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HomeMy WebLinkAbout2017-11-09 RMLD Board of Commissioners MinutesOFq� O Town of. Reading - Meeting Minutes. ,sJ9'1Ny co Board - Committee Commission - Council: RMLD Board of Commissioners Date: 2017-11-09 Building: Reading Municipal Light Building Address:. 230 Ash Street Purpose: General Business Attendees: Members - Present: i r.ik i Time: 7:30 PM Location: Winfred Spurr Audio Visual Room Session: Open Session Version: Philip B. Pacino, Chairman; David Hennessy, Vice Chairman -Secretary Pro Tem; Thomas O'Rourke, Commissioner; John Stempeck, Commissioner. Members - Not Present: Dave Talbot, Commissioner Others Present: RMLD: Coleen O'Brien,General Manager, Hamid Jaffari, Director'of Engineering and Operations, William Seldon, Assistant Director of Integrated Resources, Wendy Markiewicz, Director of Business Finance, Joyce Mulvaney, Communications Manager, and Tracy Schultz, Executive Assistant Citizens' Advisory Board: Dennis Kelley, Secretary Guests: Frank Biron and Zackary Fentross, Melanson Heath & P.C. Public: Mary Ellen O'Neill, Resident, 125 Summer Ave., Reading, MA Minutes, Respectfully Submitted By: David Hennessy, Vive Chairman, Secretary Pro Tem Topics of Discussion: Call Meeting to Order Chair Pacino called the meeting to order and announced that the meeting is.being videotaped at the RMLD office at 230 Ash Street, for distribution to the community television stations in Reading, North Reading, Lynnfield, and Wilmington. Opening Remarks Chair Pacino read the RMLD Board of Commissioners' Code of Conduct and welcomed . Mr, Kelley from the Citizens' Advisory: Board. Public Comment Reading resident_ Mary Ellen O'Neill took the floor, introducing herself as' a Reading resident, a current and longtime Town Meeting :member; and a former: member of. the CAB, the: RMLD Board, and a former Chairman of the RMLD Board. Ms. O'Neill expressed her concerns regarding RMLD's tree trimming program and the potential damage -done to the trees in the process. Ms. O'Neill explained. that the cuts are akin to wounds and . asked the Board to consider some compensation to the Towns. Ms. O'Neill stated that she understands the. importance of service . reliability. It would be fair and. just for the trees to set aside money to give to the municipalities to , Page 1 1 Public Comment plant trees in the communities. under consideration:: - The Commissioners had no questions and will take her suggestion Approval -of Board Minutes June 15, 2017 (Attachment 1) :`Chair Pacino explained that the Board minutes were not reviewed in time for this, meeting. Presentation of Fiscal Year 2017 Audit (Attachment 2) Melanson Heath & P.C. -Frank- Blron,and Zackary Fentross Mr. Biron stated that the results of the audit are a clean opinion. The financial statements are in 'accordance with generally accepted accounting principles.' That's the best opinion you can : receive from. an independent outside audit. The overall cash balance is in a very strong :position: $15 million. This is about two months' worth of operating cash. Other restricted cash reserves add. up -to $29 million. Receivables are current; all the receivables that are on the books are under 60 days old. WILD has no:long-term bonds payable and funds all capital addition's through the rate ,.structure and the normal budget process. RMLD has a pension liability of $12 million because of participation in the Town's contributory -retirement system.'The Town's retirement system is about 73 percent funded, which is better than most municipals in Massachusetts, which are typically funded in the 50 to 60 percent range: The Department has another $5 and a half million set aside in the pension reserve fund. The new. GASB 74 and 75 deal with post -employment benefits. Actuaries' determined that. the overall liability for the Department for retirees' healthcare benefits is about $10 million. The Department has about $3 million set aside in a restricted account. The - net liability is about $7 million. Next year's audit will require that to be reported on the balance sheet. The Department had a profit of $4.5 million. It's limited by the DPU; RMLD can't exceed. a profit of more than 8 percent of capital assets. RMLD was in the 7.5 percent range. It was a very profitable year. Mr.. Fentross stated that RMLD's accounting records are in fantastic shape. 70 percent of communities receive a management letter. RMLD lakes. internal controls very seriously. Mr. Fentross thanked everyone involved in the audit for being well-prepared and pleasant. Mr. O'Rourke asked Mr. Fentross to explain what management letter is. Mr. Fentross explained that his firm looks at the internal controls of the Department to ensure assets are properly safeguarded., If it were determined that an improvement could be made, would formerly recommend it in.a management letter. Chair Pacino -stated that the Audit Committees of the. Town and the Board met before this meeting and received a more detailed presentation from the auditors. Both committees voted to accept the audit and to recommend that the Board of Commissioners accept theaudit. The vote was 4:0 for -the -Town and 2:0 for the RMLD Audit Committee. Mr. O'Rourke made a motion, seconded by Vice Chair Hennessy, that the Board of Commissioners accept the Audit Report.from Melanson Heath, Fiscal Year ended June 30, 2017 as presented. Motion Carried: 4:0:0 Report of the Chair i Chair Pacino reported that the Sub -Committee on the Payment to the Town of Reading met and discussion as to what the Town is trying to . achieve ensued. Chair Pacino made a presentation lo the members on RMLD's financial structure. The Committee is comprised of two CAB members, Mr. Stempeck, and Dan Ensminger from the Town . of Reading. Mr. Stempeck .added that it was fruitful exploring mechanisms and ideas of how to meet the needs of the Town. As the Town will be reporting at the upcoming Town Meeting, discussions. are ongoing. Page 12 Report on RMLD Board Member Attendance at RMLD Citizens' Advisory Board Meeting Chair Pacino stated that the CAB meeting had two highlights: -the IRD presentation that. is also being presented tonight,. and -a presentation on RMLD's financial structure. Mr. Kelley added that the CAB has a full Board again. Community Engagement Ms. Mulvaney reported that RMLD participated in public power week and had over 300 people attend .its Open House. The elementary student art contest awards will be in `January. The historical calendar will be available at the end of November. The holiday light decorating contest will be held this year after Thanksgiving. The RMLD website is -going to be updated and will be more mobile friendly. The High School Art Contest will be held during the spring -semester. Mr. Stempeck commented on how fantastic the artwork is from. the summer contest. Report.of.the General Manager -October 29, 2017 Storm Response -Ms. O'Brien Ms. O'Brien provided .an update on the recent storm. The total amount of customers that -went out was 2,617. Wilmington 190 Lynnfield 350 North Reading 402 and Reading 1,675. The majority in Reading was due to a feeder outage which lasted two hours: -Every single one of the outages was tree' related. RMLD issued 72 tweets updating customers with information and restoration times. Ms. O'.Brien stated that when large trees come down, RMLD can't get in there right away. Cranes may be needed and a lot of tree work needs to be done: Concord, Littleton, Wakefield and a contract crew provided mutual aid. Overall, RMLD did very well. Everyone was back in power well ahead of other towns. Mr. Jaffari will be demonstrating a new outage management system next week, and RMLD is hoping to implement it in spring. Report of the General Manager -October 29, 2017 Storm Response -Ms. O'Brien Vice Chair Hennessy asked how the new system will .provide the public with more and better', information. Mr. Jaffad .explained that the- new outage management system is integrated with the AMI system (the mesh_ network) so when an outage occurs a signal is sent system and we will see -which customers are out, the, feeder out on the GIS map, and -which -streets and how many customers -are out. It will be a more accurate way to capture when customers are out and when they'll, be, back on. It.will let RMLD know when customers are restored. Chair Pacino stated that the electrical system was. up quickly, well ahead of other towns, and asked Ms. O'Brien to pass along the Board's gratitude to RMLD employees. Integrated Resources Division - Power Supply Report -August and September 2017 -Mr. Seldon (Attachment 3) Mr. Seldon began by comparing the day ahead pricing. and the real-time pricing of the last three summer peaks. Due,, to how much higher the latter is, RMLD wants to have as much power, purchased ahead of time as possible. Transmission and capacity went up in 2017. Since this year's co.sts.are the highest per kW, month,, you would think that 2017's overall costs for. the month of September would have been higher than they were. in 2016. But, the peak was much higher in 2016, over '20 megawatts. higher, therefore costing more. Energy prices are still on, the downswing. Historically, Natural gas prices go down during the three summer months. Capacity costs are high this year. The, capacity load isn't increasing exponentially, but costs are,going up. Mr. Stempeck clarified that* that's due to infrastructure investment that was made .by other utilities. Mr. Seldon replied that it's according to what ISO says we need forgeneration capacity in our zone -they say that we're constrained. This Will be the case until they finish all their transmission upgrades and get FirstUght online -generation that should be.there right now but ' isn't. Page 13 Power Supply Rlsk Management Strategy -Mr. Seldon (Attachment 4) Mr. Seldon explained that the objectives of,the presentation are to show how upgrading current strategy will help mitigate risks, keep the rates stable, improve the way we lock in pricing at optimum times, and help secure costs overall. RMLD has-been using a laddering and layering strategy for the last six or seven years annually to go out. for pricing and stagger how much power we're buying with -most of the purchase being within the first year and then staggering in increments over four years. hopefully gives smooth curve. With this new system, we're not locking in all the power supply. There are contracts already in place and entitlements all of that has been pulled out of the energy needs.that.we're looking at. The current system is. limiting because. itinvolves a lot of purchasing all at once. It takes up a lot of staff time and involves significant legal costs to negotiate contracts. The new process will help mitigate staff time and legal- costs moving forward. There are two different triggers: price and time. If you can't take advantage of the market at a certain price, this .gives a certain amount of time to look at prices and lock insomething. There are, dates to look at and a pricing matrix.. This has been done in the past with heat rate index contracts, using. the same philosophy.. Mr. Stempeck asked .where this system was developed. Mr. Seldon answered that it has been utilized by municipal utilities for a while. Ms. O'Brien stated that NextEra will be helping RMLD and that RMLD is working hard. to stabilize rates and this allows more opportunities to capture better pricing..' Mr. O'Rourke made a motion, seconded by Vice Chair Hennessy, that the Board of Commissioners accept. the Risk Management Strategy as presented, and authorize the General ' Manager, to enter into purchase, power agreements that satisfy the criteria set forth in the Risk Management Strategy. As a matter of protocol, the- Department will provide a report on transactions relative to this strategy. . Motion Carried 4:0:0. Chair Pacino noted that the CAB recommended: that the Board of Commissioners approve the motion 5:0. Engineering and Operations. Report -July, August, and.September 2017 -Mr. Jatforl (Attachment 5) Mr. Jaffari stated that good progress is being made on projects. $279,450 has been spent on routine construction, The Station upgrade is 99 percent completed. Construction of the Station 3 reactorwill start in the spring. The Board will be voting on a bid related to this later in the evening. The GIS project is now 100 percent completed. That will be the base for the outage management system. It will be ready in -February or March. RMLD is still installing more meters to expand the mesh network. Year-to-date, $1.329 million has been spent of the budgeted $7.685 million. That leaves approximately $6.4 million to go. Pole inspections will start on Monday. 650 poles are tested annually.. There are 249 porcelain cutouts that still need to be replaced. There were no substation ,hot spots: infrared scans showed no problems. Systemwide, RMLD has 74 transfers to.do. RMLD is trying to pull ten pole butts a week. However, more upgrades mean more double poles. Mr. Jaffari then moved. on to the outage management reliability indices, SAID[ CAIDI and SAIFI, which are all below national and regional averages. Mr. Stempeck clarified that those numbers are through September. Mr. Jaffari explained that the October storm will _increase the numbers, but RMLD will still be below the nationaland regional averages. Mr. Kelley stated that the tree trimming average in 2012 and 2017 was 4.58 per month. The last three months, the average has been 11 per month. Mr. Kelley stated that it seems like RMLD is spending money cutting trees back, but tree -caused outages. seem to be increasing. Mr. Jaffari explained that the tree trimming program cannot prevent all outages. Even if winds are onlyl0 mph, if the roots are not, strong- trees come down. Even if you have an excellent tree trimming Page 14 Engineering and Operations Report -July, August, and September. 2017 -Mr. Jaffari (Attachment 5) program it depends on the situation. There's -also many trees private property trees we can't trim. We can only do main lines. Mr. Stempeck if you look at total number as, opposed to percentages, equipment -caused outages show a substantial reduction. Mr. Kelley asked what is considered an "unknown" outage cause. Mr. Jaffari replied.that during outage troubleshooting, sometimes we .get there and it's unexplained. You would expect. to see an animal but there isn't one on the scene. Mr.. Kelley asked how restorations are prioritized during a storm.. Mr. Jaffari explained that the main feeder takes priority, unless there are dangerous situations, such as downed wires. -Those would be dealt with first. Mr. Kelley asked if the new outage management program will allow RMLD to react faster. Mr. Jaffari answered if the main line is out it will still take time to patrol for the problem. Once the feeder is on then it willbe easier. The smart_ grid switches will automatically isolate the faulted section in a matter of seconds, but right. now we're doing it manually. RMLD Procurement Requests Requiring Board'Approval (Attachment 6) Before moving on to the bid proposals; Chair Pacino stated that he received an e-mail from a bidder on a project, introducing himself. Chair Pacino stated that the Department has a procurement process for reviewing and approving bids and he expects that will be followed. Anyone who wants to reach out to him -is wasting their time. IFB 2018-11 Tree Trimming Services Mr. Jaffari stated that two companies responded: Mayer Tree Services and The Davey Tree Expert Company. The lowest responsible and responsive bidder was Mayer Tree Services. Davey's checked off that they didn't take any exceptions but they didn't provide a variety of. documents that RMLD required. Mayer Tree. Services didn't take any exceptions and RMLD has. received exceptional service from them in the past. Mr. Jaffari explained that there is no number in the bid motion because there are many variables. The tree trimming budget for FY18 is $852,000, but we don't know how many storms there will be. The cost differential between the two bidders was $8,000. Mayer was a little bit more over a period of three years. RMLD Procurement Requests Requiring Board Approval (Attachment 6) IFB 201.8.11 Tree Trimming Services There was debate amongst the Board the motion should include a not to exceed $850,000 clause. Chair Pacino suggested. adding "various rates as specified in bid" and the Board agreed this was satisfactory. Mr. O'Rourke made a motion, seconded by Vice Chair Hennessy, that bid IFB 2018-11 for: Tree Trimming Services be awarded to Mayer Tree Service_, Inc., at the various rates specified in the bid, pursuant to Massachusetts. General Law Chapter 30 Section 39M, as the lowest responsible and eligible bidder on the recommendation of the General Manager: This.is a one-year contract beginning. January 1, 2018, with an RMLD option for two additional one-year terms. Motion Carried 4:0:0. IFB 2018-12 Current Limiting Reactor Construction and Installation at Station 3 Mr. Jaffari said that RMLD received_ sealed construction bids from Mass Bay Electrical Corp., Murphy, Valiant Electric, LLC, and Power Line Contractors. The lowest responsive and responsible bidder was Mass Bay Electrical Corp. The project was budgeted for $165,000, and the construction is scheduled to start in April. Page 15 IN 2018-12 Current Limiting Reactor Construction and Installation at Station 3' Mr. -O'Rourke made a motion, seconded by Vice Chair Hennessy, that bid IFB 2018-12 for: Current Limiting Reactor Construction and Installation at Station 3.be awarded to: Mass Bay Electrical Corp. for $153,920, pursuant to Massachusetts General Law Chapter 30 Section 39M, as the lowest responsible and eligible bidder, on the recommendation of the General Manager. Motion Carried 4:0:0. General Discussion Chair Pacino announced that the Subsequent Town Meeting will be.on Monday,. November 13. The next Board Meeting will be on December 14. The next CAB meeting will be on Wednesday, November 15. None of the Commissioners could immediately commit to attending so Ms. Schultz agreed to circulate an email. Executive Session - I . At 8:52 p.m. Mr. O'Rourke made a motion,.seconded by Vice Chair Hennessy, that the Board go into Executive Session to consider the purchase of real property and to return toregular session for the sole purpose of adjournment. Chair Pacino called for a poll of the vote: Mr. O'Rourke: Aye; Chair Pacino: Aye; Vice Chair Hennessy: Aye; Mr. Stempeck: Aye. Motion Carried 4:0:0. Adjournment Mr. O'Rourke made a motion, seconded by Vice Chair Hennessy, to adjourn the Regular Session. Motion carried 4:0:0. A true copy of the RMLD Board of Commissioners minutes as prod by9.majority of the Commission. David Hennes y, Secretary Pr6fem. RMLD Board of Commissioners Page 16 READING MUNICIPAL LIGHT DEPARTMENT BOARD OF COMMISSIONERS REGULAR SESSION NOVEMBER 9, 2017 J t APPROVAL OF BOARD MINUTES JUNE 15,-2017 ATTACHMENT l PRESENTATION OF FISCAL YEAR 2017 AUDIT. ATTACHMENT 2 8 G TOWN OF READING, MASSACHUSETTS READING MUNICIPAL LIGHT DEPARTMENT Annual Financial Statements For the Year Ended June 30, Reading Municipal Light Department TABLE OF CONTENTS INDEPENDENT AUDITORS' REPORT MANAGEMENT'S DISCUSSION AND ANALYSIS, BASIC FINANCIAL STATEMENTS: Proprietary Fund: Statements of Net Position Statements of Revenues, Expenses, and Chges in Net Position Statement ash Flo s iducia Fu , ds: D 0 St tem nts,of i cia t P . ition PAGE 1 3 7 10 ateen .of hanges in Fiduciary Net Position 11 es to Financial Statements 12 REQUIRED SUPPLEMENTARY INFORMATION Pension: r Schedule of Proportionate Share of the Net Pension Liability (GASB 68) 38 Schedule of Pension Contributions (GASB 68) 39 OPEB: Schedule of OPEB Funding Progress (GASB 45) 40 Schedule of Changes in Net OPEB Liability (GASB 74) 41 Schedule of Net OPEB Liability, Contributions, and Investment Returns (GASB 74) 42 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 activi- ties and the aggregate remaining fund information of the Town of ReadiVMULight Department ("the Department") (an enterprise fund of the Toding, Massachusetts), as of and for the year ended June 30, 201 d e relaes to the financial statements, which collectively compris a Depa bncial statements as listed in the Table of Conte ft. Management's Re sibili fort a 'na ial tate Fand, epa enf ma a me t is esp ible or he p eparation an air presenta- o ese na cial's ate ents ' accordance i h ountin principles generally 9p p 9 Y e ted I. th . Hite tate of m ca, t ' ludes the design, implementation, ain ena c ofi to al ,co r levant to the preparation and fair presentation n nc' I st to ent tha ree from material misstatement, whether due to fraud orer or. Wuditors' 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 statements 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 en'tity'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 aggre- gate remaining fund information of the Town of Reading Municipal Light Department as of June 30, 2017, and the respective changes in financial position and, where appli- cable, cash flows thereof for the year then ended in accordance with accounting princi- ples generally accepted in the United States of America. Report on Summarized Comparative Information We have previously audited the Department's fiscal yesear f �aneial s ` ents, and we expressed an unmodified audit opinion on ti- audi ial tatements in our report dated October 20, 2016. In , inion, he smma ized conpai ative infor- mation presented -herein as of and f r the i cal ye -9r, ed' une 30, 2016 is con- sistent, in all mate ' spects, with t e phdite fina cial ments from which it has been dd. D a. thtte-7 r y_ ccd rating rincis'generally accepted in the United States of America require that hegement's Discussion and -Analysis and the Pension and OPEB schedules ppearing.on pages.38 to 42 be presented to supplement the basic financial state- ments. 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 proce- dures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the infor- mation for consistency with management's responses to our inquiries, the basic finan- cial 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 information because the limited procedures do not provide us with evidence sufficient to express an opinion or provide any assurance. , 2017 2 MANAGEMENT'S DISCUSSION AND ANALYSIS Within this section of the Town of Reading Municipal Light Department's ("the Depart- ment")annual financial report, management provides'a narrative discussion and anal- ysis of the Department's financial activities for the year ended June 30, 2017. The Department's performance is discussed and analyzed within the context of the accom- panying 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. Proprietary funds. Proprietary fund reporting focuses o tq rmin ' n of operating income, changes in net position (or cos very), ipo ition, and cash flows. The proprietary fund cater includ s e rise Enterprise funds st be edni iebt ha s s (2) I s oj�j users, and m ances ar ve i esh ss c cWrgecp rep a tivq forhich a is char ed o external en a the Ilo ing riteria are Met: (1 activity is :ure so by a pi ge f the net reve ues from fees Jul tions re uire h ac ity's costs of providing ser- a dc ges the pricing policies of the activity s' ed to recover its costs, including capital costs 10 service. The primary focus on these criteria is on fees users. Notes to financial statements. The notes provide additional information -that is essential to a full understanding of the data provided in the government -wide and fund financial statements. Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information which is required to be disclosed by accounting principles generally accepted in the United States of America. B. FINANCIAL HIGHLIGHTS The Proprietary Fund Statements of Net Position is designed to indicate, our finan- cial -position at a specific point in time. At June 30, 2017, it shows our net worth of $109,368,059 which comprises $76,110,937 invested in capital assets, $4,951,661 and $5,683,014 restricted for depreciation fund and the pension trust, and $22,622,447 unrestricted. 3 The Proprietary Fund Statements of Revenues, Expenses and Changes in Net Position summarize our operating results and reveal how much, if any, of a profit was earned for the year. As discussed in more detail below, our net profit for the year ended June 30, 2017 was $4,472,650. The Proprietary Fund Statements of Cash Flows provide information about -cash receipts, cash payments, investing, and .financing activities during the accounting period. A review of our Proprietary Fund Statements of Cash Flows indicates that cash receipts from operating activities adequately covered our operating expenses in fiscal year 2017. The following is a summary of the Department's financial data for the current and prior fiscal years (in thousands). Summary of Net Position 2016 $ 92,617 $ 88,736 2017 84,200 2016 Current assets $ 26,614 $J 4,473 Noncurrent assets 10 101,455 $ 109,368 Deferred outflows of resources 4 13 Total assets and deferred o ofresour $ 13 ,215 $Cu ent li s'� o curre i iliti ,791$ 1 ,341 15,719 e rred inflow f res rces 715 883 T tal li bi ies an d ferr d inflo s fres urc s °° O"Ne 26,847 .24,847 t ion: et investment in capital assets 76,1.11 72,202 Restricted for depreciation fund 4,952 4,495 Restricted for,pension trust 5,683 5,610 Unrestricted 22,622 22,588 Total net position 109,368 104,895 Total liabilities and net position. $ 136,215 $ .1291742 Summary of Changes in Net Position. Operating revenues Operating expenses Operating income Non-operating revenues (expenses) Change in net position Beginning net position,- as restated Ending net position 4 2017 2016 $ 92,617 $ 88,736 87,128 84,200 5,489 4,536 1,016 (1,096) 4,473 3,440 104,895 101,455 $ 109,368 $ 104,895 Electric sales (net of discounts) were $91,822,764 in fiscal year 2017, an increase of 3.93% from the prior year. In fiscal year 2017, kilowatt hours sold decreased by 0.09%,to 675,536,970, compared to 676,128,060 in fiscal year 2016. In fiscal year 2017, customers received charges of $724,692 in purchase power fuel charge adjust- ments, compared to credits of $63,410 in fiscal year 2016. In fiscal year 2015, the Department restructured its rates and began billing cus- tomers purchase power capacity and transmission costs separately from the base rate. In fiscal year 2017, customers were charged purchase power capacity and transmission adjustments of $69,300. Operating expenses totaled $87,127,810 in fiscal year 2017, an overall increase of 3.48% from fiscal year 2016. The largest portion of this total, $64,703,438, was for purchase power costs. Other operating expenses included $16,889,921 for gen- eral operating and maintenance costs, $1,433,143 for voluntary payments to Towns, and depreciation expense of $4,101,308. In fiscal year 2017, the depreciaf rate was 3.0%. In fiscal year 2017, the Department contributed $ 0,000 a din ,Municipal Light Department Employees' Retir Trust Per M Trust") a d thePension Trust contributed $1,579 345 to a To of Leag C ntribut ry Retirement System on be a -De artm nt' em oye n fiscal ea 2017,:t ne epa me contn ut94,319 to the Other Post- yme t enefits T t (" PEB st"),as $138,068 less than the a tua ially d term n d liab' i at June 2017. As a result, the Department r cog ize 'a OP B 'abili ne 30, 2017 in the Statements of Net Position. on inf rm ion on the Department's OPEB contributions can be found in Note 1 on pages 28-32 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 $74,845,094 (net of accumulated depreciation), an increase of $3,908,524 from the prior year. This investment in depreciable capital assets includes structures and improvements, equipment and furnishings, and infrastruc- ture assets. Debt and other long-term liabilities. At the end of the current fiscal year, the Department had no outstanding bonded debt. Additional information on capital assets and other long-term liabilities can be found in the Notes to Financial Statements. 5 REQUESTS FOR INFORMATION 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 C-9 TOWN OF READING, MASSACHUSETTS MUNICIPAL LIGHT DEPARTMENT BUSINESS -TYPE PROPRIETARY FUND STATEMENTS OF NET POSITION JUNE 30, 2017 AND 2016 / Other 2017 ASSETS 9,790,795 Current: Unrestricted cash and short-term investments $ 15,522,815 Receivables, net of allowance for uncollectable 8,761,845 Prepaid expenses 680,703 Inventory 1,648,675 Total current assets 26,614,038 Noncurrent: 714,888 Restricted cash and short-term investments 26,482,494 Restricted investments 2,659,813 Investment in associated companies 212,428 Land 1,265,842 Capital assets, net of accumulated depreciation 74,845,094 Total noncurrent assets 4,951,661 DEFERRED OUTFLOWS OF RESOURCES r41707-8— Related to pensions 22,622,447 TOTAL ASSETS E ED OUT LO S $ 109,368,059 OF RESO CES 1 6,214 787 t I T I ElD Curren Acco nts 3ayable 93,756 Accru d li bilitie 565,784 Cust a depos s 1,080,257 Cus mer advan es for struction 927,303 C rent p of long-term liabilities: / Other 23,695 Total current liabilities 9,790,795 Noncurrent: Net pension liability 13,076,538 Net OPEB obligation 138,068 Other, net of current portion 3,126,439 Total noncurrent liabilities 16,341,045 DEFERRED INFLOWS OF RESOURCES Related to pensions 714,888 TOTAL LIABILITIES AND DEFERRED INFLOWS OF RESOURCES 26,846,728 NET POSITION Net investment in capital assets 76,110,937 Restricted for: Depreciation fund 4,951,661 Pension trust 5,683,014 Unrestricted 22,622,447 TOTAL NET POSITION $ 109,368,059 The accompanying notes are an integral part of these financial statements. 7 2016 $ 13,123,605 8,203,587 985,756 1,590,329 23,903,277 26,080,078 2,691,326 26,994 5,484,732 449,404 901,905 1,007,142 401,347 8,244,530 12,862,732 2,856,462 15,719,194 883,172 24,846,896 72,202,413 4,494,953 5,610,105 22,587,938 $ 104,895,409 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, 2017 AND 2016 l 2017 2016 Operating Revenues: Electric sales, net of discounts of $3,648,851 and $3,294,567 respectively $ 91,822,764 $ 88,353,905 Purchase power adjustments: Fuel charge adjustment 724,692 (63,410) Capacity and transmission adjustment 69,300 445,488 Total Operating Revenues 92,616,756 598 Operating Expenses: Purchase power 64, 8 63,7 0,338 Operating 14, 12,9 2,149 Maintenance 2,578 2,2.2,540 Voluntary pay nts to towns` ' 1, 33,143 1,4 0,347 ion D 4, 01,308 44,792 tal Op rat ng Expense 27,810 84,200,166 Op ratin In ome 5,488,946 4,535,817 on erat' g R ven es (Expenses): Intere ncom 271,658 333,497 EC surplus 148,898 250,690 Intergovernmental grants 67,797 125,000 Contributions in aid of construction 335,198 285,921 Return on investment to Town of Reading (2,384,668) (2,370,445) Loss on disposal of capital assets (44,692) (85,561) Other 589,513 365,046 Total Nonoperating Revenues (Expenses), Net (1,016,296) (1,095,852) Change in Net Position 4,472,650 3,439,965 Net Position at Beginning of Year, as restated 104,895,409. 101,455,444 Net Position at End of Year $ 109,368,059 $ 104,895,409 The accompanying notes are an integral part of these financial statements. 1i TOWN OF READING, MASSACHUSETTS MUNICIPAL LIGHT DEPARTMENT BUSINESS -TYPE PROPRIETARY FUND STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED JUNE 30, 2017 AND 2016 2017 2016 Cash Flows From Operating Activities: Receipts from customers and users $ 91,442,858 $ 87,519,922 Payments to vendors and employees (80,175,335) (79,529,184) Customer purchase power adjustments 793,993 382,077 Net Cash Provided By (Used For) Operating Activities 12,061,516 8,372,815 Cash Flows From Noncapital Financina Activities: Return on investment to Town of Reading (2,384,668) (2,370,445) MMWEC surplus 148,898 250,690 Other 924,710 365,047 Net Cash Provided By (Used For) Noncapital Financing Activities (1,311,060) 54, 08) Cash Flows From Capital and Related Financina Activities: Acquisition and construction of capital assets (8110 6,316,416) Contributions in aid of construction (79,839) 403,289 Intergovernmental revenues 7,797 125,000 Net Cash Provided By (Use apital nd Rela d FiAancin Activit s 6,567) 5,788,127) Investment inco e V 1 271,658 333,497 se i restricted ca and in stments (556,337) (1,191,734) y Used or) nvestin A. ivitie (284;679) (858,237) JishPr Unr strict Cas ort -Term Investments 2,399,210 (28,257) nd - erm Investments, Beginning of Year 13,123,605 13,161,862 nd Short -Term Investments, End of Year $ 15,522,815 $ 13,123,605 Reconciliation of Operatina Income (Loss) to Net Cash: Operating income Adjustments to reconcile operating income to net cash provided by (used for) operating activities: Depreciation expense Changes in assets,,liabilities, and deferred outflows/inflows Accounts receivable Prepaid and other assets Inventory. Deferred outflows - related to pensions Accounts payable and accrued liabilities Due to other postemployment benefits trust Net OPEB obligation Net pension liability Deferred inflows - related to pensions Other Net Cash Provided By (Used For) Operating Activities The accompanying notes are an integral part of these financial statements. 9 $ 5,488,946 $ 4,535,817 4,101,308 (558,258) 305,054 (58,346) 703,140 1,717,729 138,068 213,806 (168,284) 178,353 $ 12,061,516 3,944,792 (889,528) 152,142 (9,922) (4,790,403) 438,515 (345,382) 4,398,069 883,172 55,543 $ 8,372,815 TOWN OF READING, MASSACHUSETTS MUNICIPAL LIGHT DEPARTMENT FIDUCIARY FUNDS STATEMENTS OF FIDUCIARY NET POSITION JUNE 30, 2017 AND 2016 ASSETS Cash and short-term investments TOTAL ASSETS NET POSITION . Total net position held in trust Other Post Employment Benefits Trust Fund 2017 2016 $ 2,857,150 $ 2,525,843 2,857,150 2,525,843 E The accompanying notes are an integral part of these financial statements. 10 f TOWN OF READING, MASSACHUSETTS MUNICIPAL LIGHT DEPARTMENT FIDUCIARY FUNDS STATEMENTS OF CHANGES IN FIDUCIARY NET POSITION FOR THE YEARS ENDED JUNE 30, 2017 AND 2016 Additions: Contributions: Employers Total Contributions Investment Income (Loss): Increase (decrease) in fair value of i vestm Net inv ent income (I s) To addi ions D s /T-6tal deductions Net increase (decrease) Net position: Beginning of Year End of Year Other Post Employment Benefits Trust Fund 2017 2016 $ 794,319 $ 95 308 5 1 13 928 2,561 I 928 816,880 322,723 485,573 - 485,573 - 331,307 322,723 2,525,843 2,203,120 $ 2,857,150 $ 2,525,843 The accompanying notes are an integral part of these financial statements. 11 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 Depart- ment (the Department). (an enterprise fund of the Town of Reading, Massachu- setts) 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 Munic' I right Board ctric rates, excluding the purchase power fue rge an rch se power capacity and transmission char ,cannot e.c ed more t an nce every three months. Rate `schedul s are led wi hth achus tts D partment of Public U ' ' ' ). e t e D U ex rcises ral sup rvis ry author= ity over,the art ent, he pa en is r tes are not ub'e t to DPU a ro I. T eepa me is y is o rep re its financia statements in con or ity with g erall accepted ac nti principles. The pr prie a fund al statements are reported using the economic res ur es eas entfocus and the accrual basis of accounting. Under this tho , evenues,are recognized when earned and expenses are recorded when liabilities are incurred. Proprietary funds distinguish operating revenues and expenses from non- operating items. Operating revenues "and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating rev- enues of the Department's proprietary fund are charges to customers for electric sales and services. Operating expenses for the Department's pro- prietary 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 portions of electricity service and enabled consumers to purchase their energy from a retail supplier of their choice. Municipal utilities are not currently subject to this legislation. 12 D. Retirement Trust - The Reading Municipal Light Department Employees' Retirement Trust (the "Pension Trust") was established by the Reading Munic- ipal Light Board on December 30, 1966, pursuant to Chapter 64 of the General Laws of the Commonwealth of Massachusetts. The Pension Trust constitutes the principal instrument of a plan established by the Municipal Light Board to fund the Department's annual required con- tribution to the Town of Reading Contributory Retirement System (the System), a cost-sharing, multi-employer public employee retirement system. In accordance with Government Accounting 'Standards Board Statement 68 (GASB 68), the Retirement Trust was consolidated into the Business -Type Proprietary Fund and is reflected in net position as "restricted for pension trust." E. Other Post -Employment Benefits Trust -The Other Post -Employment Benefits. Liability Trust Fund (the "OPEB Trust") was established by the ding Municipal Light Board pursuant to Chapter 32B, Section e G neral Laws of the Commonwealth of Massachusetts The OPEB Trust constitutes r cipal i stru ent f a pla established by the Municipal Li ht Board t fund th Dep rtm s a nual a tuar ally deter- mined contrib tion f rZd re etire sLses F. Re en 'es - Iden es a e b on at ablished by the Department and fil d with the PU. even fro sf electricity are recorded on the a is o Is re ed rom ly meter readings taken on a cycle bas s nd a e s ted discounts. Recognition is given to the amount of sa s t cu omers which are unbilled at the end of the fiscal. period. Cash and Short-term Investments - For the purposes of the Statements of Cash Flows, the Department considers unrestricted cash on deposit with the Town Treasurer to be cash or short-term investments. For purposes of the Statements of Net Position, both the proprietary funds and :fiduciary funds consider unrestricted and restricted. investments with original maturi- ties 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 in can be made in securities issued or unconditionally guar- anteed by the U.S. Government or agencies that have a maturity of one year or less from the date.of purchase and repurchase agreements guaran- teed 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. 13 I. Inventory - Inventory consists of parts and accessories purchased for use in the utility business for construction, operation, and maintenance purposes and is stated at average cost. Meters and transformers are capitalized 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 of tired asset, less accumulated depreciation, salvage value and ash proc eds, is charged to the Department's unrestricted siti Massachusetts General /La ire uti ity p ant in servic to b depreci- ated at a minimum annuto of %. To cha a thi rate, e D partment must o pprova froe PU. Cha ges nual de reci tion rates ay b ma�e�fgr fin ncic o rel tin to c sh flow for p a xpansion, ra er han ee ng f Blatin t esti ates of useful lives. K. )ally e Co ensa d' bs ces - oyee vacation leave is vested annu- u ma on be forward to the succeeding year with supervisor o I a , if ropriate, within the terms of the. applicable Department y nion contract. Generally, sick leave may accumulate according to union and Department contracts and policy, and is paid upon normal termi- nation 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 upon normal 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 Statements 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. 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 14 2. l of plant. The Department's 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 limitations, the Department performs the following calculation. Using the net income per the audited financial statements, 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 multiplied by eight percent. From this calculation, the Municipal Light Board will determine what cash transfers need to be made at the end of the fiscal year. Cash and Investments Total cash and investments as of lu ae 30, panying financial statements a folio nd: ca anihsrtho - rm and -term ins 7 d short-term investments - OPEB Trust Total cash and investments in `tlhe accom- $ 15,x,815 26,482;494 2,659,813 2,857,150 $ 47,522,272 Total cash and investments at June 30, 2017 consist of the following: Cash on hand $ 3,500 Deposits with financial institutions 47,518,772 Total cash and investments $ 47,522,272 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 provide .the cash flow and liquidity needed for operations. 15 As of June 30, 2017, the Department (including the Pension Trust and OPEB Trust) held cash and short-term investments in pooled investments with the Massachusetts Municipal Depository Trust (MMDT), FDIC -insured savings accounts, and 90 -day FDIC -insured bank certificates of deposit. Because of their immediate liquidity and/or short-term maturity, these funds are classified as cash and short-term investments in the accompanying financial statements and are not considered to' be exposed to significant interest rate risk. As of June 30, 2017, the Department and Pension Trust held investments in domestic and foreign fixed income bonds with varying maturity dates as follows: Proprietary Moody's Investment Type Fund Rating Corporate bonds: Restricted Maturity AT&T Inc Investments Date Corporate bonds 429,272 Al AT&T Inc $ 4331147 1/22 General Electric Cap Corp 2 01 /2' Wells Fargo & Co 422 08/1 /2� Rabobank Nederlan Bank 522 11/0 /2'2 T arm „a ceut F n B 427,7 12/1 /Z BNP ribas � 424 594 � 03/0 Tr $ ,659 813 as R la ing't r t Risk Gen,efally,�dit risk is the risk that the issuer of an investment will not fulfill its igation to the holder of the investment..This is measured by the assigning of a rating by a nationally recognized statistical rating organization. As of June 30, 2017, the Department and Pension Trust held investments in domestic and foreign fixed income bonds with varying ratings as follows: Proprietary Fund 16 Restricted Moody's Investment Type Investments Rating Corporate bonds: AT&T Inc $ 433,147 BAA1 General Electric Cap Corp 429,272 Al Wells Fargo & Co 422,960 A3 Rabobank Nederland Bank 522,140 A3 Teva Pharmaceut Fin BV 427,700 BAA2 BNP Paribas 424,594 Al Total . $ 2,659,813 16 Concentration of Credit Risk The Department follows the Town of Reading's investment policy, which does not limit the amount that can be invested in any one issuer beyond that stipu- lated by Massachusetts General Laws. At June 30, 2017, the Department and Pension Trust investments were held in domestic and foreign fixed income bonds, as detailed in the sections above. Five of the bonds each individually represent approximately 16% of the Department's and System's total 'investments, while the investment in-Rabobank Nederland Bank represents approximately 20%. Custodial Credit Risk Custodial Credit Risk for deposits is the risk that, in the event of the failure sof 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 r' that, in the event of the failure of the counterparty (e.g., broker-deale ransa tion, the Department will not be able to recover the value o ' stments ateral securities that are in the possession of anot r party. uses General Laws, Chapter 44, Section 55, li osits " n a nk or trust co payor bank- ing company to an amount not ceedi si per nt o the ca ital and surplus of such bF7menLfba6ws' ust co any r b kin com "any ss satisf tsecurity is to it nk r tru t c an or anki g company ��rh excess." The D a a ass usett st tute s written, as well as ,the Town �f�Rea ineposit icy f r cus��l cre it 7Bau e e epa me s its cash and short-term investments with the n f R aldi an bank accounts are maintained in the name of the Town, the moun of the Department's balance exposed to custodial credit risk at une 30, 2017, cannot be reasonable determined. As of June 30, 2017, none of the Department or Pension Trust investments were exposed to custodial credit risk because the related securities are regis- tered in the Department's name. Fair Value The Department categorizes its fair value measurements within the fair value hierarchy established by Governmental Accounting Standards Board Statement No. 72 Fair Value Measurement and Application (GASB 72). The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unob- servable inputs. 17 Fair Value Measurements Using: Quoted prices in active Significant Significant markets for observable unobservable identical assets inputs inputs Description (Level 1) (Level 2) (Level 3) Investments by fair value level: Debt securities Corporate bonds $ 2,659,813 $ 2,659,813 $ - $ - Total $ 2,659,813 3. Restricted Cash and Investments The Department's proprietary fund restricted cash and investment balances represent the following reserves: 6/30/17 6/30116 Cash Investm s Investments Depreciation fund $ 2,451, $ 4,494,95 $ - Construction fund 2,500 00° - 1,500,00 - Deferred fuel r 5,84 ,567 5,116,8.7 - Deferred energy cons rvati n res�rve 6 2,1 717,41 - ate sta iliz tion 6, 83,542 6,822,339 - R serve or ncoll 'ble ccou s 200 00 - 200,000 - Si k lea e b nefits 20,228 1,329,907 1,912,146 1,345,663 azar us ast nd 750,000 - 150,000 - .Cu mer deposits 1,080,257 - 901,905 - ension trust 4,353,108 1,329;906 4,264,442 1,345,663 Total $ 26,482,494 $ 2,659,813 $ 26,080,078. $ 2,691,326 The Department maintains 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. 18 - Reserve for uncollectible accounts - This account was set up to offset a portion of the Department's bad debt reserve. - Sick leave benefits - This account is used to offset the Department's actu- arially determined compensated absence liability. - Hazardous waste fund -This reserve was set up by the Board of Com- missioners 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. - Pension trust -The principal instrument of a plan established by -the Munic- ipal 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. 4. Accounts Receivable Accounts receivable consists of the following at June Customer Accounts: Billed onts Less al s:ncollectibleacc S es 'sco is �e, al ed V 2,189,981 Unbil net6,118,951 Tota omer accounts 8,308,932 Other Accounts: Merchandise sales 249,384 MMWEC surplus 147,193 Intergovernmental grants 43,056 Liens and other 13,280 Total other accounts 452,913 Total net receivables $ 8,761,845 5. Prepaid Expenses Prepaid expenses consist of the following: Insurance and other $ 298,971. Purchase power (201,947) NYPA prepayment fund 307,573 WC Fuel - Watson 276,106 Total $ 680,703 19 I 6. . Inventory Inventory comprises supplies and materials at June 30, 2017, and is valued using the average cost method. 7. Investment in Associated Companies Under agreementswith the New England Hydro -Transmission Electric Company, 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 Department is carrying its investment at fair value, 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 JuneM, 2017: New England Hydro -Transmission (NEH & NHH� 212 8. Capital Assets Thefolio g is a sun o nd ): D B iipment and fumishinga Infrastructure Total capital assets, being depreciated Less accumulated depreciation for: Structures and improvements Equipment and furnishings Infrastructure Total accumulated depreciation Total capital assets, being depreciated, net Capital assets, not being depreciated: Land Total capital assets, not being depreciated Capital assets, net. 20 ivity in cap (in Ending Increases Decreases Balance $ 16,146 $ 3,268 $ - $ 19,414 32,511 1,322 (241) 33,592 88,053 3,465 (991) 90,527 136,710 8,055 (1,232) 143,533 (8,949) (465) - (9,414) (20,856) (905) 241 (21,520) (35,969) (2,731) 946 37,754 (65,774) (4,101) 1,1876( 8,688) 70,936 3,954 (45) 74,845 1,266 - - 1,266 1,266 - - 1,266 $ 72,202 $ 3,954 $ (45) $ 76,111 9. Deferred Outflows of Resources Deferred outflows of resources represent the Department's consumption of net position that is applicable to future reporting periods. Deferred outflows of resources have a positive effect on net position, similar to assets. Deferred outflows of resources related to pensions, in accordance with GASB Statement No. 68, Accounting and Financial Reporting for Pensions, are more fully discussed in Note 16. 10. Accounts Payable Accounts payable represent fiscal 2017 expenses that were paid after June 30, 2017. 11. Accrued Liabilities Accrued liabilities consist.of the following atJu 0 $ Accrued payr 14 61 ed sale to 219 58 Other 03,065 �. To al $ 565,784 2. C sto r Do 'ts� Thi alan a represents deposits received from customers that are held in escrow. 13. Customer Advances for Construction This balance represents deposits received from vendors in advance for work to be performed by the Department. The Department recognizes these deposits as revenue after the work has been completed. 14. Accrued Employee Compensated Absences Department employees are granted sick leave in varying amounts. Upon retire- ment, normal termination, or death, employees are compensated for unused 'sick leave (subject to certain limitations) at their then current rates of pay. 15. Deferred Inflows of Resources Deferred inflows of resources are the acquisition of net position by the Depart- ment that are applicable to future reporting periods. Deferred inflows of resources 21 16. have a negative effect on net position, similar to liabilities. The Department reports two items as deferred inflows of resources: one which is attributable to changes in the net pension liability, and the other which arises from the current financial resources measurement focus and the modified accrual basis of accounting in governmental funds. Deferred inflows of resources related to pension will be recognized in pension expense in future years and is more fully described in Note 16. Reading Contributory Retirement System The Department follows the provisions of. GASB Statement No. 68, Accounting and Financial Reporting for Pensions, = An Amendment of GASB Statement No. 27, with respect to the employees' retirement funds.. A. Plan Description Substantially all.employees of the Department are m s of the To n of Reading Contributory Retirement System (the m),' ost- arin , multiple - employer public employee retire ent sy tem . lig ble employees must participate in the Syste . Th pensi npl ides p nsio i benefits, deferred alto and ea a d dis bility be fits. Ch pte 32 of.the Massa usetts Gen' ral L ws sta ish th authority of he ystem, as II as con i u on rce tag s nd en fits aid.. The Sys etirement Bo rd oes t h e th aut ority to nd enefit provisions. Additional info m tion' disci ed in t y to nual financial reports, which are pub icl av it le fr t System's - administrative. offices located. at Re di g To n owell Street, Reading, Massachusetts, 01867. 1 31 The System provides for retirement allowance benefits up to a maximum of 80% of a member's highest three-year average annual rate of. regular compensation for those hired prior to April 2, 2012 and the highest five-year average annual rate of regular compensation for those first becoming members of the Massachusetts System on or after that date. However, per .Chapter 176 of the Acts of 2011, for members who retire on or after April 2, 2012, if in the 5 years of creditable service immediately preceding retire- ment, the difference in the annual rate of regular compensation between any 2 consecutive years exceeds 10 percent, the normal yearly amount of the retirement allowance shall be based on the average annual rate of regular compensation received by the member during the -period of 5 con- secutive years preceding retirement. Benefit payments are based upon a member's age, length of creditable service, level of compensation and group classification. If a participant was a member prior to February 2012,, a retirement allow- ance may be received at any age, upon attaining 20 years of service. The 22 plan also provides for retirement at age 55 if the participant was a member prior to January 1, 1978, with ;no minimum vesting requirements. If the par- ticipant was a member on or after January 1, 1978 and a member of Groups 1 or 2, then a retirement allowance may be received if the participant (1) has at least 10 years of creditable service, (2) is age 55, (3) voluntarily left Department employment on or after that date, and (4) left accumulated annuity deductions in the fund. Members of Group 4, have no minimum vesting requirements, however, must be at least age 55. Groups 2 and 4 require that participants perform the duties of the Group position for at least 12 months immediately prior to retirement. A participant who became a member on or after April 2, 2012 is eligible for a retirement allowance upon 10 years creditable service and reaching ages 60 or 55 for Groups 1 and 2, respectively. Participants in Group 4 must be at least age 55. Groups 2 and 4 require that participants perform the duties of the Group position for at least 12 months immediately prior to retirement„ A retirement allowance consists of two parts: member's accumulated total deductions generate.constitute the ann a diffe encs allowance and the annuity i the p sion. The io a i ty and aret�irement on. A e in they n the otal benefit is. Em to eesw o res n fro servi and who are not eligible to receive a retir ent Ilo rice ntitled to request a refund of their accumulated tot I d duc ons. embers voluntarily withdrawing with at least 10 years'of rvice or involuntarily withdrawing, receive 100% of the regular interest that has accrued on those accumulated total deductions. Members voluntarily withdrawing with less than 10 years of service get credited interest each year at a rate of 3%. Participants Contributions Participants contribute a set percentage of their gross regular compensation annually. Employee,contribution percentages are specified in Chapter 32.of the Massachusetts General 'Laws. The employee's individual contribution percentage is determined by their date of entry into the system. In addition, all employees hired after January 1, 1979 contribute an additional 2%.on all gross regular compensation over the rate of $30,000 per yean'The percent- ages are as follows: Before January 1, 1,975 5% January 1, 1975 - December 31, 1983 7% January 1, 1984 - June 30, 1996 8% Beginning July 1, 1996 9% 23 For those members entering a Massachusetts System on or after April 2, 2012 in Group ,1, the contribution rate will be reduced to 6% when at least 30 -years of creditable service has been attained. Employer Contributions Employers are required to contribute at actuarially determined rates as accepted by the Public Employee Retirement Administration Commission (PERAC). The Department's contribution to the System for the year ended June 30, 2017 was $1,579,345, which was equal to its annual required contribution. B. Summary of SignificantAccounting Policies For purposes of measuring the net pension liability, deferred o resources and deferred inflows of resources related to pen sion expense, information about the fiduciary 4nIq,ofadditions`to/deductions from System's fidu ' itomined on the same basis as t re rep rte.F benefit payments (including r funds f emp oyeutions when due ay le in ccQ da a wi h brms. at fgir-�(alue Pe io 1iabiTitie and Deferre d4nflovi?� .., ._ the Svc ws of I pen - and deter - r thipurpose, areLecognized vesents are Y un 30, 201 epartment reported a liability of $13,076,538 for its o a share of the System's -net pension liability. The net pension lity was measured as of December 31,. 2016, and the total pension lia- bility used to calculate the net pension liability was determined by an actuarial valuation as of January 1, 2015 rolled forward to December 31, 2016. The Department's proportion of the net pension liability was based on an actuari- ally determined projection of the Department's long-term share of contribu- tions to the pension plan relative to the projected contributions of all par- ticipating employers. At December 31, 2016, the Department's. proportion was 29.15%. Town of Reading Municipal Light Department Employees' Retirement Trust (`Pension Trust"): The Department has established an irrevocable trust for the purpose of currently funding its annual* required contribution to the Town of Reading Contributory Retirement System (RCRS). Annual contributions to the trust are actuarially determined to be the net normal cost for funding the Department's liability for pension benefits for covered employees, and both the principal and income of the trust is restricted for the exclusive bene- fit of Department employees and their beneficiaries. This Pension Trust is included in the proprietary fund statements in the Department's basic finan- cial statements. 24 As noted in the first paragraph of this section, the Department's proportion- ate share of the RCRS net pension liability was determined by an actuarial valuation as of January 1, 2015 rolled forward to December 31, 2016. How- ever, the actuarial valuation does not take into account the fiduciary net position of the Department's Pension Trust at December 31, 2016 (the meas- urement date). Accordingly, the following reconciliation is provided: For the year ended June 30, 2017, the Department recognized pension expense of $2,313,974. In addition, the Department reported deferred out- flows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Outflows of Inflows of Resources Resources Net differences between expected and actual experience $ - $ ,888 Changes of assumptions 2 - Net difference between .projected and actual. investment earnings on pens' 1 8,405 - Changes in and di ere ces betty en em to erc ntrib ion nd rop rtion to s are f co trib i s 222,437 - of I 4,135,078 $ 714,888 Amu is re ort eferred, outflows of resources and deferred inflows Do es related to pensions will be recognized in pension expense as ollows: Year ended June 30: 2018 $ 1,028,288 2019 1,028,288 2020 1,015,954 2021 347,660 Total $ 3,420,190 D. Actuarial Assumptions The total pension liability was determined by an actuarial valuation as of January 1, 2015, rolled forward to the measurement date of December 31, 2016 using the following actuarial assumptions, applied to all periods included in the measurement: 25 Valuation Date Actuarial Cost Method Actuarial Assumptions: Investment rate of return Projected salary increases Inflation rate Post-retirement cost -of -living adjustment January 1, 2015 Entry Age Normal Cost Method 7.65%, net of pension plan investment expense, 4.25%-6.00% for Group 1 and 4.75%-7.00% for Group 4 . 11 3.00% Annually 3.00% of first $12,000 Mortality rates were based on the RP -2014 Mortality Table with full genera- tional mortality improvement using Scale MP -2014. For disabled lives, the mor- tality rates were based on the RP -2014 Disabled Mortality Table. The long-term expected rate of return on pension Iestment was determined using a building-block method in estimat anges of expected future real rates of return (exp cted r et f pe ision plan investment expense and infl on) re de v lop d f ach m jor a set class. These ranges mbine to rod ce th long-term expect d ral a of return by wei Ing the ex ee fu re r al rtes, return by t e target asset antm tic r�at'rat pen io pla 'starg t rize i the of wing an by a ding ex ecte inflation. B stimates of of etur for ea ajo asset class included in the as et n ecember 31, 2015 are summa - Asset Class le: International Equity Domestic Equity Core Fixed Income Value -Added Fixed Income Private Equity Real estate Hedge funds Timber/Natural Resources Portfolio Completion Strategies Total Target Asset Allocation 22.00% .18.00% 13.00% 10.00% 10.00% 10.00% 9.00% 4.00% 4.00% 100.00% Long-term Expected Rates of Return 8.75% 7.63% 3.76% 6.45% 9.50% 6.50% 6.50% 7.07% 6.18% E. Discount Rate The discount rate used to measure the total pension liability was 7.65%. The. projection of cash flows used to determine the discount rate assumed that the plan member contributions will be made at the current contribution rate 26 and that employer contributions will be made at contractually required rates, actuarially determined. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments to current active and inactive plan members. There- fore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. F. Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate The following table presents the Department's proportionate share of the net pension liability (asset) calculated using the current discount rate of 7.65%, as well' as what the Department's proportionate share of the net pension liability (asset) would be if it were calculated using a discount rate that is 1 percentage -point lower (6.65%) or 1 percentage -point higher (8.65%) than the current rate: Current 1% Discou 10 Decrease Rate Increase (6.65%) (7.650) 8.65%) $ 18, 9,07 13, 76, 38 $ 8,349,754 Pe i Plan iary et Position Det it d inf r tion o e pension plan's fiduciary net position is avail- abl in the sepaissued System financial report. ("Pension Trust") The Department has established an irrevocable trust for the purpose of cur- rently funding its annual required contribution to the Town of Reading Con= tributory Retirement System (RCRS). Annual contributions to the trust are actuarially determined to.be the net normal cost for funding the Department's liability for pension benefits for covered employees, and both the principal and income of the trust is restricted for the exclusive benefit of Department employees and their beneficiaries. This Pension Trust is included in the proprietary fund statements in the Department's basic financial statements. As noted in the first paragraph of this section, the Department's proportion- ate share of the RCRS net pension liability was determined by an actuarial valuation as of January 1, 2015 rolled forward to December 31, 2016..How- ever, the actuarial valuation does not take into account the fiduciary net position of the Department's Pension Trust at December 31, 2016 (the meas- urement date). As of December 31, 2016, the value of the pension trust was $4,016,746. 27 17. Other Post -Employment Benefits — OPEB (GASB 45) The Department follows GASB Statement No. 45, Accounting and Financial Reporting by Employers for Post -Employment Benefits Other Than Pensions. Statement No. 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 contri- bution as an expense on the proprietary fund Statements of Revenues, Expenses, and Changes in Net Position when a future retiree earns their post -employment benefits, rather than when they use them. To the extent that an entity does not fund their actuarially required contribution, a post -employment benefit liability is recognized on the proprietary fund Statements of Net Position over time. A. Plan Description In addition to providing the pension benefits described in Note 16, the Depart- ment provides post -employment health and life insurance be o r tired employees through the Town of Reading's participa " i e Mass setts Interlocal Insurance Association (MIIA) H enefit Be efits, ben- efit levels, employee contributi and a ploy ontributio s are governed by Chapter 32 of the Massa husett Gen ral L of Ju a 30 2017, the actuarial v n m asure en .dat app oximat 1 retire s an 58 active emplo eesni the ligib it uir a is T e plan does of is ue a sep- LI ar to finanpo . B. Ben fi s PrQvided Th D part en�iesst-employment medical, prescription drug, and Ii f insixafirce benefits to all eligible retirees and their surviving spouses. All active employees who retire from the Department and meet the appropriate criteria are eligible to receive these benefits. C. Fundirig Policy As of the June 30, 2017, the actuarial valuation measurement date, retirees are required to contribute 29% of the cost of the medical and prescription drug plan, as 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 2017 annual OPEB expense is calculated based on the annual required contribution of the employer (ARC), an amount actuark ally determined. 'in accordance with the parameters of GASB Statement No. 45. The ARCrepresents 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 remaining period of sixteen years. 28 The following table shows the components of the Department's annual OPEB cost for the year ending June 30, 2017, 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, 2017. Annual Required Contribution (ARC) $ 932,387 Annual OPEB cost 932,387 Projected benefit payments 485,573 Increase in net OPEB obligation 446,814 Net OPEB obligation - beginning of year - Contributions to OPEB Trust3( 08,746) Net OPEB obligation - end of year $ 138,068 - See Part E for additional information The Department's.annual OPEB cost, the ag f a ual EB cost contributed to the plan, and the n OPEB obli or isca yea 2017 and the two preceding fiscal ye s wer as fo lows nn I P rce age of OP O EB OPEB is al YeL—rEn d Cost o st C_o itributed Obligation - 2( bli ation2 1 $ 2,38 85.2% $ 138,068 2 15 58,525 100.0% $ - 14 $ 768,378 100.0% $ - 2013 $ 604,987 100.0% $ - .E Funded Status and Fundinq Progress The funded status of the plan as of June 30, 2017, the most recent actuarial valuation measurement date was as follows: Actuarial accrued liability (AAL) $ 10,015,425 Actuarial value of plan assets 2,857,072 Unfunded actuarial accrued liability (UAAL) $ 7,158,353 Funded ratio (actuarial value of plan assets/AAL) 28.53% Covered payroll (active plan members) N/A UAAL as a percentage of covered payroll N/A In 2010, the Department's Municipal Light Board voted to accept the provi- sions of Chapter 3213 §20 of Massachusetts General Laws and create an Other Post -Employment Benefits Liability Trust Fund as a mechanism to set 29 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. The assets and net position of this trust are reported in the Department's Fiduciary Funds Statements 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, mor- tality, 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 expec- tations and new estimates are made about the future. The schedule of fund- ing progress, presented as required supplementary information 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. F. Actuarial Methods and Assumptions Projections of benefits for as understood by the De types of be vide histori a pattern of hari incl & tecHfique,$� aria a crue abilii Ion temp rs ect nc' reporti g pu s are ba ed n the plan .1 nt and t e pl bers and i clude the t o ti e o each a rial va uati n and the i ene t c is etween the epa ment and h actu ri me hods and as mptions used esigned t I du c short-term volatility in actu- act ' ue of assets, consistent with the calculations. I he 30, 2017 actuarial valuation, the Projected Unit Credit actuarial cost method was used. The Department's actuarial value of plan assets was $2,857,072. The actuarial assumptions included a 7.50% investment rate of return and an initial annual health care cost trend rate of 7.0% which decreases by 0.5% for five years to an ultimate level of 4.5% per year. The amortization costs for the initial UAAL is a level percentage of payroll amor- tization, with amortization payments .increasing at 2.5% per year for a remain- ing period of 14 years. 18. Other Post -Employment Benefits — OPEB (GASB 74) In 2010 the Government established an OPEB Trust fund to provide funding for future employee health care costs. Cash and Short-term Investments At June 30, 2017, cash and short-term investments consisted of amounts held in money market and certificates of deposit. Concentration and rate of return infor- mation was not available. 30 Net OPEB Liability The components of the net OPEB liability were as follows: Total OPEB liability $ 10,015,425 Plan fiduciary net position 2,857,072 Net OPEB liability $ 7,158;353 Plan fiduciary net position as a percentage of the total OPEB liability 28.5% Actuarial assumptions. The total OPEB liability was determined by an actuarial valuation as of June 30, 2017, using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified: Bra - pally • Disabled — RP -2014 Disabled Retiree Table projected generationally with Scale MP2014. The actuarial assumptions used in the June 30, 2017 valuation were the same used during the January 1, 2015 actuarial valuation of the Reading Contributory Retirement System. The long-term expected rate of return on OPEB plan investments was deter- mined using a building-block method in which best -estimate ranges of expected future real rates of return (expected returns, net of investment expense and inflation) are developed for each major asset class. These ranges are com- bined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by, adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the target asset allocation as of June 30, 2017 are summarized in the following table: 31 Discount rate. The discount rate used to measure the total OPEB 1 7.50%. The projection of cash flows used to determine the dis ra, that contributions from plan member will be ma current c rate. Based on those assumptions, the OP plan i n t p� not projected to be available tall pr 'ect fu a ben it p current plan mem§ of th ing r)rdse is th t if it Jve e (6. 0% oi, 1 ntag was assibution med ition was ments of . 'rVB1ibili y ch ng s in he discount rote -The follow - bili as wel as wha the net OPEB liability would ua nt r t a is 1 -percentage -point lower igher .50%) than the current discount rate: 1% Discount 1 % Decrease Rate Increase (6.50%) (7.50%) (8.50%) $ 7,814,750 $ 7,158,353 $ 6,105, 048 Sensitivity of the net OPEB liability to changes in the healthcare cost trend rates. The following presents the net OPEB liability as well as what the net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1 -percentage -point lower (7.00% decreasing to 6.00%). or 1 -percentage -point higher (7.00% increasing to 8.00%) than the current healthcare cost trend rates: 1 % Decrease Target Asset Long-term Expected Asset Class Allocation Real Rate of Return Domestic equity 18.00% 6.44% International developed markets equity 16.00% 7.40% International emerging markets equity 6.00% 9.42% Core fixed income 12.b0% 2.02% High -yield fixed income 10.00% 4.43% Real estate 10.00% 5.00% Commodities 4.00% 4.43% Hedge Fund, GTAA, Risk parity 13.00% 3.75% Private equity 11.00% 10.47% Total 100.001 Discount rate. The discount rate used to measure the total OPEB 1 7.50%. The projection of cash flows used to determine the dis ra, that contributions from plan member will be ma current c rate. Based on those assumptions, the OP plan i n t p� not projected to be available tall pr 'ect fu a ben it p current plan mem§ of th ing r)rdse is th t if it Jve e (6. 0% oi, 1 ntag was assibution med ition was ments of . 'rVB1ibili y ch ng s in he discount rote -The follow - bili as wel as wha the net OPEB liability would ua nt r t a is 1 -percentage -point lower igher .50%) than the current discount rate: 1% Discount 1 % Decrease Rate Increase (6.50%) (7.50%) (8.50%) $ 7,814,750 $ 7,158,353 $ 6,105, 048 Sensitivity of the net OPEB liability to changes in the healthcare cost trend rates. The following presents the net OPEB liability as well as what the net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1 -percentage -point lower (7.00% decreasing to 6.00%). or 1 -percentage -point higher (7.00% increasing to 8.00%) than the current healthcare cost trend rates: 1 % Decrease 1 % Increase (7.00% Healthcare (7.00% decreasing to Cost Trend increasing to 6.00%) Rates (7.00%) 8.00%) . $ 6,034,235 $ 7,158,353 $ 7,799,633 „32 19. Participation in Massachusetts Municipal Wholesale Electric Company The Town of Reading, acting through its Light Department, is a Participant in certain Projects of the Massachusetts Municipal Wholesale Electric Company . (MMWEC). 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 facili- ties 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 oject Participant to pay its pro rata share of MMWEC's costs rela a Pr 'ect, which costs include debt,service on the revenue b ued by C to finance the Project, plus 10% of MMWEC's de service i into a Reserve and Contingency Fund. In additi uld a rojeFe,and cipant it to make any payment when due ther Proj ct Pa 'cipan s ofoject ay b required to increas p -up) t it p m is nd rregly their P rticipant's Aharee of t at Pr ' 's P ojec Ca a ility o a adamourt to exceed 25% th it oal- artic' an share of thatt's Project Capability.. ject P rticipants ve vena to collect rates at least su icie t t mee�heir o li ati s un a PSAs. [—Zrp W as sueciseparate issues of revenue bonds for each of its eight ctC s, w i'ch are payable solely from, and secured solely by, the revenues erived 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% interest in the W.F. Wyman Unit No. 4 plant, which is operated and owned by its majority owner, FPLEnergy Wyman IV, LLC, a subsidiary of NextEra Energy Resources LLC, and a 4.8% ownership interest in the Millstone Unit 3 nuclear unit, oper- ated by Dominion Nuclear Connecticut, Inc. (DNCI), the majority owner and an indirect subsidiary of Dominion Resources, Inc. DNCI also owns and operates the Millstone Unit 2 nuclear unit. The operating license for the Millstone Unit 3 nuclear unit extends to November 25, 2045. 33 MMWEC A substantial portion of MMWEC's plant investment and financing program is an 11.6% ownership interest in the Seabrook Station nuclear gen- erating unit operated by NextEra Energy Seabrook, LLC. (NextEra Seabrook) the majority owner and an indirect subsidiary of NextEra Energy Resources LLC. The operating license for Seabrook Station extends to March 15, 2030. ,NextEra Seabrook 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 Particle 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. The Reading Municipal Light Department has ent o PSAs ower Purchase Agreements (PPAs) with MMWEC rider bo t As rid PPAs, the Department is required tom a ain p me s to MWE pay ble solely from Department revenues. U der th PSA , ea a icipant is u condition- ally obliga make,p yme is a to MM EC ler or n t -the Project(s) l mple d o rati g an n ithst riding " g t e suspension terruption the ut ut o tPro' ct( WE i ,inv d in ri us gal a ns. In the opinion of management, the co f sgitioln h l ' atio aims will not have a material adverse effect on e fi nci I of the company. Kfter the July 1, 2017 principal payment, total capital expenditures amounted to $1,704,467,000, of which $126,846,000 represents the amount associated with the Department's Project Capability. MMWEC's debt outstanding for the Projects from Power Supply System Revenue Bonds totals $10,680,000,. of which $182,000 is associated with the Department's share of Project Capability. After the July 1, 2017 principal payment, MMWEC's total future debt service requirement on outstanding bonds issued for the Projects is $11,540,000, of which $190,000 is anticipated to be billed to the Department in the future. The aggregate amount of the Department's required, payments under the PSAs and PPAs, exclusive of the Reserve and Contingency Fund'billings, to MMWEC at June 30, 2017 and estimated for future years is shown below. Annual Costs For years ending June 30, 2018 $ 190.000 Total $ 190,000 34 20. 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 $9,548,000 and $11,894,000 for the years ended June 30, 2017 and 2016, respectively.. Renewable Energv 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. Energy suppliers meet their annual .RPS obligations by acquirin cient quantity of RPS -qualified renewable energy certificatesthat are ated and recorded at the New England Power P PO ) ner tion Infor- mation System (GIS). Suppliers can urchas RE m electr city generators or from other utilities that have cquir d RE s. As part o Its on oing om it t to Green nergy, the D pa ment has n e d in o P rch se owe Ag a men ( PAs with Swift R r Hydro LLC -andc rd S am rpor tion to purch pow r generated from renewable e 'our . The a PA ' c u epartment taking title to RECs, a ify a the er produced was the product of , a renewable . ec use epartment is exempt from the RPS provisions, it has n olding these RECs until they expire or selling them through the L GIS. Information regarding the Department's fiscal year 2017 REC activity and bal- ances is as follows: REC Sales During Fiscal 2017 Sale proceeds netted against fiscal year 2017 purchased power fuel charge 35 Unit Certificates Price Amount CT Class 1 9,173 $ 16.00 $ 146,768 MA Class 1 2,770 $ 9.50 26,315 MA Class I1 3,827 $ 24.00 91,848 MA/RI/CT Class 1 14,934 $, 9.50 141,873 CT Class 1 3,155 $ 9.50 29,973 Total 33,859 $ 436,777 (1) Sale proceeds netted against fiscal year 2017 purchased power fuel charge 35 REC Holdinos at June 30. 2017 A banked REC is a REC that has been processed by the NEPOOL GIS Coor- dinator and is in the Department's GIS account. A projected REC is the Depart- ment's estimate of what will be received based on invoices generated by REC- producing projects that the Department has entitlements to. Because there is no formal accounting guidance under GAAP or IFRS f ECS and the Department does not have a formal policy for the fu isposit n of RECs, the estimated fair value of the Departmenoldings ne 30, 2017 are not recognized as an asset on the oprieta tem nts of Net Position. �\ 21. Leases I L Th D ame t i the 1 so f facilities that are currently sub -leased to the r R adi g wn mp es Federal Credit Union. The original sub -lease agree - men com ced in December 2000 and was extended by various amend- nts through November 30, 2017. Following is the future minimum rental income to be received by the Department under the terms of this lease for the year ending June 30: 2018 $ 4,084 Total. $ 4,084 Operating Lease - Warehouse The Department is the lessee of a warehouse facility owned by JCM Real Estate Trust. The original lease agreement for this facility commenced in December 1998 and was extended by various amendments through May 31, 2016. Under the terms of the most recent lease amendment, the Department has exercised the option to extend the lease for an additional 24 months until May..31, 2018. Following is the future minimum rental expense to be paid by the Department for the year ending June 30: - 2018 $ 147,902 Total $ 147,902 „Banked Projected . Total Estimated Certificates Certificates Certificates Value MA Class I & II 8,655 8,580 17,235 $ 275,380 CT Class 1 2,218 3,356 3,356 89,184 RI Class 1 8 20 20 828 Total 10,881 11,956 20,611 $ 365,392 A banked REC is a REC that has been processed by the NEPOOL GIS Coor- dinator and is in the Department's GIS account. A projected REC is the Depart- ment's estimate of what will be received based on invoices generated by REC- producing projects that the Department has entitlements to. Because there is no formal accounting guidance under GAAP or IFRS f ECS and the Department does not have a formal policy for the fu isposit n of RECs, the estimated fair value of the Departmenoldings ne 30, 2017 are not recognized as an asset on the oprieta tem nts of Net Position. �\ 21. Leases I L Th D ame t i the 1 so f facilities that are currently sub -leased to the r R adi g wn mp es Federal Credit Union. The original sub -lease agree - men com ced in December 2000 and was extended by various amend- nts through November 30, 2017. Following is the future minimum rental income to be received by the Department under the terms of this lease for the year ending June 30: 2018 $ 4,084 Total. $ 4,084 Operating Lease - Warehouse The Department is the lessee of a warehouse facility owned by JCM Real Estate Trust. The original lease agreement for this facility commenced in December 1998 and was extended by various amendments through May 31, 2016. Under the terms of the most recent lease amendment, the Department has exercised the option to extend the lease for an additional 24 months until May..31, 2018. Following is the future minimum rental expense to be paid by the Department for the year ending June 30: - 2018 $ 147,902 Total $ 147,902 22. 23. Beginning Net Position Restatement and Reclassification In fiscal year 2017 the Governmental Accounting Standards Board released Implementation Guide No. 2017-1. The implementation guide states that a munic- ipality cannot reduce their net pension liability by the value of a separate pen- sion trust: Furthermore, the implementation guides states that the pension trust should be presented as part of the proprietary statement of net position and not a separate fiduciary fund. As a result of this implementation guide, the begin- ning (July 1, 2015) net position of the Department's proprietary and fiduciary funds has been restated and reclassified as follows: As previously reported Reclassification to Business -Type Activities GASB 68 Restatement As restated Business -Type Activities Proprietary Fund $ 101,445,083 5,450,833 (5.440,472 Fiduciary Funds Pension Trust 4 Fund $ 5,450,833 0,833) Pe e nme tal cc nti g S and Board ( ASB) has is ed Statement A oun ng a Fin cial Re ortin for P temployment Benefits Other ns ons, lad r quir en tatements No. 45 and 57, effective a art n egin h its year ending June 30, 2018. This Statement e sta dar r recognizing and measuring liabilities, deferred outflows rc eferred inflows of resources, and expense/expenditures. In addi- Statement details the recognition and disclosure requirements for employers with payables to defined benefit OPEB plans that are administered through trusts that meet the specific criteria and for employers whose employees are provided with defined contribution OPEB. 37 I TOWN OF READING, MASSACHUSETTS, MUNICIPAL LIGHT DEPARTMENT SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY (GASB 66) JUNE 30, 2017 (Unaudited) Readina Contributory Retirement System Proportion Proportionate of the Share of the Proportionate Share of the Plan Fiduciary Net Position Fiscal Measurement Net Pension Net Pension Net Pension Liability as a Percentage of the Total Year Date Liability Liability Covered Payroll Percentage of Covered Payroll Pension Liability June 30, 2017 December 31, 2016 29.15% $13,076,538 $ 6,393,765 204.52% 73.43% June 30, 2016 December 31, 2015 28.25% $12,862,732 $ 6,147,851 209.22% 17% June 30; 2015 December 31, 2014 28.25% $8,464,663 $ 5,908,694 143.26% 79 9% Schedules are intended to show informati years. Additional ears ill be played s they beco ilable. See Independent s' Report D 38 TOWN OF READING, MASSACHUSETTS, MUNICIPAL LIGHT DEPARTMENT SCHEDULE OF PENSION CONTRIBUTIONS (GASB 68) JUNE 30, 2017 (Unaudited) Reading Contributory Retirement System Contributions in Relation to the Contractually Contractually Contribution C i utions as Fiscal Required Required Deficien y a ercentage of Year Contribution Contributio Excess P roll C ered Pa roll June 30, 2017 $ 1,57 $ ,579,3 5 $ - 3,765 24.70% June 30, 2016 $ 14616 $.. ,461, 50 $ - $ 6,147,851 23.77% y Ju 015 1401, 38 $ ,401,638 $ - $ 5,908,694 23.72% Schedules are intended to show information for 10 years. Additional years will be displayed as they become available. See Independent Auditors' Report. 39 TOWN OF READING, MASSACHUSETTS, MUNICIPAL LIGHT DEPARTMENT SCHEDULE OF OPEB FUNDING PROGRESS (GASB 45) June 30, 2017 (Unaudited) Other Post -Employment Benefits Actuarial UAAL as Accrued a Percent - Actuarial , Liability Unfunded age of Actuarial Value of (AAL) - AAL Funded Covered Covered Valuation Assets Entry Age (UAAL) Ratio Payroll yroll Date -a /c 06/30/16 $ 2,857,072 $ 10,015,425 $ 7,158,3 8.53°/ A N/A 06/30/14 $ 1,846;042 $ 7,726,667 5,880,6 5` % N A N/A 06/30/13 $ 1,495,511 $ 7,588,99 $ ,093,4 2 ` o N A N/A 06/30/11 $ 1,167,1 ,... ,643,4 8 - ` $ 476,2 7 . 1 /° N A N/A 06/30/08 $ - $ `e`8 085, 88 = $ $ 85,3 8 0.00% N A N/A See I' endent Auditors' Report. TOWN OF READING, MASSACHUSETTS MUNICIPAL LIGHT DEPARTMENT OTHER POST -EMPLOYMENT BENEFITS (OPEB) Schedule of Changes in the Net OPEB Liability (GASB 74) (Unaudited) Total OPEB liability Service cost Interest on unfunded liability - time value of $, Benefit payments, including refunds of member contributions } Net change in total OPEB liability Total OPEB liability - beginning Total OPEB liability - ending (a) Plan fiduciary net position Contributions - emplo Net investmer ome aym nts, i i g ref nds o me b cont 'buti ns Net p rY han9 e i I n fid i I ne ositio P an fid ciary net positi n beginn' g 2017 $ . 245,842 698,939 (485,573) 331,230 2,525,842 Pan fl ucia n tpos tion e $ 2,857,072 Net OP liability (asset)'- ending (a -b)* $ 7,158,353 *Materially agrees with Statement of Fiduciary Net Position Schedule is intended to show information for 10 years. Additional years will be displayed as they become available. See notes to the Department's financial statements for summary of significant actuarial methods and assumptions. See Independent Auditors' Report. 41 TOWN OF READING, MASSACHUSETTS MUNICIPAL LIGHT DEPARTMENT OTHER POST -EMPLOYMENT BENEFITS (OPEB) Schedules of Net OPEB Liability, Contributions, and Investment Returns (GASB 74) (Unaudited) Schedule of Net OPEB Liability Total OPEB liability Plan fiduciary net position Net OPEB liability (asset) Plan fiduciary net position as a percentage of the total OPEB liability Covered payroll Participating employer net OPEB liability (asset) as a percentage of covered payroll Sc le of C ntrib ' ICo u dnally et rmined contrib 'on ntr butio s i relati n the a u ially etermined contribution n ibuti d cien y (ex ed payroll Contributions as a percentage of covered payroll Schedules are intended to show information for 10 years. Additional years will be displayed as they become available. See notes to Department's financial statements for summary of significant actuarial methods and assumptions. See Independent Auditors' Report. 42 2017 $ 10,015.,425 2,857,072 1 7,158,353 28.5% 2017 $ 932,387 794,319 $ 138,068 unavailable unavailable POWER SUPPLY REPORT AUGUST and SEPTEMBER 2016. ATTACHMENT 3 0 INTEGRATED RESOURCES RMLD BOARD OF COMMISSIONERS MEETING NOVEMBER 9, 2017 REPORTING FOR AUGUST Et SEPTEMBER 2017, RATE COMPARISSION FOR NOVEMBER 2017 William Seldon, Assistant Director of Integrated Resources 164 162 150 ISO RmId Di 5-7C 7/29/15 6.00 PM 8/12116 4.00 PM 6/13/17 5:00 PM 24,329 25,463 23,508 155 163 155 2 5, 750 25,250 24,750 24, 250 23,750 23,250 22,750 22,250 21,750 5931;365 $ 1,149,000 $ 1,284,290 J $1,540,298 $1,351,323 2013 2014 2015 2016 2017 Juoy August September m 2015 $0.0483 $0.0453 $0.0528 m 2010 $0.0430 $0.0431 $0.0478 2017 $0.0407 $0.0405 $0.0351 � J $ 1,489,733 $1,419,977 51,346,792 2013 .2014 ' . 2015 $1,666,547 2016 S-2,166,683 2017 N To: Coleen O'Brien Fr�te. : / Maureen McHugh, Jane Parentea D October 31, 2017 Subject: Purchase Power Summary — August, 2017 Energy Services Division (ESD) has completed the Purchase Power Summary for the month of August, 2017. ENERGY The RMLD's total metered load for the month was 64,179,880 kWh, which is a 14.83% decrease from the August, 2016 figures. Table 1 is a breakdown by source of the energy purchases, Table 1 Monthly Total 62,759,403 $40.61 100.00% $2,548,601 100.00% 'Pepperell, Woronoco,lndlan River, TumorFalls,Collins, Ploneer,HosieryMills, Summit Hydro Amount of Cost of % of Total Total $ $ as a Resource Energy, Energy Energy Costs % (kWh) ($/Mwh) Millstone. #3 3,634,214 $6.72 5.79% $24,427 0.96% Seabrook 5,908,154 $5.93 9.41% $35,025 1.37% Stonybrook Intermediate 2,573,494 $31.79 4.10% $81,801 3.21% Shell Energy 13,823,600 $60.36 22.03% $834,327 32.74% NYPA 2,695,340 $4.92 4.29% $13,261 0.52% EDF 4,747,200 $47.14 7.56% $223,806 6.78% ISO Interchange (154,991) $0.00 -0.25% -$12,480 -0.49% Community Solar Power 193,748 -$167.59 0.31% $32,471 -1.27% Coop Resales 26,353 $139.65 0.04% $3,680 0.14% _ SP Energy 12,666,400 $46.78 20.18% $592,534 23.25% Hydro Projects* 845,952 $55.13 1.35% $46,641 1.83% Braintree Watson Unit 335,680 $81.41 0.53% $27,327 1.07% Saddleback/Jericho Wind 1,386,213 $85.95 2.21% $119,320 4.68% One Burlington Solar 380,933 $71.05 0.61% $27,065 1.06% Exellon 13,643,200 $40.46 21.74% $552,033 21.66% Stonybrook Peaking 51,913 $237.00 0.08% $12,303 0.48% Monthly Total 62,759,403 $40.61 100.00% $2,548,601 100.00% 'Pepperell, Woronoco,lndlan River, TumorFalls,Collins, Ploneer,HosieryMills, Summit Hydro I Table 2 breaks down the ISO interchange . between the DA LMP Settlement and the RT Net Energy for the month of August, 2017. Table 2 Amount Cost % of Total Resource of Energy of Energy Energy (kWh) ($/Mwh) ISO DA LMP 5,142,101 $20.27 8.19% Settlement RT Net Energy (5,297,092) $22.30 -8.44% Settlement ISO interchange (154,991). $8.08 -0.25% (subtotal) Independent System Operator Day -Ahead Locational Marginal Price AUGUST 2017 ENERGY BY RESOURCE Stonybrook Pk. Rit-Icho CM Projects —J.' . it -.jam A Inter 336 BELD 10.53% Hydro I Coop n 0.01 CAPACITY The RMLD hit a demand of 140,722 kW, which occurred ,on August 22, at 5 pm. The RMLD's monthly UCAP requirement for August, 2017'was 220,648 Ms. Table 3 shows the sources of capacity that the RMLD utilized to meet its requirements. Table 3 Source Amount (kWs) Cost ($/kW -month) Total Cost $ % of Total Cost Millstone #3 4,950 26.97 $133,514 6.50% Seabrook 7,909 22.88 $180,992 8.81% Stonybrook Peaking 24,980 2.03 $500720 2.47% Stonybrook CC 42,925 3.38 $145,113 7.07% NYPA 0 0.00 -$10,792 -0.53% Hydro Quebec 0 0 -$37,846 -1.84% Braintree Watson Unit 0 0.00 -$4,723 -0.23% ISO -NE Supply Auction 139,884 11.42 $1,596,892. 77.75% Total 220,648 $9.31 $2,053,870 100.00% Table 4 shows the'dollar amounts for energy and capacity per source. , Table 4 Cost of 9/6 of Amt of Energy. Power Resource Energy Capacity Total cost Total Cost (kWh) ($/kWh) Millstone #3 $24,427 $133,514 $157,942 3.43% 3,634,214 0.0435 Seabrook $35,025 $180,992 $216,017 4.69% 5,908,154 0.0366 Stonybrook Intermediate $81,801 $145,113. $226,914 4.93% 2,573,494. 0.0882 Hydro Quebec $0 -$37,846 -$37,846 -0.82% - 0.0000 Shell Energy $634,327 $0 $834,327 18.13% 13,823,600 0.0604 NextEra/EDF $223,806 $0 $223,806 4.86% 4,747,200 0.0471 ,r NYPA $13,281 -$10,792 . $2,469. 0.05% 2,695,340 0.0009 ISO Interchange -$12,480 $1,596,892 $1,584,412 34.43% (154,991) -10.2226 Noma Congestion -$46,518 $0 -$46,518 -1.01% 193,748 -0.2401 BP Energy $592,534 $0 $592,534 12.87% 12,666,400 0.0468 ,r Hydro Projects $46,641 $0. $46,641 1.01% 845;952 0.0551 Braintree Watson Unit $27,327 -$4,723- $22,604 0.49% 335,680 0.0673 * Saddleback/Jericho $119,320 $0 $119,320 . 2.59% 1,388,213 0.0860 Burlington & Community Solar $41,112 $0 $41,112 0.89% 380,933 0.1079 Coop Resales $3,680 $0 $3,680 0.08% 26,353 0.1397 Exelon Energy $552,033 $0 $552,033 11.99% 13,643,200 _0.0405 Stonybrook Peaking $12,303 $50,720 $63,023 1.37% 51,913 1.2140 Monthly Total $2,548,601 $2,053,870 $4,602,471 100.00% 62,759,403 0.0733 - * Renewable Resources 8,48%, RENEWABLE ENERGY CERTIFICATES (RECe) Table 5 shows the amount of banked and projected RECe for the Swift River Hydro Projects through August 2017, as well as their estimated market value.. Table 5 RECe Summary Period -. January 2017, - August 2017 'Banked Projected Total- Est. RECe RECe RECe Dollars Woronoco 0 5,155 5,155 $82,480 Pepperell 0 2,775 2,775 $44,400 i Indian River 0 1,552 1,552 $24,833 Turners Falls 0 1,280 1,280 $20,480 i saddleback 0 8,743 8,74.3 $139,888 i Jericho 0 -4,286 4,286 $68,576 u -tota - 23, , . RECe Sold $0- 0 $0 Grand Total 0 23,791 23,791 $300,07 TRANSMISSION The RMLD's total: transmission costs for the month of August, 2017 were $1,414,026. This is a decrease of 8.55%.from the July transmission cost of $1,546,151. In August, 2016 the transmission costs were $1,370,117. Table 6 Current Month Last Month Last Year Peak Demand (kW) 140,722 145;294 183,134 Energy (kWh) 62,759,403 66,553,229 74,092,068 Energy ($) $2,548,601 $2,709,058 $3,194,092 Capacity ($) $2,653;870. $2,081,717 $1,915,137 Transmission($) $1,414,026 $1,546,151 $1,370,117 Total $6,016,497 $6,336,927 $6,479,345 To: Coleen O'Brien Frgr»� Maureen McHugh, Jane Parenteau Date: October 31, 2017 Subject: Purchase Power Summary 7 September, 2017 Energy Services Division (ESD) has completed the Purchase Power Summary for the month of September, 2017. ENERGY The RMLD's total metered load for the month was 56;651,202 kWh; which is a 1.80% decrease from the September, 2016 figures. I Table 1 is a breakdown by source of the energy purchases. r Table 1 t _ Amount of Cost of % of Total Total $ $ as a Resource Energy Energy Energy Costs % j (kWh) ($/Mwh) . Millstone #3 3,532,365 $6.72 6.26% $23,743 1,20% Seabrook 5,696,670 $5,93 10.10% $33,783 1,70% Stonybrook Intermediate 13,675 $107.71 0.02% $1,494 0.08% Shell Energy 9,084,000 $58.61 16.060/0 $531,240 . 26.79% NYPA 2,258;398 $4.92 4.00% $11,111 0.56% EDF 4,520,000 $25.18 8.01% $113,793 5.74% ISO Interchange 10,558,540 $35.13 18.71% $370,896 16.71% Community Solar Power 147,323 $127:02 0.26% $18,713 0.94% Coop.Resales 13,894 $155.16 0.02% $2,156 0.11% BP Energy 9,624,000 $46.78 17.05% $450,211 22.71% Hydro Projects" 744,852 $70.52 1.32% $52,525 2.65% Braintree Watson Unit. 581,106 $40.26 1.03% $23,393 1.18% Saddlebackliedcho Wind . 604,315 $76.38 1.07% $46,160 2.33% One Burlington Solar 275,447 $71.05 0.49% $19,571 0.99% Exelon 8,720,000 $30.30 15.45% $264,232 13.33% Stonybrook Peaking i 80,407 $245.90 0.14% $19,772 1.00% Monthly Total 56,437,192 $35.13 100.00% $1,982,794 100:00% •Pepperell, Woronoco,lndian Mver,Turner Falls,Collins, PioneergHosiery.Mills, Summit Hydro Table -2 breaks down the ISO interchange between the DA LMP Settlement and the RT Net Energy for the month of September, 2017. Table 2 Amount Cost % of Total Resource of Energy of Energy Energy (kWh) ($/Mwh) ISO DA LMP 15,0571644 $29.47 26.68% Settlement RT Net Energy (4,499,004) $15.73 -7.97% Settlement ISO Interchange 10,558,540 $35.13 18.71% (subtotal) Independent System Operator Day -Ahead Locational Marginal Price SEPTEMBER 2017 ENERGY BY RESOURCE . 1.07% BUILD 1.03% PYOV0 ViolLfcts Energy V.05%. r Stonybrook Pic, fffilkvono Wj 0 14% SOW 0.75% NYPA 4.ULI% Stonybrook Issuer. 0112% CAPACITY The RMLD hit a demand of 127,181 M, which occurred. on September 27, at 4 pm. The RMLD's'monthly UCAP requirement.for September, 2017 was. 220,648 Ms. Table 3 shows the sources of capacity that the RMLD utilized to meet its requirements. 1 Table 3 Source Amount (kWs) Cost ($/kW -month) Total Cost $ % of Total Cost Millstone #3 4,950 26.90 $133,142 6.14% Seabrook 7,909 22.87 $180,864 8.35% Stonybrook Peaking 24,980 2.31 $57,717 2.66% j Stonybrook CC 42,925 3.34 $143,404 6.62% NYPA 0 0.00 -$10,792 -0.50% Hydro Quebec 0 0 -$37,665 -1.74% Braintree Watson Unit 0 0.00 $31,484 1.45% ISO-NESupply Auction 139,884 11.93 $1,668,529 77:01% Total I s i 220,648 $9.82 $2,166,683 100.00% Table 4 shows the dollar amounts for energy and capacity per source. Table 4 Cost of % of Amt of Energy Power Resource Energy Capacity Total cost Total Cost (kWh) ($/kWh) Millstone #3 $23,743 $133,142 $156,885 3:78% 3,532,365 0.0444 Seabrook $33,783 $180,864. $214,647 5.17% 5,698,870 0.0377 Stonybrook Intermediate $1,494 $143,404 $144,899 3.49% 13,875 10.4431 HydroQuebec $0 437,665 -$37,665 -0.91% - 0.0000 Shell Energy. $531,240 -$0 $531,240 12.80% 9,064,000 0.0586 NextEra/EDF $113,793 $0 $113,793 2.74% 4,520,000 0.0252 'r NYPA $11,111 -$10,792 $320 0.01% 2,258,398 0.0001 180 Interchange $370,896 $1,668,529 $2,039,425 49:15% 10,558,540 0.1932 Name Congestion $8,032 $0 $6,032 0.19% 147,323 0.0545 BP Energy. $450,211. $0 $450,211 .10.85% 9,624,000 .0.0468 Hydro Projects $52,525 $0 $52,525, 1.271/6 744,852 0:0705 Braintree Watson Unit $23,393 $31,484 $54,877. 1.32% 561,106 0.09.44 Saddleback/Jericho $46,160 ($0 $46,160 1.11% 604,315 - 0.0764 Burlington & Community Solar $30,251 $0 $30,251 0.73% 275,447 0.1098 Coop Resales . $2,156 $0.$2,156. 0.05% 13,894 0.1552 Exelon Energy $264,232 $0 $264,232 6.37% 8,720,000 r 0.0303 Stonybrook Peaking $19,772. $57,717 $77,489 1.87% 80,407 0.9637 Monthly Total . $1,982,794 $2,16603 $4.149,477. 100.00% 56,437,192 0.0735 * Renewable Resources 6.86% RENEWABLE ENERGY CERTIFICATES (RECs) Table 5 shows the amount of banked andprojected RECs for the Swift River Hydro Projects through September, as well as their estimated market value. - 1 Table 5 . RECe Summary Period - January 2017 - September 2017 Banked Projected Total Est: RECs RECs RECs Dollars j Woronoco 0 5,155 . 5,155 $82,480. �J Pepperell 0 2,913. 2,913 $46,608 ' i Indian River- .0 1,552 1,552 $24,833 i Turners Falls 0. 1,280 1,280 $20,480 'Saddleback 0 9,347 9,347 $149,552 Jericho 0 4,286 4,286 $68,576. I _ _ Su total , { RECs Sold $0 0 $0. jGrand,Total 0'.. 24,533 24,533: $392,529 - TRANS MISSION 392,529TRANSMISSION The RMLD's total transmission costs for the -month of September, 2017 were $1,351,323. This is a decrease 6f.4.43% from the August transmission cost of $1,414,026. In September, 2016 the transmission costs were $1,540,298: Table 6 Current Month Last Month Last Year Peak Demand (kW) 127,181 140,722 143;166 Energy (kWh) 56,437,192 62,759,403 57,965,937 Energy(($) $1,982,794 $2,548,601 $2,769,221 Capacity ($) - $2,166,683 $2,053,870: $1,666,347 Transmission($) $1,351,323 $1,414,026 $1,540;298 Total $5,500,800 $6,016,497 $5,975,866 POWER SUPPLY RISK MANAGEMENT STRATEGY ATTACHMENT 4 Jo, Mitigate risk ► Stabilize. rates ► Optimize ability to secure lower. - pricing Cur. -rent Strategy Historically, RMLD has procured': its energy purchases annually using,a and layering. app -roach which prod for" the- next_ four years Ladder- and layer contracts diversi- duration and type Annual RFPs. are only, for a portion' requirements; Atlows'-RMLD. to manage evolving n rules and future pricetrends, Laddering' and Layering Approach" 0. Currently, RMLD looks out every four years and secures ricing after receiving both CAB and Board. approva . ► Administrative processes currently limit RMLD's ability to take advantage of.dynamic pricing. opportunities'. ► Requires extensive labor hours and costly legal. expenses ► Provides the value of dollar cost averaging, however, does not build a "portfolio" of prices that should be at/or below the final market settle Historical Laddering and Layering Results 4 years 4 years 3..years 1 year 2 year 2 year 1/1/14-1 BP Energy 45111.31. ATC 12/31/17 1/1/15- Shell 4637067 ATC 12/31/18 Energy 1/1/16-. Exelon 294Y233 ATC 12/31/18 1/1/.19- NextEra 110; 262 ATC 12/31/19 1/1/17- EDF 98,752 ATC 12/31/18 Trading 1/1/19-- Exelon . 171y547, ATC 12/31/20 ATC = Around the Clock $47.42 $63.09 $47.68 $45.95 $37.57 $39.31 Improved Risk. Management Strategy ►Abetter approach to procuring energy would be to buy smaller quantities over time. ► This would allow. RMLD to respond to market price changes buying_ more when prices are low and less when prices are high. ► Similar to "dollar cost averaging" in building a stock ' portfolio. _ This approach comes under best utilities standards practice, Improved Risk Management Strategy ► Two "buying triggers" 1. 2. Price triggers ► When price is below long-term average (4 years). ► Four years represents the period, of time over which prices h cycled between low and high extremes. ► Build "portfolio" market settle. Time triggers of prises that should be at/or below the fin ►. As the purchase' date approaches ► Final protection against spot volatility "dollar cost averaging f ► Smooth out price variations - f ►. As the purchase' date approaches ► Final protection against spot volatility "dollar cost averaging f ► Smooth out price variations - I Target 1 Percent of Target Volume To Purchase Price Current Percentile Year Year2 Year 3 Year 4 Year 5 501 th % 60% 40%0 20% 0% 0% tho400 0 010%0%, `70 /0 50 /0 30 /0 80% .60% ..40% 20% 0% 201 th % 90% 70% 5.0% 30% 10%,, '! 100% 80% 60% 40% .20% 8 Time Triggers No. Recommended time triggers ► 12 months prior. lock in 25% ► 9 -months prior lock in 50% ► 6 months prior lock in 75% ► 3 months prior lock In .100% These represent a percentage of the TARGET position, not the entire open position, i.e., 90% c the on -peak load during January and February. i. r 9 1 January 2017 On -Peak EnergyPrice $160 market peak was $149.32 on ---------------------------------------=--------------=--------- $140 ---------- --- - - I _______ Forward Price $120 ------------------------------------------ $100-------------------------=-----=------------------------- i $80----------------------------------------------------------------------------------------------------------------------------------------------- - $60---------------=------------------------------------------------------------------------------------------ ---------------- = ----------------- $40-------------------------------------------------------------------------- - ---------------------- - --------------------- market bottom was _ $60.94 on Feb. 24, 2016 $20--------------------------------------------------------------------------------------------------------------------------------- --- ----------------------------------------- $0 titi� tion ti°`ti°` ti� tih tih ti� tih tih 10 Popo OPSIlly OeC ��o 10 � 10 CP Oec; Pit 1 J PJac Cp OeC f Trading Date 10 Why. Have -a Risk Management Strategy? lo. A consistently applied Risk Management Strategy will remove speculativejudgement from decisions to purchase energy. 100. h& A Risk, Management. Strategy will permit -'RMLD to take advanta of price opportunities consistently over the next several years and beyond. This-stratogy will allow RMLD to secure monthly quantities that;! -n an nual are below the four year average, versus locking, i quantities. A strategy of utilizing time triggers will smooth out variations' i h- - the market over time. Motion Move that RMLD Board of Commissioners accept the Risk Management Strategy as presented, and authorize. the General Manager to enter in purchase power agreements that satisfy the criteria set forth in the Risk Management Strategy. 4s a matter of protocol, the Department will ; � provide a report on transactions relative to this )trategy. r 12 ENGINEERING &OPERATIONS REPORT JULY, AUGUST, and SEPTEMBER 2017 ATTACHMENT 5 igineering & Operations Report RMLD Board of Commissioners Meeting November 9, 2017 July through September 2017 Reporting Period Hamid Jaffari, Director of Engineering & Operations Capital Improvement Projects Engineering &Operations REMAINING YTD BUDGET PROJ #_ CONSTRUCTION .._ _ COMPLETE-; JUL _ AUG_ .. SEP Underground Facilities Upgrades (URD's, Manholes, etc.) 69,193 5,36 95,09 89,731 106 • Aspen Road, North Reading On-going 199,084 2,308 35,005 • Haverhill Street, North Reading 27,50 222,28 194,78 24,794 107 13.8kV Upgrade (Step-down areas, etc.) _ On-going 1,658 1,043,891 764,441 Forrest Glen Road, Reading _ 108 115 kV Transmission Line Upgrade 15% 4,494 87: 137 Pole Line Upgrade - Woburn Street, W 10% 1,200, 175 Pole Replacement Program On-going 12,001 38,307 6,31 f 458 Secondary 8, Main Replacement Program ; On-going 5,362- 18,542 3,595 Various New Service Installations (Commercial/Industrial) On-going 10,830 4,141 9,82E Various -Routine Construction (detail on next slide) On-going . 37,926; 97,650 143,871 REMAINING YTD BUDGET 37,31 344,72 307,40 1,65 70,851 69,193 5,36 95,09 89,731 1,20 200,28 199,084 56,62 209,00 152,37 27,50 222,28 194,78 24,794 155,93 131,140 279,45 1,043,891 764,441 Routine Capital Construction Detail i JUL AUG SEP Pole Setting/Transfers 7,387 15,438 8,080 Overhead/Underground 5,293 28,344 42,236 Projects Assigned as Required • Voltage Regulators, Lynnfield Pole Damage/Knockdowns - Some Reimbursable • Work was done to repair or replace nine (9) poles. Station Group Hazmat/Oil Spills Porcelain Cutout Replacement Program Lighting (Street Light Connections) Storm Trouble Underground Subdivisions (new construction) • Garden of Eden, Wilmington • Murray Hill Subdivision (Phase 2), Wilmington Animal Guard Installation Miscellaneous Capital Costs - 25,376 50,744 955 4,399 24,046 556 9,083 352 83 21,028 415 2,209 1,425 16,815 $10 0 (3,230) $7 YTD 30, 906 75,873 F-76,120', 29,40 9,99 1,50 48,68 41 6,55 Capital Improvement Projects Engineering &Operations (continued) _STATION UPGRADES _ .. _COMPLETE,: JUL_ Distributed Gas Generator, NR 99% 21,696 New Wilmington Sub -Station, W 5% 35 kV Underground Cable Upgrade Station 4, 5 and RR 0% ROW, R/W Station 4: 4W9 Getaway Replacement, R 100% 1,769 Substation Equipment Upgrade On-going AUG SEP, 15,696 97,77 6,439 1,99 64;007 25,20. Station 3: Remote Terminal Unit (RTU) Replacement, NR 100% 434 1,627 227 Station 3: Relay Upgrades and SCADA Integration, NR 100% 959 16,859 1,98 Station 3 Reactor, NR 20% 76, 10,28 YTD BUDGET RBA EMANINGI LANCE 135,16 8,431 650,000 206,81 (135,167) 641,569 206,81 90,97 (90,977) 50,21 50,21 2,28 (2,288). 19,80 76,10 56,30 10,361 561,34 550,98 Capital Improvement Projects Engineering &Operations (continued) t % _PROD #_ _ _ _ $YSTEM_PROJECTS 8, CAPITAL PURCHASES_ i ,'_COMPLETE_ 102 Pad Mount Switchgear Upgrade at Industrial Parks, W 7% 110,924 115,176. 103 `'Grid Modernization and Optimization , All Towns ' On-going 19,9501 20,785 112 AMI Mesh Network Expansion, All Towns On-going - 125 ,'GIS 99% 19,375 13,535 23 126 Communication Equipment (Fiber Optic), All Towns . On-going 131 ;LED Street -Light Implementation, All Towns 78% �i 84,527,; 108,6391 41 116 Transformers and Capacitors (purchase), All Towns On=going r 117 Meters (purchase), All Towns :; On-going 1,65 t Other capital Projects/Purchases (Facilities, I RD, IT) # ' -� %b COMPLETE __JUL _ _ . _!�_-AUG,_ ___ SEPI-� YTf) ' Facilities: 096 (Control Center Modifications 45% 154 33,515 =3-3,6,7 097'. Power Washer and Vacuum 10% - 121 !Remote SCADA Room i 0% A 104 RMLD Lighting (LED) Upgrade 0% - ',--._ 095 !Building Upgrades On-going ]! if { - ' { 098 .Office Upgrades On-going - c . 119 ISecurity Upgrades All Sites On-going 1 118.'Rolling Stock Replacement- On-going 19,863 i-_ YJ 19,8 -_ Integrated Resources: - t 099 Vehicle Supply Equipment 10% 2,558 6,065 8,M .Electric - 101 (Flow Battery Energy Storage Unit 0% ! jL - a --. - Information Technology: -.- 127 Computer Hardware Upgrades I On-going �; 3,198 665 3,353 7,21 \. � �L__._.._JF _ 128 Com uter'Software � p and Licensing tet On-goirig ; ." _M - TOTAL CAPITAL SPENDING YTD (ALL DIVISIONS) $331,808 $551,524 $445,912 $1,329,244 $7,685,521 $6,356,277 Routine Maintenance Transformer Replacement (through August 2017) Pad mount 26.68% Overhead 18.11 Pole Inspection (as of 8/24/17) 243 poles have been replaced 141 of 243 transfers have been completed Quarterly Inspection of Feeders (as of 8/22/17) Inspected Circuits (Jan -Mar): 3W5, 3W6, 3W7, 3W8, 3W 13, 3W 14, 3W 15, 3W 18, 4W4, 4W5, 4W6, 4W7, 4W9, 4W23, 4W24, 5W4, 5W5, 5W8, 5W9, 4P9, 4P2 Inspected Circuits (Apr -Jun): 4W 10, 4W 12, 4W 13 Inspected Circuits (Jul -Sep): 3W5, -3W7, 3W8, 3W 13, 3W 14, 3W 18 Manhole Inspection (through September 2017) 961 of 1,237 manholes have been inspected. Porcelain Cutout Replacements (through September 2017) 91% complete 249 remaining to be replaced Tree Trimming July: 84 spans Aug: 105 spans Sept: 175 spans YTD: 364 through September Substation Maintenance Infrared Scanning - through September complete - no hot spots found 9 I Double Poles nership: 16,000 (approximately) 50% RMLD 50%. Verizon todial: Reading - split (see map) North Reading - RMLD Lynnfield - Verizon Wilmington - Verizon Town of Reading "r Pole Jurisdiction �� f , '•,,. 71 Town of ReaWn -� �- Polo Ov r TELCO LYNNFIELD Countof Ticket NTG Member and JobType -T Number L-JCMCTNR 5 C-iCorricast Massadtusetts TRANSFER 5 LFLDFD ,B Lynnfteld Fire TRANSFER , D RMLD 2 Readilif Municipal L19M Department Erizon Massachusetts TRANSFER Grand Total 3 NJUNS "Next to Go" as of October 30, 2017 READING Countof _J Verizon Massadumetts Countof NTG Member and JobType -t Ticket iCMCFNR 6 'DCarn®st lYlawaduasetts 1 TRANSFER 6 — NP3PMA 8 - Non-patticipeting3diamW 56 =jAttacher- Massactttsetts 1 TRANSFER 8 3 _ IRDNGFO 6 �DReadingFire Department TRANSFER 6 S +RMLD _ _92 5 --+Reading Municipal Light Depmtment - TRANSFER 27 4 PULLPOLE 65 4 17 =+VZNESA 40 e Verizon RUSsadussens TRANSFER 40 4+(blank) Grand Total 152 1►i•]t11:1"1ylr)1►(Cl 7�VZKEDR Countof _J Verizon Massadumetts Ticket NTG Member and JobType -i Number �JCMCINR 6 2C0mC=tftvMarhuw is 1 TRANSFER 6 ``-I NGMA 1 ,National Grid 56 TRANSFER 1 3 NRDGFD 37 -+North Retiding Fin Department 3 TRANSFER 37 3RMLD _ _ 44 - - =+RnaditgMunicipal Light Department TRANSFER 13 PULLPOLE 31 7�VZKEDR 2Z _J Verizon Massadumetts TRANSFER 19 PULLPOLE 3 = VZBMA 1 Grana Total 110 WILMINGTON Countof Tldret NTG Member and Job Type + Number CANLT R 4 'Comcatusetts TRANSFER 4 = NP3PAM i Nm-pwUdpatinS3rd PartyAtsdter• Nlassarhuseth; TRANSFER 1 = NPFAMA 4 Non-partldpatins Fite Alamos - Massachusetts TRANSFER 4 RMI. _ 33 E)ReadlnS Mtmldpal USbt Depadment TRANSFER 29 PULL POLE 4 = VZBMA 1 - Verizon Massadtasetts ft-dnP$ TRANSFER 1 _=, VZAI81 56 iVedzon Massadero — TRANSFER 53 PUIL POLE 3 ='1NIAiFi6 _ _ —'=,TownafUnfininston -- — lD TRANSFER 10 ;WNGNFD niArdmir 0 FreDepwtrrawct--- ---- TRANSFER 72 . Grand Total 181 Questions ? RMLD PROCUREMENT REQUESTS REQUIRING BOARD APPROVAL ATTACHMENT b RMLD -Reading Municipal Light Department RELIABLE POWER FOR GENERATIONS 230 Ash Street P.O. Box 150 Reading, MA 01867-0250 Tel: (781) 944-1340 Fax: (781) 942-2409 Web: www.mdd.com October 30, 2017 Town of Reading Municipal Light Board Subject: IFB 2018-11: Tree Trimming Services Pursuant to M.G.L c. 30 § 39M, on September 20, 2017, an invitation for bid was placed as a legal notice in the Middlesex East Section of the Daily Chronicle, the Central Register, and on the RMLD and.COMMBUYS websites requesting sealed bids for Tree Trimming Services. An invitation for bid was sent to the following twelve companies: Asplundh Lucas Tree Experts Northeastern Tree Cicoria Tree Service Mayer Tree Service, Inc. The Davey Tree Expert Company Favreau Forestry, LLC Nelson Tree Service, Inc., Tree Tech, Inc. Lewis Tree Service Northern Tree Service Viking Tree Service Sealed bids werereceived from two companies: The Davey Tree Expert Company and Mayer Tree Service, Inc. The sealed. bids were publicly opened and read aloud at 11:00 a.m. on. October 11, 2017, in the Town of Reading Municipal Light Department's Audio Visual',Spurr Room, 230 Ash Street, Reading, Massachusetts. The bids were reviewed, analyzed and evaluated by staff and recommended to the General Manager. Move that bid IFB 2018-11 for: Tree Trimming Services be awarded to: Mayer Tree Service, Inc., pursuant to M.G.L c. 30 § 39M, as the lowest responsible and eligible bidder on the recommendation of the General Manager. This is a one-year contract beginning January 1,2018, with an RMLD option for two additional one-year terms. These services wil p 'd from th scal year Operating Budget(s). McDonagh 0-.,/ eAA A Coleen' $ 'en . File. Bid/PY18/2018-11 for: Tree Trimming Services IFB 2018-11: Tree Trimming SeMces NOTE: These costs are provided for bid comparison purposes only.' PURCHASING NOTES: Davey bid did not meet mandatary requirements, i.e. incomplete documentation. .11/3/20171206 PM - YEIIR1 MAYER TREE YEAR2 ' YEAR3 THE DAVEY TREE EXPERT COMPANY YEAR YEAR2 YEAR3 A. SPANS . ' Price per Span (8.fcot cut) -S144 $144 $144 5139 $142 5146 Average Price per Day 118 spans) 51;152 - - SL152 - $1.152 $1,112 SL136 SL168 Avarage Price per week (40 spans) 55,760 $5,760 S-5,760 SS360 55,680 55,840 AvengaAnnual Total (SDweeks ) $288,000 $288,000 $288,000.. $278.000 $?d4,000 $292,000 N. (HAZARDOUS) TREE REMOVALS: Dlamenter Class ID3H) Unit Rates- 1S°� 6' S35 $35 $35 S55 . $56 S57 6"c= 12" 5149 5149 5149 _ $166 '_ $170 S174 12°<= 18° _ S298 .5298 5298 5333 '$341 5350 18'c= 24' $565 $565 5565 5677 $694 $711 24' C__ 32" .$1.246 $1,246 $1.246 5999 51,024 SLO50 32' >+ $1,790 SL790 SL790 SL997 SZO43 51098 TOTAL $4083 $1,083 $4,083 $4.227 $4,332 $4A40 C. HOURLY RATES srR"wr TIME . OVERTIME - ' STRWW TIME OVERAME .. .- --- STWCifr TME OVDmME - . - STRIV6TT TIME .OVEIMUE STRMGHT TIME OVERTONE SMGHT .TIME OVDmME Foreman 552.00 567.00 $119.00 $52.00 567.00 5119.00 55100 $67.00 $119.00 $34.74 .546.90 $81.64 $35.78 S4&30 $84.08 $36.85 $49.75 S86.60 Climber $5200 567.00 5119.00 55200 .567.00 $119. $5100 567.00 $119.00 530.84 541.63 572.47 531.76 • $42.88 574.64 532.71 544.1 '576.87 Ground Hand $45.00 $57.00 $102.00 545.00 $57.00 102.00 $4S.00 SS700 $102.00 $30.84 $41.53 S72A7 $31.76 $42.88 574.64 532:71 544.16 676.87 General Foreman 552.00 567.00 9119.001 $52,00 $67.00 $119.00 552.00. $67.00 $119.00 $46.26 S6Z45 $108.71 $47.64 $6431 $111.95 $49.07 $66.24 $115.31 Crane Operator $52.00 $67.00 _ $119.001 $52.00 567.00 S319.00 552.00 567.00 5119.00 597.65 5331.83 S229.48 S100S8 5135.73 523636 5103.60 5339 5243.46 Loader0perator 552.00 367.00 ,$139.00 $5100 _ 567.00 $119.00 S52.001 $67. - $119.00 $82.16 5110.92 5393, 84.62 5114.24 $198.86 587.16 $117.67 5204.83 Mower Operator SS100 $67.00 5119.00 SS2Mj $67.00 - . 5139.00 SS2.001 367.00 - . _5119• 596:80 ..5130.68 $227.4E1 $99.70 $134.60 S23430 $102.69 $138.63 5241.32 TOTAL$357.00 $458.00 $81400357 $ 00 5459.00 $81600 001 $459.00 $816.00 $419M $S6rwM $985.33 $43LB41 $58Z.991 $1,014.83 $444.79 $60&17 $1.04526 ANNUALTOTALS: $29769900 $22,899 $283,21233 $289346!3 $z"ALM GRAND TOTAL (THREE-YEAR CONTRACT $878,697.00 $870,044.42 NOTE: These costs are provided for bid comparison purposes only.' PURCHASING NOTES: Davey bid did not meet mandatary requirements, i.e. incomplete documentation. .11/3/20171206 PM - RMLD October 30, 2017 Reading Municipal Light.Department, RELIABLE POWER -FOR GENERATIONS 230 Ash Street P.O. Box 150 Reading; MA 01867-0250 Tel: (781)944-1340 Web: wwwmnld.com Town of Reading Municipal Light Board Subject: IFB 2018-12 Current Limiting Reactor Construction and Installation at Station 3 Pursuant to M.G.L c. 30 § 39M, on September 13, 2017, an invitation for bid was placed.as a legal notice in the Middlesex East Section of the Daily Chronicle, the Central Register, and on the RMLD and COMMBUYS websites requesting sealed bids for. Current Limiting Reactor Construction and'Installation at Station 3. An invitation for bid was sent to the following twenty companies: Albanese Brothers, Inc. ElecComm Corp. Grattan Line Construction Corp. K.B. Arada Construction, Inc. McDonough. Electric Construction Northeast Line Construction Corp. Power Line Contractors, Inc. ConstructConnect Fischbach & Moore Hamilton Electric Co., Inc. Mass Bay Electrical Corp. Murphy Valiant Electric, LLC OSP,.LLC Utility Service &Assistance, Inc. Construction Journal GEOD Consulting Hi Volt Line Construction & Maintenance Maverick Construction N. Granese & Sons, Inc. Ostrow Electric Company Sealed bids were received from three companies: Mass Bay Electrical Corp., Murphy Valiant Electric, LLC, and Power Line Contractors, Inc. The sealed bids were publicly opened and read aloud at 11:00 a.m., October 4, 2017, in the Town of Reading Municipal Light Department's Audio Visual Spurr Room, 230 Ash Street, Reading, Massachusetts. The bids were reviewed, analyzed and evaluated by staff and recommended to the General Manager. Move that bid IFB 2018-12 for: Current Limiting Reactor Construction and Installation at Station 3 be awarded to: Mass Bay Electrical Corp. for $153,920, pursuant to MAL c. 30 § 39M, as the lowest responsible and eligible bidder on the recommendation of the General Manager. The FYI Capital Budget amount for this item is $165,000. Nick D'Alleva amid Jaff ' een O'Brien File: Bid/FY18/2018-12 for. Current Limiting Reactor Current Limiting Reactor Construction and Installation at Station 3 IFP 2018-12 Certified. Exceptions to Firm All forms Check or stated bid Authorized Bidder Total Price Price filled out Bid Bond reauirements signature Mass Bay Electrical Corp. Reactor - Station 3 $153,920 yes yes yes no yes Murphy Valiant Electric, LLC, 1 Reactor - Station 3 $159,910 yes yes yes yes yes Exception: Submitted bid states "This proposal is valid for 30 days"; bid requires 60 days. Power Line Contractors, Inc. Reactor - Station 3 $183,831 yes yes yes no yes Board IFB 2018-12 Analysis BOARD MATERIAL AVAILABLE BUT NOT DISCUSSED From: Tracy Schultz To: RMt_D Board Members Group Cc: Jeanne FOti Subject: AP and Payroll for November Board Book Date: Wednesday, November 01, 2017 1:00:00 PM There were no Commissioner questions on the 9.8.17, 9.15.17, 9.22.17, 9.29.17, 10.6.17, 10.13.17, 10.20.17, and 10.27.17 AP. There were no Commissioner questions on the 9.18:17, 10.2.17, 10.16.17, and 10.30.17 Payroll. This e-mail will be included in the 11-9-17 Board Book. Tracy Schultz Executive Assistant Reading Municipal Light Department 230 Ash Street. Reading. MA. 01867 Tel: 781.942.6489 TOWN OF READING MUNICIPAL LIGHT DEPARTMENT RATE COMPARISONS READING & SURROUNDING TOWNS November -17 EVERSOURCE(NSTAR) TOTAL BILL $146.81 $260.13 $193.60 PER KWH CHARGE $0.19574 $0.17342 $0.19360 % DIFFERENCE 27.94% 31.14% 39.12% $1,433.47 $238.48 $6,948.02 $1,185,688.95 $0.19637 $0.22081 $0.19851 $0.17235 43.47% 22.23% 49.21% 55.88% PEABODY MUNICIPAL LIGHT PLANT TOTAL BILL $83.33 $160.46 $109.04 $976.04 $154.58 $4,822.98 $660,645.16 PER KWH CHARGE _ $0.11111 $0.10697 $0.10904 $0.13370 $0.14313 $0.13780 $0.09603 %DIFFERENCE -27.38% -19.11% -21.64% -2.31% -20.77% 3.58% -13.15% MIDDLETON MUNICIPAL LIGHT DEPT. TOTAL BILL $98.74 $201.66 $132.75 PER KWH CHARGE $0.13165 $0.13444 $0.13275 %DIFFERENCE -13.95% 1.67% -4.61% $959.51 $168.44 $4,762.93 $807,171.40 $0.13144 $0.15596 $0.13608 $0.11733 -3.960A -13.67% 2.2961. 6.12% WAKEFIELD MUNICIPAL LIGHT DEPT. TOTAL BILL $126.74 $235.92 $159.38 $1,202.79 $191.68 $5,648.08 $955,969.30 PER KWH CHARGE $0.16898 $0.15728 $0.15938 $0.16477 $0.17749 $0.16137 $0.13896 % DIFFERENCE 10.44% 18.94% 14.53% 20.39% -1.76% 21.30% 25.68% INDUSTRIAL - TOU RESIDENTIAL RESIDENTIAL-TOU RES. HOT WATER COMMERCIAL SMALL COMMERCIAL SCHOOL RATE 109,500 kWh's 750 kWh's 1500 kWh's 1000 kWh's 7,300 kWh's - 1,080 kWh's 36000 kWh's 250.000 kW Demand 76/26 Split 25.000 kW Demand 10.000 kW Demand 130.5 kW Demand 80120 Split READING MUNICIPAL LIGHT DEPT. TOTAL BILL $114.75 $198.35 $139.16 $999.11 $195.11 $4,656.40 $760,653.49 - PER KWH CHARGE $0.15300 $0.13224 $0.13916 $0.13686 $0.18066 $0.13304 $0.11057 NATIONAL GRID TOTAL BILL $176.21 $407.40 $220.64 $1,684.69 $257.76 $6,411.12 $1,169,516.60 PER KWH CHARGE $0.23494 $0.27160 $0.22064 $0.23078 $0.23867 $0.18317 $0.17000 %DIFFERENCE 53.56% 105.39% 58.55% 68.62% 32.11% 37:68% 53.75% EVERSOURCE(NSTAR) TOTAL BILL $146.81 $260.13 $193.60 PER KWH CHARGE $0.19574 $0.17342 $0.19360 % DIFFERENCE 27.94% 31.14% 39.12% $1,433.47 $238.48 $6,948.02 $1,185,688.95 $0.19637 $0.22081 $0.19851 $0.17235 43.47% 22.23% 49.21% 55.88% PEABODY MUNICIPAL LIGHT PLANT TOTAL BILL $83.33 $160.46 $109.04 $976.04 $154.58 $4,822.98 $660,645.16 PER KWH CHARGE _ $0.11111 $0.10697 $0.10904 $0.13370 $0.14313 $0.13780 $0.09603 %DIFFERENCE -27.38% -19.11% -21.64% -2.31% -20.77% 3.58% -13.15% MIDDLETON MUNICIPAL LIGHT DEPT. TOTAL BILL $98.74 $201.66 $132.75 PER KWH CHARGE $0.13165 $0.13444 $0.13275 %DIFFERENCE -13.95% 1.67% -4.61% $959.51 $168.44 $4,762.93 $807,171.40 $0.13144 $0.15596 $0.13608 $0.11733 -3.960A -13.67% 2.2961. 6.12% WAKEFIELD MUNICIPAL LIGHT DEPT. TOTAL BILL $126.74 $235.92 $159.38 $1,202.79 $191.68 $5,648.08 $955,969.30 PER KWH CHARGE $0.16898 $0.15728 $0.15938 $0.16477 $0.17749 $0.16137 $0.13896 % DIFFERENCE 10.44% 18.94% 14.53% 20.39% -1.76% 21.30% 25.68%