based on today's indicative pricing would result in contracts having a value of approximately $26 million which is equivalent to approximately $56 /Mwh. The Integrated Resources Division (IRD) will continue monitoring the forward energy prices as well as the NYMEX Natural Gas futures. The NYMEX Natural Gas futures for the balance of calendar year 2014 and beyond are projected to be in the mid $4.00 range through 2018. Per the IRD strategy, the RMLD will continue to monitor the markets and procure RMLD's energy needs through the RFP process for the period 2015 - 2018 as reflected in the attached table. RMLD intends to request indicative pricing for Fixed and Heat Rate (HR) Index products from the following suppliers, Nextera, International Power, PSEG, Merrill Lynch, Morgan Stanley, J P Morgan, Dominion, Shell, PPL, Macquarie, Exelon, Hydro Quebec US and BP. These entities have recently been contacted by other municipals for pricing or have produced indicative pricing in the past. After receiving the indicative quotes from the suppliers, IRD will analyze the pricing and short list those entities which best fit RMLD's requirements. RMLD will negotiate contracts with the short listed entities. A contract matrix will be developed which will include the various provisions in each supplier's contract as well as overall pricing. Along with the General Manager, IRD will analyze final pricing and select one or more suppliers. The Board of Commissioners and CAB will be updated on the results of the RFP. P l RMLD Proposed Power Contract Timeline (Amounts below represent kW proposed to be purchased hourly) (1) RFP Purchases In 2011, 2012 8 2013 (Nextera, Exelon, 8 BP Energy) (2) Proposed 2014 RFP - Total kWs - RMLD reserves the right to split up the Requirement between Suppliers and HR index and Firm Strip Pricing. (3) Amount of kWs that RMLD will purchase in subsequent RFP process. (4) Total Requirement of energy which represents on average 20% open position In ISO-NE Spot Market On -Peak: Mon - Fri Hours Ending 08.23 Off -Peak: Mon - Fri Hours Ending 24-07, Sat/Sun 100% 75% Year 2015 2016 Month Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec (1) On Peak Entitlements (kW) 46,525 43,900 34,150 34,400 38,425 47,275 58,400 58,400 47,900 43,550 39,950 42,500 30,500 28,725 22,225 22,150 24,700 32,025 39,700 39.700 32,775 29,600 26,600 28,575 (1) Off Peak Entitlements (kW) 29,375 30,250 25,075 28,850 28,750 27,850 37,250 37,250 27,400 31,150 26,350 27,550 20,050 20,825 17,350 19,875 20,000 19.200 25,525 25,525 18,900 21,425 18,200 19,000 (2) RFP On -Peak Purchases (kW) 13,675 10.900 9,950 12,200 13.575 17,325 28.400 28,400 16,200 15,450 19.050 17.700 15.325 12.975 11.300 13.325 14.900 17.100 26300 26.300 15.975 15,325 18.325 17.250 (2) RFP OR -Peak Purchases (kW) 7.925 8.550 9.325 4,750 7.450 15.050 14.950 14,950 12300 5.050 11.750 12,350 8.375 8.725 8.825 5.700 10,000 13.425 14.225 14.225 11.325 6,100 10.825 11,375 (3) Future On -Peak Purchases (kW) 0 0 0 0 0 0 0 0 0 0 0 0 15.275 13,900 11,175 11.825 13.200 16,375 22,000 22.000 16.250 14,975 14.975 15.275 (3) Future Off -Peak Purchases (kW) 0 0 0 0 0 0 0 0 0 0 0 0 9.475 9.850 8.725 8.525 10,000 10.875 13.250 13.250 10.075 9.175 9.675 10.125 (4) Total Requirement On Peak (kW) 60,200 54,800 41,100 46,600 52,000 64,600 86,800 86,800 64,100 59,000 59,000 60,200 61,100 55,600 44,700 47,300 52,800 65,500 88,000 88,000 65,000 59,900 59,900 61,100 (4) Total Requirement OH Peak (kW) 37,300 38,800 34,400 33,600 36,200 42,900 52,200 52,200 39,700 36,200 38,100 39,900 37,900 39, 400 34, 900 34,100 40 ,000 43,500 53,000 53,000 40,300 36,700 38,700 40,500 50% 25 Year 2017 2018 Month Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec (1) On Peak Entitlements (kW) 15.375 14,425 11,250 10,850 11,900 16,400 20,575 20,575 17,325 15.350 12,950 14,325 0 0 0 0 0 0 0 0 0 0 0 0 (1) Off Peak Entitlements (kW) 10,525 11,200 9,400 10,700 10,000 10,350 13.550 13,550 10,200 11,475 9,825 10,250 0 0 0 0 0 0 0 0 0 0 0 0 (2) RFP On -Peak Purchases (kW) 15.575 13.725 11.400 13.100 14,850 16,750 23.975 23.975 15.575 14.950 17,350 16.625 15.650 14,225 11,450 12.100 13.525 16.790 22,500 22.500 16.625 15.300 15.300 15.650 (2) RFP Off -Peak Purchases (kW) 8.675 8.750 8.300 6.550 10,000 11,700 13.300 13.300 10.200 7,125 9.775 10.250 9.700 10,075 8.950 8.725 10.000 11.150 13,575 13.575 10,300 9,400 9.900 10,350 (3) Future On -Peak Purchases (kW) 30.950 28.150 22.60 23.950 26.750 33,150 44.550 44.550 32.900 30.300 30.300 30.950 46,950 42.675 34.350 36.300 40,575 50.250 67.500 67.500 49.875 45.900 49,40o 4695n (3) Future OH -Peak Purchases (kW) 19.200 19.950 17,700 17,250 20,000 22,050 26,850 26,850 10,400 18,600 19.600 20,500 29.100 30.225 26.850 26.175 30,000 33.450 40.725 40.725 30.900 28.200 29.700 31.050 (4) Total Requirement On Peak (kW) 61,900 56,300 45,300 47, 900 53, 500 66, 300 89 ,100 89,100 65,800 60,600 60,600 61,900 62,600 56,900 45,800 48,400 54,100 67,000 90,000 90,000 66,500 61,200 61,200 62,600 (4) Total Requirement OH Peak(kVW) 38,400 39,900 35, 400 34,500 40 ,000 44,100 53,700 53,700 40,800 37,200 39,200 41,000 38,800 40,300 35, 800 34 ,900 40,000 44,600 54,300 54,300 41,200 37,600 39,600 41,400 (1) RFP Purchases In 2011, 2012 8 2013 (Nextera, Exelon, 8 BP Energy) (2) Proposed 2014 RFP - Total kWs - RMLD reserves the right to split up the Requirement between Suppliers and HR index and Firm Strip Pricing. (3) Amount of kWs that RMLD will purchase in subsequent RFP process. (4) Total Requirement of energy which represents on average 20% open position In ISO-NE Spot Market On -Peak: Mon - Fri Hours Ending 08.23 Off -Peak: Mon - Fri Hours Ending 24-07, Sat/Sun READING MUNICIPAL LIGHT DEPARTMENT FY 14 CAPITAL BUDGET VARIANCE REPORT FOR PERIOD ENDING JUNE 30, 2014 Total SCADA Projects ACTUAL New Customer Service Connections COST FY 14 ANNUAL REMAINING PROJECT DESCRIPTION TOWN JUNE ADDITIONS BUDGET BALANCE 10,047 E&O Construction - System Projects 200,302 5,772 Total Service Connections 1 5W9 Reconductoring - Wildwood Street W 54,739 152,387 169,494 17,107 2 4W4 Reconductoring W Various ALL 74,528 166,340 166,340 " 3 Upgrading Old Lynnfield Center URDs (Trog Hawley) (Partial Carryover) LC 148,101 71,284 140,827 69,543 4 Upgrading Old Lynnfield Center URDs (Cook's Farm) LC 13,549 410,983 397,434 5 4W5 - 4W6 Tie R 284,000 9,960 96,596 86,636 6 URD Upgrades -All Towns ALL 5,613 33,995 210,005 176,010 7 Stepdown Area Upgrades - All Towns ALL 2,941 58,661 232,817 174,156 92,713 Total System Projects * 18 Purchase New Pick -up Trucks 61,062 70,000 8,938 Station Upgrades Purchase Two New Line Department Vehicles 198,761 385,365 400,000 14,635 8 Relay Replacement Project - Gaw Station (Carryover) R 150,000 117,181 117,181 9 Gaw Station 35 kv Potential Transformer (PT) Replacement R 275,000 275,000 40,288 40,288 10 Station 3 - Replacement of Service Cutouts NR 19,231 " 23 30,126 30,126 * 11 Station 4 Getaway Replacement - 4W13 R 24 165,035 245,147 80,112 15 Station 5 - Getaway Replacements 5W9 and 5W10 W Communication Equipment - Fiber 95,343 95,343 90,807 Total Station Projects Communication Equipment - Security System 44,697 44,697 - (44,697) 27 SCADA Projects 15,850 119,906 181,000 61,094 28 30 RTU Replacement - Station 3 NR 180,200 87,037 84,109 84,109 Total SCADA Projects * completed projects ATTACHMENT 3 New Customer Service Connections 12 Service Installations - Commercial /Industrial ALL 233 50,006 55,549 5,543 13 Service Installations - Residential Customers ALL 10,047 194,530 200,302 5,772 Total Service Connections 14 Routine Construction Various ALL 74,528 1,681,730 1,014,306 (667,424) Total Construction Projects 148,101 2,431,137 3,309,414 878,277 Other Projects 16 Transformers 89,304 430,530 284,000 (146,530) 17A Meter Purchases 42,710 138,000 95,290 17C AMR High- Powered ERT Comm. Meter Upgrade Project (Partial Carryover) 163,433 114,601 (48,832) 17D AMR High- Powered ERT 500 Club Meter Upgrade Project 92,713 92,713 * 18 Purchase New Pick -up Trucks 61,062 70,000 8,938 " 19 Purchase Two New Line Department Vehicles 198,761 385,365 400,000 14,635 20 Build Covered Storage (Multi -year Project) 150,000 150,000 21 HVAC System Upgrade (Multi -year Project) 275,000 275,000 22 Engineering Analysis Software and Data Conversion (Partial Carryover) 17,850 37,081 19,231 " 23 New Radio System (Multi -year Project) 95,235 100,000 4,765 24 Repairs - 226 Ash Street, Station 1 (Multi -year Project) 520,000 520,000 26 Communication Equipment - Fiber 9,193 100,000 90,807 26A Communication Equipment - Security System 44,697 44,697 - (44,697) 27 Hardware Upgrades 15,850 119,906 181,000 61,094 28 Software and Licensing 5,615 93,163 180,200 87,037 29 Master Site Plan and Photovoltaic Generation Installation 150,000 150,000 Total Other Projects $ 354,227 1,463,144 2,792,594 1,329,450 TOTAL CAPITAL BUDGET $ 502,328 3,894,281 6,102,008 2,207,728 * completed projects ATTACHMENT 3 A Reading Municipal Light Department Engineering and Operations Monthly Report June 2014 Activity CAPITAL IMPROVEMENTS PROJECT SPENDING Complete Current Fiscal FY14 -15 Month YTD Construction Projects: status 5W9 Reconductoring — Ballardvale Area: 101 Completed the reconductoring of Ballardvale Street and 50% $54,739 $152,387 placed 5W9 back into service for the Summer. Project will restart in the Fall of 2014 (as of 7117114). URD Upgrades — All Towns: • Heritage Way, NR On- 106 • Wildwood Street, NR going $5,613 $33,995 • Summit Drive, R Stepdown Area Upgrades — All Towns: 107 • Bond Street, R going $2,941 $58,661 • Vine Street and Hunt Street, R New Customer Service Connections: Service Installations — Commercial /Industrial Customers: This item includes new service connections, upgrades, and service replacements for the commercial and industrial customers. This represents the time and materials associated with the replacement of an existing or installation of a new overhead service drop and the connection of an underground service, etc. This does not include the time and materials associated with pole replacements /installations, transformer replacements /installations, primary or secondary cable replacements /installations, etc. These aspects of a project are captured under Routine Construction (as outlined below). • Service Installations — Residential Customers: This item includes new or upgraded overhead and underground services. September 25, 2015 Routine Construction/Capital Improvements: MAINTENANCE PROGRAMS Aged /Overloaded Transformer Replacement • Single -Phase Padmount Transformers: 3.46% replaced through 912312014. Two replaced in June (Wildwood Street, NR; Heritage Way, NR). • Three -Phase Padmount Transformers: 1.48% replaced through 912312014. Two replaced in June (Ballardva/e Avenue, W; Research Drive, W. Pole Testing System -wide (600 -1,000 poles /year) Contract awarded to mPower Technologies. 13.8kV/35kV Feeders — Quarterly Inspections 3 W8, 3 W18, 5W4, 5 W8, 5 W9 Manhole Inspections Pending. Porcelain Cutout Replacements (with Polymer) A total of ten (10) cutouts were changed out in June. Three were changed as part of the Porcelain Cutout Replacement Program and an additional seven (7) were replaced because of damage. 87% complete. September 25, 2015 1E Current Month Fiscal YTD Pole Setting/Transfers 22,435 363,710 Overhead/Underground 34,839 412,563 Projects Assigned as Required including: • NR High School /Middle School — driveway widening • Haverhill Street, NR - pole relocation (Railroad Avenue) 4,667 368,612 • West Street, W — two new services • St. Agnes Parish - Woburn Street, R • Avalon Oaks West, W Pole Damage /Knockdowns - Some Reimbursable • Work was done to repair or replace four (4) damaged poles. 5,944 74,874 Station Group 0 2,189 Hazmat/Oil Spills 0 51,786 Porcelain Cutout Replacement Program 2,009 11,334 Lighting Street Light Connections 0 39,326 Storm Trouble 522 22,926 Underground Subdivisions (new construction) • McGrane Road Subdivision 4,061 22,769 • Amherst Road, W —three new lots • Duane Drive, NR Animal Guard Installation 52 35,590 Miscellaneous Capital Costs 0 276,051 TOTAL: $ 74,528 $ 1,681,729 MAINTENANCE PROGRAMS Aged /Overloaded Transformer Replacement • Single -Phase Padmount Transformers: 3.46% replaced through 912312014. Two replaced in June (Wildwood Street, NR; Heritage Way, NR). • Three -Phase Padmount Transformers: 1.48% replaced through 912312014. Two replaced in June (Ballardva/e Avenue, W; Research Drive, W. Pole Testing System -wide (600 -1,000 poles /year) Contract awarded to mPower Technologies. 13.8kV/35kV Feeders — Quarterly Inspections 3 W8, 3 W18, 5W4, 5 W8, 5 W9 Manhole Inspections Pending. Porcelain Cutout Replacements (with Polymer) A total of ten (10) cutouts were changed out in June. Three were changed as part of the Porcelain Cutout Replacement Program and an additional seven (7) were replaced because of damage. 87% complete. September 25, 2015 1E Substations: Infared Scanning (Monthly) Station 3 Scanning complete through August — no hot spots found Station 4 Scanning complete through August — no hot spots found Station 5 Scanning complete through August — no hot spots found Substation Maintenance Program • Inspection of all three stations by UPG in progress (80% complete). SYSTEM RELIABILITY Key industry standard metrics have been identified to enable the RMLD to measure and track system reliability. SAIDI (System Average Interruption Duration Index) is defined as the average interruption duration (in minutes) for customers served by the utility system during a specific time period. 100.00 90.00 80.00 70.00 60.00 50.00 40.00 30.00 20.00 10.00 0.00 SAIDI = the sum of all customer interruption durations within the specified time frame by the average number of customers served during that period. SAIDI 2010 -2014 shlmm 2010 -2011 -2012 -2013 -2014 Average SAIDI September 25, 2015 85.75 � 2010 62.35 � 2011 2012 X2013 2014 YTD Region Average National Average 3 SAIFI (System Average Interruption Frequency) is defined as the average number of instances a customer on the utility system will experience an interruption during a specific time period. SAIFI = the total number of customer interruptions _ average number of customers • served during that period. 0.90 0.80 0.70 0.60 0.50 0.40 0.30 0.20 0.10 0.00 SAM 2010 -2014 2010 -2011 -2012 -2013 -2014 Average SAIFI X2010 X2011 � 2012 ll� 2013 � 2014 YTD - Region Average National Average CAIDI (Customer Average Interruption Duration Index) is defined as the average duration (in minutes) of an interruption experienced by customers during a specific time frame. CAIDI = the sum of all customer interruption durations during that time period _ the number of customers that experienced one or more interruptions during that time period This matric reflects the average customer experience (minutes of duration) during an outage. I CAIDI 2010 -2014 120.00 100.00 80.00 60.00 40.00 20.00 0.00 1010 -2011 -2012 -2013 -2014 Average CAIDI °--_ 101j,11 83.00 2010 X2011 � 2012 X2013 � 2014 YTD Region Average National Average Note: Since SAIDI, SAIFI and CAIDI are sustained interruption indices; only outages lasting longer than one minute are included in the calculations. September 25, 2015 4 M September 25, 2015 U 2014 Outage Causes Types YTD June 30, 2014 Utility Human Errror 3 3% _Natural ■ Equipment ■ Wildlife o Tree • Unknown • Utility Human Errror o Natural W, RMLDOO A Reading Municipal Light Department RELIABLE POWER FOR GENERATIONS 230 Ash Street P.O. Box 150 Reading, MAO 1867-0250 Tel: (781) 944 -1340 Fax: (781) 942 -2409 Web: www.rmld.com September 22, 2014 Town of Reading Municipal Light Board Subject: Lynnfield URD Excavation Project 2015 On July 9, 2014 a bid invitation was placed as a legal notice in the Middlesex East section of the Daily Times Chronicle and The Central Register requesting proposals for the Lynnfield URD Excavation Project 2015 for the Reading Municipal Light Department. An invitation to bid was emailed to the following: Annese Electrical Services Inc. Dowling Corporation K &R Construction Co., LLC M. Keane Excavating Inc. W.L. French R.S. Hurford Co., Inc. Target Construction, LLC Botti Co. Inc. R.H. White Pecora Contracting Blue Diamond Vittiglio Construction Mennino Construction Fischbach & Moore LaRovere Design /Build Corp. Joseph Bottico, Inc. P.M. Zilioli, Inc. Strength in Concrete, LLC Tim Zanelli Excavation, LLC K.B. Aruda Construction T Ford Company Rotondi Construstion M i rraco N. Granese & Sons Mattuchio Construction Co., Inc. KOBO Utility Construction Corp. McLaughlin Bros. Contracting Corp. Power Line Contractors, Inc Systems Electrical Services Inc. Ventresca, Inc. Murphy & Fahy Construction Co., Inc. Tro -Con Corporation Caruse and McGovern Contractors James Lynch Construction Bids were received from Tim Zanelli Excavating LLC, Vantresca, Inc., Mattuchio Construction Co., Inc., and ERA Equipment. A `no bid' was received via email from Vittiglio Construction. The bids were publicly opened and read aloud at 11:00 a.m. August 6, 2014 in the Town of Reading Municipal Light Department's Board Room, 230 Ash Street, Reading, Massachusetts. The bids were reviewed, analyzed and evaluated by the Interim General Manager and the staff. Move that bid 2015 -1 for the Lynnfield URD Excavation Project 2015 be awarded to: Tim Zanelli Excavation, LLC for $217,300.00 Item 1 Labor, Equipment and Materials for Excavation $217,300.00 as the lowest qualified bidder on the recommendation of the General Manager. File: Bid /FY13 /Lynnfield URD excavation /2015 -1 ATTACHMENT 4 RMLD Reading Municipal Light Department RELIABLE POWER FOR GENERATIONS 230 Ash Street, P.O. Box 150 Reading, MAO 1867-0250 This project will be paid for from the Upgrading of Lynnfield Center URD's Capital Project allocation. The allocation for this work will be from the Operating Budget funds. / Ham'id JaffdfK Peter Price -/� r16� Brian Smith File: Bid /FY13 /Lvnnfietd URD excavation /2013 -1 E P1 P] C' r f Lynnfield URD Excavation Project 2015 Bid 2015 -1 List of Certified Time in Previous All forms Check or Authorized Exemption Bidder Total Price Business Projects lied out Bid Bond signature to bid Tim Zanelli Excavating, LLC $217,300 1 10 years I yes yes yes yes no ERA Equipment $244,000 1 12 years I yes I yes I yes I yes I no Mattuchio Construction Co., Inc. $458,000 1 10 years I yes yes yes yes no Ventresca, Inc. $599,900 1 7 years I yes I yes I yes I yes I no 2015 -1 Excavation Analysis Page 1 Reading Municipal Light Department RMLD RELIABLE POWER FOR GENERATIONS 230 Ash Street P.O. Box 150 Reading, MAO 1867-0250 Tel: (781) 944 -1340 Fax: (781) 942-2409 Web: www.rmld.com September 25, 2014 Town of Reading Municipal Light Board Subject: RFP 2014 -21— Organizational and Electrical System Reliability Studies On Monday, April 14, 2014, an RFP notice was published in the Commonwealth of Massachusetts' Goods and Services Bulletin, and on Wednesday, April 16, 2014 a Request for Proposal (RFP) was published as a legal notice in the Daily Times Chronicle, Middlesex East Section, to conduct two (2) comprehensive and integrated studies for the Reading Municipal Light Department: An Organizational Study and an Electrical System Reliability Study. RFP's were sent to the following 16 firms: Altran ESC Engineering , Navigant Consulting Utiliworks Booth & Associates Leidos PLM, Inc. Vanderweil Engineers Consulting Engineering Group Lummus Consultants RDK Engineers Weston & Sampson Control Point Technologies Marc Goldsmith & Assoc. Three -C Electrical Co. Woodard & Curren The proposals were due on May 28, 2014, at 11:00 A.M. Proposals were received from the following six companies: Booth & Associates (Reliability Study only); ESC Engineering (Reliability Study only); Leidos (Organizational and Reliability Studies); Lummus Consultants (Organizational and Reliability Studies); Navigant Consulting (Organizational and Reliability Studies); and Utiliworks (Organizational and Reliability Studies). Two (2) proposals were immediately determined non- respor-s;ve due to arriving after the deadline: Navigant Consulting and Utiliworks. The Review Committee included the General Manager and the Director of Engineering and Operations. They reviewed, analyzed, and evaluated the proposals, and using comparative criteria, developed a composite rating for each firm. Firms with the most advantageous proposal based on the ratings and pricing were Leidos to perform the Organizational Study and Booth & Associates to perform the Electrical System Study. RMLD Reading Municipal Light Department RELIABLE POWER FOR GENERATIONS 230 Ash Street, P.O. Box 150 Reading, MAO 1867 -0250 Move that the Board of Commissioners vote to accept Leidos to perform the Organizational Study at a cost of $99,000, and Booth & Associates to perform the Electrical System Reliability Study at a cost of $161,090, for the RMLD based on recommendation of the General Manager for a total cost of $260,090 The FY15 Capital Budget amount for this item is $100,000, and the FY16 Capital Budget amount is $100,000. , Hamid Jaff ri rector of Engineering and Operations Coleen O'Brien, General Manager Paula O'Leary, at als Manager P] Organizational and Electrical System Reliability Studies RFP 2014 -21 PROPOSER Organizational Study Reliabtlitij Stitdg Cost Expense Estimate Recommended Cost Booth and Associates N/A $161,090 $161,090 ESC Engineering N/A $125,000 Leidos Engineering, LLC $99,000 $100,750 $99,000 Lummus Consultants $223,900 $218,600 $2,000 Total Studies Cost: $260,090 RFQ- 2014 -21- Price Analysis.xls Page 1 Jeanne Foti �rnmt: To: Cc: Subject: Categories: Good afternoon Tom: Coleen O'Brien Monday, July 28, 2014 4:18 PM Tom O'Rourke Jeanne Foti; Bob Fournier Account Payable Warrant Question - July 18 & 25 Blue Category Here are the replies to the Account Payable Questions: 1. Geothermal Rebate — RMLD Customer Sarah Bouchie received a geothermal rebate from the residential renewable energy rebate program for $4,500, bill is attached for $349.47 why not take out the $349.47. • The $4,500 was for the a geothermal rebate from the residential renewable energy rebate program. The customer bill was included to demonstrate that they were current. They do not net the amount for record keeping purposes to track the rebate. 2. Office Depot —Asked if the invoice attached to PO # 14- EO0525 is the correct attachment. • The Image Tech PO # 14- EO0525 is the correct PO for the Waste Toner Bottle. Image Tech does not charge us for toners and waste toner bottles as part of the printer management program although they do charge us for shipping /freight and in this case the amount is $10.66. This PO # 14- E00525, is a blanket PO that is used for all the shipping /freight charges for the free toners and waste bottles that we order. 3. Northeast Public Power Association — Thinks Phil Pacino is unable to attend. • The Accounts Payable was already finished by the end of the Board meeting when we found out that Phil would not be attending. NEPPA will provide a refund or credit. Co4Rzty M . O'3 rce w General Manager Reading Municipal Light Department 230 Ash Street Reading, MA 01867 1 Jeanne Foti From: Jeanne Foti Sent: Wednesday, September 24, 2014 3:20 PM To: David Talbot; John Stempeck; Phil Pacino; Tom O'Rourke Subject: Account Payable Warrant and Payroll Good afternoon. In an effort to save paper, the following timeframes had no Account Payable and Payroll questions. Account Payable Warrant — No Questions August 1, August 8, August 15, August 22, August 29, September 5, September 12 and September 19. Payroll — No Questions July 28, August 11, August 25, September 8 and September 22. This e -mail will be printed for the Board Book for the RMLD Board meeting on October 2, 2014. Jeanne Foti Reading Municipal Light Department Executive Assistant 230 Ash Street Reading, MA 01867 781 - 942 -6434 Phone 781 - 942 -2409 Fax Please consider the environment before printing this e-mail. I F7