BOARD OF DIRECTORS BOARD MEETING 8:45 a.m.

BOARD OF DIRECTORS BOARD MEETING 8:45 a.m. OPALCO Conference Room

183 Mt Baker Road, Eastsound, WA 98245

Thursday, January 22, 2015

TRAVEL

Via Island Air

378-2376 / 378-8129 (cell)

To: Leave FH 8:00 am Leave Lopez 8:15 am Arrive Eastsound 8:30 am From: Leave Eastsound 3:00 pm Arrive Lopez 3:15 pm Arrive FH 3:30 pm

Via Ferry: To:

Leave Lopez 7:40 am Arrive Eastsound 8:30 am Leave FH 8:25 am Arrive Eastsound 9:15 am

From:

Leave Orcas 4:15 Arrive FH 4:55 p.m. Leave Orcas 2:55 Arrive Shaw 3:10 p.m.

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Orcas Power & Light Cooperative Board of Directors

Regular Monthly Meeting 183 Mt Baker Road, Eastsound, WA 8:45 am

January 22, 2015

PAGES

WELCOME GUESTS/MEMBERS

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16 17

18-37 38 39

40-65 66 67 68

ACTION ITEMS o December Minutes

o Admission of New Members o Capital Credits o Tariffs (2nd reading) o RUS Loan AP-8 – Submarine Cable Loan

Resolution 1-2015 Requesting FFB AP8 Application Resolution 2-2015 Updated, Abbreviated Load Forecast Resolution 3-2015 Approval of Ten-Year Financial Forecast Resolution 4-2015 CWP Amendment #5

o 2015 Committee on Nominations

70 71

DISCUSSION ITEMS o Resource Evaluation Timeline o “Save the Date”

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77-86 87-88

REPORTS o Cash Recap o Total Fund Balances Chart o Outages o Safety o General Manager o Island Network Update

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INFORMATION ITEMS

o New Services

o MORE Revenue

o BPA Consumption Summary

ADJOURNMENT

EXECUTIVE SESSION

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OPALCO Board of Directors Page 1 of 12 December 18, 2014 Minutes

MINUTES OF THE BOARD OF DIRECTORS MEETING

ORCAS POWER & LIGHT COOPERATIVE

Thursday, December 18, 2014

President Jim Lett called the meeting to order at 8:45 a.m. at the Friday Harbor OPALCO office. Directors Winnie Adams, Bob Myhr, Vince Dauciunas, Glenna Hall, Chris Thomerson and Jerry Whitfield were present. General Manager Foster Hildreth, Manager of Engineering and Operations Russell Guerry, Manager of Finance & Administration Nancy Loomis, Manager of Member Services and Energy Savings Amy Saxe, Executive Assistant Bev Madan, (serving as recording secretary) and consultant Jay Kimball were also present. Member/Guests In attendance were Kari Koski and Linda Lyshall of the San Juan Islands Conservation District; Steve Hudson; Jack Cory of the Island Guardian; L. Dwight Lewis; Steve Ludwig and Gray Cope. Each were offered an opportunity to address the Board. Ludwig commented on the proposed bylaw revisions, noting the changes made it more difficult for members to amend them and commented that the draft tariff revisions impacted the small user and it would be better to charge a flat rate of $0.11/kWh to everyone. Lewis made known his concerns that the underground cables were getting older and there were no obvious plans to replace them. Cory commented that it was difficult to find the Board materials on the OPALCO website and suggested a bar at the top of the home page with the agenda and minutes posted; he also suggested there be a press release of the agenda and minutes. Hudson had concerns about the value of Island Network and the proposed draft revision to the bylaws increasing the number of members required to amend the bylaws and the 5-year limitation on former employees. San Juan Islands Conservation District Linda Lyshall presented a Power Point on their accomplishments for 2014, their goals for 2015 and the partnership with OPALCO. Accomplishments included: energy roundtable meetings and the formation of Islands Energy; leadership team formation and meetings; Community Solar for Schools; MORE program outreach; Solar Stakeholders work group; and Energy Audits and Home Energy Efficient Projects (22 households with an estimated annual savings of 116,040 kWh. There were also energy fairs, pie socials and Georgetown University Energy Prize qualification. The goals for 2015 include K-12 outreach and education; community outreach, more energy fairs, renewable energy feasibility studies, affordable housing heating program and continuation of the Georgetown University Energy Prize competition. November Meeting Minutes

Motion made by Hall to accept the November minutes as presented. Motion was seconded and carried by voice vote.

New Members Motion made by Myhr and seconded to accept the new members as listed. Motion carried by voice vote.

Center Kurras, Kevin & Donna Decatur Evans, Frank S & Florence B Lopez Brooks, Andrew Cromer, Michael & Jennifer Gooding, Martha & Bryan Hall, Renee Kocak, Ece Lopez Island Wellness Ctr Market, Jenny & Brian McMullin, Kathleen Paige, Phil & Kelly Starfire, Dana

Orcas Blankenship, Christopher Bray, Brad Coates, Norman & Shurtleff, Robin Corngold, Noel & Emily Dow, Stacey Fordham, Noah Heggelund, Per O Jacobo, Andres & Kelsey Lee, Christine & & Kevin McKee, Shawn Morris, Jeff Ostle, Heather Roberts, Van Rusby, Jimmy & Julie SBCII REO, LLC Solara Property Management LLC

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Suruda, Anthony Taylor, Sophia & Easterday, Jacob Xdesigns San Juan Baker, David & Hintgen, Kristiina Baker, Richard & McEachern-Baker, Kathleen Banry, Lindsey Beck, Helene & Patricia Black, Molly Browning, Linda Davison, Matthew Doolittle, Theresa Ducote, Brittney & Cymbalista, Cory Eldick, Obeid Encore Family LLC Farnsworth, Darrel & Terry Fuller, Daniel Gallagher, Patricia O & Michael E Gresseth, Jan

Helm, Barry Johnson, Kaitlyn C Jones, Howard R McCrillis, David C Miller, Kyle & Walch, Jessica Mulhall, Megan & David Murray, Marissa Newell, Jeanne W O'Connell, Mary Paganini, Paul J Piff, Stuart Simpson, Andrew Stewart, Cindy & Edwin Weber, Matthew D Shaw Jefferts, Sue H Wedgwood, John & Turner, Kathleen

Capital Credits Motion made by Myhr and seconded to approve payment of $18,728.41 in capital

credits to the estates of deceased members listed below. Motion carried by voice vote.

Brett Alan Corbin ............................................................ $322.64 Celia C. Gregory ......................................................... $1,669.49 Howard K. Jones ......................................................... $3,971.66 Joseph A. and Jane M. Lopez ..................................... $9,843.29 James A. and Janet J. Murphy ....................................... $296.09 J. Wayne Pullman ....................................................... $1,780.87 Wade Sundstrom ........................................................... $844.37

2015 NRECA Voting Delegate The 2015 NREA annual business meeting will be held February 22-25 in Orlando, Florida. At present, no one is planning to attend from OPALCO. Motion made by Thomerson and seconded to designate Hildreth the official voting

delegate with Myhr as the alternate for the 2015 NRECA annual business meeting. Motion carried by voice vote.

Member Service Policy 3 Technical Provisions Member Service Policy 4 Service Conditions Member Service Policy 5 Line Extension Revisions were presented at the November Board meeting for review. These revisions bring them up to date with current direction. Motion to approve MS Policies 3, 4 and 5 as presented made by Myhr and seconded.

Motion carried by voice vote.

Strategic Directives Strategic Directive #1 Safety Motion made by Myhr and seconded to revise Strategic Directive #1 to read Safety is

job #1. Safety programs will be implemented to promote OPALCO’s high standards for safety to achieve the goal of no accidents.

Motion carried by voice vote.

Strategic Directive #2 Sustainable Power Supply Strategy Motion made by Myhr and seconded to revise Strategic Directive #2 to read

Maintain a long-term strategy to provide safe, adequate, reliable, advantageously priced power, including consideration of source risk and economic, climate and energy policy uncertainty:

Maintain BPA as our primary long-term power supplier. Investigate and form relationships with alternate suppliers of power. Implement energy efficiency and conservation programs as a cost effective power

resource. These include member projects, BPA programs and OPALCO infrastructure improvements.

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Encourage local generation installations consistent with our OPALCO grid operations.

Motion carried by voice vote. Strategic Directive #3 Cash and Asset Availability Motion made by Myhr and seconded to revise Strategic Directive #3 to read Ensure

revenue and financial stability and have cash and assets available to provide for foreseeable demands and to mitigate the impacts of potential significant damaging events including storm damage, loss of electric supply, equipment or cable failure.

Motion carried by voice vote. Strategic Directive #4 Access to Debt Funding Motion made by Myhr and seconded to revise Strategic Directive #4 to read Maintain

Times Interest Earned Ratio (TIER) and other relevant parameters at a level that facilitates debt structuring and satisfies major lending agencies.

Motion carried by voice vote. Strategic Directive #5 Equity as a Percent of Capitalization Motion made by Myhr and seconded to revise Strategic Directive #5 to read Maintain

a prudent equity-to-capital ratio which shall not fall below 40% on an annualized basis without the Board’s approval.

Motion carried by voice vote. Strategic Directive #6 Reliability of Electric Service Maintain reliability of electric service. Strategic Directive #7 Member Satisfaction Demonstrate greater than 80% member satisfaction. Strategic Directive #8 Communications with Members Have member communication programs to inform members of relevant issues. Information of interest to members might include financial conditions, policies, programs, operational achievements and member benefits.

Motion to accept Strategic Directives 6, 7 and 8 as presented made by Myhr, seconded and carried by voice vote.

Strategic Directive #9 Fiber Optic and Wireless Backbone for Grid Control (Operational Use) Accelerate completion of the planned fiber optic and wireless communications grid control backbone. (Per Board motion of November 2013) Strategic Directive #10 Internet and Data Services to the Premises (NewCo) Organize, manage, and control a wholly-owned subsidiary to provide access to the Internet, phone and data services to the premises, and ancillary data and communications to emergency responders. (Per Board motion of October 2014) Strategic Directive #11 Personnel Transition Plan – Apprentice and Training Programs for Key Positions Maintain and implement succession planning for all staff positions.

Motion to accept Strategic Directives 9, 10 and 11 as presented made by Myhr, seconded and carried by voice vote.

Bylaw Revisions The bylaws were reviewed by counsel and staff who suggested edits to the existing document. After discussion, the following revisions were approved by the Board: Statement of Nondiscrimination Orcas Power & Light Cooperative is the recipient of Federal financial assistance from the Rural Utilities Service (RUS), an agency of the US Department of Agriculture, and is subject to the provision of Title VI of the Civil Rights Act of 1964, as amended; Section 504 of the Rehabilitation Act of 1973, as amended; the Age Discrimination Act of 1975, as amended; and the rules and regulations of the US Department of Agriculture. This institution is an equal opportunity provider and employer.

Motion to approve the Statement of Nondiscrimination as presented made by Myhr and seconded. Motion carried by voice vote.

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Article I – Members Section 1. Any person residing and/or owning, leasing or possessing real property in San Juan County, Washington or other counties in Washington, and desiring to become an ENERGY MEMBER (hereinafter “member” or “energy member”) of the cooperative and receive electrical energy and service from it by connection to its physical system is eligible for energy membership and may apply therefor. Such applicant may become an energy member upon approval of his/her application, agreeing to purchase energy services from the cooperative, and to be bound by the articles of incorporation, bylaws, tariffs and rules of the cooperative, together with any future amendments thereto, and payment of the current fee fixed by the Board of Directors. Energy members may also purchase and receive communications and other services from the cooperative’s communications subsidiary where they are available and the member is connected to the subsidiary’s communications system. Membership in any class may be assigned to another member or reacquired by the cooperative by following the procedure established by the Board of Directors. Every member shall be responsible for payment of any and all services received from the cooperative and its communications subsidiary, and failure to pay for any of the services will be grounds for termination of all services received from the cooperative and for termination and/or forfeiture of membership. No member shall ever become the holder or owner of more than one membership in any class, and memberships held by a member in excess of one shall be redeemed by the cooperative by repayment of the membership fee.

Motion made by Myhr and seconded to approve all of Section 1 Article 1 changes. Motion carried by voice vote.

Section 2. Qualifications and Obligations. Any person, partnership, corporation or body politic may become an energy member in the cooperative by:

a) signing and submitting an application for membership form; b) paying the membership fee hereinafter specified or as adopted by the Board of

Directors; c) agreeing to purchase from the cooperative electric energy and service as hereinafter

specified by the cooperative; and d) agreeing to comply with and be bound by the articles of incorporation, bylaws, tariffs

and rules of the cooperative and any future amendments thereto; provided, however, that no person, partnership, corporation or body politic shall become a member unless and until he, she or it has been accepted for membership by the Board of Directors. Each member agrees to grant any necessary access to real property in order to allow the cooperative to provide electric energy and its communications subsidiary to provide communications and other services requested by the member and others, and further agrees to provide written easements recorded in favor of the cooperative and its communications subsidiary, as necessary.

e) A husband or wife, in becoming a member, shall automatically have a joint tenancy membership with right of survivorship, unless otherwise designated by them at the time he or she becomes a member. In the event of dissolution of the marital community between a married couple, the membership will follow the property and the person awarded the property in any decree of dissolution, in absence of which the membership will be awarded to that member of the former marital community who resides upon or has control of such real property. A married couple may join as a single member, designating which one of them is to be the member, in which event, upon death of the husband or wife, the membership shall be treated as any other membership under Article I, Section 8 of these bylaws.

Motion to accept Section 2 changes made by Myhr, seconded and carried by voice vote.

Section 3. Membership Fee The membership fee shall be set by the Board of Directors. Upon payment of the membership fee and approval of the membership application by the board, the member shall be eligible for services. Fees for providing connections shall be established by the regulations adopted by the cooperative that are applicable at the time the connections are made. Section 4. Purchase of Electric Energy. Each member shall, as soon as electric energy is available, purchase from the cooperative all electric energy for use on the premises specified in his or her application for membership, and shall pay therefore monthly at rates which shall from time to time be fixed by resolution of the Board of Directors; provided, however, that the

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electric energy which the cooperative shall furnish to any member may be limited to such an amount as the Board of Directors shall from time to time determine. Production or use of electric energy on such premises, regardless of the source thereof, by means of facilities which shall be interconnected with cooperative facilities, shall be subject to appropriate regulations as shall be fixed from time to time by the cooperative. It is expressly understood that amounts paid for electric energy in excess of cost of service are furnished by energy members as capital, and each member shall be credited with the capital so furnished as provided by these bylaws. Each member shall pay to the Cooperative a facility charge, which shall be a minimum amount per month as shall be fixed by the Board of Directors from time to time, regardless of the amount of electric energy consumed, but in no case less than said minimum amount. Energy members may also purchase communications and other services from the cooperative’s communications subsidiary where such services are available and the member is connected to the subsidiary’s communications system. Members purchasing communications or other services shall pay at rates and on terms and conditions which shall from time to time be fixed by the cooperative’s communications subsidiary. Each member shall pay all obligations that may from time to time become due and payable by such member to the cooperative as and when the same shall become due and payable. The cooperative and its communications subsidiary reserve the right to discontinue any or all service, including but not limited to electric service, to any member who has not paid the amounts owed by the member. Section 5. Non Liability for Debts of the Cooperative No Changes Made Section 6. Expulsion of Members The Board of Directors of the cooperative may, by the affirmative vote of not less than two-thirds (2/3) of the members thereof, expel any member who has violated or refused to comply with any of the provisions of the articles of incorporation, the bylaws, the tariffs or any rules or regulations adopted from time to time by the Board of Directors or any future amendments thereto. Any member so expelled may be reinstated as a member by a vote of the energy members at any annual or special meeting of the energy members. The action of the members with respect to any such reinstatement shall be final. Section 7. Withdrawal of Membership Any member may withdraw from membership upon payment in full of all debts and liabilities of such member to the cooperative and its communications subsidiary and upon compliance with such terms and conditions as the Board of Directors may prescribe. Section 8. Transfer and Termination of Membership a) Membership in the cooperative shall not be transferred except as hereinafter otherwise provided; and upon the death, cessation of existence, expulsion or withdrawal of a member, or if a member has received no electrical service for a continuous period of twelve (12) months when it was available to him or her, the membership of such member shall thereupon terminate. Termination of membership shall not release the member or the member’s estate from the debts or liabilities of such member to the cooperative. b) A membership may be transferred by a member to himself or herself and his or her spouse, as the case may be, jointly upon the written request of such member and compliance by the spouse jointly with the provisions of subdivisions (b) and (c) of Section 2 of this article. Such transfer shall be made and recorded on the books of the cooperative. c) When a membership is held jointly by a married couple, upon the death of either, such membership shall be deemed to be held solely by the survivor with the same effect as though such membership had been originally issued solely to the surviving spouse, as the case may be, provided, however, that the estate of the deceased shall not be released from any membership debts or liabilities to the cooperative. d) One whose membership has been terminated for any reason, but who requires service again, may again become a member by complying with the procedure outlined in Article 1, Section 2. Such a reinstated member, however, shall be required to pay a connection fee equivalent to that required of an existing member, in addition to the membership fee.

Motion to accept changes to Sections 3 through 8 made by Hall, seconded and carried by voice vote.

Section 9. New Classes of Memberships No changes made

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Section 10. Removal of Directors and Officers No changes made Article II – Meeting of Energy Members Section 1. Annual Meeting The annual meeting of the energy members shall be held on a date selected by the directors each year, at such place as the directors shall designate, for the purpose of electing directors and transacting such other business as shall come before the meeting. Unless the laws of the State of Washington, the articles of incorporation of the cooperative, or the bylaws provide otherwise, no business requiring a vote of the members shall be acted upon at such meeting unless notice of the business to be transacted has been given to members in accordance with notice provisions contained in Article II, Section 3 of these bylaws. If the election of directors shall not be held on the day designated herein for such annual meeting, or at any adjournment thereof, the Board of Directors shall cause the election to be held at a special meeting of the energy members as soon thereafter as conveniently may be. Failure to hold the annual meeting at the designated time shall not constitute a forfeiture or dissolution of the cooperative. Section 2. Special Meetings No changes made Section 3. Written notice of a meeting stating the place, day and hour of the meeting, and, in case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than ten (10) days nor more than fifty (50) days before the date of the meeting, either personally, by electronic transmission, or by mail, by or at the direction of the secretary, or by the persons calling the meeting, to each energy member provided, however, that with respect to all meetings at which directors are to be elected, such notice shall be so delivered not less than ten (10) days nor more than fifty (50) days before the date of the meeting. Such notice may be transmitted by mail or electronic transmission. If mailed, such notice shall be deemed delivered when deposited in the United States mail, addressed to the energy member at his or her address as it appears on the records of the cooperative, with postage thereon prepaid. If sent by electronic transmission, the notice is deemed to be delivered when sent, addressed to the member or shareholder at his or her electronic transmission address as it appears on the records of the cooperative. The failure of any energy member to receive notice of an annual or special meeting of the members shall not invalidate any action which may be taken by the members at any such meeting. Each member and director shall be responsible to provide advance written notice to the cooperative of any address change.

Motion to approve the changes made to Sections 1-3 made by Hall, seconded and carried by voice vote.

Section 4. Quorum No changes made Section 5. Voting Each energy member shall be entitled to one (1) vote and no more upon each matter submitted to a vote at a meeting of the members. At all meetings of the energy members at which a quorum is present, all questions shall be decided by a vote of a majority of the energy members voting thereon in person or by absentee ballot, provided that the proposition submitted is exactly the same as the measure voted on at the meeting, except as otherwise provided by law, the articles of incorporation of the cooperative, or these bylaws. If a married couple hold a joint energy membership, they shall jointly be entitled to one (1) vote and no more upon each matter submitted to a vote at a meeting of the energy members. Issues submitted to the energy membership for vote will be objectively stated and as free from bias as possible.

Motion to approve the changes made to Section 5 made by Myhr, seconded and approved by voice vote.

Section 6. Voting by Absentee Ballot Any energy member who is absent from any annual or special meeting of the energy members may vote electronically or by written absentee ballot upon any motion or resolution to be acted upon at any such meeting, except that motions regarding procedural matters involving the conduct of the meeting, such as approval of the minutes, may be made from the floor, and shall be acted upon solely by the energy members in attendance at the meeting. The secretary shall enclose with the notice of such meeting an exact copy of all motions or resolutions. In the event of an election of directors, the notice shall include a list of all candidates by position according to Article III, Section 3 of the bylaws that have been predetermined to be acted upon. Such absentee energy member shall express his or her vote thereon by either voting electronically following the written

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instructions provided by the cooperative, or by writing “Yes” or “No” on each such motion or resolution in the space provided therefore, and enclose each such ballot so marked in a sealed envelope marked “Ballot” and then place said envelope in another envelope addressed to the Orcas Power & Light Cooperative at Eastsound, Washington, and print or type his or her name and affix a signature to the outside thereof, and cause the same to be delivered by mail, electronically or otherwise to the Orcas Power & Light Cooperative at Eastsound, Washington by such time as may be fixed by the Board of Directors, but in no event later than the day before the annual or special meeting. When such written absentee ballot is enclosed and received from any absent energy member, it shall be accepted and counted as a vote of such absent energy member at the meeting. If a married couple hold a joint membership and are absent from any annual or special meeting of the members, they shall jointly be entitled to vote by absentee ballot, whether provided in the mail or electronically by the cooperative, as provided in this section. The failure of any such absentee energy member to receive a copy by mail or electronically, of any such motion or resolution or ballot shall not invalidate any action which may be taken by the members at any such meeting. The board may adopt voting procedures to facilitate electronic voting. In the event electronic voting procedures are adopted, the board shall provide advance notice of those procedures in the manner provided for in this Article II, and as provided by law.

Motion to approve changes made to Section 6 made by Myhr, seconded and approved by voice vote.

Section 7. Order of Business The order of business at the annual meeting of the energy members, and, so far as possible, at all other meetings of the energy members, shall be essentially as follows: 1. Call of the roll; 2. Reading of the notice of the meeting and proof of the due publication or mailing thereof, or the waiver or waivers of notice of the meeting, as the case may be; 3. Reading of unapproved minutes of previous meetings of the energy members and the taking of necessary action thereon; 4. Presentation and consideration of, and acting upon, reports of officers, directors and committees; 5. Election of directors; 6. Unfinished business; 7. New business. Any new business raised at the annual or special meeting may be continued until the next member meeting set according to these bylaws; 8. Adjournments.

Motion to approve changes to Section 7 made by Myhr, seconded and approved by voice vote.

Section 8. Robert’s Rules of Order No Changes Made Article III - Directors Section 1. General Powers No changes made Section 2. Qualifications and Tenure No changes made Section 3. Nominations and Election of Directors a) Nominations: It shall be the duty of the Board of Directors to appoint, not less than one hundred (100) calendar days before the date of a meeting of the energy members at which directors are to be elected, a committee on nominations consisting of not less than three (3) nor more than five (5) energy members from each of the voting districts for which a director is to be elected. No officer or member of the Board of Directors shall be appointed a member of such committee. The committee shall prepare and post in the lobby at the principal office of the cooperative at least sixty (60) calendar days before the meeting a list of its nominations for directors. Any fifteen (15) or more members may make other nominations from their particular district by petition with their signatures, filed with the board of directors at the principal office of the cooperative at Eastsound, Washington, not less than fifty-five (55) calendar days prior to the meeting. The secretary shall cause the same to be posted at the place where a list of nominations made by the committee is posted, including electronic postings on the cooperative’s website. The secretary shall publish a legal notice in the local newspaper(s) which carries legal notices, said notice to announce names of director candidates. The notice must be submitted to the newspaper(s) within three working days of

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the posting of nominations. The cooperative, in the alternative, may post the list of director candidates on its website in order to provide the notice required in this section. The committee, if possible, should nominate at least two (2) candidates for each open position, one of whom shall be an incumbent director, unless such director does not wish to be considered for reelection. The secretary shall mail with the notice of the meeting a statement of the number of directors to be elected from each district and showing separately the nominations made by petition, if any, or in the alternative, the cooperative shall provide such notice electronically.

Motion to accept changes to Article III Section 3 (a) made by Myhr, seconded and approved by voice vote.

b) Election of Directors. Not less than ten (10) nor more than thirty-five (35) days before an annual or special meeting of the energy members at which directors are to be elected, the secretary of the cooperative shall mail to each energy member a printed ballot marked “Ballot for Directors” containing the names of all nominees for the respective districts to be arranged alphabetically, together with a notice of said meeting, containing appropriate information and instructions relative to voting by absentee ballot or at the meeting. The ballot shall indicate thereon the number of directors to be elected from each district and shall also show separately nominations made by the nominating committee and the nominations made by petition. In the alternative, the cooperative may provide ballots to each energy member electronically. Each energy member of the cooperative present at the meeting shall be entitled to cast a vote for the election of directors unless voting previously had been completed by an absentee ballot. Absentee voting shall be conducted by the procedures established in Article II, Section 6.

Each energy member is entitled to vote for each position for which a director is to be elected, and the candidate receiving the most votes in each position is deemed to be elected; provided, where two directors are to be elected for a particular district, the two persons receiving the greatest number of votes shall be deemed elected.

Motion to accept changes to Article III Section 3 (b) made by Myhr, seconded and approved by voice vote.

Section 4. Vacancies A vacancy occurring in the Board of Directors shall be filled by the election of an energy member resident of the same district as the director whose office is vacated, by a majority vote of the remaining directors, and a director thus elected shall serve for the unexpired portion of the term or until his or her successor shall have been elected and shall have qualified. Section 5. Compensation Directors shall not receive any salary for their services, but by resolution of the Board of Directors, a fixed sum and expenses of attendance, if any, may be allowed for serving as a director at meetings on behalf of the cooperative. Close relatives of a director shall not receive compensation for serving the cooperative, unless such compensation shall be specifically authorized by a vote of the members.

Motion to accept changes to Article III Sections 4 and 5 made by Myhr, seconded and approved by voice vote.

Section 6. Rules and Regulations No Changes Made Section 7. Accounting System and Reports No Changes Made Section 8. Changes in Rates No Changes Made Section 9. Absences of Directors No Changes Made Article IV – Meetings of Directors Section 1. Regular Meetings No Changes Made Section 2. Special Meetings No Changes Made Section 3. Notice. Notice of the date, time, and location of any special meeting of the Board of Directors shall be given at least five (5) days previous thereto, by written or electronic notice, delivered to each director. If mailed, such notice shall be deemed to be delivered

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when deposited in the United States mail, addressed to the director at his or her address as it appears on the records of the cooperative, with postage thereon prepaid. If sent by electronic transmission, the notice is deemed to be delivered when sent, addressed to the director at his or her electronic transmission address as it appears on the records of the cooperative. In the alternative any special meeting of the Board of Directors can be posted on the cooperative’s website, and electronic email notice shall also be provided. The attendance of a director at any meeting shall constitute a waiver of notice of such meeting, except in case a director shall attend a meeting for the express purpose of objecting to the transaction of any business because the meeting shall not have been lawfully called or convened.

Motion to accept changes made to Article IV Section 3 made by Myhr, seconded and approved by voice vote.

Section 4. Quorum No Changes Made Section 5. Manner of Acting No Changes Made Section 6. Actions by Written Consent and Telephone or Other Electronic Means Any corporate action required or permitted by the articles of incorporation, bylaws, or the laws under which this cooperative is formed, to be voted upon or approved at a duly called meeting of the directors or of a committee of directors, may be accomplished without a meeting if unanimous written consents of the respective directors, setting forth the actions so taken, shall be signed, either before or after the action taken, by all the directors or committee members, as the case may be. Action taken by unanimous written consent is effective when the last director or committee member signs the consent, unless the consent specifies a later effective date. Further, any director may participate in any meeting by telephone, or other electronic means of communication by which all directors participating in the meeting may simultaneously hear each other during the meeting with the consent of all the directors personally present at the meeting. Any director participating by telephone or other electronic means shall be counted for purposes of the quorum.

Motion made to approve the changes to Article IV Section 6 made by Myhr, seconded and approved by voice vote.

Article V – Officers No Changes Made Article VI – Books and Records No Changes Made Article VII – Contracts, Checks and Deposits – No Changes Made Article VIII – Nonprofit Operation Section 1. Interest or Dividends on Capital Prohibited No Changes Made Section 2. Members’ Patronage Capital in Connection with Furnishing Electric Energy No Changes Made Section 3. Binding Effect of Articles of Incorporation, Bylaws, Tariffs and Rules of the Cooperative All members of the cooperative, by dealing with the cooperative, acknowledge that the terms and provisions of the articles of incorporation, bylaws, tariffs and rules of the cooperative and any future amendments thereof, shall constitute and be a contract between the cooperative and each member, and both the cooperative and such members are bound by such contract, as fully as though each member had individually signed a separate instrument containing such terms and provisions. The provisions of this article of the bylaws shall be called to the attention of each member of the cooperative by posting in a conspicuous place in the cooperative’s office. As a condition of membership, each member also agrees to respect and give legal effect to any utility easements for any services offered by the cooperative and/or its communications subsidiary, and grant any necessary access and easements as necessary to furnish all services offered by the cooperative and/or its communications subsidiary. Section 4. Patronage Refunds in Connection with Furnishing Other Services All other amounts received by the cooperative from its operations in excess of costs and expenses shall, insofar as permitted by law, be (a) used to offset any losses incurred during the current or any prior fiscal year and (b) to the extent not needed for that purpose, in the Board’s discretion either retained by the cooperative, or allocated to the members on a patronage

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basis, and any amount so allocated shall be included as a part of the capital credited to the accounts of members, as herein provided. Income received from any subsidiary corporation shall not be allocated or assigned to patrons or members prior to dissolution of the cooperative, unless so determined by the Board of Directors.

Motion to accept changes to Article VIII Sections 3 and 4 made by Myhr, seconded and approved by voice vote.

No other changes were made to the bylaws at this time. RUS 219s

Motion to approve submission of RUS Form 219s that include projects completed in October from the Construction Work Plan totaling $630,014.66 made by Myhr and seconded. Motion was seconded and carried by voice vote.

2015 Budget Hildreth reviewed the 2015 budget, noting that it is a challenging budget year with shifting to a new rate structure and make corrections required to stabilize the revenue stream. The budget increases from $22M to $24.7M to meet financial and operational commitments. Revenue is expected to increase by 12%. Key points were: 2014 revenue is down about $1.4M due to warmer than projected temperatures. The old rate structure placed too much fixed cost expense on energy (kWh) charges. The new rate structure begins to correct this vulnerability by placing more of the fixed costs in the facilities charge, which is phased in over time. The 2015 rate increase includes some catch-up for the 2014 shortfall and anticipates a continuing trend of warmer temperatures.

Due to redistribution of costs and member classes in the new rate structure, 2015 revenue adjustment is up 12%; however, actual impacts on member bills are less.

Submarine cable replacement is a major upcoming expense ($15M in 2015-17) and is driving the need to build equity and cash through rates to manage the debt necessary to complete the project. This trend will continue with three additional submarine cable replacements planned over the next 20 years.

Energy efficiency, conservation and local distributed power continue to be high priorities. However, to meet revenue requirements, the new rate structure and foreseeable rate increases will be limited to the facilities charge and cap conservation and efficiency savings at a $0.08/kWh rate level for the next five years. Our Energy Savings Department, in concert with BPA and the San Juan Islands Conservation District, will continue to fund, promote and reward energy efficiency, conservation and distributed power outside of the rate structure. In addition, OPALCO and community leadership must work together to discover new ways to reward those who help balance financial stability with energy efficiency, conservation and distributed generation goals.

The rate increases proposed for 2015 are independent of the creation of our new Internet services entity. The start-up cost is $7.5M over the next three years. The impact of this debt service on our membership is $3/member/month for 24 months. Expenses for this new entity are not included in the new rate structure. The new company is expected to break even and start generating a positive cash flow in 2017. Starting in year 2020, this revenue stream may be used to help the Co-op offset future volatility in electric revenue (i.e. due to weather) and assist with upcoming capital expenses post 2020.

OPALCO provides utility services in the most challenging service territory in the nation: serving 20 islands with 26 submarine cables, eleven substations, three line crews and two administrative offices.

OPERATING REVENUES (12% increase) Residential 17,885,711 Commercial 6,351,244 Other Non-Operating 460,186

Total Operating Revenue $24,697,141 OPERATING EXPENSES Cost of purchased power 8,452,880 Transmission 95,459

Distribution- Operations 3,462,037 Distribution - Maintenance 1,862,557 Consumer Accounts 1,000,006

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General and Administration Administration G&A 3,060,993 Energy Services G&A 743,548

Total general and administration 3,804,540

Depreciation and amortization 3,166,399 Taxes 1,038,446

Total Operating Expenses 22,882,324 Operating margins before fixed charges 1,814,817 FIXED CHARGES Interest on long-term debt 1,003,025 Total fixed charges 1,003,025 Operating margins after fixed charges 811,792 PATRONAGE CAPITAL CREDITS 56,472 Net operating margins 868,265 NON-OPERATING MARGINS Interest Income 208,165 Other income 21,933 Fiber Optics Division -- Net non-operating margins 230,098 NET MARGINS 1,098,363 OPALCO TIER 2.10 OPALCO Equity % of Total Cap 52.7% NewCo NON-OPERATING MARGINS NewCo Revenue 1,171,650 NewCo Expenses 2,420,250 Net non-operating margin (1,248,600) NewCo TIER (6.18) Consolidated Equity: OPALCO+NewCo (not reported in official financial statements) 50.1%

Motion made by Adams to approve the 2015 budget as presented. Motion was seconded and carried by voice vote.

Tariff Revisions Tariffs and Deposits and Charges were proposed to reflect the newly designed rate structure. This was the first reading of the tariff revisions; the final revisions will be presented at the January board meeting to go into effect with the February billing cycle. These tariff revisions strive to reduce revenue volatility to better position OPALCO to meet its financial and service level commitments to the membership. BPA Energy Efficiency Incentives OPALCO issued 2,784 rebates to members totaling $411,019 with an associated kWh savings of 1,558,346 during the period October 1, 2013 through November 30, 2014. 2015 Committee on Nominations The Board will appoint a committee following the newly revised bylaws, which stipulate that the committee must be named no later than 100 days prior to the annual meeting (January 22, 2015). Reports The Cash Recap shows an ending balance of $4,260,111 as of September 30, 2014. The Outage chart was reviewed. The Safety report indicated no accidents, incidents or near misses for November. The General Manager’s report was reviewed.

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Gerry Lawlor presented an IN Update and indicated levels of activity, mostly from homeowner associations. LTE testing continues with LTE devices being placed in homes close to the Eastsound OPALCO LTE pole. Hildreth encouraged the Board to read through the IN survey that was done at the San Juan County Fair and to review the web analytics provided by PixelSpoke. Adjournment The meeting adjourned at 2:20 p.m. ___________________________________ ______________________________ Jim Lett, President Jerry Whitfield, Secretary-Treasurer

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New Members December 2014

Blakely 1. Warden, Leonard & Stephanie

Lopez

2. Ashbaugh Island LLC 3. Dickison, Mark 4. Matela, Nancy 5. McLeod, E. J. 6. Nelson, Christina Leigh & Fife, Eric Mitchell 7. Reece, Ben

Orcas

8. Blankenship, James 9. Dolezal, Uva Beatrice & Antilla, Tod C 10. Ghiz-Sunn, Dylan T 11. Greenawalt, Philip S 12. Kitts, Rick 13. Kurth, Russell 14. Lemke, Ben & Long, Tom 15. Leppala, Mike 16. Martz, Daniel 17. Morris, Ryan 18. Robertson, Nora 19. Rodriguez, Elizabeth & Robert 20. Smith, Patrick O 21. Underwood, Eric & Miller, Douglas

San Juan

22. Altman, Jeff 23. Butler, Steve & Doug 24. Colleen Kenimond Atty at Law 25. Corbin, Doris 26. Diemoz, Bonita 27. Dues, Betsy 28. Gerrish, Steve & Therese 29. Graham, Erin C 30. Halverson, Helen K 31. Hansen, Kraig & Cindy 32. Hart, Sarah 33. Hendrick, Glenn 34. Kochel, Karl M & Kristin L 35. Marler, Stephanie 36. Nelson, Tamara 37. Reff, Alan 38. Schirmer, Douglas 39. SJ Essentials 40. Smith, Stacey 41. Thompson, Mark A

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CAPITAL CREDITS

Application has been received for payment of capital credits to the estates of the following deceased members:

Helen J. Arnold ....................................... $3,436.52 Ethel M. Baldwin ....................................... $628.47 Francis A. Esposito ................................... $819.24 Betty S. Gilson ....................................... $1,092.04 Lucile T. Henderson ............................... $1,221.08 Jean F. Kissner ........................................... $91.54 William Lowell ........................................... $809.27 Edith B. Martel ........................................ $1,338.94 Alice Ostendorff ......................................... $405.94 Dorothy V. Stuckey ................................... $316.84

Total .......................................................... $10,159.88

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MEMORANDUM January 16, 2015 TO: Board of Directors FROM: Foster Hildreth RE: Rates and Tariffs In an effort to confirm the effectiveness of the rate design proposed in December, staff revisited sales projections to align them with actual 2014 kWh sales. The resulting calculations predicted a 10.4% increase in revenue for 2015. To reach the targeted revenue increase of 12% (approved in the 2015 budget), kWh charges were adjusted for Residential, Pumps, Small Commercial, and Large Commercial tariffs. Attached is an updated proposed tariff schedule as well as a memo from EES with supporting data.

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2015 Budget Rate Detail: Revised with updated weather forecast and EES/Test Data Confirmation 1‐15‐15

Revenue Increase:

12% Increase 6% Increase 6% Increase 6% Increase 6% Increase 2014

Existing 2015 Budget 2016 Projected 2017 Projected 2018 Projected * 2019 Projected *

Residential Facility Rate ($/Service/Month) Demand Rate ($/Service/Month) Energy Rates ($/kWh) Block 1 (<5,000 kWh)

Block 2 (>5,000 kWh) Summer Block 1 (<1,500 kWh) Summer Block 2 (1,500 to 3,000 kWh) Summer Block 3 (>3000 kWh) Winter Block 1 (<3,000 kWh) Winter Block 2 (3,000 to 5,000 kWh) Winter Block 3 (>5,000 kWh)

28.60 $0.0852$0.1006

$38.90 0.00 $0.0850 $0.0855$0.0950 $0.0970 $0.1150 $0.0850 $0.0855$0.0950 $0.0970$0.1150

$48.20 1.00 $0.0813 $0.0850 $0.1036 $0.1050 $0.1150 $0813 $0.0850 $0.1036 $0.1050 $0.1150

$58.10 3.00

$0.0780 $0.0820$0.1085 $0.1100$0.1150 $0.0780 $0.0820$0.1100 $0.1085 $0.1150

$66.00 3.00

$0.0780 $0.0820$0.1085 $0.1100$0.1150 $0.0780 $0.0820$0.1100 $0.1085 $0.1150

$74.70 3.00

$0.0780 $0.0820 $0.1085 $0.1100 $0.1150 $0.0780 $0.0820 $0.1100 $0.1085 $0.1150

Residential TOU Facility Rate ($/Service/Month) Demand Rate ($/Service/Month) Energy Rates ($/kWh)

TOU Period 1 (6 am – Noon) TOU Period 2 (Noon – 10* pm) To be phased in over 3 years TOU Period 3 (10* pm – 6 am)

$32.20 $0.1294$0.0590

$0.0507

$43.80 $0.1450 $0.0900 Noon – 8 pm $0.0400

$54.20 $0.50

$0.1450 $0.0900 Noon – 9 pm $0.0400

$65.40 $1.00

$0.1450 $0.0900 Noon – 10 pm $0.0400

$74.30 $1.00

$0.1450 $0.0900 Noon – 10 pm $0.0400

$84.10 $1.00

$0.1450 $0.0900 Noon – 10 pm $0.0400

Small Commercial (<20 kW) Facility Rate ($/Service/Month) Energy Rates ($/kWh) Block 1 (<5,000 kWh) Block 2 (>5,000 kWh) Demand Rate ($/Service/Month) First 20 kW (Flat Rate)

Over 20 kW

$40.40 $0.0866$0.0781

$0.00 $3.15

$54.90 $0.0861 $0.0870$0.0861 $0.0970

$5.00

$67.90 $0.0861 $0.0870 $0.0944 $0.0980

$5.30

$81.90 $0.0861 $0.0870$0.1059 $0.1060

$6.00

$93.00 $0.0861 $0.0870$0.1059 $0.1060

$6.00

$105.20 $0.0861 $0.0870 $0.1059 $0.1060

$6.00

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2015 Budget Rate Detail (continued): Revised with updated weather forecast and EES/Test Data Confirmation 1‐15‐15

Revenue Increase:

12% Increase 6% Increase 6% Increase 6% Increase 6% Increase

2014 Existing 2015 Budget 2016 Projected 2017 Projected 2018 Projected * 2019 Projected *

Large Commercial (>20kW) Facility Rate ($/Service/Month) Energy Rates ($/kWh)

Block 1 (<5,000 kWh) Block 2 (5,000 – 150,000 kWh) Block 3 (>150,000 kWh)

Demand Rates ($/kW) First 20 kW Over 20 kW Block 1 (<300 kW) Block 2 (>300 kW)

$40.40 $0.0866 $0.0781

$0.00 $3.15

$54.90 $0.0775 $0.0790$0.0775 $0.0873$0.1162

$3.15 $4.73

$67.90 $0.0777 $0.0795 $0.0777 $0.0880 $0.1166

$3.15 $3.90 $4.75 $5.48

$81.90 $0.0782 $0.0800$0.0782 $0.0885$0.1173

$3.15 $4.65 $4.73 $6.23

$93.00 $0.0782 $0.0800$0.0782 $0.0885$0.1173

$3.15 $5.40 $4.73 $6.89

$105.20 $0.0782 $0.0800 $0.0782 $0.0885 $0.1173

$3.15 $6.15 $4.73 $7.73

Pumps Facility Rate ($/Service/Month) Energy Rates ($/kWh)

0-370 kWh 371-5,000 kWh Over 5,000 kWh

Demand Rate ($/Service/Month) First 20 kW (Flat Rate) Over 20 kW

$25.30 $0.0978 $0.0752 $0.0900

$0.00 $3.15

$34.40 $0.0923 $0.0802 $0.0878 $0.0900

$0.00 $3.15

$42.60 $0.0813 $0.0813 $0.0830

$1.00 $3.15

$51.40 $0.0771 $0.0771 $0.0771

$2.50 $3.15

$58.40 $0.0771 $0.0771 $0.0771

$2.50 $3.15

$66.10 $0.0771 $0.0771 $0.0771

$2.50 $3.15

Note: * Same Rate Structure as 2017; requires new Cost of Service Study

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DEPOSITS AND CHARGES

NEW MEMBERS:

MEMBERSHIP FEE (refundable) ........................................................................... $5.00 DEPOSITS (refundable):

Residential / Residential TOU ................................................................. $200.00

Commercial (Small and Large) .............. ................................. TBD by OPALCO* * Surety bond required in amount equal to deposit

NEW OR TRANSFER SERVICE .............................................................................. $20.00

NSF CHECK CHARGE ............................................................................................. $25.00

LATE PAYMENT CHARGE ............................................................. 5% of the current charges

DISCONNECT/RECONNECT FEES Disconnect Notice .................................................................................................. $5.00

Reconnect (After Disconnect for Non-Payment) Prior to disconnection of meter ................................................................... $25.00

After disconnection of meter During OPALCO business hours ........................................................ $50.00 Outside of OPALCO business hours ................................................. $100.00

Seasonal Reconnect During OPALCO business hours ....................................................... $200.00 Outside OPALCO business hours ..................................................... $350.00

MEMBER CAUSED OUTAGE ................................................................. TBD by OPALCO

METER SEAL BREAKAGE ..................................................................................... $75.00

METER TEST FEE (at member’s request) Performed by OPALCO .................................................................................... $50.00**

Performed by other qualified person .......................................................... Actual Cost**

** OPALCO will refund cost of meter testing if proved in error by more than two percent (2%)

ORCAS POWER AND LIGHT COOPERATIVE TARIFF

SIXTH REVISION – REPLACING FIFTH REVISION

__________________________________Effective Date: February 2015 Billing Period Foster Hildreth, General Manager

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Gm 1234gm

AVAILABILITY Available to all non-residential members using more than 20 kW, subject to the General Provisions hereunder. TYPE OF SERVICE Single-phase or three phase, 60 cycles, at available secondary voltage, equipment subject to automatic load management controls. APPLICATION General Service for heating, lighting, etc., for marinas for commercial use, and non-residential members. FACILITY CHARGE $54.90 ENERGY CHARGE Block 1 (<5,000 kWh) @ $0.0790 per kWh

Block 2 (>5,000 kWh) @ $0.0873 per kWh Block 3 (>150,000 kWh) @ $0.1162 per kWh

DEMAND CHARGE Block 1 (<300 kW) $3.15 per kW

Block 2 (>300 kW) $4.73 per kW MINIMUM MONTHLY CHARGE The minimum monthly charge, under the above rate, shall be $54.90 per month or prorated if service is provided for less than a full month. DETERMINATION OF BILLING DEMAND The billing demand shall be the maximum kilowatt demand established by the member for any period of fifteen (15) consecutive minutes during the month for which the bill is rendered as indicated or recorded by a demand meter and adjusted for power factor as provided below. POWER FACTOR ADJUSTMENT Demand charges may be adjusted to correct for average power factors lower than 95%. Such adjustments will be made by increasing the measured demand 1% for each 1% by which the average power factor is less than 95% lagging.

ORCAS POWER AND LIGHT COOPERATIVE TARIFF LCS –15

LARGE COMMERCIAL SERVICE EIGHTEENTH REVISION – REPLACING SEVENTEENTH REVISION

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Orcas Power & Light Cooperative Tariff LCS – 15 Large Commercial Service Page 2 of 2

WHOLESALE POWER COST ADJUSTMENT A surcharge or credit may be applied to each billing for service under this tariff to reflect increases or decreases in the wholesale cost of power based on the rates charged by the Bonneville Power Administration.

GENERAL PROVISIONS 1. Member agrees to allow the cooperative, at its discretion, to install automatic load

management controls. 2. Except for bed and breakfast establishments, service under this rate shall not be

provided to locations with occupied residential facilities unless such facilities are insignificant with respect to the business operations at the location.

3. Bed and breakfast establishments will be served under this rate tariff if the owner or manager does not live in a building served by this meter.

4. The rated capacity of any motor served under this tariff shall be as follows:

- Motors up to 2 HP can operate at 115 volts.

- Motors larger than 2 HP (single phase) are subject to requirements in Member Service Policy 3-Technical Provisions.

5. No single resistive 3-phase loads (examples: ovens, heaters, kilns) of over 45kW shall come on line simultaneously.

6. Non-resistive loads such as arc welders, fluorescent or mercury lamps, and induction heating furnaces are causes of harmonic distortion and may require corrective measures.

7. See Member Service Policy 3-Technical Provisions for additional requirements.

_________________________________Effective Date February 2015 Billing Period

Foster Hildreth, General Manager

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AVAILABILITY Available for individual residential, marina, and general service accounts where the primary and transformer only serve one member and the removal of the equipment will not affect the service to other members, and/or no service has been taken for a period of twelve (12) months. TYPE OF SERVICE Single-phase, 7200 GrdY primary or 120/240 secondary voltage. APPLICATION Payment of the line retention rate will ensure that the facilities remain in place for future use. FACILITY CHARGE $21.20 ENERGY CHARGE No energy may be used under this rate. MINIMUM MONTHLY CHARGE The monthly charge, under the above rate, shall be $21.20 per month or prorated if service is provided for less than a full month. GENERAL PROVISIONS FOR MEMBERS ON LINE RETENTION 1. The above rate is not available where energy is being used or where a meter is

installed.

2. OPALCO normally retires and/or removes facilities that have not been used for twelve (12) months. Payment of the line retention rate will ensure that the facilities remain in place for future use. If OPALCO removes any equipment and the member wants it reinstalled, the member shall be required to apply for a new service or line extension in accordance with the current member service policy.

3. Members who have discontinued service for a period of twelve (12) months or have made a formal request for service and have not connected to the system after a period of twelve (12) months are subject to the line retention rate, provided that OPALCO has determined that the facilities are causing ongoing expenses, such as line losses or line maintenance to the system.

ORCAS POWER AND LIGHT COOPERATIVE TARIFF LR – 15

SIXTEENTH REVISION – REPLACING FIFTEENTH REVISION

____________________________________ Effective Date: February 2015 Billing Period Foster Hildreth, General Manager

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AVAILABILITY Available to all members, subject to the General Provisions hereunder. TYPE OF SERVICE Single-phase, 60 cycles, at available secondary voltage, equipment subject to automatic load management controls. APPLICATION Service for pumping water for domestic use and/or irrigation. FACILITY CHARGE $34.40 ENERGY CHARGE 0-370 kWh @ $.0923 per kWh 371-5,000 kWh @ $.0802 per kWh Over 5,000 kWh @ $.0900 per kWh DEMAND CHARGE First 20 kW @ $0.00 Over 20 kW @ 3.15 per kW MINIMUM MONTHLY CHARGE The minimum monthly charge, under the above rate, shall be $34.40 per month or prorated if service is provided for less than a full month. WHOLESALE POWER COST ADJUSTMENT A surcharge or credit may be applied to each billing for service under this tariff to reflect increases or decreases in the wholesale cost of power based on the rates charged by the Bonneville Power Administration. GENERAL PROVISIONS 1. All pumps served under this tariff shall be metered separately.



- Motors larger than 2 HP shall operate at 230 volts and are subject to requirements in Member Service Policy 3-Technical Provisions.


_________________________________ Effective Date: February 2015 Billing Period Foster Hildreth, General Manager

ORCAS POWER AND LIGHT COOPERATIVE TARIFF P- 15

PUMP SERVICE EIGHTEENTH REVISION – REPLACING SEVENTEENTH REVISION

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AVAILABILITY New service under this tariff is not available after March 1, 1998. Those members receiving service under this tariff prior to March 1, 1998 may continue to do so. TYPE OF SERVICE OPALCO will own, maintain and operate suitable fixtures on brackets, with refractors and controls, and supply energy for sodium vapor lamps at locations agreed upon with the member, the service distance not to exceed 150 feet/2 wire, or 300 feet/3 wire. APPLICATION Non-metered or metered street, yard or security lighting service. BILLING CHARGE * $2.31 per month FIXTURE CHARGE $9.88 per month ENERGY CHARGE ** 100 Watts $3.97 per month 200 Watts $8.07 per month

* Applies only when not included on a bill for other energy usage. ** Applies only when energy is not metered.

WHOLESALE POWER COST ADJUSTMENT A surcharge or credit may be applied to each billing for service under this tariff to reflect increases or decreases in the wholesale cost of power based on the rates charged by Bonneville Power Administration. GENERAL PROVISIONS 1. All lamp replacements and other maintenance will be provided by OPALCO, except

that lamps and fixtures broken by vandalism will be charged to the member.

2. The member shall notify OPALCO if a lamp does not operate. OPALCO agrees to repair lamps as soon as possible, but, in any event, within five (5) working days.

3. A timing device and/or photo electric cell may be installed by OPALCO in order to limit the time interval that the lamp is turned on each night.

4. During the periods of energy shortage, lamps may be disconnected by request of either the cooperative or member, with no charge to member. The member will not be charged for the period the light has been disconnected.

ORCAS POWER AND LIGHT COOPERATIVE TARIFF POL - 15

PRIVATE OUTDOOR LIGHTING EIGHTEENTH REVISION – REPLACING SEVENTEENTH REVISION

___________________________________Effective Date: February 2015 Billing Period Foster Hildreth, General Manager

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AVAILABILITY Available to all small farm and home members, subject to the General Provisions hereunder. TYPE OF SERVICE Single-phase, 60 cycles, at available secondary voltage, equipment subject to automatic load management controls. APPLICATION Service for home and farm uses, such as cooking, lighting, heating, private docks not used for commercial purposes, etc. Residences qualifying as “cottage industries” by San Juan County shall be served under this tariff. FACILITY CHARGE $38.90 DEMAND CHARGE To be introduced in 2016

ENERGY CHARGE Summer Block 1 (<1,500 kWh) $.0855 per kWh

Summer Block 2 (1,501 – 3,500 kWh) $.0970 per kWh

Summer Block 3 (> 3,500 kWh) $.1150 per kWh

Winter Block 1 (<3,000 kWh) $.0855 per kWh

Winter Block 2 (3,001 – 5,000 kWh) $.0970 per kWh

Winter Block 3 (>5,000 kWh) $.1150 per kWh MINIMUM MONTHLY CHARGE The minimum monthly charge, under the above rate, shall be $38.90 per month or prorated if service is provided for less than a full month. WHOLESALE POWER COST ADJUSTMENT A surcharge or credit may be applied to each billing for service under this tariff to reflect increases or decreases in the wholesale cost of power based on the rates charged by the Bonneville Power Administration. GENERAL PROVISIONS 1. Member agrees to allow the cooperative, at its discretion, to install automatic load

management controls.




ORCAS POWER AND LIGHT COOPERATIVE TARIFF R - 15

RESIDENTIAL SERVICE SEVENTEENTH REVISION – REPLACING SIXTEENTH REVISION

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OPALCO Tariff R-15 Residential Service Page 2 of 2 3. No single resistive loads (examples: ovens, heaters, kilns) over 15 kW shall come on line

simultaneously.


5. See Member Service Policy 3 Technical Provisions for additional requirements.

6. Bed and breakfast establishments will be served under this rate if the owner or manager lives in a building served by this meter.

7. Summer Block is defined as May billing cycle through September billing cycle; Winter Block is defined as October billing cycle through April billing cycle.

__________________________________________ Effective Date: February 2015 Billing Period Foster Hildreth, General Manager

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Gm 1234gm

AVAILABILITY Available to all non-residential members using less than 20 kW, subject to the General Provisions hereunder. TYPE OF SERVICE Single-phase or three phase, 60 cycles, at available secondary voltage, equipment subject to automatic load management controls. APPLICATION General Service for heating, lighting, etc., for marinas for commercial use, and non-residential members. FACILITY CHARGE $54.90 ENERGY CHARGE Block 1 (< 5,000 kWh) @ $.0870 per kWh

Block 2 (> 5,000 kWh @ $.0970 per kWh DEMAND CHARGE $5 per month MINIMUM MONTHLY CHARGE The minimum monthly charge, under the above rate, shall be $54.90 per month or prorated if service is provided for less than a full month. DETERMINATION OF BILLING DEMAND The billing demand shall be the maximum kilowatt demand established by the member for any period of fifteen (15) consecutive minutes during the month for which the bill is rendered as indicated or recorded by a demand meter and adjusted for power factor as provided below. POWER FACTOR ADJUSTMENT Demand charges may be adjusted to correct for average power factors lower than 95%. Such adjustments will be made by increasing the measured demand 1% for each 1% by which the average power factor is less than 95% lagging. WHOLESALE POWER COST ADJUSTMENT A surcharge or credit may be applied to each billing for service under this tariff to reflect increases or decreases in the wholesale cost of power based on the rates charged by the Bonneville Power Administration.

GENERAL PROVISIONS 1. Member agrees to allow the cooperative, at its discretion, to install automatic load

management controls.

ORCAS POWER AND LIGHT COOPERATIVE TARIFF SCS – 15

SMALL COMMERCIAL SERVICE EIGHTEENTH REVISION – REPLACING SEVENTEENTH REVISION

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Orcas Power & Light Cooperative Tariff SCS-15 Small Commercial Service Page 2 of 2

2. Except for bed and breakfast establishments, service under this rate shall not be provided to

locations with occupied residential facilities unless such facilities are insignificant with respect to the business operations at the location.

3. Bed and breakfast establishments will be served under this rate tariff if the owner or manager does not live in a building served by this meter.



- Motors larger than 2 HP (single phase) are subject to requirements in Member Service Policy 3-Technical Provisions.

5. No single resistive 3-phase loads (examples: ovens, heaters, kilns) of over 45kW shall come on line simultaneously.



___________________________________ Effective Date February 2015 Billing Period Foster Hildreth, General Manager

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AVAILABILITY Available to all small farm and home members, subject to the General Provisions hereunder. TYPE OF SERVICE Single-phase, 60 cycles, at available secondary voltage. Equipment subject to automatic load management controls. APPLICATION Service for small farms, homes, pools, greenhouses and other non-essential loads. Limited to single phase loads. FACILITY CHARGE: $43.80 DEMAND RATE: To be introduced in 2016 ENERGY CHARGE:

TOU Period 1 (6 a.m. - noon) –$0.1450 per kWh TOU Period 2 (noon - 8 p.m.) –$0.0900 per kWh TOU Period 3 (8 p.m. - 6 a.m.)- $0.0400 per kWh

MINIMUM MONTHLY CHARGE The minimum monthly charge, under the above rate, shall be $43.80 per month or prorated if service is provided for less than a full month. WHOLESALE POWER COST ADJUSTMENT A surcharge or credit may be applied to each billing for service under this tariff to reflect increases or decreases in the wholesale cost of power based on the rates charged by the Bonneville Power Administration. GENERAL PROVISIONS

1. Member agrees to allow the cooperative, at its discretion, to install automatic load management controls.




3. No single resistive loads (examples: ovens, heaters, kilns) over 15 kW shall come on line simultaneously.

ORCAS POWER AND LIGHT COOPERATIVE TARIFF TOU- 15

RESIDENTIAL TIME OF USE RATE

(Formerly known as “ESR-08 Energy Saving Rate)

SIXTEENTH REVISION – REPLACING FIFTEENTH REVISION

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Orcas Power & Light Cooperative Tariff TOU-15 Time of Use Page 2 of 2


5. Loads served under this tariff shall not be capable of being switched to another meter served under a different tariff.

6. See Member Services Policy 3 Technical Provisions for additional requirements.

___________________________________ Effective Date: February 2015 Billing Period Foster Hildreth, General Manager

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MEMORANDUM

January 16, 2015

TO: Board of Directors

FROM: Foster Hildreth

RE: RUS Loan AP8 – Submarine Cable and Other Transmission Projects

This is a follow-up to the prior existing AM8 loan, whereby the transmission portion of the CWP was omitted from the loan due to environmental permitting delays. Included with this board packet are documents necessary for making application with RUS for a Guaranteed Federal Financing Bank loan (“AP8”). This loan will be used for transmission facilities in the amount of $17,100,000. Included are:

1) Resolution 1-2015 Requesting Guaranteed Federal Financing Bank (FFB) “AP8” Loan Application in the amount of $17,100,000

2) Resolution 2-2015 Updated, Abbreviated 2014-2024 Load Forecast 3) Updated, Amended Load Forecast for 2015-2024 4) Resolution 3-2015 Approval of Ten-Year Financial Forecast 5) Resolution 4-2015 Approving Amendment #5 to the 2013-2016

Construction Work Plan Staff recommends the Board make a motion to approve the submittal of the FFB loan AP8, corresponding board resolutions and loan submittal documentation.

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BOARD OF DIRECTORS

RESOLUTION 1-2015 REQUESTING GUARANTEED FEDERAL FINANCING BANK (FFB)

“AP8” LOAN APPLICATION WHEREAS, it has been determined on the basis of the current 2013-2016 Construction Work Plan that financing is needed for transmission facilities as shown on RUS Form 740c, Cost Estimates and Loan Budget for Electric Borrowers, as follows: RUS Guaranteed Federal Financing Bank (FFB) “AP8” Loan Application $ 17,100,000

NOW THEREFORE BE IT RESOLVED that Orcas Power & Light Cooperative makes application to the Rural Utilities Service pursuant to 7 CFR Part 1710 for total guaranteed FFB financing in the approximate total amount of $17,100,000 with loan terms to be used in accordance with the provisions of 7 CFR Part 1710 to finance the above mentioned facilities. BE IT ALSO RESOLVED that the RUS guaranteed “AP8” FFB note shall bear a maturity date to cover an approximate period of 30 years. BE IT ALSO RESOLVED that the Board of Directors of Orcas Power & Light Cooperative authorizes its officers to execute and attest all necessary papers, documents, and applications related to the foregoing.

BE IT FURTHER RESOLVED that the President, Vice President, Secretary-Treasurer, and General Manager are authorized on behalf of the Borrower (a) to execute and deliver from time to time advance requests, maturity extension election notices, prepayment election notices and refinancing election notices, in the form of such instruments attached to the note payable to FFB, and (b) to specify information and select options as provided in such instruments. BE IT FURTHER RESOLVED that Orcas Power & Light Cooperative hereby authorizes the RUS to release appropriate information and data relating to the application to the FFB and any existing supplemental lenders.

CERTIFICATION OF SECRETARY

I, Jerry Whitfield, Secretary of Orcas Power & Light Cooperative, do hereby certify that the above is a true and correct copy of a resolution adopted at the meeting of the Board of Directors of Orcas Power & Light Cooperative on January 22, 2015, at which a quorum was present and voted. SEAL

_______________________________________

Jerry Whitfield, Secretary

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BOARD OF DIRECTORS

RESOLUTION 2-2015

Updated, Abbreviated 2014-2024 Load Forecast

WHEREAS, Joel Mietzner, System Engineer of Orcas Power and Light Cooperative, has identified minor revisions to the 2014 - 2024 Electric Load Forecast, which was previously approved by the board on July 17, 2014, and by RUS on July 25, 2014; and WHEREAS, these revisions to the 2014-2024 Electric Load Forecast, are identified in the Updated, Abbreviated 2014-2024 Load Forecast, dated January 22, 2015, which is recommended for board acceptance at this time by Joel Mietzner, System Engineer; and

WHEREAS, the Board of Directors has reviewed the data for this Updated Load Forecast and finds that it meets the needs of Orcas Power and Light Cooperative for projection in a Ten-Year Financial Forecast in support of the “AP8” Loan Application. NOW THEREFORE BE IT RESOLVED that the Board of Directors of Orcas Power & Light Cooperative accepts and approves the Updated, Abbreviated 2014-2024 Load Forecast upon recommendation of the System Engineer at a regular meeting held on January 22, 2015 and directs the General Manager to submit this study for the review and acceptance by the Rural Utilities Service (RUS).

CERTIFICATION OF SECRETARY

I, Jerry Whitfield, Secretary of Orcas Power & Light Cooperative, do hereby certify that the above is a true and correct copy of a resolution adopted at the meeting of the Board of Directors of Orcas Power & Light Cooperative on January 22, 2015, at which a quorum was present and voted. SEAL

Jerry Whitfield, Secretary

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Orcas Power and Light Cooperative

Updated Electric Load Forecast

Amended Load Forecast for the Period 2015-2024

January 2015

By

OPALCO Engineering Department

Joel Mietzner P.E.

Washington State Registration # 42905

Exp. Date 03/16/2015

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Table of Contents

I. Introduction and Overview ..................................................................................................................... 4

A. System Description ..................................................................................................................... 4

B. New Member Account Forecast.................................................................................................. 6

C. Energy Consumption per Member .............................................................................................. 8

D. Total Energy Sales .................................................................................................................... 11

E. Total Energy Requirements ...................................................................................................... 13

F. Effects of Demand Side Management Programs ...................................................................... 16

G. Member Owned Generation Facilities ...................................................................................... 19

H. Effects of Electric Cars on Electrical system ............................................................................ 19

II. CONCLUSIONS ........................................................................................................................... 20

III. REFERENCES ............................................................................................................................. 21

IV. APPENDIX I ................................................................................................................................ 22

Figure I-I: Historical Commercial Energy Sales .............................................................................. 5

Figure I-II: Historical Residential Energy Sales .............................................................................. 6

Figure I-III: Historical New Services............................................................................................... 7

Figure I-IV: Monthly kWh Usage per Residential Account 2007-2014 .......................................... 8

Figure I-V: Average Energy per Residential Account 2007-2014 .................................................. 8

Figure I-VI: Monthly kWh Usage per Commercial Account 2007-20014 ...................................... 9

Figure I-VII: Average Usage per Commercial Account 2007-2014 ................................................ 9

Figure I-VIII: Heating Degree Days vs. Energy Purchased 2007- 2014 ....................................... 10

Figure I-IX: Monthly kWh Sales Trends ....................................................................................... 11

Figure I-X: Historical System Losses…………………………………………………………….13

Figure I-XI: Historical Monthly Peak (MW).………………………………………………….....15

Figure I-XII: Member Owned Generation sites…………………………………………………..17

Figure I-XIII: Energy Consumed by Renewable Interconnection vs. Average Member ............... 18

Figure I-XIV: Effect of EV Cars on Average Daily Energy Reg. ................................................. 19

Figure I-XV: Peak Daily EV Usage ............................................................................................... 19

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Table I-I: San Juan County Population Growth ............................................................................... 7

Table I-II: Heating Degree Days 2007 to Present .......................................................................... 10

Table I-III: Projected Energy Sales……………………………………………………………….12

Table I-IV Total Energy Requirements…………………………………………..…………....…14

Table I-V: Monthly Historical Demand Variance ...…………………………………….………..15

Table IV-I: Historical Number of Member Accounts and Energy Use per Account ………….....22

Table IV-II: Historical Energy Sales, OPALCO Use, Energy Requirements and Peak Demand . 23

Table IV-III: Forecast of Member Accounts and Energy Use per Account .................................. 24

Table IV-IV: Forecast Energy Sales, OPALCO Use, Energy Requirements and Peak Demand (kWh)

…………………………………………………………………………………………………….25

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I. Introduction and Overview

The Orcas Power and Light Cooperative (OPALCO) Electric’s 2015 updated Load Forecast amends

the 2014 Load Forecast submitted to RUS and provides a description of OPALCO’s overall system, an

estimate of the number of members, energy consumption per member, total energy sales, total energy

system requirements and peak demand, on an annual basis, for the period 2015 through 2023. This

forecast also looks at the effects of: demand side management programs; member owned power

generation facilities; and use of electric cars may have on the system load.

OPALCO has three consumer classifications that are reported to Rural Utilities Service (RUS) on the

Financial and Statistical Report. These consumer classifications are: residential;

commercial/industrial (1000kVA or less); and public street and highway lighting. Public street and

highway lighting is largely disregarded in this forecast because it’s slowly being phased out and has

low usage (6 accounts with 1,153 kWh yearly sales in 2013 and declining). OPALCO has no large

(over 1000kVA) commercial or industrial loads connected to its system, and little prospect of having

any in the near future. This load forecast provides a ‘high’, ‘medium’ and ‘low’ scenario load forecast

for OPALCO’s service area. The focus of this forecast is the number of members and energy sales for

OPALCO’s two major member rate classifications which are residential and commercial/industrial

sales. These two member rate classifications make up over 99.99% of OPALCO’s energy sales.

A. System Description

San Juan County is comprised of a total land mass of 179 square miles. As such, it is the smallest of

Washington’s 39 counties and is comprised of approximately 200 islands. OPALCO provides

electrical service to 20 of these islands; the four major islands served are San Juan, Orcas, Lopez and

Shaw. With the exception of Decatur, Center and Blakely Islands, the other minor islands are served

by distribution circuits from the four major islands and are treated as part of the four major island

loads. Because we are surrounded by a large body of water that is approximately at 50°F, OPALCO’s

member’s energy needs are reduced by the thermal effect of this large body of water. OPALCO

members receive free cooling in the summer time from the 50°F water and free heating in the winter

time. Starting in May of 2014 the water temperature surrounding OPALCO’s service area was

measured at 5o F above historical average water temperatures in this area. This increased water

temperature resulted in increasing the ambient temperature on the Islands and created an environment

where storms where pushed to the North and South of OPALCO’s service area.

According to OPALCO’s December 2014 sales report, 1,981 commercial/industrial accounts were

served. These accounts are made up of schools, banks, stores, marinas and individual marine boat

slots, restaurants, lodging (hotels, bed and breakfasts) establishments, medical facilities, county and

state offices, and other businesses serving the needs of the county. There are a number of small scale

agricultural and manufacturing businesses in the county, but none with large energy requirements at

this time. Recreational marijuana grow businesses are beginning to come into operation on San Juan

and Orcas Islands. At this time it is unknown what the true effect of these marijuana grow operations

will be on the system but it is anticipated that in total they will require an additional 2,000,000 kWh of

energy annually. For the most part, Commercial accounts are commercial businesses which provide

services to the local residential community year round and to the tourism business which is seasonal

(May-September). Although tourism fuels the local economy in the summer months, in particular the

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marinas, lodging establishments and restaurants, tourists do not consume a lot of energy. Figure I-I

shows monthly commercial energy sales for the years 2004-2014. Commercial Energy requirements

peak in the winter, driven mostly by heating and lighting needs of schools, grocery stores, local

county, and state government offices. In the summertime, when the schools are out and there is an

abundance of natural light, and little heating or cooling, energy Commercial Energy consumption

drops. There is no one main commercial entity which consumes more energy than the rest. The largest

employer in the county is the government; in 2010 this sector accounted for 18.0 percent of the total

employment in the county. This employment has remained steady and is not anticipated to drop

dramatically.

Figure I-I: Historical Commercial Energy Sales

Over the past 10 years, average commercial energy consumption has increased at a rate of less than

0.47% per year due mostly to growth in new commercial accounts, although the last 5 years have been

trending 0.05% higher to 0.52%. The rate of consumption can be directly attributed to the growth in

population in San Juan County. The drop in commercial energy sales from May 2009 to September 2010

is attributed to the effects of the recession, which has resulted in a decrease in marina usage, restaurant

sales; and the population holding off on making property improvements. The mild winter temperatures

in 2009 and 2010, and 2014, which required less heating in the winter months, are also a large factor in

the decrease of energy sales. Commercial sales in 2014 are below the present 10-year trend of around

0.84% growth. In 2014 warmer weather was the most likely cause of decreased commercial sales.

OPALCO’s residential energy consumers make up the largest consumer classification. Residential

energy consumers are made up of primary and secondary (vacation/summer) homes as well as rental

and apartment housing units. Figure I-II shows Residential energy sales for the years 2004-2014. In

December 2014, there were 12,862 metering locations under the residential sales classifications. This is

up from December 2013’s 12,801. In 2014 OPALCO actually added 146 new metering locations while

removing 85 abandoned meterbases or meterbases combined with other existing services. Yearly

residential energy consumption has been increasing by approximately 1.067% a year since 2004, with

OPALCO selling 142,254,091 kWh in 2014. This decrease sales of residential energy in 2014 (from

148,603,549 in 2013 down to 142,254,091 in 2014) was driven by lower energy usage due to

warmer/dryer weather. Over the past 10 years the increase in energy usage is attributed to new service

connections and increased population. Peak energy usage occurs in the winter months to meet the

lighting and heating load of the resident population and the minimum heating requirements of vacant

y = 100.1x + 695686R² = 0.0541

3.5E+06

4.0E+06

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2000-2014 Historical Commercial Energy Sales

COMMERCIAL kWh(s)

Linear (COMMERCIAL kWh(s))

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vacation/summer homes. In 2010, 2012 and 2014 OPALCO residential energy consumption went down

due to moderate temperatures in the winter and spring months.

Figure I-II: Historical Residential Energy Sales

OPALCO has been growing by an average of 132 new services a year over the past 5 years, although

there has been a downward trend in new service connections since the late 1990’s, OPALCO is

presently supplying energy to a total of 14,825 consumers in all billing categories. This is an increase

of 626 active accounts since 2009. OPALCO’s 2014 energy requirements average 24,241 kW of

hourly power with a peak demand of 62,745 kW and a minimum demand of just below 11, 000 kW.

The 2014 forecast has been developed focusing on residential and commercial/industrial accounts as

they have been trending over the past 10 years. Although relationships between the number of

members and several variables were considered, the most significant correlations were established

with new services, population growth in San Juan County, and ambient temperature conditions.

B. New Member Account Forecast

Over the last 15 years the number of installations of new services has been declining, as seen in Figure

I-III: Historical New Services. This trend is predicted to level off in the next 2 to 3 years and then

start to slowly increase. The cost of land, construction materials, labor and county permitting are all

barriers to new service growth. The recent recession and housing “bust” has had an impact on the

2009-2012 new service numbers. In 2014, 146 new services were installed. It is anticipated that 2015

and 2016 new service numbers will be between 140 and 160 based on San Juan County Building

Permitting Department records.

y = 363.58x - 3E+06R² = 0.0277

5,000,000

7,000,000

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kWhr

2004-2014 HISTORICAL RESIDENTAIAL ENERGY SALES

RESIDENTIAL kWh(s)

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Figure I-III: Historical New Services

An analysis of the development patterns in the county indicates that there are approximately 15,794

parcels of which just over 51% are developed. Based on the ability to further subdivide, the County

appears to have the capacity for approximately 8,935 more housing units. According to the 2010

census, the population of San Juan County was 15,769 and the average household was 2.13 persons.

The Office of Financial Management (OFM) predicts that the San Juan County population will grow

at a 1.6% annual rate between 2010 and 2033. The projected population increase of San Juan County

between 2014 and 2024 is estimated at 3,818, as seen in Table I-I. To meet the needs of a growing

population, the San Juan County Department of Affordable Housing estimates that 3,365 new homes

will be built over the next 20 years. This equates to an average of 168 new services per year over the

next 20 years, most of which will be residential dwelling units.

SAN JUAN COUNTY POPULATION GROWTH PREDICTIONS

Rate of Population Growth

1.60% 1.80% 2.00%

Based on 2010 Census

Data:

Year Population Based on % Growth

2010 15,769 15,769 15,769

Estimated 2011 15,789 16,053 16,084

Estimated 2012 15,791 16,342 16,406

Estimated 2013 15,875 16,636 16,734

Estimated 2014 16,100 16,935 17,069

Projected 2015 16,572 17,240 17,410

Projected 2016 17,045 17,551 17,758

Projected 2017 17,522 17,866 18,114

Projected 2018 17,904 18,188 18,476

Projected 2019 18,191 18,515 18,845

Projected 2020 18,482 18,849 19,222

Projected 2021 18,777 19,188 19,607

Projected 2022 19,078 19,533 19,999

Projected 2023 19,383 19,885 20,399

Projected 2024 19,693 20,243 20,807

Table I-I: San Juan County Population Growth

0

100

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400

500

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Ne

w O

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LCO

Se

rvic

es OPALCO New Services

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C. Energy Consumption per Member

A number of factors such as: weather conditions; per capita income; home size; member owned

generating facilities; electric rates; and propane costs have an effect on electrical energy consumption

per member. In OPALCO’s case, residential energy consumption per member has remained relatively

constant over the past 8 years, as can be seen below in Figure I-IV Monthly kWh Usage per

Residential Account 2007-2014.

Some change from year to year is noted, most likely due to periodic changes in weather, but overall

the lack of a trend up or down indicates that increased electrical loads for computers,

telecommunication devices and other new appliances are being countered by improved energy related

construction standards and more efficient appliances.

Figure I-IV: Monthly kWh Usage per Residential Account 2007- 2014

The average monthly residential energy usage over the past 5 years is 946 kWh per consumer and is

trending downward. The increase in 2009 are attributed to the cooler winter. The decrease in 2010,

2012 and 2014 energy usage is attributed to milder winters when the total heating degree days were

significantly lower than average (see Figure I-VIII: Heating degree Days vs. Energy Purchased).

Economic factors effected residential energy sales, but to a much lesser extent than

commercial/industrial energy usage.

Figure I-V: Average Energy per Residential Account 2007 -2014

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kWh Ave Monthly kWh Usage Per Residential AccountAverage kWh per account 2007 Average kWh per account 2008

Average kWh per account 2009 Average kWh per account 2010



y = -1.1436x + 1023.3R² = 0.0109

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Energy usage per commercial account has been declining over the past 5 years although the number of

commercial accounts has been increasing. Most school, grocery stores, and state and local government

offices have been modified to be more energy efficient.

Figure I-VI: Monthly kWh Usage per Commercial Account 2007-2014

The average monthly commercial energy usage over the past 5 years is 2,549.5 kWh per consumer. The

April-October 2012, 2013 and 2014 decline is attributed to the drier warmer weather conditions which

allowed vacationers to spend more time outdoors while schools and local government office buildings

reduced energy costs by lowering temperature and lighting levels in their buildings. OPALCO did add

around 150 small commercial accounts in 2012. These accounts were mostly small office suites, well

pumps and marina slips that were metered as part of a larger commercial account in the past.

Most all of the schools, grocery stores, and government buildings have taken advantage of window,

insulation, heating equipment, lighting upgrades, and new energy savings technology to reduce energy

costs. Although commercial accounts will continue to grow, commercial account energy usage will

continue to trend slightly lower over the next 10 years due to these new energy savings technologies.

Figure I-VII: Average Usage per Commercial Account 2007 -2014

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kWh Ave Monthly kWh Usage Per Commercial AccountAverage kWh per account 2007 Average kWh per account 2008Average kWh per account 2009 Average kWh per account 2010Average kWh per account 2011 Average kWh per account 2012Average kWh per account 2013 Average kWh per account 2014

y = -10.666x + 3321.8R² = 0.3284

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The data shown in the graph below indicates that the annual energy purchased from BPA has a direct

relation to Heating Degree days (HDD). Since 2007, OPALCO has been averaging 1,426 Heating

Degree days per year. When the yearly HDD number increases above 1,550 HDD’s, OPALCO tends

to sell more Energy and when the HDD number is less than 1,300 a noticeable drop in Energy sales

occurs. It is assumed for this forecast that over a 10 year period OPALCO would have as many mild

winters as it does cooler winters and that the average HDD yeas will be 1426.

Figure I-VIII: Heating Degree Days vs. Energy Purchased 2007 -2014

Table I-II: Heating Degree Days 2007- to Present

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HDDkWh

2007 - 2014 Purchased Energy Vs. Heating Degree Days

BPA Energy Purchased VS. HDDBPA Energy Purchase Heating Degree Days (HDD)

2007 2008 2009 2010 2011 2012 2013 2014

Month

Jan 389 358 366 153 291 276 342 245

Feb 219 243 240 142 314 192 202 326

Mar 246 280 260 200 157 190 209 168

Apr 98 183 128 93 160 101 110 83

May 47 39 52 48 65 62 31 24

Jun 7 14 1 6 16 19 57 12

Jul 0 2 0 2 17 6 7 4

Aug 0 1 2 1 7 5 3 1

Sept 8 7 8 3 8 28 7 8

Oct 92 89 59 57 55 56 76 12

Nov 215 110 128 126 208 135 198 185

Dec 340 449 350 347 254 261 378 213

Yearly Total 1,661 1,775 1,594 1,178 1,552 1,331 1,620 1,281

Heating Degree Days (HDD) - Year 2007 to Present

HDD Calculated at 50 degrees Fahrenheit using data from the Friday Harbor Airport weather site.

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D. Total Energy Sales

Total energy sales will most likely follow the patterns of the past 10 years. The average growth rate of

residential, commercial and all other energy sales is around 0.89%. Sale of energy due to electric vehicles (EV)

will slowly increase energy usage, but some of this usage will be offset by new member owned photovoltaic

(PV) systems and demand side energy management programs. New member services will stabilize at up to

around 168 new units per year in the future, but for the next 5 years remain around the 140 to 150 range due in

part to a surplus of existing housing units. It is expected that more of the estimated 5,700 vacant homes in San

Juan County will become occupied which will increase the energy consumption.

Figure I-IX below shows the past 10-year monthly OPALCO energy sales trend. Table IV-II and Table IV-

IV, found in Appendix I, provides the historical and forecasted energy trend data. Most load growth is

associated with new residential dwelling units, and an increased summertime use of vacant dwelling

units. There will be some commercial growth due to recreational marijuana grow operations.

Presently there are four known operations in the county. Because of recreational marijuana grow

operations small numbers (six or less) and there relative size their success or failure will not greatly

impact this forecast over the next 10 years.

San Juan County has little cooling load in the summer and a potentially large heating load in the

winter. The winter heating and lighting loads can affect the total energy purchase per year by +/- 5%.

Over the past 10 years ambient temperatures, precipitation and wind have been the three factors that

most influence the variability of yearly kWh sales in San Juan County. In December of 2014 energy

sales were down due to warmer dryer weather, only 213 Heating Degree days were recorded when

over the past 8 years OPALCO has averaged 322 Heating Degree days. Overall only 1,281 Heating

Degree days were recorded for all of 2014, the average over the past 8 years has been 1530 Heating

Degree days.

Figure I-IX: Monthly kWh Sales Trends

y = 293.62x + 5E+06R² = 0.0062

10,000,000

12,000,000

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kWh salesMontly 2004-2024 Monthly kWh Sales Trends

Monthly kWh Sales High Low Linear (Monthly kWh Sales)

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Based on the graph‘s trend line in Figure I-IX, Energy sales are projected for the next 10 years in Table

I-III. The actual energy sold in 2014 calendar year was around 198,727,400 kWh or an average of 22.685

MW’s per hour. Because 2014’s weather was very mild and members did not have to heat or cool their

homes and business for long periods, energy sales for 2015 are forecast to be plus or minus 5% of

213,038,180 kWh(s). This energy sales prediction assumes normal or average temperatures will occur

in 2015.

Year Predicted Energy Sales

(kWh)

%5 Above Predicted Energy

Sales (kWh)

%5 Below Predicted Energy

Sales (kWh)

2015 213,038,180 223,690,089 202,386,271

2016 215,431,345 226,202,912 204,659,777

2017 217,817,970 228,708,869 206,927,072

2018 220,204,596 231,214,825 209,194,366

2019 222,591,221 233,720,782 211,461,660

2020 224,984,385 236,233,604 213,735,166

2021 227,371,011 238,739,561 216,002,460

2022 229,757,636 241,245,518 218,269,754

2023 232,144,262 243,751,475 220,537,049

2024 234,537,426 246,264,297 222,810,555

Table I-III: Projected Energy Sales

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E. Total Energy Requirements

OPALCO’s total energy requirement is the sum of the total energy sales, OPALCO’s own usage and

energy losses. Energy losses experienced by OPALCO have averaged 6.54% per year the past 7 years.

It is expected that OPALCO will continue to make transmission and distribution system improvements

to reduce system loss equal to or greater than the increased losses due to load growth on the system.

These system improvements should keep system losses at or below 6.32%. Figure I-X below shows the

system loss trending for the past 10 years.

Figure I-X: Historical System Losses

In 2014 OPALCO used 360,000 kWh of energy in support of its facilities. This is approximately 0.2%

of the total energy purchased to operate its: 3 district offices; 3 electric vehicle charging stations; 11

substations; 12 submarine cable terminals; power consumed by field equipment for monitoring and

protecting the transmission and distribution system. As OPALCO begins to build more facilities for

Broadband and Wireless communication it is assumed that OPACLO will need to increase the amount

of Energy needed to support these new facilities. Historical and forecast information regarding

OPALCO’s “own use kWh” data can be found in Appendix Table IV-II and Table IV-IV. For this report,

OPALCO’s own usage is assumed to grow to 0.7% of total Energy sales over the next 10 years.

The forecasted total energy requirements for the next 10 years are shown in Table I-IV. Total energy

requirements predicted for 2015 trended up by 5%, over 2014’s actual total energy requirements. This

predicted purchase increase is due to 2014’s above normal temperatures and lack of significate storms

and the assumption that sea water temperatures with return closer to normal in 2015 allowing more

storms to occur in OPALCO’s service area. However, past 10 year Energy trending indicates an average

growth of around 1.01% will occur over the next 10 years in energy purchase requirements.

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

System Losses 9.88 8.47 6.99 7.41 5.23 5.98 7.60 8.92 4.98 6.32

0.00

2.00

4.00

6.00

8.00

10.00

12.00

% Losses OPALCO System Losses

System Losses

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Year Predicted Energy Purchase

(kWh)

%5 Above Predicted Energy

Purchase (kWh)

%5 Below Predicted

Energy Purchase (kWh)

2015 223,210,818 237,648,351 215,015,175

2016 225,584,924 240,317,973 217,430,547

2017 227,965,534 242,980,302 219,839,321

2018 230,339,640 245,642,630 222,248,094

2019 232,713,746 248,304,959 224,656,868

2020 235,087,852 250,974,581 227,072,240

2021 237,468,462 253,636,910 229,481,014

2022 239,842,568 256,299,238 231,889,787

2023 242,216,674 258,961,567 234,298,560

2024 244,590,780 261,631,189 236,713,933

Table I-IV: Total Energy Requirements

Peak demand for OPALCO has been forecasted based on the total energy requirements through 2024

and an assumed annual load factor. Load factor is the ratio of the average demand to the peak demand

during a particular period. In this case a 12 month period is used. From 1998 through 2014 the load

factor on OPALCO’s system has varied between 50% and 36%. In recent years the load factor has been

trending close to 40%. Although OPALCO’s annual load factor (12 month average) is 41%, the month

by month load factor will vary between 27% in the winter and 75% in the summer. One reason for

OPALCO’s low load factor in the winter is the number of vacant (vacation/second) houses in San Juan

County. The 2010 census shows that 42% of the dwelling units in San Juan County are vacant. This is

an increase from the 2000 census that estimated 33% of dwelling units were vacant. Because these

houses are unoccupied most of the year their load on the system is small until there is a power outage

or a cold spell when the vacant dwelling unit’s minimum temperature requires heating for freeze

protection. OPALCO’s peak demand occurs between November and March and is forecast to increase

at a slower rate than energy (kWh) due to peak demand load management techniques. Figure I-XI shows

OPALCO system peaks over the last 10 years. Table IV-II and IV-IV, in Appendix I, shows historical

and forecast energy peak demand.

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Figure I-XI: Historical Monthly Peak (MW)

OPALCO Monthly Historical Demand Variance

Month High Low Average St Deviation

January 57.40 36.44 46.80 6.64

February 51.89 38.65 44.28 3.85

March 46.54 35.37 42.79 2.78

April 45.17 34.81 38.56 2.85

May 35.10 24.59 31.91 2.54

June 30.38 22.79 25.97 2.44

July 29.78 22.20 25.23 2.23

August 28.66 22.30 24.54 1.53

September 28.88 22.84 25.96 2.10

October 41.98 23.72 32.41 5.37

November 49.38 28.90 39.78 5.50

December 63.80 39.80 47.95 7.69

Table I-V: Monthly Historical Demand Variance

22.00

24.00

26.00

28.00

30.00

32.00

34.00

36.00

38.00

40.00

42.00

44.00

46.00

48.00

50.00

52.00

54.00

56.00

58.00

60.00

62.00

64.00

66.00

68.00

January

April

July

October

January

April

July

October

January

April

July

October

January

April

July

October

January

April

July

October

January

April

July

October

January

April

July

October

January

April

July

October

January

April

July

October

January

April

July

October

January

April

July

October

MW

HISTORICAL BPA MEASURED (2004-2014) SYSTEM MONTHLY MW PEAKS

2004-2014 Monthly Peak MW

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F. Effects of Demand Side Management Programs

As a provision related to its power supply contract with BPA, OPALCO offers energy efficiency

programs to its members. The programs which offer both residential and commercial rebates for energy

efficiency retrofits have an impact on energy consumption in the county. In 2014 the energy saving

resulting from these programs was estimated by OPALCO to be 1,750,000 kWh. Most of these energy

savings were from commercial consumers, such as grocery stores and schools, although in 2014 more

residential consumers took advantage of the programs. This amount represents approximately 0.9% of

total energy sales in 2014. This is significant when you consider that OPALCO’s total energy

requirement have only increased by around 1.1% from 2013 to 2014, when kWh sales are adjusted for

weather.

Most of the schools, Local County, state and federal government buildings, along with the grocery stores

in the county have, and continue to undergo, energy efficiency upgrades. It is anticipated that both

commercial and residential consumers will continue to take advantage of new technology and the energy

efficiency programs offered by OPALCO. For this report, it is assumed over the next 10 years OPALCO

members will annually save 1,000,000 kWh of energy through energy efficiency programs.

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G. Member Owned Generation Facilities

As of December 31, 2014 OPALCO had 177 member owned power generating facilities that are

authorized to be connected to the system. Of the 177 generation facilities: three are micro-hydro; one

is a photovoltaic (PV)/micro-hydro; one is a 10 kW wind generation with 25 kW of PV; and the other

172 are PV sites ranging from 1kW to 50 kW. All of the growth in member owned generating facilities

is in the PV area. There are 1 MW of installed member owned power generation facilities, not including

gas or diesel generators, on OPALCO’s system. In 2014 these sites generated an estimated 750,000

kWh of energy. Over the past 5 years OPALCO has averaged 30 new PV systems being installed per

year most in the 5 kW to 25 kW range. This growth is heavily dependent on future incentives. The

limitation in the installed kW per site is largely due to the physical size of the solar panel, and cost.

Another limiting factor is that San Juan County only averages 3 solar hours a day over a year’s

production time. As the cost of photovoltaic panels decreases and watts per photovoltaic cell increases

larger PV sites will be installed.

Figure I-XII: Member Owned Generation Sites

The energy generated at these PV sites is largely consumed at these sites. Very little of this power is

available for resale on OPALCO’s distribution system. Where it is seen that the average residential

consumer consumed 946 kWh(s) per month of energy OPALCO’s distribution system in 2014, the

average member owned generation site with a PV array still consumes an average of 800 kWh(s) per

month of energy from OPALCO’s distribution system.

Existing Interconnect, 177 as of

December 2014

10

20

30

40

50

60

70

80

90

100

110

120

130

140

150

160

170

180

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

Number of

Interconnection

Year

MEMBER OWNED GENERATION FACILITIES

INSTALLED MEMBER OWNED POWER…

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Figure I-XIII: Energy Consumed by Renewable Interconnection vs. Average Member

Two issues that are being seen with member owned power generation facilities are reliability and time

of production. Since these systems are being managed and maintained by the member, a single

component failure may bring down the PV system for months or cause the member to ”scrap” the PV

array. Secondly, PV systems produce the bulk of their yearly energy in the summer when OPALCO’s

energy (kWh) and demand (kW) needs are low. The result of this is that OPALCO’s energy (kWh)

needs are lower but our peak demand (kW) is not altered and our per unit energy cost rises. The PV

sites still add to OPALCO’s high energy uses in the early mornings and evenings thus not reducing the

instantaneous peak demands on our transmission lines or at our substations. OPALCO has two main

components on its energy bills: total energy consumed and peak energy consumed. The PV sites do

help to reduce the total yearly energy bill for OPALCO, but have no effect on the peak energy bill which

generally happens in the early mornings or late evenings.

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

Jan

Mar

May

July

Sep

t

No

v

Jan

Mar

May

July

Sep

t

No

v

Jan

Mar

May

July

Sep

t

No

v

Jan

Mar

May

July

Sep

t

No

v

Jan

Mar

May

July

Sep

t

No

v

Jan

kWhEnergy Consumed by Renewable Interconnections

vs Average Member

PV Interconnects RES kwh/con

58 of 93

H. Effects of Electric Cars on Electrical System

San Juan County is an excellent location for Electric Vehicles (EV). Short driving distances and low

speeds make the limited driving range of the EV practical. According to the Washington State

Department of Licensing, as of December 2014 there are presently 131 EV registered in the county.

Most of these vehicles are Level I (120 Volt) units with a battery capacity of under 13kWh. It is

anticipated that a slow, but steady increase in EV will connect onto OPALCO’s electrical system over

the next 20 years. The effect of these EV’s charging on OPALCO’s system is estimated to be small in

the short term (5 to 9 years). In the long term (i.e. 10 to 20 years out) the electric car may have a large

impact on the amount of energy used and the peak energy usage time in the county.

Figure I-XIV shows a typical load on OPALCO’s transmission system (shown in blue) over a 5 day

period, as seen from BPA. If 400 EV, (Level II “240 Volt charging stations”) were charging between

4:00 PM and 1:00 AM on the system, then OPALCO’s purchase of energy from BPA would be affected

as indicated by the red line on the graph below. The green line on the graph indicates the effect on the

transmission system if 2000 Level II EV units were to be charged between 4:00 PM and 1:00 AM. Presently, OPALCO’s daily energy peaks occur in the morning hours between 7:00 and 9:00. An

increase in EV charging may result in OPALCO’s daily energy peaks occurring in the evening.

Figure I-XIV: Effect of EV Cars on Average Daily Energy Req.

In 2014 OPALCO purchased 213,914,790 kWh(s) of energy from BPA. The portion of that power

which was used to charge the 131 EV units registered in San Juan County is estimated to be less than

43,000 kWh’s per year. In 20 years (2035) EV cars may require up to 8,400,000 kWh(s) of yearly

energy. The Figure I-XV indicates how daily EV charging may increase over the next 20 years.

Figure I-XV: Peak Daily EV Usage

15,000

20,000

25,000

30,000

35,000

40,000

2:0

0:0

06

:00

:00

10

:00

:00

14

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:00

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:00

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:00

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2:0

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0:0

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:00

:00

10

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:00

14

:00

:00

18

:00

:00

22

:00

:00

kWh Effect of EV Cars on Average Daily Energy Req.

Typical Load 400 EV Level II 2000 EV Level II

-

20,000.00

40,000.00

60,000.00

20

11

20

12

20

13

20

14

20

15

20

16

20

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kWh/Day Peak Daily EV Usage

Peak Daily EV Energy kWh

59 of 93

II. CONCLUSIONS

In the short term, rate of addition of new services will remain low due to the ample supply of

existing homes on the market. In the long term, the rate of new services will most likely stabilize at

an average 10 year rate of 168 services per year.

Energy usage per residential consumer will remain constant at around 11,353 kWh per year but

residential total energy consumption may increase at a rate of 1.06% a year over the forecast period

due to population growth.

Energy usage per commercial consumer will most likely decrease or remain constant at 30,594 kWh

per year but total energy consumption will increase at a rate of 0.59% a year over the next 10 years

due to new commercial accounts being created to serve population growth.

Overall energy sales (Residential, Commercial and Lighting) are predicted to continue to increase at

a weighted average over the next 10 years at a rate of 0.86% a year.

Transmission and distribution system losses will average 6.24% over the next 10 years.

Demand side management programs will have a small dampening effect on total energy sales in the

future, but will most likely have its biggest impact on dampening peak energy needs of the Utility.

Member owned power generation facilities, mostly photovoltaic (PV) will continue to be installed at

a rate of 30 to 40 per year. The new installations will decrease energy sales growth by approximately

140,000 kWh per year.

The impact of electric vehicles (EV) on the total energy sales will be offset partially by PV systems

and demand side management programs. Due to the slow increase in sales of electric vehicles, the

impact of these vehicles will not impact OPALCO’s electrical system until after 2020.

Recreational marijuana grow operations will increase commercial energy sales by over 500,000 kWh

a year.

OPALCO will Sell 207,306,206 kWh of energy in 2015, based on the assumption of 1,426 Heating

Degree Days.

OPALCO will Purchase 220,242,113 kWh of energy from BPA in 2015, based on the assumption of

1,425 Heating Degree Days.

Peak System demand will occur during the winter months and may be as high as 70 MW’s.

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III. REFERENCES

1. Orcas Power and Light Cooperative 2005 Electric System Load Forecast, November 2005

2. Orcas Power and Light Cooperative 2014-2032 Load Forecast.

3. San Juan County Comprehensive Plan, Appendix 1- Population Projections, build out Analysis

and Land use Inventory, San Juan County \Planning department, 2008 http://www.co.san-

juan.wa.us/planning/compplan.aspx

4. 2000 and 2010 US Census; http://www.factfinder2.census.gov/

5. EC&M July 2010 Charging Ahead “Building the electric vehicle infrastructure”

6. OPALCO Form 7 (1998-2014)

7. Friday Harbor Airport Temperature data

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http://www.co.san-juan.wa.us/planning/compplan.aspx

http://www.co.san-juan.wa.us/planning/compplan.aspx

http://www.factfinder2.census.gov/

IV. APPENDIX I

Orcas Power and Light Cooperative 2014-2024 Power Requirement Study

Table IV-I 2000-2014 Historical Number of Customer Accounts and Energy Use per Account

Number of Accounts Average Yearly kWh per Account

Year Residential

Annual %

Change Commercial

Annual %

Change Res/Comm

Ratio Lighting Total Residential Commercial Lighting Weighted Average

kWh

2000 9,648 1,603 6.02 7 11,258 12,880 32,266 936 15,633

2001 9,935 2.89% 1,606 0.19% 6.19 7 11,548 12,473 32,146 792 15,202

2002 10,180 2.40% 1,634 1.71% 6.23 7 11,821 12,546 31,612 729 15,175

2003 10,427 2.37% 1,653 1.15% 6.31 7 12,087 11,876 30,471 828 14,413

2004 10,694 2.49% 1,690 2.19% 6.33 7 12,391 11,758 31,422 686 14,434

2005 10,962 2.44% 1,693 0.18% 6.47 6 12,661 12,025 32,398 517 14,744

2006 11,476 4.49% 1,501 -12.79% 7.65 5 12,982 11,732 38,331 455 14,803

2007 12,013 4.47% 1,590 5.62% 7.55 6 13,609 11,665 37,376 484 14,664

2008 12,292 2.27% 1,667 4.58% 7.37 6 13,965 11,754 36,656 609 14,721

2009 12,521 1.83% 1,696 1.72% 7.38 6 14,223 11,625 34,023 337 14,291

2010 12,739 1.72% 1,661 -2.09% 7.67 6 14,407 10,813 32,695 239 13,331

2011 12,858 0.92% 1,753 5.23% 7.33 6 14,617 12,308 33,754 213 14,875

2012 12,803 -0.43% 1,929 9.12% 6.64 6 14,738 10,937 28,584 195 13,242

2013 12,801 -0.02% 1938 0.46% 6.61 6 14,745 11,609 29,905 192 14,009

2014 12,862 0.47% 1981 2.17% 6.49 6 14,849 11,098 28,034 192 13,353

5 Year Member Growth Rate Average 5 Year Growth

Rate 5 year Average Usage Trend

1998-2004 10.84% 5.43% 6.21 1.83% 10.1% 12,307 31,583 794 14,971

2005-2009 13.00% -3.94% 7.29 0.00% 12.3% 11,760 35,757 480 14,645

2010-2014 0.44% 12.49% 6.95 0.00% 3.0% 11,353 30,594 206 13,762

Table IV-I: 2000-2014 Historical Number of Customer Accounts and Energy per Account

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Table IV-II-Forecasted Energy Sales, Own Use, Energy Requirements and Peak Demand (kWh)

Year

Residential

15 Year

Actuals

Residential

15 year linear

Trend

Commercial

15 year

Actuals

Commercial

15 year

linear trend

Total Sales

15 year trend

Total Sales

15 year

linear trend

Heating

Degree Days

Actuals (50

Degree F

Bases)

Heating Degree

days 15 year

linear trend ((50

Degree F

Bases)

Total

Purchase 15

year Actual

Total

Purchase 15

year linear

trend

Weather

Normalized

Total

Purchase

kWh

Weather

Normalized

Total Sales

kWh

Own Use

kWh Losses

Loss %

of Total

Reqs.

Peak

Demand

(kW)

Annual

Load

factor

12/31/1999 122,640,283 120,542,015

50,783,536 52,728,814

173,434,852 177,219,182 1,421 1,396 187,052,663 187,573,210 187,261,071 173,643,260 789,541 12,828,270 6.86% 54,287 39%

12/31/2000 124,256,848 120,542,015

51,722,261 52,728,814

175,985,659 177,219,182 1,479 1,400 184,954,299 189,953,820 184,363,146 173,806,381 925,807 8,042,833 4.35% 41,750 51%

12/31/2001 123,918,016 122,427,240

51,627,169 53,230,726

175,550,759 179,605,807 1,471 1,400 186,060,561 189,953,820 185,558,744 173,700,817 822,920 9,686,882 5.21% 47,480 45%

12/31/2002 127,719,130 124,312,465

51,654,816 53,732,637

179,379,491 181,992,433 1,496 1,404 198,158,117 192,327,926 195,418,875 176,500,374 808,649 17,969,977 9.07% 49,750 45%

12/31/2003 123,829,432 126,197,690

50,369,110 54,234,549

174,204,335 184,379,058 1,242 1,407 187,578,406 194,702,032 198,836,957 181,781,636 770,117 12,603,954 6.72% 42,780 50%

12/31/2004 127,066,113 128,088,080

53,103,761 54,737,835

180,174,678 186,772,222 1,155 1,411 192,377,706 197,076,138 203,536,536 191,333,508 803,836 11,399,192 5.93% 60,460 36%

12/31/2005 131,804,913 129,973,305

54,850,097 55,239,747

186,658,114 189,158,848 1,269 1,415 207,979,337 199,456,749 209,105,004 193,123,906 697,862 20,623,361 9.92% 59,650 40%

12/31/2006 134,638,062 131,858,530

57,535,531 55,741,658

192,175,867 191,545,473 1,292 1,418 211,396,303 201,830,855 211,954,941 197,694,818 789,547 18,430,889 8.72% 55,640 43%

12/31/2007 140,128,326 133,743,755

59,440,635 56,243,570

199,571,864 193,932,099 1,661 1,422 215,834,866 204,204,961 212,036,631 189,900,192 1,171,963 15,091,039 6.99% 57,030 43%

12/31/2008 144,474,886 135,634,145

61,096,451 56,746,856

205,574,989 196,325,263 1,775 1,425 223,724,626 206,579,067 212,849,291 191,210,279 1,232,434 16,917,203 7.56% 66,800 38%

12/31/2009 145,551,343 137,519,370

57,703,601 57,248,768

203,256,968 198,711,889 1,594 1,429 216,009,733 208,959,677 214,134,375 196,343,485 1,217,696 11,535,069 5.34% 55,380 45%

12/31/2010 137,744,268 139,404,595

54,313,907 57,750,679

192,059,607 201,098,514 1,178 1,433 205,321,459 211,333,783 215,533,448 202,271,596 983,835 12,278,017 5.98% 59,200 40%

12/31/2011 156,790,066 141,289,820

59,170,040 58,252,591

215,961,384 203,485,140 1,552 1,436 219,123,617 213,707,889 215,954,148 210,776,915 885,339 2,276,894 1.04% 61,030 41%

12/31/2012 140,025,358 143,180,210

55,139,046 58,755,877

195,165,575 205,878,304 1,331 1,440 215,595,074 216,081,995 216,276,387 199,079,013 523,291 19,906,208 9.23% 57,398 43%

12/31/2013 148,603,549 145,065,435

57,956,032 59,257,789

206,560,734 208,264,929 1,620 1,444 217,913,854 218,462,606 216,329,966 198,576,909 502,294 10,850,826 4.98% 63,800 39%

12/31/2014 142,254,091 146,950,660

56,316,307 59,759,700

198,571,545 210,651,555 1,281 1,447 212,349,941 220,836,712 216,711,535 204,543,333 360,010 13,318,386 6.32% 62,745 39%

Average Average kWh Average kWh

Average

(HDD) Average kWh Average Growth Average

135,715,293 55,173,894 190,892,901 1,426 205,089,410 1999-2007 7.09% 23.0% 43%

Standard

Dev

Residential

15 year linear

Trend Standard Dev

Commercial

15 year

linear trend Standard Dev

Total Sales

15 year

linear trend

Standard

Dev Standard Dev 2008-2014 5.78% -6.1% 41%

10,020,465 % Change 3,303,808 % Change 13,000,394 % Change 179 13,142,943 % Change

1999-2007 11% 7% 9% 9%

2008-2014 8% 5% 7% 6%

Table IV-II: 1999-2014 Historical Energy Sales, Own Use, Energy Requirements and Peak Demand

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Table IV-III-Forecast Number of Accounts and Energy Use per Account

Number of Accounts Average Yearly kWh per Account

Year Residential Annual % Change Commercial

Annual %

Change Res/Comm

Ratio Lighting Total Residential Commercial Lighting Total

2014 12,862 1,981 6.64 6 14,849

11,353

30,594 206

13,911

2015 12,958 0.75% 1,991 0.50% 6.70 6 14,955

11,344

30,563 203

13,907

2016 13,095 0.75% 2,001 0.50% 6.75 6 15,102

11,336

30,533 199

13,904

2017 13,233 0.75% 2,011 0.50% 6.81 6 15,250

11,327

30,502 196

13,900

2018 13,373 0.75% 2,021 0.50% 6.87 5 15,399

11,319

30,472 192

13,897

2019 13,514 0.75% 2,031 0.50% 6.92 5 15,550

11,310

30,441 189

13,893

2020 13,657 0.75% 2,041 0.50% 6.97 5 15,703

11,302

30,411 185

13,890

2021 13,801 0.75% 2,051 0.50% 7.02 5 15,857

11,294

30,380 182

13,886

2022 13,946 0.75% 2,062 0.50% 7.07 5 16,013

11,285

30,350 178

13,883

2023 14,093 0.75% 2,072 0.50% 7.12 4 16,169

11,277

30,320 175

13,879

2024 14,242 0.75% 2,082 0.50% 7.17 4 16,328

11,268

30,289 171

13,876

Annual Growth Rates

2014-2019 0.96% 0.40% 0.00% -0.08% -0.10% -1.86% -0.03%

2019-2024 1.08% 0.49% 0.00% -0.07% -0.10% -1.86% -0.03%

Table IV-III: Forecast of Future Member Accounts and Future Energy Use per Account

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Table IV-IV-Forecasted Energy Sales, Own Use, Energy Requirements and Peak Demand (kWh)

Year

Residential

Predicted

Trend

Commercial

Predicted

trend

Total

Predicted

Sales trend

Total

Predicted

Purchase trend

Own Use

kWh Losses

Loss % of

Total Reqs.

Peak Demand

(kW)

Annual Load

factor

12/31/2015 148,835,885 60,261,612 213,038,180 223,210,818 350,000 14,104,702 6.32% 62,745 41%

12/31/2016 150,726,275 60,764,899 215,431,345 225,584,924 350,000 14,254,722 6.32% 62,745 41%

12/31/2017 152,611,500 61,266,810 217,817,970 227,965,534 350,000 14,405,153 6.32% 62,745 41%

12/31/2018 154,496,725 61,768,722 220,204,596 230,339,640 350,000 14,555,173 6.32% 62,745 41%

12/31/2019 156,381,950 62,270,633 222,591,221 232,713,746 350,000 14,705,193 6.32% 62,745 41%

12/31/2020 158,272,340 62,773,920 224,984,385 235,087,852 350,000 14,855,213 6.32% 62,745 41%

12/31/2021 160,157,565 63,275,831 227,371,011 237,468,462 350,000 15,005,644 6.32% 62,745 41%

12/31/2022 162,042,790 63,777,743 229,757,636 239,842,568 350,000 15,155,663 6.32% 62,745 41%

12/31/2023 163,928,015 64,279,654 232,144,262 242,216,674 350,000 15,305,683 6.32% 62,745 41%

12/31/2024 165,818,405 64,782,941 234,537,426 244,590,780 350,000 15,455,703 6.32% 62,745 41%

Annual %

Change

Annual %

Change

Annual %

Change

Annual %

Change

Annual %

Change

2015-2024 1.14% 0.75% 1.01% 0.96% 6.32%

Table IV-IV: Weather Adjusted Forecast Energy Sales, Own Use, Energy Requirements and Peak Demand (kWh)

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BOARD OF DIRECTORS

RESOLUTION 3-2015

APPROVAL OF TEN-YEAR FINANCIAL FORECAST

WHEREAS, The Ten (10) Year Financial Forecast for the period of 2014 through 2023 as prepared and included with the Federal Financing Bank (FBB) loan application is an acceptable projection of the financial trend and conditions of Orcas Power & Light Cooperative; and WHEREAS, the Board of Directors of Orcas Power & Light Cooperative has reviewed the attached Long Range Financial Forecast prepared by the Cooperative's staff; and WHEREAS, the Financial Forecast includes estimates taken from a Board approved Load Forecast Study, which has been previously approved by Rural Utilities Service (RUS), Four-Year Construction Work Plan dated 2013-2016 with Amendments #2, #3 and #4, which have been previously approved by RUS; and WHEREAS, the Long Range Financial Forecast is based upon Board approved policies, operating rules and plans and sets forth appropriate management goals, all of which are acceptable to the Board of Directors as an overall plan of operations. NOW, THEREFORE, BE IT RESOLVED that the Board of Directors of Orcas Power & Light Cooperative hereby approves and accepts the Ten-Year Long Range Financial Forecast as proposed, as a plan of operations, and has reviewed the projected rates which are included in the Forecast and is committed to take whatever action may be necessary to implement such rate changes as may be required on a timely basis to achieve the goals outlined therein.

CERTIFICATION OF SECRETARY I, Jerry Whitfield, Secretary of Orcas Power & Light Cooperative do hereby certify that the above is a true and correct excerpt from the minutes of the meeting of the Board of Directors of Orcas Power & Light Cooperative, held on January 22, 2015, at which meeting a quorum was present.

SEAL Jerry Whitfield, Secretary

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BOARD OF DIRECTORS RESOLUTION 4-2015

APPROVING AMENDMENT #5 TO THE 2013-2016 CONSTRUCTION WORK PLAN

WHEREAS, the Board of Directors has approved the 2013-2016 Construction Work Plan (CWP); and, WHEREAS, Amendment #5 is necessary to increase the cost of replacing submarine cable between Lopez and San Juan from $3 million to $17.1 million; and WHEREAS, the Board considers the amendment to the CWP to be the current estimate for this capital project. NOW, THEREFORE, BE IT RESOLVED THAT THE Board of Directors of Orcas Power and Light Cooperative accepts and approves Amendment #5 to the CWP upon the recommendation of the Engineering and Operations Manager at a regular meeting held on January 22, 2015 and directs the General Manager to process CWP Amendment #5 as required by the Rural Utilities Service.

CERTIFICATE OF SECRETARY

I, Jerry Whitfield, certify that I am the Secretary of Orcas Power and Light Cooperative and that the above and foregoing is a true excerpt from the minutes of a meeting of the Board of Directors on January 22, 2015, at which a quorum was present, and that the above portion of the minutes have not been modified or rescinded. S E A L ________________________________ Jerry Whitfield, Secretary

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MEMORANDUM

January 14, 2015



RE: 2015 Committee on Nominations

The following members of District 2 (Orcas, Armitage, Blakely, Obstruction, Big Double, Little Double and Fawn islands) have agreed to serve on the 2015 Committee on Nominations:

Douglas Ellis, Anne Marie Shanks, David Sarver

Once the Board ratifies the nominations committee and participants, staff will coordinate an orientation (scheduled Monday, January 26 pending board approval) with the committee.

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MEMORANDUM

January 12, 2015



RE: Resource Evaluation Timeline

Staff is involved in the resource evaluation process as follows:

Resource Evaluation Study (2014/2015) Develop suite of cost effective and environmentally sensitive resource and

efficiency options applicable to OPALCO Develop Strategy for future resource and efficiency acquisitions

Similar to the rate design process, resource evaluation will occur over the course of several months as indicated below.

Resource Evaluation Summary Timeline

A. √ Complete Staff kick-off meeting: November B. Development of Load forecast scenarios: November – February C. Development of BPA Power Supply modeling: November – February D. Present Load-Resource Balance and scenarios to Board: Q2 E. Research resource and efficiency options applicable to OPALCO: Q2 F. Evaluate strategic alliances with other utilities: Q2 G. Present options and considerations to OPALCO Board: Q3 H. Develop benefit/cost analysis of identified resource and efficiency options: Q3 I. Develop risk analysis: Q3 J. Draft Report: Q3 K. Present Evaluation results and strategic options for the future: Q3 L. Present Analysis of strategic alliances: Q4 M. Finalize Report: Q4

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TOTAL FUND BALANCE

Notes:

1. Add'l liquidity:CFC $10M LOC, $5M PV line, and CoBank $5M LOC

2. Loan draw #1 $1.22M @ 3.456% (January 2014)

3. Loan draw #2 $878k @ 3.479% (January 2014)

4. Loan Draw #3 $2M @ 3% (September 2014)

5. Loan Draw #4 $2M @ 3% (November 2014)

2,006,348

2,006,348

2,007,240

2,008,260

2,008,832

2,009,415 1,509,803

1,510,655

1,511,219

1,511,790

1,511,940

1,511,940

1,279,616

-500,000

1,500,036 1,834,138

1,834,265

1,334,381

900,359 400,148 200,000

900,000

500,000 100,000

-

630,151

2,090,339

1,565,283

1,330,486 1,400,997

1,371,393

1,327,796

1,495,926 1,261,281

1,854,942

1,173,216

2,648,171

2,072,155

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14

Restricted Fund Cash Reserve Fund General Fund

$2,972,500$3,737,958$5,244,094

$4,715,189

$3,185,156$5,072,559

$3,406,729 $4,266,733

$3,351,771

$5,172,884

$2,636,499

$4,596,687 $4,260,111

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Occurrences Members Affected

Duration (hrs.) Occurrences Members Affected

Duration (hrs.) Occurrences Members Affected

Duration (hrs.)

System Scheduled 0 0 0 0 0 0 0 0 0System Faulty Equipment or Installation 0 0 0 12 1167 34.1 9 1431 25.766System System Issue 1 4 3 10 1213 45.75 14 1235 17.5System Age or Deterioration (Failed URD) 3 82 18.75 52 2332 312.5 45 4708 213.25System Right‐of‐way 0 0 0 3 415 19.5 7 1184 12.75System Secondary 0 0 0 10 31 22 6 8 6System Unknown 2 68 41 6 340 48 5 1138 11.83Nature Weather 14 4818 43.25 58 7040 192.75 12 1704 30.44Nature Animal 0 0 0 1 10 1 6 128 9Member Member/Public 0 0 0 17 1915 35.25 11 123 27.75

20 4972 106 169 14463 710.85 115 11659 354.286Totals

Outage Report: Trending + YTD Summary

YTD SummaryCategory

DescriptionGroup Description December 2014 YTD 2014 YTD 2013

0

2

4

6

8

10

12

14

16

18

Outage Occurrence Trending

System Nature Member Log. (System) Log. (Nature) Log. (Member)

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MEMORANDUM Date: January 14, 2015 To: Board of Directors From: Foster Hildreth, General Manager Subject: Safety Program – December 2014 Safety Training Jeff Myers conducted grounding training. This is an annual training session for informing and training all qualified workers on procedures and regulations for grounding equipment and cables prior to conducting work. RESAP (Rural Electric Safety Accreditation Program) This program will be implemented utilizing our safety contractor as the primary program director. This will involve the collection of statistical information of the history of safety and a peer inspection of our facilities and worksites for recommendations on creating a safer workplace. Accidents/Incidents/Near Miss None.

Near Misses Incidents Accidents Loss Time

December 2014 0 0 0 0

YTD (2014) 3 1 4 1

Total Hours Worked without Loss Time Accident: 35,475

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Orcas Montessori School’s

Renewable School Project

Final Report November 2014

Project Goal

In 2013, as it celebrated its 25th year serving local families, the Orcas Montessori School set its sights

on the future and initiated a renewable school project. The project’s multiple goals included:

1) Improving the overall efficiency of the school facility, reducing both energy costs and

greenhouse gas contributions, and

2) Engaging the school’s students, families and the broader community in green energy.

Orcas Montessori School students celebrate their school’s solar power improvements! 80 of 93

Summary of Accomplishments

Facility Energy Assessment:

Completed in spring 2013 by the Community Energy Challenge.

Heating System:

In June 2013, the school’s outdated oil boiler was replaced with ductless electric heat pumps

by San Juan Heating. Approximately 40% of the heat pump cost was covered by a rebate from

the Community Energy Challenge. Estimated to reduce heating costs by 70%.

PV Solar System:

In September 2013, a 9.2 kilowatt grid-tied solar photovoltaic system was installed at the

school by Artisan Electric. The system is expected to produce over 5,000 kWH of electricity

annually with a projected energy cost savings $500 per year and incentives of $2,000 per year.

Funding for the solar system was provided by Bonneville Environmental Foundation’s

Solar4RSchools Program, with matching funds from OPALCO and Community Energy

Challenge grants, private donations raised by Orcas Montessori for the project, and the

school’s operating budget (new roof).




Artisan Electric staff show the school’s director how to read

the system’s inverters and meters.

The school’s west array at installation. 81 of 93

Summary of Accomplishments continued...

Teacher Training:

A for- credit renewable energy teacher training workshop for local educators was held in

October 2013, led by an expert from Bonneville Environmental Foundation and coordinated

by the Orcas Montessori School.

16 teachers and community members from multiple Orcas Island preschools, Orcas

Elementary School, Waldron Elementary School, OPALCO and the Funhouse participated.

Hands-on materials and curriculum (solar ovens, cars, windmills, etc.) are integrated at Orcas

Montessori School and available for checkout by educators at the Funhouse.

Teacher training workshop and materials were provided by the Bonneville Environmental

Foundation’s Solar4RSchools Program and supported by OPALCO’s matching grant funds.




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Summary of Accomplishments continued…

Community Outreach– Print and Online Media:

Orcas Montessori School’s solar energy and education project were the subject of multiple

articles in the local Islands Sounder print and online paper and the online Orcas Issues. Media

coverage in both venues occurred in April, August, September and October of 2013, with final

thank you to project supporters articles published in January 2014 editions.

Orcas Montessori School’s solar project was featured in the Friends of the San Juans Summer

2014 Energy Futures Newsletter mailed to all county box holders.

The solar project was the topic of a special informational postcard mailed by the school to

Montessori’s supporters and all Orcas Island box holders.




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Summary of Accomplishments continued...

Community Outreach- Events:

School students and families participated in the June 2013 Solstice Parade and the 2013 4th of

July parades on Orcas, promoting solar energy and the renewable schools project.

In June of 2014 Orcas Montessori School participated in the full day community Energy Fair at

the Eastsound Village Green, baking (and distributing!) ten batches of cookies in the solar oven

and sharing information on the school’s efficiency projects and hands-on activities for students.




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Summary of Accomplishments continued…

Classroom Lighting:

In April 2014, outdated fluorescent lighting was replaced by Orcas Electric with higher

efficiency bulbs and additional switching options (supporting less lights on at once) were also

installed. 70% of the lighting upgrade costs were covered by OPALCO lighting rebates.

A private donor to the school also supported the project which is projected to reduce lighting

energy usage by 40%.

Attic Insulation & Crawlspace Weatherization:

In June 2014 Sage Building Solutions replaced attic insulation (R4 to R49!) and added new R19

insulation to portions of the crawlspace currently missing insulation.

A combination of OPALCO and Community Energy Challenge rebates covered a portion of the

project cost with the remainder covered by the school’s operating budget.

Projected annual energy cost savings of $140 per year and additional benefits of reduced

moisture and improved indoor air quality.

Next Steps

Heat Recovery Ventilator:

The school ‘s staff and board are currently exploring options to install a heat recovery/air

exchange system to improve indoor air quality and reduce heat loss. Small rebate possible

from Community Energy Challenge.

Metering:

To promote energy conservation the school’s board and staff are exploring options to fund

separation of the school’s electrical usage from the upstairs residential apartment.




For more information on the Orcas Montessori School’s renewable schools project please contact director

Teresa Chocano or visit the school’s website at www.orcasmontessori.org 85 of 93

Budget




TASK BEF OPALCO CEC OMS TOTAL

Energy

assessment

-

-

inkind inkind

Heat pumps - - $4,500 $6,317** $10,817

Solar System

(including new

metal roof)

$40,000

$5,000

(grant)

$2,930 $4,763*

$10,772**

$10,000 inkind

labor & donated

materials

$50,000

(solar system

project mgt.

and install)

$23,465

(roof)

Teacher

training &

materials

inkind $5,000

(grant)

- inkind $5,000

Lighting - $993

(rebate)

- $100*

$325**

$1,418

Insulation (attic

& crawlspace)

- $362

(rebate)

$724 $4,138** $5,224

Project Totals $40,000 $11,355 $8,154 $36,415 $95,924

private funds raised by Orcas Montessori School from individual donors for the renewable schools project

** funds from the Orcas Montessori School operating budget

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Island Network

Page 1 of 2

To: OPALCO Board of Directors From: Foster Hildreth Date: January 15, 2015 Re: Island Network January 2015 Update Community and area designs are moving forward. Moving past 70 designs in the pipeline. The following groups are the most advanced: San Juan: Cattle Point/Cape San Juan – 84 Connections Construction is underway. The first pole has been set, and fiber run to it. Michels is currently hanging fiber in the roads that will provide FTTP. The pole that will provide the microwave link to the Cape will be set this week near Skagit Valley College. Second pole is being sighted next week with placement soon after. Once the middle mile build is complete we will begin last mile FTTP to various homes. LTE testing will begin in earnest. Lopez: Lopez Village – 8 Connections Fiber is installed; installation to individual properties is currently underway south of the village. Service to be delivered by February 1. Orcas: Eagle Lake – 36 connections 39 of 41 votes voted in favor of a middle mile assessment cost of $2164. Backbone fiber is near completion, and middle mile vault setting will begin in the coming days. Microwave shot from Blakely to the area will be completed in 3 weeks. Target for delivering to first customer is March 1 with the balance soon thereafter. Lopez: South Lopez Fiber installation has been completed, and splicing is underway. Pole construction planned for late January to early February. LTE testing at designated locations will begin once we get equipment installed after pole install. San Juan: Mineral Point/Highlands – approx. 40+ connections We met with representatives of all three HOAs on January 14. They are finalizing their borrowing arrangements and cost allocations among their members. They have committed to Feb. 1 for delivering us the check to begin middle mile construction, and we will be poised to begin work immediately. We are targeting March 1 for delivering service to first customers with completion within Q2 2015. A communication LTE site is also planned for this area.

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Island Network

Page 2 of 2

Orcas: Spring Point/Harborview We joined the HOA Board and Islanders Bank in presenting to a large meeting of the Spring Point membership (over 50 people) on Jan. 12. After discussion, the board voted to go forward with sending the membership a ballot to vote to build a middle mile that will reach every property in the HOA (not just existing homes) for @ $2500 per household, which will be financed and assessed. Official ballots will be sent out soon, and a 30-day wait is required before the decision can be formalized. If the membership approves this decision, construction should begin in late February. We are also planning a 700MHz pole location within the community to expand crew & emergency communication capabilities. Orcas: Alder Cottages (9 connections) and Alder Forest (up to 10 more) Condo associations in Eastsound core; Alder Cottages design has been reviewed and accepted, and 9 of the ten units have signed on. This is an easy physical construction job, and we expect to be providing service in January 2015. We also hope to serve a local banking institution within this build and extend the infrastructure into neighboring homes/businesses. Friday Harbor – Peterson and Nillson Commercial buildings We have installed fiber into the interior of these two adjacent multi-tenant commercial buildings. The Bean coffee shop will be among the first of the resident businesses to connect. The Bean has agreed to actively promote our services in exchange for receiving 200 Mbps service. We plan on jointly marketing the capability in a local high traffic establishment. There are approximately 30 businesses that will have the ability to connect to the Fiber in these two buildings. Friday Harbor Technology Center This building is already wired. Of 16 tenants, we already have 6. We are adding one new customer there this week, and working with the manager to solicit all of the remaining tenants. Other notes of activity Transition of legacy IN customers to the new products/pricing models is underway. We met with San Juan County on Jan. 14 and agreed to a new, simplified arrangement that will include a slight increase in revenue for IN. We have developed a process for creating and recording communication easements for all last mile connections, and for middle mile routes where necessary. We are employing an expert consultant to help us streamline that process and ensure that the documents are correctly drawn up. We now have Notaries on staff. IN Team is now operating in its new Eastsound office space with a plan to open full customer sales and support capability within Q1 2015.

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NEW SERVICES

December 2014

Orcas

San

Juan Lopez Center/Decatur

Blakely/Obstruction/

Crane/Shaw Total

Residential 2 2 4

Commercial 3 2 5

Line Retention 0

Other - OPALCO 0

Total* 5 4 0 0 0 9

2014 YTD 53 69 17 3 4 146

2013 YTD 34 59 21 5 7 126

2012 YTD 26 50 31 3 2 112

2011 YTD 37 68 12 2 8 127

2010 YTD 63 89 21 4 3 180

2009 YTD 76 95 26 5 4 206

2008 YTD 90 121 51 5 5 272

2007 YTD 289

*Figures have been queried from the Service Order billing module and reconciled

to the RUS Form 7 New Service numbers.

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OPALCOHistorical MORE Revenue

(All Green kWh and MORE Blocks)

For Years 2012 - 2014 YTD

All Green All Green All Green

# kWh # # Block Total # kWh # # Block Total # kWh # # Block Total

Month Members kWh Revenue Members Blocks Revenue Revenue Members kWh Revenue Members Blocks Revenue Revenue Members kWh Revenue Members Blocks Revenue Revenue

0.04$ 4$ 0.04$ 4$ 0.04$ 4$

Jan 44 47,428 1,897 454 970 3,880 5,777 43 54,479 2,179 433 921 3,684 5,863 44 41,878 1,675 411 871 3,484 5,159

Feb 43 37,664 1,507 452 962 3,848 5,355 43 50,927 2,037 432 918 3,672 5,709 44 47,227 1,889 410 870 3,480 5,369

Mar 42 37,682 1,507 449 953 3,812 5,319 42 42,787 1,711 429 915 3,660 5,371 44 35,590 1,424 408 866 3,464 4,888

Apr 42 27,636 1,105 449 953 3,812 4,917 42 31,063 1,243 427 904 3,616 4,859 44 30,702 1,228 408 865 3,460 4,688

May 42 21,993 880 448 952 3,808 4,688 41 21,699 868 426 897 3,588 4,456 44 26,412 1,056 408 858 3,432 4,488

Jun 43 20,335 813 448 952 3,808 4,621 41 20,336 813 426 897 3,588 4,401 45 17,020 681 418 870 3,480 4,161

Jul 43 19,649 786 449 953 3,812 4,598 43 17,756 710 425 895 3,580 4,290 44 19,421 777 416 865 3,460 4,237

Aug 43 22,457 898 446 948 3,792 4,690 42 18,716 749 421 893 3,572 4,321 44 16,540 662 415 864 3,456 4,118

Sep 42 13,136 525 443 947 2,530 3,055 42 18,786 751 418 890 3,560 4,311 44 16,477 659 414 860 3,440 4,099

Oct 42 21,162 846 443 947 3,788 4,634 43 23,882 955 415 887 3,548 4,503 45 17,566 703 413 860 3,440 4,143

Nov 44 30,335 1,213 438 943 3,772 4,985 44 31,535 1,261 414 881 3,524 4,785 44 27,414 1,097 410 860 3,440 4,537

Dec 43 43,849 1,754 437 929 3,716 5,470 44 47,347 1,894 412 879 3,516 5,410 42 36,929 1,477 409 855 3,420 4,897

Total 43 343,326 13,733$ 446 11,409 44,378$ 58,111$ 43 379,313 15,173$ 423 10,777 43,108$ 58,281$ 44 333,176 13,327$ 412 10,364 41,456$ 54,783$

Notes: 2 members participate in both All Green and Green Blocks. Average blocks per member is 2.1.

Average kWh per month usage for All Green members is 631 kWh (below average for residential)

Beginning June 2011, report reflects combined data for the former Green Power program and MORE.

Beginning September 2012, half of the members were transitioned to a mid-month billing cycle; these

members were billed for 15 days of consumption, a prorated basic charge, and prorated MORE blocks

on 9/14/12.

2014 YTD

MORE Blocks

2013 YTD

MORE Blocks

2012 YTD

MORE Blocks

1/6/201591 of 93

BPA Consumption SummaryThrough

December 2014

A. B. C. D. E.Prior 12 Months Prior 12 Months Current 12 Months Current 12 Months Difference (D-B)

Jan-13 25,942,681 Jan-14 24,042,632 (1,900,049) Feb-13 20,704,258 Feb-14 24,808,824 4,104,566 Mar-13 20,690,151 Mar-14 21,068,301 378,150 Apr-13 17,253,318 Apr-14 16,580,487 (672,831)

May-13 14,309,061 May-14 13,567,275 (741,786) Jun-13 12,503,372 Jun-14 12,439,266 (64,106) Jul-13 13,179,669 Jul-14 13,334,282 154,613

Aug-13 13,635,840 Aug-14 13,371,257 (264,583) Sep-13 13,342,354 Sep-14 12,487,726 (854,628) Oct-13 17,149,832 Oct-14 14,894,686 (2,255,146) Nov-13 20,925,364 Nov-14 21,386,705 461,341 Dec-13 28,277,954 Dec-14 24,368,500 (3,909,454)

217,913,854 212,349,941 (5,563,913)

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

J F M A M J J A S O N D

kWh Purchased - Load Variance (rolling 12 months)

Prior 12 Months Current 12 Months

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BPA Consumption SummaryThrough

December 2014

A. B. C. D. E. F. G. H.

Prior 12 Months Prior 12 Months $ per kWh Current 12 Months Current 12 Months $ per kWh Difference (E-B) % Change (F to C)

Jan-13 $736,305 $0.0284 Jan-14 $670,805 $0.0279 -$65,500 -2%

Feb-13 $675,379 $0.0326 Feb-14 $961,210 $0.0387 $285,831 19%

Mar-13 $688,755 $0.0333 Mar-14 $691,864 $0.0328 $3,109 -1%

Apr-13 $691,224 $0.0401 Apr-14 $651,601 $0.0393 -$39,623 -2%

May-13 $289,366 $0.0202 May-14 $425,316 $0.0313 $135,950 55%

Jun-13 $303,730 $0.0243 Jun-14 $424,286 $0.0341 $120,556 40%

Jul-13 $238,152 $0.0181 Jul-14 $371,553 $0.0279 $133,401 54%

Aug-13 $380,699 $0.0279 Aug-14 $429,270 $0.0321 $48,571 15%

Sep-13 $395,230 $0.0296 Sep-14 $441,858 $0.0354 $46,628 19%

Oct-13 $610,063 $0.0356 Oct-14 $516,082 $0.0346 -$93,981 -3%

Nov-13 $635,770 $0.0304 Nov-14 $711,250 $0.0333 $75,480 9%

Dec-13 $998,086 $0.0353 Dec-14 $849,021 $0.0348 -$149,065 -1%

Total Annual Percent Change 7.5%

Total Rolling 12 Months (2013) Total Rolling 12 Months (2014) Total Difference

Annual kWh Purchase 217,913,854 212,349,941 -$5,563,913 -2.55%Annual Total Bill $ 6,642,759 7,144,116 $501,357 7.55%Annual $ per kWh $0.0305 $0.0336 $0.0032 10.37%

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

J F M A M J J A S O N D

$ Total Bill (rolling 12 months)

Prior 12 Months Current 12 Months

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BOARD OF DIRECTORS BOARD MEETING 8:45 a.m.

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