CONTINUING DISCLOSURE REPORT...Dogwood Generating Facility Project Fredericktown Energy Center...

CONTINUING DISCLOSURE REPORT POWER PROJECT REVENUE BONDS

Dogwood Generating Facility Project

Fredericktown Energy Center Project

Iatan Unit 2 Project

Plum Point Project

Prairie State Project

FISCAL YEAR ENDING December 31, 2017

Prepared by:

Michael J. Loethen Chief Financial Officer & Vice President of Administrative Services

Updated May 31, 2018 This Continuing Disclosure Report (the “Report”) provides information and updates pertaining to certain MJMEUC projects that have been financed with bonds and is not intended to be an all-inclusive report regarding MJMEUC’s operations or financial position. This Report is delivered as required by MJMEUC pursuant to continuing disclosure undertakings entered into in connection with the issuance of its Power Project Revenue Bonds, and pursuant to Rule 15c2-12 of the Securities and Exchange Commission. Nothing contained in the undertaking or this document shall be deemed to be a representation by MJMEUC that the financial information and operating data included in this Report constitutes all of the information that may be material to a decision to invest in, hold or sell any securities of MJMEUC. The financial data and operating data presented in this document are as of the dates shown.

Under the terms of MJMEUC’s CONTINUING DISCLOSURE AGREEMENT, the Report is to be disseminated to the MSRB via EMMA not later than 5 months after the end of each of MJMEUC’s fiscal year (currently, by May 31). MJMEUC members’ audits required by this Report will be disseminated in conjunction with this Report or as soon as received.

Contents

Officers & Management Information ................................................................................. 2

Introduction ......................................................................................................................... 3

MJMEUC - Map of Project Locations & MPUA/MJMEUC Office .................................. 6

MJMEUC – Map of MoPEP Pool Participants and Unit Power Purchasers ...................... 7

MoPEP Facilities Bonds ..................................................................................................... 8

Dogwood Generating Facility .................................................................................10

Fredericktown Energy Center .................................................................................14

Iatan Unit 2 Project .............................................................................................................18

Plum Point Project ..............................................................................................................22

Prairie State Project.............................................................................................................28

Major Purchasers:

A. Missouri Public Energy Pool #1 (“MoPEP”) ........................................................34

B. MoPEP Large Pool Power Purchasers ..................................................................42

C. Large Unit Power Purchasers ...............................................................................48

• North Little Rock, AR (Unit Power Purchaser - Plum Point)............................50

• Osceola, AR (Unit Power Purchaser - Plum Point)............................50

• Poplar Bluff, MO (Unit Power Purchaser - Plum Point)............................50

• Kirkwood, MO (Unit Power Purchaser - Prairie State) ..........................54

• Hannibal, MO (Unit Power Purchaser - Prairie State) ..........................58

• Columbia, MO (Unit Power Purchaser - Iatan Unit 2, Prairie State) .....62

• Independence, MO (Unit Power Purchaser - Iatan Unit 2) ..........................68

MJMEUC 2017 Audited Financial Statements...................................................................76

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Officers & Management Information

Missouri Joint Municipal Electric Utility Commission

1808 I-70 Drive S.W. Columbia, Missouri 65203 (573) 445-3279

2017-2018 MJMEUC Officers

Chair ............................................................................................... Chuck Bryant

Vice Chair ....................................................................................... Bruce Harrill

Secretary/Treasurer ......................................................................... Andy Boatright

Chair, Engineering Committee ....................................................... Bob Stevenson

Chair, Operating Committee ........................................................... Kyle Gibbs

Chair, Budget & Finance Committee ............................................. Richard Shockley

Chair, Power Contract Cities Committee ....................................... Chad Davis

Chair, MISO Committee ................................................................. Tad Johnsen

Chair, SPP Committee .................................................................... Steve Stodden

Member at Large............................................................................. Ron Scheets

Immediate Past Chair ...................................................................... Jim Gillilan

MJMEUC Management

President, Chief Executive Officer, and General Manager......... Duncan Kincheloe

Senior Vice President and Associate General Manager ............. Eve Lissik

Chief Operating Officer and Vice President of Engineering, Operations and Power Supply ................................................

John Grotzinger

Chief Financial Officer and Vice President of Administrative Services ..................................................................................

Michael J. Loethen

Financial Advisor

Ramirez & Co., Inc. New York, New York

Bond Counsel Trustee, Bond Registrar and Paying Agent Gilmore & Bell, P.C. Kansas City, Missouri

The Bank of New York Mellon Trust Company, N.A. St. Louis, Missouri

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Introduction

MJMEUC

The Missouri Joint Municipal Electric Utility Commission, (“MJMEUC”), a body public and corporate of the State of Missouri, was created by contract as of May 1, 1979 (the “Joint Contract”) for the purpose of permitting cities, incorporated towns and villages of the State of Missouri that own and operate retail electric utility systems and that become parties to such contract (the “Contracting Municipalities” or the “Members”) to secure, by joint action among themselves, or by contract with other utilities, an adequate, reliable and economical supply of electric power and energy. The Joint Contract was entered into pursuant to the Joint Municipal Utility Commission Act, Sections 393.700 to 393.770, Revised Statutes of Missouri, as amended (the “Act”). Under the Act, MJMEUC may construct, operate and maintain jointly owned generation, transmission and distribution facilities and related resources for the benefit of its Members. MJMEUC has the authority to enter into contracts for power supply, transmission service, and other services necessary for the operation of an electric utility. Established by six charter Members, MJMEUC has grown to a membership of 70 municipally-owned retail electric systems ranging in size from 233 to 114,942 electric service meters, as of 2017 calendar year-end. In order to become a Member, a city, town or village requesting membership must execute and deliver a supplement to the Joint Contract, satisfy certain requirements for membership as set forth in the Joint Contract, and be approved by the affirmative vote of two-thirds of the MJMEUC Board of Directors. Under the Act and the Joint Contract, each Member is represented on the Board of Directors by a director and alternate director, and are eligible to participate in all activities undertaken by MJMEUC on behalf of its Members. In 1989, MJMEUC created two additional categories of membership to accommodate participation in MJMEUC’s power supply programs and projects by entities that do not quality for regular membership in accordance with the Act and the Joint Contract. The first additional category is referred to as “advisory membership,” and is open to municipalities located outside the State of Missouri who operate electric utility systems. The second additional category is referred to as “associate membership,” and is open to rural electric cooperatives located within or outside of the State of Missouri. MJMEUC’s Advisory Members currently consist of four municipally-owned retail electric systems located in the State of Arkansas. MJMEUC’s Associate Members currently consist of one rural electric cooperative located in the State of Missouri. MJMEUC Members’ and Advisory Members’ electric systems serve over 500,000 retail customers, and have a combined peak load of approximately 3,200 MW, as of 2017 calendar year-end.

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ENERGY POOLS

There are three full requirements energy pools within MJMEUC: MoPEP, which consists of 35 municipal members, the Mid-Missouri Municipal Power-Energy Pool (“MMMPEP”), which consists of 13 municipal members and the Southwest Missouri Public Energy Pool (“SWMPEP”), which consists of two (2) municipal members. Missouri Public Energy Pool #1 MoPEP was formed for the benefit of those MJMEUC Members that are participating in MoPEP (the “Pool Power Purchasers”), pursuant to an agreement among MJMEUC and each Pool Power Purchaser (the “Pool Power Purchase Agreement”). MoPEP commenced operations on January 1, 2000. The Pool Power Purchase Agreement provides for MJMEUC to supply the full energy requirements of each Pool Power Purchaser. As of December 31, 2017, the Pool Power Purchasers currently consist of 35 of MJMEUC’s Members who take full requirements service from MoPEP. The Pool Power Purchaser Agreement does not have an established termination date and will remain in effect until cancelled as to all Pool Power Purchasers. The Pool Power Purchasers directed MJMEUC to acquire ownership interests and/or long-term capacity entitlements in several generating facilities, the first of which commenced operations in 2007. MoPEP operations are governed by a committee (the “Pool Committee”) consisting of one representative from each Pool Power Purchaser. Rates established by the Pool Committee for services to Pool Power Purchasers are based on recovery of all of MJMEUC’s expenses. Rates are established so as to charge each Pool Power Purchaser its proportionate share of all costs associated with MJMEUC’s performance under the Pool Power Purchase Agreement. If the Pool Power Purchase Agreement is cancelled by a Pool Power Purchaser for any reason, the Pool Power Purchaser must continue to pay MoPEP monthly charges designed to recover the Pool Power Purchaser’s allocable share of MJMEUC’s direct costs associated with the Pool Power Purchase Agreement. Only the Pool Power Purchasers, and no other MJMEUC Members, are responsible for MJMEUC’s obligations under the Pool Power Purchase Agreement. Each Pool Power Purchaser owns and operates an electric system for the distribution of electric power and energy, together with the additional facilities necessary to conduct its business. As of December 31, 2017, twelve Pool Power Purchasers operate electric generating facilities, all the capacity of which is dedicated solely to MoPEP. Retail electric service in areas adjoining the service areas of the Pool Power Purchasers is provided by investor-owned utilities (“IOUs”) or rural electric cooperatives which, in some instances, also serve a limited number of customers within the corporate limits of the Pool Power Purchasers. Missouri law controls the boundaries of an electric utility’s assigned service area, and changes to these boundaries must be approved by the Missouri Public Service Commission. Mid-Missouri Municipal Power-Energy Pool The second pool operated by MJMEUC is called the Mid-Missouri Municipal Public Energy Pool (“MMMPEP”). The original twelve municipal members of the MMMPEP pool entered into power

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purchase contracts with MJMEUC for the full power requirements of their respective municipality. These contracts were originally for five years and were set to expire on May 31, 2018. MJMEUC and MMMPEP entered into a new contract in 2016 that extended the commitment of services for an additional ten years, now expiring on May 31, 2028. A thirteenth city joined MMMPEP as a member in 2016 and began receiving full requirements power in January 2018. Southwest Missouri Public Energy Pool The third pool operated by MJMEUC is called the Southwest Missouri Public Energy Pool (“SWMPEP”). On September 29, 2017, MJMEUC authorized the Missouri cities of Monett and Mt. Vernon (together, the “SWMPEP Cities”) to join MJMEUC and execute a power supply contract with the SWMPEP Cities. The SWMPEP Cities and MJMEUC have executed ten-year power purchase contracts for the full power requirements of their respective municipality. Supply pursuant to these contracts will begin in June 2020 and expires May 31, 2030. MPUA

The Missouri Public Utility Alliance (“MPUA”) represents community-owned (municipal) electric, natural gas, wastewater, and water utilities that work together for the benefit of their customers - customers who, in effect, "own" the utilities in their community. For many years, the vision of a strong, versatile and multi-faceted collaboration grew in the minds of municipal utility leaders from across Missouri. In October of 1998, the three member organizations of MPUA (Municipal Gas Commission of Missouri, Missouri Association of Municipal Utilities, and Missouri Joint Municipal Electric Utility Commission) voted to combine efforts and resources to better serve their members by establishing the umbrella of the Missouri Public Utility Alliance. MPUA is a trade name representing the nature of the partnership among the three legally distinct member organizations. Each organization maintains its own legal status and Board of Directors. A Joint Operating Committee, comprised of three Executive Committee members from each of the three organizations, provides guidance and cohesiveness to joint issues. An integrated set of budgets make the broad array of MPUA services available to all members of the three member organizations.

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MJMEUC – Map of Project Locations & MPUA/MJMEUC Office

The Laddonia Project is a nominal 12 MW natural gas fired generating facility near the City of Laddonia, Missouri owned by MJMEUC. The generating facility, which commenced commercial operations in the third quarter of 2007, is included for illustration purposes only. MJMEUC has not issued any revenue bonds for the construction or operations for the Laddonia facility, and there are no continuing disclosure requirements related to this facility.

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MJMEUC – Map of MoPEP Pool Participants & Unit Power Purchasers

Note: Effective June 1, 2017 Marceline is no longer a Unit Power Purchaser and was released of such obligations as a result of full assignment of its 4 MW capacity and energy offtake to MoPEP (see “Prairie State Project”).

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MoPEP FACILITIES BONDS

MJMEUC has issued its MoPEP Facilities Bonds to finance the Fredericktown Energy Center and Dogwood Generating Facility. The MoPEP Facilities Bonds are payable from certain net revenues generated by MJMEUC from MoPEP under the Pool Power Purchase Agreement; revenues dedicated to repayment of debt issued for other specific projects (like Iatan Unit 2, Prairie State and Plum Point) are excluded as a source of revenue for repayment of MoPEP Facilities Bonds.

Bonds

Issue Date

Final

Maturity

Amount Outstanding as of

December 31, 2017* Power Supply System Revenue Bonds (MoPEP Facilities), Series 2011**

12/8/2011

12/1/2020

$ 2,175,000

Power Supply System Revenue Bonds (MoPEP Facilities), Series 2012**

3/28/2012

1/1/2021

$ 3,850,000

Power Supply System Revenue Bonds (MoPEP Facilities), Series 2017 (Refunding Bonds)***

12/21/2017

12/1/2036

$ 35,600,000

*Balances shown are net of any debt refunded amounts, as applicable. **Partially advance refunded with the Series 2017 bonds. ***Proceeds from the Series 2017 partially refunded certain MoPEP Series 2011 & Series 2012 Bonds.

Ratings:

Fitch Ratings: A Stable Outlook Moody’s Investor Services: A2 Stable Outlook

The Series 2011 Bonds were issued to finance MJMEUC’s costs to construct the Fredericktown Energy Center, to fund a debt service reserve for the Series 2011 Bonds, and to pay costs of issuance of the Series 2011 Bonds. The capacity and power of the MJMEUC ownership interest is fully dedicated to MoPEP power supply needs. The Series 2012 Bonds were issued to finance MJMEUC’s costs to acquire an undivided 8.2% ownership interest in the Dogwood Generating Facility, fund a debt service reserve, and pay costs of issuance. The capacity and power of the MJMEUC ownership interest is fully dedicated to MoPEP power supply needs. The Series 2017 Bonds were issued to advance refund and defease certain of MJMEUC’s outstanding Power Supply System Revenue Bonds (MoPEP Facilities), Series 2011 and Series 2012 and pay costs of issuance of the Series 2017 Bonds. The refunding was initiated by MJMEUC to achieve interest cost savings and reduce annual debt service requirements. MJMEUC reduced its MoPEP total debt service payments by approximately $3.7 million with this refunding.

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DOGWOOD GENERATING FACILITY

Introduction The Dogwood Generating Facility is a nominal 610 MW combined-cycle natural gas-fired electric generating facility located in Pleasant Hill, Missouri. As of April 30, 2018, MJMEUC owns an undivided 8.2% ownership interest in all of the assets, properties and rights related to the Dogwood Generating Facility. Five of the six co-owners of the Dogwood Generating Facility are public power entities. Below is the complete list of co-owners of the Dogwood Generating Facility.

Owner (April 30, 2018) Ownership Interest % MJMEUC 8.2% Kansas Power Pool 10.3% City of Independence, Missouri 12.3% Kansas City, Kansas Board of Public Utilities 17.0% Kansas Municipal Electric Agency (“KMEA”) 10.1% Dogwood Energy, LLC 42.1%

In March 2018, Dogwood Energy, LLC sold a 10.1% interest in the Dogwood Generating Facility to KMEA. Upon consummation of KMEA’s purchase, KMEA became party to, and is now bound by the terms of, the Participation Agreement among the co-owners. Dogwood Energy, LLC has publicly announced its intention to sell all or a part of its remaining interest in the Dogwood Generating Facility.

MJMEUC and Dogwood Energy, LLC, entered into an Asset Purchase Agreement, dated as of January 26, 2018, whereby MJMEUC plans to acquire an additional 8.2% undivided ownership interest in the Dogwood Generating Facility, for a total undivided ownership interest of 16.4% after the planned

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acquisition is complete. The acquisition closed on May 31, 2018. MJMEUC funded the acquisition costs through the issuance of $26,605,000 principal amount of MoPEP Facilities Bonds, Series 2018, which closed on May 30, 2018. Following MJMEUC’s closing on the additional 8.2% undivided ownership interest, Dogwood Energy, LLC’s ownership interest will be reduced to 33.9%.

Participants

All of MJMEUC’s interest in the Dogwood Generating Facility has been dedicated to MoPEP.

Project Financing MJMEUC issued its MoPEP Facilities Series 2012 Bonds to finance MJMEUC’s costs to acquire an undivided 8.2% ownership interest in the Dogwood Generating Facility, fund a debt service reserve, and pay costs of issuance. The Series 2012 Bonds were originally issued in the principal amount of $32,950,000.

The Series 2017 Bonds were issued to advance refund and defease a portion of MJMEUC’s outstanding MoPEP Facilities Bonds, which included certain Series 2012 Bonds. (See “MoPEP Facilities Bonds”).

All anticipated capital costs are included in MJMEUC’s annual budget. Capital costs are funded through member rates. MJMEUC has available, and may use at its discretion, operating and maintenance accounts and reserve accounts for funding operating and capital costs.

Project Update Background

The Dogwood Generating Facility (“Dogwood”) is contained within a 67 acre parcel. The generating station includes two Siemens Westinghouse model 501FD2 gas-fired turbines that were upgraded in 2009 to model 501FD3 specifications, two Toshiba heat recovery steam generators (“HRSGs”), a Toshiba steam turbine, three generator step-up transformers, associated buildings, and ancillary support facilities. The generating station was constructed by Black & Veatch. Dogwood contracts with North American Energy Services (“NAES”) operating company to operate and maintain the plant on behalf of the ownership group. With duct-firing and power augmentation, the plant has a 650 MW nominal output capacity measured at 60 degrees and 60% humidity, and an annual average of approximately 635 MW. Dogwood primarily serves as an intermediate power supply resource for MoPEP.

Dogwood is within the Southwest Power Pool (“SPP”) Regional Transmission Operator (“RTO”) geographical footprint and participates in the SPP Day-Ahead Market. The plant is located adjacent to an existing substation owned and operated by KCP&L - GMO and includes three 161 kV interconnections and two 345 kV interconnections. The 161 kV steps down to 69 kV and has direct connection to MJMEUC’s MoPEP member, the City of Harrisonville, Missouri.

On March 1, 2014 Dogwood began operations in the newly formed SPP Day-Ahead Market (the “Market”). Dogwood continues to benefit from its place in the Market, especially when outages occur with the larger units in SPP and with its relative short startup time. There are additional generation opportunities when wind generation resources drop off from the grid.

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Project Performance Summary

Dogwood’s overall 2017 operations met MJMEUC’s expectations with an operating availability factor of 88.5% for the year. Scheduled outages were completed during the year for repair and maintenance activities customary from time to time for a similarly designed facility. Dogwood had two outages scheduled and completed in 2017, one in spring and one in the fall. Both outages were routine 14-day scheduled outages where no major issues were found.

Opportunities for SPP to dispatch Dogwood were limited during the first three months of 2017 due to mild temperatures, high wind generation and a lack of large coal unit outages, even with low gas prices. The aforementioned spring 14-day scheduled outage started on March 25, 2017. The outage served primarily as a “tune-up” for summer operations, however, there was additional work completed on the heat recovery steam generators (“HRSGs”), also known as the boilers.

During the first quarter of 2018, Dogwood operated at a capacity factor 26.4% which equated to a total generation of 370,710 MWhrs which exceeded expectations. Expectations were exceeded as a result of a combination of strong market conditions due to colder temperatures, other unit outages in the region and a scheduled outage shift from March to April 2018.

NAES staff under the direction of Dogwood Management Company continues to provide excellent operational and project management services to the Dogwood Generating Facility owners. Dogwood Management Company works well with NAES on plant operations, Westar on the Energy Management of the unit, and Panhandle and Southern Star on gas contracts.

The Dogwood Generating Facility was awarded the highest safety award for all the combined-cycle plants of its size in the NAES fleet at the NAES Safety Conference in February 2017. Dogwood continues to have an excellent environmental and safety record and continues to be a valuable asset for MoPEP in SPP as well as providing great value to MJMEUC’s members.

Permits, Licenses and Approvals

All permits necessary for operation of Dogwood remain in place.

Capital Expenditures

MJMEUC’s share of capital improvements related to the Dogwood Generating Facility totaled $221,364 in fiscal year 2017. These costs were funded through rates and charges paid by MoPEP.

Reserve Accounts

MJMEUC has fully funded all required debt service reserves and operating and maintenance reserves required by the bond documents.

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Performance Statistics The following chart summarizes 2017 operations and an update of operations through the first quarter of 2018 for Dogwood.

Thru 1Q 2018 2017 AnnualDogwood Net Generation (MWh) 370,710 1,133,000 Plant Capacity Factor 26.4% 19.9%Plant Operating Availability Factor 99.1% 88.5%Total Fuel Cost 8,660,313$ 27,087,574$

2017Operating ExpensesFuel & Transportation 2,221,163$ Other Variable Expenses and Commodities 144,404 Fixed Operating Expenses 1,034,422 Total Operating Expenses 3,399,989

Capital Costs and Reserve RequirementsNet Debt Service 2,245,595 Capital Expenditures 221,364 Total Capital Costs 2,466,959

Total Dogwood Project Annual O&M Costs 5,866,948$ Average Annual Busbar Cost ($/MWh) 64.19$

2017 AveragePower Purchaser Net Revenue Busbar ($/MWh)

MoPEP (Net of off system sales) 5,866,948$ $64.1991,399

MJMEUC Project Costs

ElectricitySold (MWh)


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FREDERICKTOWN ENERGY CENTER

IntroductionThe Fredericktown Energy Center (the “Fredericktown Facility”) is a two-unit, 28 MW (combined) natural gas fired generating facility, and located in the City of Fredericktown, Missouri.

Participants All of MJMEUC’s interest in the Fredericktown Facility has been dedicated to MoPEP.

Project Financing

MJMEUC issued its MoPEP Facilities Series 2011 Bonds to finance MJMEUC’s costs to construct the Fredericktown Energy Center, to fund a debt service reserve for the Series 2011 Bonds, and to pay costs of issuance of the Series 2011 Bonds. The Series 2011 Bonds were originally issued in the principal amount of $17,060,000.

The Series 2017 Bonds were issued to advance refund and defease a portion of MJMEUC’s outstanding MoPEP Facilities Bonds, which included certain Series 2011 Bonds. (See “MoPEP Facilities Bonds”).

Owner Ownership Interest % MJMEUC 100.0%

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Project Update Background

On January 31, 2013, turbines were operated up to full speed with no load for the first time. Additional third party electrical interconnection upgrades to connect the plant to the power grid, final tuning, testing and startup followed before Fredericktown Energy Center commenced operations at the end of June 2015. Compliance tests were completed for both turbines and submitted to the Missouri Department of Natural Resources for review. Test reports show the Fredericktown Energy Center units performed well below their permitted limits. To date, all permits necessary for operation of the Fredericktown Energy Center remain in place.

The Fredericktown Energy Center serves as an efficient natural gas peaking power supply resource within the MoPEP power supply portfolio and is interconnected into the SPP Regional Transmission Operator (“RTO”) geographical footprint and participates in the real-time market. The turbines have been equipped for remote operations from MJMEUC’s Columbia, Missouri office. SPP contacts MJMEUC’s energy schedulers when making notifications for unit operations. The energy schedulers then remotely start and operate the turbines for the required schedule based on SPP requirements.

MJMEUC has a maintenance agreement with Solar Turbines, Inc. (“Solar”), the turbines’ original equipment manufacturer (“OEM”). MJMEUC staff and the member cities of Macon and Fredericktown assist MJMEUC with operations of the Fredericktown Energy Center.

The Fredericktown Energy Center turbines successfully completed its second full year of operations in 2017. The Fredericktown Energy Center experienced increased operations in 2017 as SPP continued to request the unit to operate for peaking applications. The turbines short start time characteristics and flexible operating parameters have proven to be a reliable source to SPP and a valuable asset and resource mix to MoPEP.

During the first four months of 2017, Fredericktown Energy Center was available for operations in SPP. The winter cold temperatures in December and January typically provide the Fredericktown Energy Center the opportunity to generate in the real-time market. However, the two turbines saw limited operations in early January. With warmer mid-January temperatures, and high wind generation, loads were down and limited opportunities existed to generate in the SPP market. A scheduled short semi-annual inspection occurred during the week of April 10-14, 2017 and the units were promptly returned to service for SPP dispatching. Throughout 2017, the Fredericktown Energy Center units’ operating times increased as SPP continued to request their service for peaking applications.

During the first two months of 2018, both Fredericktown Energy Center’s turbines were dispatched several times, with a couple of continuous overnight operations. During the first three weeks of January 2018, the facility’s performance exceeded the hours of operations in 2017 with a 50% increase in generation output. The turbines continue to receiving dispatching requests in the SPP day-ahead and real-time markets. Their quick starting times, flexible operations and heat rate makes them a viable peaking asset to SPP.

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Twice a year, spring and fall, the units are typically scheduled for short outages for preventative maintenance activities performed by the OEM, Solar Turbines, and all balance of plant maintenance activities are performed by MJMEUC staff and City of Macon staff.

Permits, Licenses and Approvals

All permits necessary for operation of the Fredericktown Energy Center remain in place.


There were no capital improvement expenditures related to the Fredericktown Energy Center in fiscal year 2017. MJMEUC typically funds any capital improvement expenditures through MoPEP rates and charges.

Performance Statistics The following chart summarizes 2017 operations and an update of operations through the first quarter of 2018 for the Fredericktown Energy Center. The Fredericktown Energy Center includes two single-shaft turbine generators, each with a nominal net output capacity of approximately 12 MW to serve MoPEP peaking capacity needs.

Thru 1Q 2018 2017 AnnualFredericktown Net Generation (MWh) 3,539 2,225 Plant Capacity Factor 6.4% 1.0%Plant Operating Availability Factor 99.97% 97.95%Total Fuel Cost 38,081$ 147,553$

2017Operating ExpensesFuel & Transportation 147,553$ Other Variable Expenses and Commodities 29,494 Fixed Operating Expenses 258,674 Total Operating Expenses 435,721

Capital Costs and Reserve RequirementsNet Debt Service 1,246,530 Capital Expenditures - Total Capital Costs 1,246,530

Total Fredericktown Project Annual O&M Costs 1,682,251$

Power Purchaser Net RevenueMoPEP (Net of off-system sales) 1,682,251$


Sold (MWh)2,225

Electricity

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IATAN UNIT 2 PROJECT

Introduction

In August 2006, MJMEUC acquired an undivided interest in the Iatan Unit 2, a 870 MW (net) coal-fired generating plant constructed at the Iatan Station site in Platte County, Missouri (“Iatan Unit 2”). MJMEUC’s undivided interest in Iatan Unit 2 and certain associated common facilities entitles MJMEUC to approximately 102 MW (net) of the capacity and output of Iatan Unit 2 (the “Iatan 2 Project”). Iatan Unit 2 commenced operation in January 2011.

Kansas City Power & Light (“KCP&L”) is the majority owner and operator of the Iatan Station site and was the developer of the Iatan Unit 2. The current co-owners of Iatan Unit 2 are:

Owner Ownership Interest %

MJMEUC 11.8% Kansas Electric Power Cooperative 3.5 Empire District Electric Company 12.0 KCP&L Greater Missouri Operations Company 18.0 Kansas City Power & Light 54.7

MJMEUC continues to monitor project operations since construction was finalized in January 2011 and also retains an outside engineering consultant to provide additional monitoring of the Iatan Unit 2 Project operations.

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Participants

Approximately 71 MW of the capacity of the Iatan 2 Project is assigned to the Missouri cities of Columbia and Independence (together, the “Iatan Unit Power Purchasers”) pursuant to separate unit-specific, life-of-unit, take-or-pay power purchase agreements between MJMEUC and each of the Iatan Unit Power Purchasers, and the balance of the capacity of the Iatan 2 Project (approximately 31 MW) is assigned to MoPEP to provide a portion of the electric power and energy requirements of those MJMEUC Members participating in MoPEP. Iatan Unit 2 Project MoPEP Cities: Albany, Ava, Bethany, Butler, Carrollton, Chillicothe, El Dorado Springs, Farmington, Fayette, Fredericktown, Gallatin, Harrisonville, Hermann, Higginsville, Jackson, La Plata, Lamar, Lebanon, Macon, Marshall, Memphis, Monroe City, Odessa, Palmyra, Rock Port, Rolla, Salisbury, Shelbina, St. James, Stanberry, Thayer, Trenton, Unionville, Vandalia, and Waynesville. Iatan Unit 2 Project Unit Power Participants: Cities of: Columbia and Independence.

Project Financing

Bonds Issue Date

Final Maturity


December 31, 2017* Iatan 2 Project, Series 2009A ** 4/1/2009 1/1/2019 $ 4,485,000 Iatan 2 Project, Series 2014A (Refunding Bonds) 10/7/2014 1/1/2034 151,095,000

Iatan 2 Project, Series 2015A (Refunding Bonds) 11/5/2015 12/1/2038 80,265,000

* Balances shown are net of any debt refunded amounts, as applicable. ** Partially advance refunded with 2014A and 2015A Bonds.

Ratings: Fitch Ratings: A Stable Outlook

Moody’s Investor Services: A2 Stable Outlook MJMEUC issued its Series 2006 Bonds (fully retired in 2016; original principal amount of $182,385,000) and Series 2009 Bonds (original principal amount of $103,135,000) to finance MJMEUC’s share of costs to construct Iatan Unit 2 and certain associated common facilities. All necessary financing for construction of MJMEUC’s portion of Iatan Unit 2 is complete. Final construction costs of approximately $1.85B for completion cost of Iatan Unit 2, common facilities and initial coal inventory were determined in 2012 after procurement efforts closed out all contracts and purchase orders.

In fall 2014, MJMEUC issued the Series 2014A Bonds to advance refund a portion of its Power Project Revenue Bonds Series 2006A and Series 2009A. The advance refunding was initiated by MJMEUC to achieve interest cost savings and reduce annual debt service requirements. MJMEUC reduced its Iatan total debt service payments by approximately $23.9 million with this advance refunding.

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In fall 2015, MJMEUC issued the Series 2015A Bonds to refund the remaining portion of its Power Project Revenue Bonds Series 2006A and a portion of its Power Project Revenue Bonds Series 2009A. The refunding was initiated by MJMEUC to achieve interest cost savings and reduce annual debt service requirements. MJMEUC reduced its Iatan total debt service payments by approximately $15.0 million with this refunding.

Project Update

Project Performance Summary

The Iatan Unit 2 operations exceeded performance expectations for 2017. Year-end performance summaries showed the unit achieving an annual equivalent availability factor (“EAF”) of 96.4% and capacity factor (“CF”) of 86.45% for the year. Iatan Unit 2 experienced only two forced outages, in February and in December, respectively. The outages were caused by tube leaks and boiler tube overheating stemming from exfoliation issues which have repeatedly affected the boiler in recent years. The facility’s capacity factor has underperformed as compared to previous years primarily due to the influx of wind into the SPP Region and transmission constraints in the Iatan Plant area.

Iatan Unit 2 is conducting its first steam turbine major overhaul during a scheduled spring outage, which began on March 3, 2018. Originally, the steam major overhaul was expected to be completed in approximately 70 days and return to service in mid-May. During disassembly of the turbine-generator several discovery items were identified, which increased the scope of work to be conducted. The largest discovery item related to the insulation in the generator rotor which resulted in a complete rewind of the rotor. As a result, the original return-to-operation date for Iatan Unit 2 is rescheduled for early June 2018. The scope of the outage work also includes replacing the platen and finishing superheater tubes. These tubes, as previously mentioned, have experienced exfoliation issues and their replacement is the critical path of the outage. Preplanning has kept the tube replacements on schedule to be completed well before all the steam turbine work thus not impacting startup schedules.

Coal inventories have remained consistent, BNSF rail deliveries have been good, and the plant has been able to manage its inventories. During the 2018 spring outage, there was a 14-day outage on the coal unloading system for repairs and upgrades. After that, rail deliveries resumed since Iatan Unit 1 was online.

Iatan Unit 2 remains fully compliant with all environmental permits and regulations. In addition, KCP&L has a strong safety culture as demonstrated by their continuous excellent safety record.


MJMEUC’s share of capital improvements related to Iatan Unit 2 totaled $5,789,375 in fiscal year 2017. These costs were funded through rates and charges paid by MoPEP and the Unit Power Purchasers.


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Performance Statistics The following chart summarizes 2017 operations and an update of Iatan Unit 2’s operations through the first quarter of 2018.

Thru 1Q 2018 2017 AnnualIatan Unit 2 Net Generation (MWh) 919,117 6,671,662 Unit Capacity Factor 48.30% 86.45%Unit Operating Availability Factor 57.81% 96.35%Total Fuel Cost 12,637,878$ 89,858,525$

2017Operating ExpensesFuel & Transportation 9,362,314$ Other Variable Expenses and Commodities 572,963 Fixed Operating Expenses 5,046,066 Total Operating Expenses 14,981,343

Capital Costs and Reserve RequirementsNet Debt Service 18,587,735 Deposit to O&M Reserve and other Contingency Fund - Additions to Working Capital - Capital Expenditures 5,789,375 Total Capital Costs 24,377,110

Total Iatan Unit 2 Project Annual O&M Costs 39,358,453$ Average Annual Busbar Cost ($/MWh) 58.25$


Columbia 7,862,873$ 56.62$ Independence 19,701,272 59.97$ MoPEP 11,794,310 56.62$ MJMEUC Total 39,358,455$



138,870

675,718

328,542 208,306

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PLUM POINT PROJECT

Introduction

In March 2006, MJMEUC acquired an undivided interest in the Plum Point Energy Station, a 665 MW (net) coal-fired generating plant recently constructed in northeast Arkansas (“Plum Point”). MJMEUC’s undivided interest in Plum Point entitles MJMEUC to approximately 147 MW (net) of the capacity and output of such generating plant (such interest is referred to herein as the “Plum Point Project”). The Plum Point Energy Station commenced commercial operations on September 1, 2010. The current co-owners of Plum Point are:

Owner Ownership Interest % MJMEUC 22.1% Municipal Energy Agency of Mississippi 6.0 Empire District Electric Company 7.5 East Texas Electric Cooperative, Inc. 7.5 Plum Point Energy Associates, LLC 56.9

In addition to its undivided ownership interest, MJMEUC also executed a long-term power purchase agreement with Plum Point Energy Associates, LLC (“PPEA”), a wholly-owned subsidiary of PPEA Holding Company, LLC, entitling it to 50 MW of capacity and energy from Plum Point. The capacity and energy supplied under the power purchase agreement with PPEA is dedicated to MoPEP. MJMEUC continues to monitor project operations since construction was finalized in September 2010 and also retains an outside engineering consultant to provide additional monitoring of the Plum Point Project (“Plum Point”), operations.

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Participants

MJMEUC has assigned 127 MW of the capacity of the Plum Point Project to three of its Members (the Missouri cities of Poplar Bluff, Carthage and Malden) and to the four Advisory Members that are Arkansas Cities (the cities of North Little Rock, Osceola, Benton and Piggott) pursuant to separate unit power purchase contracts. On June 9, 2011, MJMEUC voted to approve a proposal from the City of Kennett, Missouri (“Kennett”) to terminate Kennett’s 20 MW unit power purchase contract associated with the Plum Point Project and to dedicate the full 20 MW of output to MoPEP to provide a portion of the electric power and energy requirements of the Pool Power Purchasers. In 2012, the Cities of Malden and Piggott agreed to assign 3 MW and 2 MW, respectively, for a combined 5 MW assignment to the City of Benton, Arkansas, effective April 1, 2014. Plum Point Project MoPEP Cities: Albany, Ava, Bethany, Butler, Carrollton, Chillicothe, El Dorado Springs, Farmington, Fayette, Fredericktown, Gallatin, Harrisonville, Hermann, Higginsville, Jackson, La Plata, Lamar, Lebanon, Macon, Marshall, Memphis, Monroe City, Odessa, Palmyra, Rock Port, Rolla, Salisbury, Shelbina, St. James, Stanberry, Thayer, Trenton, Unionville, Vandalia, and Waynesville. Plum Point Project Unit Power Participants: Missouri Cities: Carthage, Malden, and Poplar Bluff Arkansas Cities: North Little Rock, Osceola, Piggott, and Benton

Project Financing

Bonds Issue Date

Final Maturity


December 31, 2017* Plum Point Project, Series 2009A (Federally Taxable Build America Bonds – Direct Pay)

8/20/2009 1/1/2039 $ 48,600,000

Plum Point Project, Series 2009B 8/20/2009 1/1/2037 4,860,000 Plum Point Project, Series 2014A (Refunding Bonds) 12/20/2014 1/1/2034 185,765,000

Plum Point Project, Series 2015A (Refunding Bonds) 12/17/2015 1/1/2036 37,215,000

* Balances shown are net of any debt refunded amounts, as applicable.


Moody’s Investor Services: A3 Stable Outlook Standard & Poor’s Rating Service: A- Stable Outlook

MJMEUC issued its Series 2006 Bonds (original principal amount of $278,880,000) and Series 2009 Bonds (original principal amount of $53,460,000) to finance MJMEUC’s share of costs to construct Plum Point. All necessary financing for construction of MJMEUC’s portion of Plum Point is complete.

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The 2009 Bonds were issued as direct pay Federally Taxable Build America Bonds (“BABs”), where MJMEUC is entitled to receive a 35% subsidy from the United States Federal Government. The United States Federal Government has been and is currently subject to the process of sequestration, whereby spending for many Federal programs, including BABs subsidy payments, have been reduced. MJMEUC’s subsidies were reduced by approximately 6.9% and 6.6% for 2017 and 2018 by the United States Government. MJMEUC is recovering these lost subsidies through member rates. In fall 2014, MJMEUC issued the Series 2014A Bonds to advance refund a portion of its Power Project Revenue Bonds Series 2006. The advance refunding was initiated by MJMEUC to take advantage of market rates at the time, achieve interest savings and an annual reduction in debt service. MJMEUC reduced its Plum Point total debt service payments by approximately $26.7 million from this advance refunding. In fall 2015, MJMEUC issued the Series 2015A Bonds to refund the remaining portion of its Power Project Revenue Bonds Series 2006. The refunding was initiated by MJMEUC to take advantage of market rates at the time, achieve interest savings and an annual reduction in debt service. MJMEUC reduced its Plum Point total debt service payments by approximately $4.5 million from this refunding.

Project Update Project Performance Summary

During the 2017 calendar year, Plum Point began with normal and consistent operation until local heavy rainfall in mid-January created standing water in the coal pile. Heavy rainfall continued in February, causing wet coal which reduced operations at Plum Point until a scheduled spring outage on March 4. During the scheduled spring outage, the Plum Point steam turbine unit was fully opened and inspected as part of its first major overhaul. During the inspection, additional maintenance needs were discovered which extended the length of the scheduled outage to 78 days and increased capital repairs beyond the original budget.

During the scheduled 2017 spring outage, Plum Point staff also addressed a number of generation issues throughout the facility. With the successful completion of the steam turbine major overhaul, Plum Point met performance expectations since returning to service in May and continued strong operational performance through the fall, when Plum Point took a 5-day outage to address boiler tube leaks. Since the 2017 fall outage, the facility has remained online for 165 consecutive days as of April 6, 2018. Favorable market conditions have also contributed to high output operations. Plum Point has maintained a capacity factor over 90% through mid-March 2018 and an equivalent availability factor (“EAF”) of 93% since June 2017.

Plum Point was taken offline on April 6, 2018 for a three-week scheduled spring outage to replace one-layer of selective catalytic reduction (“SCR”) catalyst. All other tasks scheduled during the outage were completed before the catalyst replacement creating opportunities to shorten the outage. New coal contracts with Cloud Peak Mines were favorably negotiated and in place for 2018. While BNSF rail deliveries have performed as expected, Plum Point has entered into an allowance agreement with BNSF. Under the

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agreement, BNSF has identified a set monthly delivery allowance and any delivery beyond the allowance will result in a $4.00/ton credit to Plum Point. High capacity factors during the first 3 months of the year netted Plum Point over $1.5M dollars in savings.

The Plum Point Energy Station’s majority owner, Plum Point Energy Associates, LLC (“PPEA”), restructured its ownership in January 2018. PPEA, a wholly-owned subsidiary of PPEA Holding Company, LLC, was previously comprised of John Hancock Life Insurance and Ares Management L.P. Energy Investors Fund (“Ares EIF”). In January 2018, Starwood Energy Group Global acquired Ares EIF’s ownership in PPEA. Additionally, Plum Point Services Company, LLC, formed by PPEA to manage Plum Point operations under the Plum Point Management Agreement, announced PurEnergy Management Services (“PEMS”), a subsidiary of North American Energy Services (“NAES”) will succeed as Plum Point Energy Station’s Project Management Company.

The Plum Point employees continue to have an excellent safety record and the plant remains in compliance with all required permits. The plant continues to operate within its permitted limits with no major issues. In addition, employees of Plum Point’s operator, NRG Energy Services (“NRG”), continue to have an excellent safety record. Capital Expenditures

MJMEUC’s share of capital improvements related to Plum Point totaled $4,304,521 in fiscal year 2017. A $1.4 million refund was received by MJMEUC from the IRS for arbitrage rebate paid during the construction period, which was available and used for 2017 Plum Point capital expenditures. In addition, MJMEUC has available, and may use at its discretion, operating and maintenance accounts and contingency reserve accounts for funding certain operating and capital costs.



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Performance Statistics The following chart summarizes 2017 operations and provides an update of operations for Plum Point through the first quarter of 2018.

Thru 1Q 2018 2017 Annual

Plum Point Net Generation (MWh) 1,333,724 3,520,804 Plant Capacity Factor 92.20% 60.0%Plant Operating Availability Factor 99.43% 66.57%Total Fuel Cost 24,499,525$ 64,112,099$

2017Operating ExpensesFuel & Transportation 14,784,547$ Other Variable Expenses and Commodities 1,275,106 Fixed Operating Expenses 10,202,775 Total Operating Expenses 26,262,428

Capital Costs and Reserve RequirementsNet Debt Service 20,852,839 Deposit to O&M Reserve and other Contingency Fund - Capital Expenditures 4,304,521 Total Capital Costs 25,157,360

Total Plum Point Project Annual O&M Costs 51,419,788$ Average Annual Busbar Cost ($/MWh) 64.10$



Benton 1,747,547$ 64.05$ Carthage 4,197,429 64.10$ Malden 1,397,285 64.02$ MoPEP 6,996,457 64.11$ North Little Rock AR 20,990,487 64.11$ Osceola AR 6,996,457 64.11$ Piggott AR 2,097,669 64.07$ Poplar Bluff 6,996,457 64.11$ MJMEUC Total 51,419,788$ 802,144

65,481 21,827

109,135 327,406

32,741 109,135


27,284

109,135

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PRAIRIE STATE PROJECT

Introduction

In 2007, MJMEUC acquired an undivided interest in the Prairie State Energy Campus (“Prairie State”). Prairie State includes an approximately 1,600 MW (net) coal-fired, steam-electric generating station located in Washington, St. Clair and Randolph Counties, Illinois. Prairie State also includes transmission facilities to interconnect Prairie State with the grid at the delivery point; a water pipeline to the Kaskaskia River; a natural gas pipeline to deliver gas to the site; facilities for the disposal of coal combustion waste from the facilities; associated power plant facilities and equipment; and certain coal reserves, mine facilities, mining equipment and coal storage handling and conveying equipment. MJMECU’s undivided interest in Prairie State entitles MJMEUC to approximately 195 MW (net) of the capacity and output of Prairie State (the “Prairie State Project”). Prairie State Unit 1 commenced operations in June 2012 and Prairie State Unit 2 commenced operations in November 2012. On May 19, 2016, Lively Grove Energy Partners, LLC sold its 5.06 percent share of the Prairie State Energy Campus to the Wabash Valley Power Association (“WVPA”), a not-for-profit generation and transmission cooperative headquartered in Indianapolis, Indiana. Lively Grove Energy Partners, LLC’s transfer of shares to WVPA brings the campus fully under public power and rural electric cooperative ownership.

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The current co-owners of Prairie State are as follows:

Owner Ownership Interest % MJMEUC 12.3% Wabash Valley Power Association 5.0 Northern Illinois Municipal Power Agency 7.6 Kentucky Municipal Power Agency 7.9 Southern Illinois Power Cooperative 7.9 Prairie Power, Inc. 8.2 Indiana Municipal Power Agency 12.6 Illinois Municipal Electric Agency 15.2 American Municipal Power 23.3

MJMEUC continues to monitor project operations since construction was finalized in November 2012 and also retains an outside engineering consultant to provide additional monitoring of the Prairie State operations.

Participants

MJMEUC has assigned approximately 109 MW (56%) of the capacity of the Prairie State Project to the Missouri cities of Columbia, Kirkwood, Hannibal, Fulton, Centralia and Kahoka pursuant to separate unit power purchase contracts. The balance of the capacity of the Prairie State Project (approximately 86 MW, or 44%) has been dedicated to MoPEP to provide a portion of the electric power and energy requirements of the Pool Power Purchasers.

Initially, the City of Marceline received a 4 MW (2%) share of the Prairie State Project pursuant to a separate unit power purchase contract. In 2013, MoPEP agreed to purchase the capacity and energy that Marceline received from the Prairie State Project until June 1, 2017, at which time this 4 MW of capacity was permanently assigned to MoPEP and Marceline was discharged from all obligations in connection with the Prairie State Project. MoPEP’s 86 MW, or 44%, of MJMEUC’s total output from the Prairie State Project referenced above includes the formerMarceline share.

Prairie State Project Missouri Public Energy Pool #1 Power Participants: Albany, Ava, Bethany, Butler, Carrollton, Chillicothe, El Dorado Springs, Farmington, Fayette, Fredericktown, Gallatin, Harrisonville, Hermann, Higginsville, Jackson, La Plata, Lamar, Lebanon, Macon, Marshall, Memphis, Monroe City, Odessa, Palmyra, Rock Port, Rolla, Salisbury, Shelbina, St. James, Stanberry, Thayer, Trenton, Unionville, Vandalia, and Waynesville.

Prairie State Project Unit Power Participants: Cities of: Centralia, Columbia, Fulton, Hannibal, Kahoka, Kirkwood, and Marceline (until 6/1/2017).

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Project Financing

Bonds Issue Date

Final Maturity

Amount Outstanding

as of December 31, 2017

Prairie State Project, Series 2007A 9/26/2007 Retired $ 0 Prairie State Project, Series 2009A (Federally Taxable Build America Bonds – Direct Pay)*

12/17/2009 1/1/2042 184,890,000

Prairie State Project, Series 2010A (Federally Taxable Build America Bonds – Direct Pay) 12/10/2010 1/1/2042 71,875,000

Prairie State Project, Series 2015A (Refunding Bonds) 4/14/2015 12/1/2031 205,125,000

Prairie State Project, Series 2016A (Refunding Bonds) 3/10/2016 12/1/2041 252,745,000

Prairie State Project, Series 2017 (Refunding Bonds)** 12/21/2017 1/1/2029 26,640,000

* Includes the Series 2009A Bonds maturing January 1, 2029 in the principal amount of $30,845,000 that were partially advance refunded with Series 2017 Bonds on a crossover basis where the refunded Series 2009 Bonds are not legally or financially defeased and will remain outstanding until January 1, 2019 (see below for description of Series 2017 transaction). **Crossover advance refunding of Series 2009A Bonds, as described above.


Moody’s Investor Services: A2 Stable Outlook

The Series 2007 (original principal amount $549,805,000), Series 2009 (original principal amount $207,920,000), and Series 2010 Bonds (original principal amount $78,005,000) were issued by MJMEUC to finance the costs of acquiring its interest in the Prairie State Project.

The 2009A and 2010A Bonds were issued as direct pay Federally Taxable Build America Bonds (“BABs”), where MJMEUC is entitled to receive a 35% subsidy from the United States Federal Government. The United States Federal Government has been and is currently subject to the process of sequestration, whereby spending for many Federal programs, including BABs subsidy payments, have been reduced. MJMEUC’s subsidies were reduced by approximately 6.9% and 6.6% for 2017 and 2018 by the United States Government. MJMEUC is recovering these lost subsidies through member rates.

In April 2015, MJMEUC issued the Series 2015A Bonds to advance refund a portion of its Power Project Revenue Bonds Series 2007A. The advance refunding was initiated by MJMEUC to take advantage of market rates at the time, achieve interest savings and an annual reduction in debt service. MJMEUC reduced its Prairie State total debt service payments by approximately $27.8 million from this advance refunding.

In March 2016, MJMEUC issued the Series 2016A Bonds to advance refund a portion of its Power Project Revenue Series 2007A Bonds. The advance refunding was initiated by MJMEUC to take advantage of market interest rates at the time, to achieve interest savings and reduce total debt service payments. MJMEUC reduced its Prairie State debt service payment by approximately $56.2 million from the advance refunding.

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The Series 2017 Bonds were issued to advance refund on a crossover basis $30,845,000 of MJMEUC’s outstanding Power Supply System Revenue Bonds, Series 2009 Bonds maturing on January 1, 2029 (the “Refunded Bonds”) and pay costs of issuance of the Series 2017 Bonds. Proceeds of the Series 2017 Bonds and certain other funds were deposited in an escrow fund pledged to the owners of the Series 2017 Bonds and the owners of the Refunded Bonds for payment of: (i) interest on the Series 2017 Bonds to and including January 1, 2019 and (ii) to redeem the principal of the Refunded Bonds until the crossover date on January 1, 2019. The Refunded Bonds are not legally or financially defeased and will remain outstanding until the crossover date, at which point the funds held in escrow will be used to refund the principal amount of the Refunded Bonds and they will be removed from MJMEUC’s statements of net position. The refunding was initiated by MJMEUC to achieve interest cost savings and reduce annual debt service requirements. MJMEUC reduced its Prairie State total debt service payments by approximately $4.8 million with this refunding.

Project Update Background The ownership group governs the construction and operation of Prairie State through a non-profit corporation, Prairie State Generating Company, LLC (“PSGC”). Each Prairie State owner indirectly owns PSGC on a basis proportionate to their ownership interests and exercise control through a management committee (referred to herein as the “PSGC Board”) based on weighted voting proportionate to their voting interests.

Project Performance Summary – Unit 1 Prairie State Unit 1 experienced one boiler tube leak in January 2017 that was repaired quickly, and the unit returned to service. On March 4, 2017 the unit underwent its first steam turbine major overhaul during a scheduled spring outrage. During the 70-day outage, there were several plant repairs and upgrades completed in addition to the turbine work. The generator was upgraded, the boiler underwent maintenance, including a boiler tube material upgrade on the platen tubes. During the outage, maintenance beams and access panels were installed in the boiler to allow for quick repair access to reduce the length of future outages. The spring outage also included air pre-heater cold end basket replacements, SCR catalyst replacement and plant equipment inspections.

Following the 2017 spring outage, Prairie State Unit 1 performance achieved an equivalent availability factor (“EAF”) of 91% for the last 7 months of the year. Overall, Unit 1 completed the year with a 70.91% capacity factor and 72.88% EAF.

In 2018, the Prairie State Unit 1 completed a scheduled 28-day outage in early May. The scope of the scheduled outage largely included boiler inspections and completing maintenance and repairs as necessary, with a strong emphasis on preparing the boiler for 18-month cycles for scheduled outages going forward versus the previous practice of 12-month intervals for outages. The unit has since returned to service with expectations of running 18-months until the next scheduled outage in fall of 2019.

Project Performance Summary – Unit 2

During 2017, Prairie State Unit 2 experienced several small tube leaks creating forced outages but were quickly repaired. Many of the tube leaks occurred in the lower slope of the boiler, an area that was addressed in the 2017 fall outage. In late August 2017, a lightning arrestor on the generator setup

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transformer (“GSU”) failed causing the unit to shut down for one week. Upon completion of the repairs, the unit operated until the scheduled annual 28-day outage in late September. During the scheduled outage, enhancements to the lower slope of the boiler were made to prevent tube leaks in that area of the boiler. Since that time, Prairie State Unit 2 has operated continuously and has not experienced additional tube leaks. Prairie State Unit 2 returned to service from its fall outage in late October 2017 and has continued to operate well since that time. Annual performance metrics of Prairie State Unit 2 included an EAF of 82.7% and capacity factor of 80.57%.

Prairie State Unit 2 will undergo its first steam turbine major overhaul during the next scheduled outage in fall 2018. The unit is scheduled to be down for 56-days for the outage. In addition to the steam turbine major overhaul, the Prairie State Unit 2 will undergo boiler inspections and necessary repairs to prepare the boiler for longer maintenance cycles. The Prairie State Unit 2 will explore extending the time between scheduled outages from 12-months to 18-months along with Prairie State Unit 1.

PSGC’s overall safety record for the Power Plant continues to be very good and PSGC staff continues to improve on its safety program with constant training and continuous evaluations and updates of all safety procedures.

Environmentally, there are no issues with either unit and the units remain compliant with all permit requirements.

Mine

Mine operations at Prairie State met performance expectations. The Lively Grove mine is considered one of the top mines in the state and country for operations and safety. Mine staff aim to improve coal quality in order to improve overall plant operations. Prairie State maintains an excellent safety record and safety remains a top priority for Prairie State.

The Mine continues with its outstanding mining operations. During 2017, the mine produced and delivered approximately 6.2 million tons of coal to the plant’s long term coal storage pile. During the four months of 2018, the mine produced and delivered approximately 2,233,000 tons of coal to the plant’s long term coal storage pile. The plant as of the end of April 2018, has an estimated coal inventory of 1,071,350 tons or approximately 50 days of coal available.

The overall safety record for mine continues to remain good with reportable accidents better than the industry standards for this type of mining facility.


MJMEUC’s share of capital improvements related to Prairie State totaled $7,383,740 in fiscal year 2017. These costs were funded through rates and charges paid by MoPEP and the Unit Power Purchasers In addition, MJMEUC has available, and may use at its discretion, operating and maintenance accounts and contingency reserve accounts for funding certain operating and capital costs.

MJMEUC has fully funded all required debt service reserves, contingency reserves, and operating and maintenance reserves required by the bond documents.

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Performance Statistics

The following chart summarizes 2017 operations and provides an update of operations for the Prairie State through the first quarter of 2018.

Thru 1Q 2018 2017 AnnualPrairie State UNIT 1 Net Generation (MWh) 1,543,256 ### 5,084,303 Unit 1 Capacity Factor 87.49% 70.91%Unit 1 Operating Availability Factor 89.88% 72.88%Total Fuel Cost 18,287,389$ 63,595,271$

Thru 1Q 2018 2017 AnnualPrairie State UNIT 2 Net Generation (MWh) 1,678,826 ### 5,732,676 Unit 2 Capacity Factor 96.14% 80.57%Unit 2 Operating Availability Factor 97.77% 82.70%Total Fuel Cost 19,893,876$ 71,705,224$

2017Operating ExpensesFuel & Transportation 16,784,169$ Other Variable Expenses and Commodities 3,865,328 Fixed Operating Expenses 15,677,840 Total Operating Expenses 36,327,337

Capital Costs and Reserve RequirementsNet Debt Service 49,943,810 Deposit to O&M Reserve and other Contingency Fund - Capital Expenditures 7,383,740 Total Capital Costs 57,327,550 Total Prairie State Project Annual O&M Costs 93,654,890$ Average Annual Busbar Cost ($/MWh) 70.11$


627,866 708,019 2017

0.47 0.53 ElectricityAverage Busbar

Power Purchaser Unit 1 Unit 2 Sold (MWh) Net Revenue ($/MWh)Centralia 6,439 7,262 13,701 960,563$ 70.11$ Columbia 160,991 181,544 342,535 24,014,074 70.11$ Fulton 32,198 36,309 68,507 4,802,815 70.11$ Hannibal 64,397 72,617 137,014 9,605,629 70.11$ Kahoka 6,439 7,262 13,701 960,563 70.11$ Kirkwood 80,495 90,772 171,267 12,007,037 70.11$ Marceline 4,622 5,211 9,833 787,459 80.08$ MoPEP 272,284 307,043 579,327 40,516,747 69.94$ MJMEUC Total 627,866 708,019 1,335,885 93,654,887$

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A. MISSOURI PUBLIC ENERGY POOL #1 (“MoPEP”)

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MoPEP Pool Member Cities

MoPEP participates in the following revenue bond projects: Dogwood, Prairie State, Iatan Unit 2, Plum Point, and Fredericktown

POOL POWER PURCHASERS

Peak Loads

City

2017 Peak Load

(MW)(1) Percent of Total

Rolla .................................................................................... 55.2 10.4% Lebanon ............................................................................... 55.0 10.4 Farmington .......................................................................... 46.8 8.8 Jackson ................................................................................ 38.0 7.2 Marshall............................................................................... 36.5 6.9 Harrisonville ........................................................................ 25.6 4.8 Chillicothe ........................................................................... 24.1 4.5 Macon .................................................................................. 18.8 3.5 Trenton ................................................................................ 16.9 3.2 Lamar .................................................................................. 14.0 2.6 Higginsville ......................................................................... 13.8 2.6 Ava ...................................................................................... 13.1 2.5 St. James .............................................................................. 13.0 2.5 Waynesville ......................................................................... 12.4 2.3 Fredericktown ..................................................................... 12.0 2.3 El Dorado Springs ............................................................... 11.7 2.2 Hermann .............................................................................. 11.3 2.1 Odessa ................................................................................. 11.2 2.1 Butler ................................................................................... 11.1 2.1 Carrollton ............................................................................ 10.3 1.9 Palmyra ............................................................................... 9.6 1.8 Bethany ............................................................................... 9.2 1.7 Monroe City ........................................................................ 9.2 1.7 Shelbina ............................................................................... 6.9 1.3 Fayette ................................................................................. 5.8 1.1 Memphis .............................................................................. 5.0 0.9 Vandalia .............................................................................. 5.0 0.9 Unionville ............................................................................ 4.7 0.9 Albany ................................................................................. 4.6 0.9 Salisbury .............................................................................. 4.4 0.8 Thayer ................................................................................. 4.0 0.8 Gallatin ................................................................................ 3.8 0.7 Rock Port ............................................................................. 2.9 0.5 Stanberry ............................................................................. 2.4 0.5 La Plata................................................................................ 2.3 0.4 Total .................................................................................... 530.6 100.0%

Total Pool Power Purchasers Served by MoPEP as of December 31, 2017 ........................................................................................

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(1) Coincident peak occurred July 17, 2017.

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Historical & Projected MoPEP Loads & Resources (1) (MW)

(1) Excludes new Members until the respective years in which they become Pool Power Purchasers. (2) Includes firm sales, 15% system reserve requirements, sales to MMMPEP of 35 MW through May 2018, and

planned sales to MMMPEP of 70 MW from June 2018 through 2021 and dropping to 35 MW for 2021-2024. (3) Includes firm power sales agreements, 57 MW of capacity from NC2, 50 MW of capacity from the Plum Point

Project and 3 MW of capacity from the Lamar Project, an additional 2.4 MW in December 2012 from Lamar Project expansion, an additional 2 MW in early 2018 from Lamar Project expansion, a power purchase agreement for 4 MW from the Prairie State Project in 2014 through June 2017, and an agreement for 3.8 MW from the Black Oak landfill in March 2015.

(4) The Iatan Unit 2 Project began service in January of 2011. MJMEUC transferred 20 MW of its ownership interest in Plum Point to MoPEP in June 2011, 41 MW from Unit 1 of the Prairie State Project in June 2012, 41 MW from Unit 2 of the Prairie State Project in November 2012 and 4 MW of the Prairie State Project in June 2017. MJMEUC completed its joint-ownership acquisition of Dogwood Generating Facility in the first quarter of 2012 and expects to acquire another 50 MW ownership interest with proceeds of the Series 2018 Bonds. The Fredericktown Energy Center commenced service in June 2015. MJMEUC expects to construct an additional unit at its Laddonia facility of 12 MW and commencing service in 2019.

(5) Beginning in 2017, includes 5% of the 20 MW of nameplate wind generation capacity and 10% of the 16 MW of nameplate solar generation capacity for a combined total of 3 MW of net capacity.

Fiscal Year Ending

December 31

Annual Peak Load

Peak Capacity

Requirement(2)

Dedicated Member

Capacity Contract

Purchases(3,5)

MJMEUC Owned

Capacity(4) Total

Capacity Surplus/ (Deficit)

Historical:

2013 518 631 348 240 196 784 153

2014 531 646 268 240 194 702 56

2015 526 640 268 244 218 730 90

2016 532 650 288 244 218 750 100

2017 531 646 284 244 222 750 105

Projected:

2018 557 710 284 246 272 802 92

2019 562 717 284 246 284 814 97

2020 568 723 284 246 284 814 91

2021 574 685 284 149 284 717 32

2022 580 691 284 149 284 717 26

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MoPEP’s Diversified Resource Mix Includes:

Co-Gen Coal Hydro Landfill Gas Natural Gas Solar Wind

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2013 2014 2015 2016 2017Revenues

Sale of Electricity Wholesale(1) 196,142,856$ 202,426,526$ 183,904,260$ 183,082,750$ 181,249,511$

Other Operating Revenue 6,273 3,407 967 773 580 Total Revenues 196,149,129 202,429,933 183,905,227 183,083,523 181,250,091

Expenses

Purchased Power 171,488,747 175,521,048 163,768,654 162,002,057 162,019,800 Power Generation 7,792,073 8,963,413 6,898,730 7,270,596 7,068,519 Future Recoverable Costs 10,157,455 7,593,282 1,817,586 498,678 (3,897,893)Other Operating Expenses 1,574,621 1,805,206 1,968,953 1,771,619 1,952,495 Depreciation 1,925,333 1,941,353 2,093,620 2,504,088 2,728,277

Total Operating Expenses 192,938,229 195,824,302 176,547,543 174,047,038 169,871,198

Operating Income 3,210,900 6,605,631 7,357,684 9,036,485 11,378,893

Interfund Transfers In/(Out) 3,353,270 (831,146) (811,804) (981,175) (961,834)Net Operating Income 6,564,170 5,774,485 6,545,880 8,055,310 10,417,059

Non-Operating Income/Expenses

Interest/Non-Operating Income 125,385 123,395 302,702 322,634 323,633 Interest/Non-Operating Expense (2,019,083) (1,817,169) (2,434,014) (3,470,877) (3,023,357)

Total Non-Operating (1,893,698) (1,693,774) (2,131,312) (3,148,243) (2,699,724)

Increase in Fund Equity 4,670,472 4,080,711 4,414,568 4,907,067 7,717,335

Fund Equity Beginning of Year 20,515,190 25,185,662 29,266,373 33,680,941 38,588,008

Fund Equity End of Year 25,185,662$ 29,266,373$ $ 33,680,941 $ 38,588,008 $ 46,305,343

(1) MoPEP sells electric in the energy market though Regional Transmission Operators (“RTOs”) and MoPEP purchases energy from theRTOs where MoPEP economically needs to receive the power.

Condensed Statements of Operations and Changes in Fund Equity(1)MoPEP POOL FUND

38

Average Cost of MoPEP Delivered Energy

YEAR $/MWh

2013 ...................................................... 65.98

2014 ...................................................... 67.79

2015 ...................................................... 63.37

2016 ...................................................... 62.42

2017 ...................................................... 63.64

The table above shows the system average rate for all energy delivered during the last five calendar years. Charges include all costs for capacity, energy, transmission, load monitoring, scheduling, dispatch and ancillary services and all administrative costs for managing MoPEP. System average rates include average bill credits for the use of Member Capacity. If MJMEUC did not apply such credits as an offset to MoPEP participants’ energy bills, MJMEUC’s average cost of delivered energy and annual revenues for MoPEP would be approximately 5-6 percent higher and MJMEUC’s operating expenses for MoPEP would be higher by an equal amount. NOTE: MoPEP’s average cost for years 2013 and 2014 are correctly stated above but were incorrectly reported higher at $68.82 and $67.85, respectively, in Official Statements for bond issues completed by MJMEUC in 2014 and 2015.

For Additional Information

Copies of MJMEUC’s audited financial statements may be obtained from Missouri Joint Municipal Electric Utility Commission, 1808 I-70 Drive S.W., Columbia, MO 65203 or website: www.mpua.org/Financials.php. This Report and prior years’ reports can be also found on Municipal Securities Rulemaking Board (“MSRB”) via Electronic Municipal Market Access (“EMMA”). In addition to this Report, annual audits for all Large Pool Power Purchasers, and Unit Power Purchasers, event notices, annual reports, and other materials are located on the MSRB website at www.emma.msrb.org.

Historical & Projected MoPEP Energy Requirements

Year

Historical Energy Requirements (MWh)

Year

Projected Energy Requirements (MWh)

2013 2,613,601 2018 2,662,000

2014 2,659,193 2019 2,695,000

2015 2,588,340 2020 2,683,000

2016 2,609,294 2021 2,710,000

2017 2,517,758 2022 2,737,000

39

http://www.mpua.org/

http://www.emma.msrb.org/

MoPEP Member Capacity Through December 31, 2017

Facility

Fuel Type

Capacity (MW)

2017 Capacity Factor

Chillicothe Units 1 & 2 Natural Gas/Oil 80.0 <1.0%

Macon Gas Turbine Natural Gas 9.0 96.7%(1)

City of Higginsville Natural Gas 38.6 <1.0%

City of Jackson 10 units Oil 21.0 <1.0%

Other Peaking Units Natural Gas/Oil 135.3 <1.0%

Total Member Capacity ……………… 283.9 _______________

(1) The capacity of this unit is based upon a summertime rating, determined with evaporation at

100oF. At lower temperatures, the output of the unit is well above 9.0 MW, and the unit regularly produces 10 MW.

Litigation

At the time of delivery of this Report, MJMEUC certifies that other than matters disclosed in this Report, there is no material pending litigation relating to MJMEUC or its operations.


40


41

B. MOPEP LARGE POOL POWER PURCHASERS

(OFFICIAL STATEMENT - APPENDIX B)

42

Large Pool Power Purchasers General Information Summary

RollaMunicipal Utilities

City of Lebanon

City of Farmington

City of Marshall

City of Jackson

GeneralYear Established 1945 1853 1891 1914 1905Service Area (sq. Miles) 11.6 19 5.2 10.5 10.7Fiscal Year End September-30 June-30 September-30 September-30 December-31

Fiscal Year 2017Peak Load - MW 67 57.5 49 37.2 37.4Residential Sales 92,153 74,781 76,745 46,684 71,506 Commercial Sales 132,824 52,992 37,828 56,541 45,718 Industrial Sales 54,651 115,128 105,387 65,443 22,800 Total Sales 279,628 242,901 219,960 168,668 140,024

Fiscal Year 2016Peak Load - MW 64 62.5 49 38.6 37.5Residential Sales 95,465 77,586 78,107 48,439 72,756 Commercial Sales 130,526 64,423 39,596 54,626 47,389 Industrial Sales 55,441 118,253 111,744 67,898 23,556 Total Sales 281,432 260,262 229,447 170,963 143,701

Fiscal Year 2015Peak Load - MW 67 65.5 49 38 37Residential Sales 103,558 79,917 82,259 48,121 72,624 Commercial Sales 129,933 63,904 32,437 54,973 47,423 Industrial Sales 56,815 117,232 117,317 70,222 26,074 Total Sales 290,306 261,053 232,013 173,316 146,121

Fiscal Year 2017Residential Sales $ 9,760 $ 7,624 $ 7,687 $ 5,730 $ 8,564 Commercial Sales 12,068 5,143 3,752 6,526 5,244 Industrial Sales 4,249 10,316 9,554 5,881 2,338 Other Sales 331 - 345 420 - Total Sales $ 26,408 $ 23,083 $ 21,338 $ 18,557 $ 16,146

Fiscal Year 2016Residential Sales $ 10,199 $ 7,642 $ 7,788 $ 5,922 $ 8,632 Commercial Sales 12,301 5,908 3,926 6,146 5,398 Industrial Sales 4,495 10,137 10,025 6,351 2,369 Other Sales 347 - 105 - - Total Sales $ 27,342 $ 23,687 $ 21,844 $ 18,419 $ 16,399

Fiscal Year 2015Residential Sales $ 10,759 $ 7,244 $ 8,108 $ 5,539 $ 8,540 Commercial Sales 12,226 5,466 4,035 6,016 5,315 Industrial Sales 4,600 9,364 10,081 5,939 2,561 Other Sales 349 - 11 - - Total Sales $ 27,934 $ 22,074 $ 22,235 $ 17,494 $ 16,416

(1) Other category includes City services* MoPEP Large Pool Participants are Cities with at least 5% of the total MoPEP peak load level for 2017.

Peak Load (in MW) & Energy Sales in (MWh)

Customer Revenues (in 000's)

43

Large Pool Power Purchasers Balance Sheet Summary (‘000s)

Fiscal Year 2017Assets: UNAUDITED

Utility Plant, Net $ 38,577 $ 1,277 $ 15,599 $ 18,126 $ 18,138 Cash and Investments 25,587 11,016 7,824 24,499 9,600 Other Assets 6,168 3,234 4,851 7,103 -

Total Assets 70,332 15,527 28,274 49,728 27,738 Deferred Outflows of Resources $ 806 $ 152 $ 207 $ 947

Total Assets & Deferred Outflows $ 71,138 $ 15,679 $ 28,481 $ 50,675 $ 27,738

Liabilities, Deferred Inflows & Equity:Equity $ 55,238 $ 14,515 $ 23,795 $ 47,150 $ 27,402 Revenue Bonds Payable, Noncurrent 10,247 - 1,810 - - Other Liabilities 5,249 1,083 2,737 3,170 336 Deferred Inflows of Resources 404 81 139 355 -

Total Liabilities, Deferred Outflows & Equity $ 71,138 $ 15,679 $ 28,481 $ 50,675 $ 27,738

Fiscal Year 2016Assets:

Utility Plant, Net $ 38,117 $ 871 $ 15,606 $ 17,555 $ 14,543 Cash and Investments 26,339 9,610 8,270 23,264 11,784 Other Assets 4,767 3,800 4,455 7,746 441

Total Assets 69,223 14,281 28,331 48,565 26,768 Deferred Outflows of Resources 2,084 283 $ 495 $ 2,018 $ -


Liabilities, Deferred Inflows & Equity:Equity $ 54,321 $ 13,337 $ 22,507 $ 46,317 $ 26,432 Revenue Bonds Payable, Noncurrent 11,129 - 2,873 - - Other Liabilities 5,429 1,170 3,356 3,795 336 Deferred Inflows of Resources 428 57 90 471 -


Fiscal Year 2015Assets:

Utility Plant, Net $ 39,705 $ 594 $ 14,976 $ 18,083 $ 13,979 Cash and Investments 24,846 8,500 6,528 20,733 10,362 Other Assets 4,010 5,281 4,788 8,188 175

Total Assets 68,561 14,375 26,292 47,004 24,516 Deferred Outflows of Resources - 87 $ 196 $ 738 $ -


Liabilities, Deferred Inflows & Equity:Equity $ 52,292 $ 14,132 $ 21,045 $ 44,332 $ 24,159 Revenue Bonds Payable, Noncurrent 11,978 - 2,640 - - Other Liabilities 4,291 268 2,747 3,175 357 Deferred Inflows of Resources - 62 56 235 -


(a) MJMEUC anticipates Jackson's annual audits to be diseminated by first part of June.

City of Jackson (a)

City of Marshall

City of Farmington

City of Lebanon

Rolla Municipal Utilities

44

Large Pool Power Purchasers Income Statement Summary (‘000s)

Fiscal Year 2017 UNAUDITEDCustomer Revenues $ 29,256 $ 24,773 $ 21,338 $ 21,487 $ 16,182 Other Revenues 580 284 3,458 420 66

Total Revenues 29,836 25,057 24,796 21,907 16,248

Purchased Power Expense 20,903 21,053 17,225 11,541 11,887 Other Operating Expense 4,890 2,753 5,394 5,744 1,418

Total Operating Expenses 25,793 23,806 22,619 17,285 13,305 Net Revenues 4,043 1,251 2,177 4,622 2,943

Depreciation, Amortization 2,729 78 951 2,024 657 Transfers Out to City - - - 1,788 944 Other non-Operating 437 - (211) - -

Extraordinary Item (8) (31) - (23) - Net Income $ 885 $ 1,204 $ 1,437 $ 833 $ 1,342

Debt Service/Capital Lease $ - $ - $ 1,341 $ - $ - Debt Service Coverage 0.00 0.00 1.62 0.00 0.00

Fiscal Year 2016Customer Revenues $ 30,223 $ 23,012 $ 21,844 $ 21,294 $ 16,815 Other Revenues 1,054 291 3,422 327 66

Total Revenues 31,277 23,303 25,266 21,621 16,881


Total Operating Expenses 26,504 23,494 22,833 16,256 13,578 Net Revenues 4,773 (191) 2,433 5,365 3,303

Depreciation, Amortization 2,935 49 922 1,579 662 Transfers Out to City - - 1,802 944 Other non-Operating 564 1 49 - -

Extraordinary Item - - - (575)Net Income $ 1,274 $ (241) $ 1,462 $ 1,984 $ 2,272

Debt Service/Capital Lease $ - $ - $ 627 $ - $ - Debt Service Coverage 0.00 0.00 3.88 0.00 0.00

Fiscal Year 2015Customer Revenues $ 30,902 $ 23,198 $ 22,235 $ 20,413 $ 16,813 Other Revenues 544 345 3,027 311 69

Total Revenues 31,446 23,543 25,262 20,724 16,882


Total Operating Expenses 27,198 24,872 22,696 18,583 14,316 Net Revenues 4,248 (1,329) 2,566 2,141 2,566

Depreciation, Amortization 2,851 - 924 1,600 646 Transfers Out to City - 81 - - 760 Other non-Operating 498 - (157) - -

Extraordinary Item - - - - - Net Income $ 899 $ (1,410) $ 1,799 $ 541 $ 1,160

Debt Service/Capital Lease $ - $ - $ 504 $ - $ - Debt Service Coverage 0.00 0.00 5.09 0.00 0.00(1) Combined utility (electrc and water)

Rolla Municipal Utilities (1)

City of Lebanon

City of Farmington (1)

City of Marshall

City of Jackson

45

Large Pool Power Purchasers Top Ten Customers by Revenue Customer

Industry

% of Revenues

Rolla – 2017

MS&T – Physical Facilities Educational 13.7% Phelps County Regional Medical Center Medical 6.4% Brewer Science Research & Development 3.3% MS&T – Student Affairs Educational 2.7% Rolla Public Schools Educational 2.3% City of Rolla Local Government 2.1% Mercy Clinic Medical 1.6% Wal-Mart Stores Inc. 01-101 Retail 1.6% Rolla Municipal Utilities Local Government 1.3% T&C/Price Chopper Supermarket 0.9%

Lebanon – 2017

Copeland Manufacturer AC Compressors 13.1% Independent Stave Company Manufacturer Oak Barrels 8.2% Mercy Hospital Healthcare 2.2% Detroit Tool Metal Products Manufacturer Metal Stamper 2.1% Marathon Electric Manufacturer Electric Motors 1.8% Wal-Mart Retail 1.8% Tracker Marine Plastics Manufacturing Plastic Kayaks 1.3% Detroit Tool & Engineering Manufacturing Tool & Die 1.2% Marine Electric Manufacturing Marine Electrical 1.1% Tracker Marine LLC Manufacturer Aluminum Boats 1.0%

Farmington – 2017

SR Automotive Products Automotive 10.7% BJC Health Group Medical Center/Health Services 4.9% US Tool Grinding Inc Manufacturing – Tooling 3.0% Farmington R-7 Schools Education 2.7% Wal-Mart Super Center Retail 1.6% Schnuck’s Markets Retail 1.0% Menard’s Retail 0.9% Country Mart Retail 0.9% The Molding Company-Forte Manufacturing - Plastics 0.8% Lowes Home Center, Inc Retail 0.8%

Marshall – 2017

Con Agra Food Packaging Mfg. 17.8% Cargill Food Packaging Mfg. 5.8% Fitzgibbon Hospital Hospital 2.2% Americold Logistics Refrigeration Plant 2.2% Wal-Mart Retail 1.8% CMAS Grain Facility 1.7% MMU Wastewater Government 1.6% MMU Water Government 1.3% Marshall Public Schools Schools 9-12 0.8% Marshall Egg Products Agriculture-Dry Egg Production 0.8%

46

Jackson – 2017

Jackson R-2 Schools* Education 6.5% Rubbermaid Closet Organization Products 6.4% American Rail Car* Railroad car industry 2.7% Mondi Jackson Inc. Flexible packaging manufacturer 2.4% Midwest Sterilization Processing 1.6% Cape Girardeau County* Government 1.5% Wal-Mart Retail 1.5% NLC, Inc. Manufacturer electrical 1.2% Country Mart Grocery Retail 1.1% Signature Packaging Manufacturer Corrugated Packaging 0.8%

*Multiple locations


47

C. LARGE UNIT POWER PURCHASERS

AS SHOWN IN THE FOLLOWING OFFICIAL STATEMENTS

OFFICIAL STATEMENT (PLUM POINT & IATAN UNIT 2) - APPENDIX B

OFFICIAL STATEMENT (PRAIRIE STATE) - APPENDIX C

48

Large Unit Power Purchasers – Projects Involved

• Columbia, MO (Unit Power Purchaser - Iatan Unit 2 & Prairie State) ......62

• Hannibal, MO (Unit Power Purchaser - Prairie State) ..............................58

• Independence, MO (Unit Power Purchaser - Iatan Unit 2) ...............................68

• Kirkwood, MO (Unit Power Purchaser - Prairie State) ..............................54

• North Little Rock, AR (Unit Power Purchaser - Plum Point) ................................50

• Osceola, AR (Unit Power Purchaser - Plum Point) ................................50

• Poplar Bluff, MO (Unit Power Purchaser - Plum Point) ................................50

49

Unit Power Purchasers - General Information Summary

Cities of North Little Rock, AR, Poplar Bluff, & Osceola, AR Unit Power Purchaser: Plum Point Project

NorthGeneral Little Rock, Osceola, AR

Year Established 1906 1913 1918Service Area (sq. Miles) 60 40 7.8Fiscal Year End December-31 December-31 December-31

Fiscal Year 2017Peak Load - MW 229 71 29Residential Sales 365,110 112,300 37,020 Commercial Sales 273,440 168,550 19,006 Industrial Sales 257,179 71,012 96,371 Other Sales 313 8,609 -

Total Sales 896,042 360,471 152,397

Fiscal Year 2016Peak Load - MW 233 76.1 26Residential Sales 365,999 112,939 40,706 Commercial Sales 282,380 168,795 20,011 Industrial Sales 257,769 73,021 93,490 Other Sales 322 9,471 -

Total Sales 906,470 364,226 154,207

Fiscal Year 2015Peak Load - MW 238 80 26Residential Sales 387,985 123,234 40,581 Commercial Sales 278,719 169,032 19,905 Industrial Sales 263,696 76,119 92,969 Other Sales 324 10,163 -

Total Sales 930,724 378,548 153,455

Customer Revenues (in 000's)Fiscal Year 2017

Residential Sales $ 40,054 $ 10,736 $ 3,941 Commercial Sales 28,542 15,923 2,350 Industrial Sales 21,805 9,912 9,391 Other Sales 37 1,296 -

Total Sales $ 90,438 $ 37,867 $ 15,682

Fiscal Year 2016Residential Sales $ 37,486 $ 10,819 $ 4,314 Commercial Sales 26,056 15,995 2,451 Industrial Sales 18,971 10,219 9,280 Other Sales 33 1,016 -

Total Sales $ 82,546 $ 38,049 $ 16,045

Fiscal Year 2015Residential Sales $ 40,807 $ 11,024 $ 4,332 Commercial Sales 27,484 15,536 2,563 Industrial Sales 21,194 10,499 9,304 Other Sales 37 1,002 -

Total Sales $ 89,522 $ 38,061 $ 16,199

Peak Load (in MW) & Energy Sales in (MWh)

Poplar Bluff, MO

50

Unit Power Purchasers - Balance Sheet Summary (‘000s)

Fiscal Year 2017Assets: UNAUDITED UNAUDITED UNAUDITED

Utility Plant, Net $ 141,947 $ 32,120 $ 19,173 Cash and Investments 20,667 10,958 4,488 Other Assets 23,447 5,043 -

Total Assets $ 186,061 $ 48,121 $ 23,661

Liabilities and Equity:Equity $ 130,344 $ 31,098 $ 17,563 Bonds/Leases Payable, Noncurrent 44,871 12,869 4,302 Other Liabilities 10,846 4,154 1,796

Total Liabilities and Equity $ 186,061 $ 48,121 $ 23,661 Fiscal Year 2016Assets:

Utility Plant, Net $ 137,875 $ 31,857 $ 19,161 Cash and Investments 25,941 9,836 7,663 Other Assets 18,013 5,814 -

Total Assets $ 181,829 $ 47,507 $ 26,824


Total Liabilities and Equity $ 181,829 $ 47,507 $ 26,824 Fiscal Year 2015Assets:

Utility Plant, Net $ 137,049 $ 31,731 $ 18,697 Cash and Investments 41,324 4,699 5,198 Other Assets 15,197 4,556 114

Total Assets $ 193,570 $ 40,986 $ 24,009


Total Liabilities and Equity $ 193,570 $ 40,986 $ 24,009

Poplar Bluff, MO

(a) MJMEUC anticipates Osceola's annual audits to be diseminated by late-summer.

Osceola, AR (a)North Little Rock, AR

51

Unit Power Purchasers - Income Statement Summary (‘000s)

North LittleRock, AR Osceola, AR

Fiscal Year 2017 UNAUDITED UNAUDITED UNAUDITEDCustomer Revenues $ 90,291 $ 32,784 $ 17,024 Other Revenues 2,043 5,248 178

Total Revenues 92,334 38,032 17,202 Purchased Power Expense 45,191 27,844 11,540 Other Operating Expense 17,691 6,211 2,999

Total Operating Expenses 62,882 34,055 14,539 Transfer from R&C Fund - - - Net Revenues 29,452 3,977 2,663

Depreciation, Amortization 8,549 2,081 1,370 Transfers Out to City 12,000 - 3,815 Other non-Operating Expenses - 967 111

Extraordinary Item - - - Net Income $ 8,903 $ 929 $ (2,633)

Debt Service/Capital Lease $ 3,451 $ - $ - Debt Service Coverage 6.0 0.0 0.0Fiscal Year 2016Customer Revenues $ 83,016 $ 33,147 $ 18,950 Other Revenues 1,133 5,807 51



Depreciation, Amortization 8,549 1,993 1,239 Transfers Out to City 12,000 (1,250) 1,296 Other non-Operating Expenses - 1,080 (164)

Extraordinary Item - - - Net Income $ 1,975 $ 4,250 $ 3,541

Debt Service/Capital Lease $ 5,675 $ - $ - Debt Service Coverage 4.0 0.0 0.0Fiscal Year 2015Customer Revenues $ 89,382 $ 33,045 $ 17,885 Other Revenues 4,525 5,682 196



Depreciation, Amortization 8,111 1,972 1,131 Transfers Out to City 12,000 (113) 1,595 Other non-Operating Expenses 2,803 1,120 228

Extraordinary Item - - - Net Income $ 11,927 $ 731 $ 1,158

Debt Service/Capital Lease $ 7,889 $ - $ - Debt Service Coverage 4.4 0.0 0.0

Poplar Bluff, MO

52

Unit Power Purchasers - Top Ten Customers by Revenue

Customer

Industry

% of Revenues

North Little Rock, AR – 2017

VA Medical Center Hospital 2.0% L’Oreal USA Manufacturing 2.0% Union Pacific Railroad Transportation 1.7% Wal-Mart Stores, Inc. Retail 1.7% Tyson Poultry Inc. Poultry 1.3% Caterpillar Inc. Manufacturing 1.2% Baptist Health (Springhill) Hospital 1.2% St. Vincent Hospital Hospital 0.9% All American Poly Corporation Manufacturing 0.8% Tenebaum Recycling 0.6%

Poplar Bluff, MO – 2017

Briggs & Stratton Manufacturing 7.9% Poplar Bluff Regional Medical Center Hospital 6.3% Mid-Continent Fasteners Manufacturing 4.0% PB School District School 2.6% VA Hospital Hospital 2.0% Gates Rubber Co. Manufacturing 1.9% Wal-Mart Superstore Retail 1.8% Revere Plastics Manufacturing 1.8% Three Rivers College College 1.3% Nordyne Manufacturing 0.7% Starting USA Manufacturing 0.7%

Osceola, AR – 2017

Cyro Industries Acrylic Mfg. 16.3% American Greetings Greeting Card Mfg. 14.6% Kagome (Creative) Foods Margarine Mfg. 5.5% Denso Automobile Part Mfg. 5.4% BlueOak Arkansas E-Waste Recycler 3.0% Systex Automobile Part Mfg. 2.8% SMC Regional Med Hospital 2.4% Food Giant Retail 1.5% Wal-Mart General Merchandise 1.3% Actagro Fertilizer Mfg. 1.3%

53

City of Kirkwood, Missouri

Unit Power Purchaser: Prairie State Project

139 South Kirkwood Road Kirkwood, Missouri 63122

314-822-5806 www.Kirkwoodmo.org

Fiscal Year Ending March 31, 2017

Organization

The City of Kirkwood, Missouri (“Kirkwood”) was the first planned suburban residential area west of the Mississippi River. Kirkwood is located in St. Louis County, approximately 14 miles west of the City of St. Louis. Kirkwood covers approximately 9.1 square miles and is bounded by Interstate 44 on its southern boundary and traversed by Interstate 270 near its western boundary. Together, the interstate highways provide excellent access to all parts of the St. Louis metropolitan area. Kirkwood has a diverse economic base, which includes several large retailers, limited industries, and many small specialty shops.

Kirkwood was established in 1853, incorporated in 1865, re-incorporated as a fourth class city in 1899, and as a third class city in 1930. In 1984, Kirkwood became a home rule city as permitted under a 1971 amendment to the Missouri Constitution. Kirkwood is governed according to a Council–Manager form of government which places legislative and policy-making authority in the city council, which includes the Mayor, and the administrative authority in a Chief Administrative Officer. The Mayor and six council members are elected by the citizens of Kirkwood. Other than the Mayor, three council seats are filled every two years on a rotating basis. The Mayor is elected from the city at large for a term of four years.

The Mayor is the official representative of Kirkwood, presides over meetings of the City Council, and leads the annual review of the Chief Administrative Officer. The City Council appoints a Chief Administrative Officer to implement its policies and direct operations of Kirkwood departments. All decisions concerning the Electric Department are made by the City Council. Recommendations are made to the Council by the Chief Administrative Officer.

Service Territory, Transmission and Distribution System

Kirkwood serves retail customers in approximately two thirds of Kirkwood. The remainder of Kirkwood’s residents and business receive service from Ameren Missouri. Kirkwood limits consist of a 9.1 square mile area. Kirkwood serves just over 10,000 retail customers for electric service.

As of March 31, 2017, Kirkwood’s distribution system consisted of approximately 132 circuit miles of overhead and underground lines. The City maintains six distribution substations. Kirkwood’s distribution system is interconnected to transmission facilities owned by Ameren Missouri.

Power Supply

Kirkwood currently purchases energy and capacity at very favorable rates under agreements with American Electric Power, and MISO. These contracts will supplement Kirkwood’s purchase of capacity and energy from the Prairie State Project. Kirkwood performs its own scheduling and load forecasting services to round out its power portfolio. The transition from full requirements contracts to partial requirements and market participation has enabled Kirkwood to rebuild its reserve fund to nearly one year’s worth of operating expenses.

54

Projected Capital Additions

Current estimates indicate that Kirkwood will invest up to $5.2 million in capital improvements over the next 5 years. A majority of the capital improvements will be dedicated to improving and updating the distribution system, with additional improvements to the traffic signal and street lighting systems in Kirkwood. Kirkwood will fund the improvements with available cash on hand, Congestion Mitigation and Air Quality Improvement Program grants, and Transportation Enhancement Program grants.

Electric Rates

The City Council has sole authority to establish electric rates. Kirkwood reviews these rates as needed and the City Council has the authority by ordinance to adjust the energy rate included in its electric rate schedules in accordance with recommendations by the Chief Administrative Officer. Kirkwood has historically charged the same rates for electric service as Ameren Missouri but also has a power supply cost recovery factor that allows Kirkwood to adjust its rates as needed to maintain a predetermined target of reserve funds by the end of fiscal year 2020 of at least one year’s worth of operating expenses. Currently the Missouri General Assembly is contemplating legislation (HB2265) that would streamline Ameren Missouri’s ability to adjust its rates. Kirkwood electric rates were most recently changed in January of 2016 when the City Council approved an overall base rate increase of 5% with 2.5% of that increase effective in April of 2017. If this current legislation before the Missouri General Assembly passes Kirkwood Electric will evaluate any rate modifications made by Ameren Missouri and if need be will modify its rates to maintain consistent rates for Kirkwood residents presiding in the Ameren Missouri and Kirkwood Electric service territories.

Energy Sales and Customer Information

Fiscal year 2017 produced revenue in excess of $22,039,822. Since Kirkwood’s load is almost exclusively residential and affluent, its load continues to remain steady at an average of 215 GWh. Although the area experienced a mild summer and lower summer peak demand, the generation portfolio possessed by the utility stabilized purchase power expenses. Total energy in Fiscal Year 2017 was consistent with prior years and the energy produced from Prairie State hedged the utility’s expenses against higher than normal energy prices in the MISO market. Delinquent account write-offs continue to be less than 1% of billing and sales in Fiscal Year 2017. Reduced energy market prices have enabled the department’s revenues to exceed its expenditures.


55

Historical Peak Load and Energy Sales

Peak Load (in MW)

Total Energy Sold (MWh)

2013 64.3 215,382 2014 57.1 214,525 2015 58.5 208,442 2016 57.4 202,263 2017 59.4 207,491

Kirkwood’s service area is primarily residential in nature. As of March 31, 2017, 87.43% of Kirkwood’s customers were residential and 12.57% were commercial.

Customers by Class

2015 2016 2017 Average Number of Customers:

Residential 8,872 8,769 8,737 Commercial 1,268 1,261 1,256

Total Customers 10,140 10,030 9,993

Kirkwood’s sales are fairly evenly dispersed among residential and commercial customer classes. As of March 31, 2017, 47.31% of Kirkwood’s energy sales were made to residential customers and 52.69% were made to commercial customers. Commercial customers represent a full spectrum of business. Education, health care and retail represent major areas of the large customer base.

Energy Sales (MWh) by Class

2015 2016 2017 Residential 98,250 96,631 98,164 Commercial 110,192 105,632 109,327

Total Retail Sales 208,442 202,263 207,491

As of March 31, 2017, 46.67% of Kirkwood’s revenues from the sale of energy were made to residential customers and 53.34% were made to commercial customers.

Energy Revenues by Class

2015 2016 2017 Residential $10,268,866 $9,137,177 $10,284,643 Commercial 11,517,020 11,695,479 11,755,179

Total Retail Sales $21,785,886 $20,832,656 $22,039,822

Financial Condition

The following Condensed Balance Sheet and Condensed Statement of Operations for the last three fiscal years have been prepared by Kirkwood based upon audited financial statements. Copies of Kirkwood’s audited financial statements may be obtained from City of Kirkwood, Finance Department, 139 South Kirkwood Road, Kirkwood, MO 63122 or on the web at www.Kirkwoodmo.org under the Finance Department link.

56

City of Kirkwood Electric Enterprise Condensed Balance Sheet

Fiscal Year Ending March 31

2015 2016 2017 Assets

Utility Plant, Net $ 5,230,627 $ 6,501,313 $ 7,586,390 Cash and Investments 17,514,076 17,188,078 17,865,311 Other Assets 2,726,246 2,556,183 2,855,883

Total Assets $25,470,949 $26,245,574 $28,307,584 Liabilities and Net Position

Net Position $24,908,576 $25,566,565 $26,495,147 Total Liabilities 562,373 679,009 1,812,437

Total Liabilities and Net Position $25,470,949 $26,245,574 $28,307,584

City of Kirkwood Electric Enterprise Condensed Statement of Operations

Fiscal Year Ending March 31

2015 2016 2017 Revenues Sale of Electricity Retail $21,359,466 $20,832,656 $22,039,822 Other Revenues 426,420 293,281 261,229 Total Revenues 21,785,886 21,125,937 22,301,051 Operating Expenses Purchased Power 16,609,881 14,585,165 16,011,719 Distribution & Customer Care 3,217,118 3,095,361 3,149,084 Administrative and General 1,121,906 1,096,438 1,170,723 Depreciation 234,461 250,434 277,088 Total Operating Expenses 21,183,366 19,027,398 20,608,614 Non-Operating/Other (Revenues) Expenses

Other / Transfers 10,561 1,440,550 763,855 Change in Net Position $ 591,959 $ 657,989 $ 928,582

Net Revenues Available for Debt Service

The City of Kirkwood’s Electric Department has no long-term debt outstanding.

Litigation

There is no material pending litigation relating to Kirkwood or its operations.

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City of Hannibal, Missouri

Unit Power Purchaser: Prairie State Project

320 Broadway Hannibal, MO 63401

573-221-0111 email: [email protected]

Fiscal Year Ending June 30, 2017 Organization

The City of Hannibal, Missouri (“Hannibal”) was founded in 1819 and became chartered as a city in 1845. Hannibal is located 116 miles northwest of St. Louis in Marion County along the Mississippi River’s west bank. Hannibal and adjacent area comprise an area over 14 square miles and contain approximately two-thirds of the Marion County population and a portion of Ralls County. Hannibal and surrounding area population is over 20,000, and over 250,000 people live within a radius of fifty miles.

Hannibal is organized under the laws of the State of Missouri and operates under a Constitutional Charter approved by the citizenry in 1845. Hannibal is governed according to a Council–Manager form of government. The Mayor and six council members are elected by the citizens of Hannibal for 3 years with staggered terms of service. The City Council appoints a City Manager to implement its policies and direct operations of Hannibal departments.

The Board of Public Works (the “BPW”) is an executive department of the City of Hannibal under the City Charter. The City Charter grants the Board all management, supervision and control of Hannibal’s electric, water, wastewater treatment, collection and artificial underground stormwater collection systems. The BPW was formed in 1903 and is governed by four Board Members who are appointed for a four-year term by the City Manager, subject to confirmation by the City Council, with one member appointed each year. The Board has the exclusive power to establish rates and provide for the assessment and collection of charges for Hannibal’s municipal utilities. The Board has delegated responsibility for the day-to-day management and operations of the municipal utilities to its General Manager.


The BPW serves retail customers inside and outside the limits of Hannibal and provides approximately 8,800 retail customers with electric, water and wastewater service.

The BPW’s transmission and subtransmission systems are comprised of approximately 8 miles of 161 kV transmission line and 21 miles of 34.5 kV subtransmission lines, and is interconnected to transmission facilities owned by AmerenUE. The BPW operates three transmission lines that loop around Hannibal, allowing supply of power from any of three directions. The BPW built a 161 kV transmission line and substation west of Hannibal in 2009-2010.

As of June 30, 2017, the BPW’s distribution system consisted of approximately 132 miles of overhead and underground 13.8 kV primary circuits. Hannibal maintains 6 distribution substations.

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Power Supply

The BPW is a unit participant in the purchase of 20 MW of capacity and energy from the Prairie State Project. The BPW purchases the balance of its power needs in the MISO day-ahead marketplace, with the assistance of a consulting engineering firm with significant expertise in MISO operations and scheduling.


The BPW completed $10 million of capital improvements in the electrical system during 2009-2010 to increase the reliability of the BPW power grid. These improvements are expected to carry Hannibal’s load for the next 20 years. In the fall of 2016, the BPW committed to purchase 20 MW of diesel gensets. These were purchased for the purpose of providing generation capacity as well as a source of backup power in case of a failure in the transmission lines bringing power to the City.

Electric Rates

Rate adjustments were made to the residential class in Fiscal Year 2013. Net revenue in Fiscal Year 2013 after all expenses including debt service was 5.1% of gross revenues. Rate adjustments were also made to all rate classes in Fiscal Year 2014. Net revenue for Fiscal Year 2014 fell due to higher costs of purchased power. Fiscal Year 2014 was the first full year of Prairie State debt repayments. Net revenue in Fiscal Year 2014 was 1.9% of gross revenue. Rate adjustments were again made to all rate classes for Fiscal Year 2015. Net revenue in Fiscal Year 2015 was 10.7% of gross revenue. Rate adjustments were made to some rate classes in Fiscal Year 2016. Net revenue in Fiscal Year 2016 was 4.1% of gross revenue. No rate adjustments were made in Fiscal Year 2107. Net revenue in Fiscal Year 2017 is 10.8% of gross revenue.



Peak Load (in MW)


2013 60.0 264,980 2014 57.0 273,866 2015 58.0 259,754 2016 57.0 257,026 2017 57.0 255,877

BPW’s service area is primarily residential in nature. As of June 30, 2017, 86.6% of BPW’s customers were residential, 12.1% were commercial, and 1.3% were industrial.

Customers by Class


Residential 7,567 7,613 7,660 Commercial 1,056 1,089 1,072 Industrial 141 117 118 Other 0 0 0

Total Number of Customers 8,764 8,864 8,850

The BPW’s sales are dispersed among all customer classes. As of June 30, 2017, 31% of the BPW’s energy sales were made to residential customers, 12% were made to commercial customers and 57% were attributable to industrial and other customers. Large commercial and industrial customers represent a full spectrum of business. Major industrial customers include General Mills Incorporated, Spartan Light Metal Products, Buckhorn Rubber, Enduro Industries, and Watlow Industries. General Mills Incorporated is the area’s largest employer, with approximately 1,000 employees.

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2015 2016 2017 Residential 78,031 79,280 78,205 Commercial 27,133 31,150 30,914 Industrial 154,591 150,213 146,759 Other * 129,009 144,433 133,000

Total Energy Sales (MWh) 388,764 405,076 388,878 _________________ * Other energy sales in 2017 includes 133,000 MWh of sales into the MISO market

As of June 30, 2017, 32% of the BPW’s revenues from the sale of energy were made to residential customers, 12% were made to commercial customers and 56% were attributable to industrial and other customers.


2015 2016 2017 Residential $ 9,319 $ 9,184 $ 9,243 Commercial 3,159 3,562 3,514 Industrial 13,516 12,461 12,574 Other 3,260 3,271 3,827 Total Energy Revenues (000’s) $29,254 $28,478 $29,158

Financial Condition

The following Condensed Balance Sheet and Condensed Statement of Operations for the last three fiscal years have been prepared by the BPW based upon audited financial statements. Copies of the City’s audited financial statements may be obtained from City of Hannibal, 320 Broadway, Hannibal, MO 63401 or email [email protected].

City of Hannibal Electric Enterprise Condensed Balance Sheet

2015 2016 2017 Assets:

Utility Plant, Net $15,566,274 $15,399,996 $19,870,430 Cash and Investments 8,431,149 8,477,630 10,647,099 Other Assets 5,373,718 5,481,232 5,430,701

Total Assets $29,371,141 $29,358,858 $35,948,230 Deferred Outflows 411,728 1,097,224 492,945

Total Assets & Deferred Outflows $29,782,869 $30,456,082 $36,441,175 Liabilities and Equity:

Equity $22,733,478 $22,930,083 $25,203,241 Revenue Bonds Payable, Noncurrent 2,313,460 1,387,110 5,705,478 Other Liabilities 4,324,203 5,895,646 5,299,250

Total Liabilities and Equity $29,371,141 $27,212,839 $36,207,969 Deferred Inflows 154,199 243,243 233,206

Total Liabilities & Deferred Inflows $29,782,869 $30,456,082 $36,441,175

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City of Hannibal Electric Enterprise Condensed Statement of Operations

2015 2016 2017 Revenues Sale of Electricity Retail $25,993,431 $25,206,850 $25,331,603 Other Revenues 3,446,732 3,554,739 4,445,794 Total Revenues 29,440,163 28,761,589 29,777,397 Operating Expenses Purchased Power 21,362,120 22,430,734 21,192,751 Distribution & Customer Care 2,625,985 2,902,101 2,980,372 Administrative and General 2,148,534 1,981,565 1,986,915 Total Operating Expenses 26,136,639 27,314,400 26,160,038 Other Expenses Depreciation 1,129,992 1,140,470 1,152,343 Interest Expense 155,938 110,114 191,858 Other/Transfers 0 0 0 Total Other Expenses 1,285,930 1,250,584 1,344,201 Net Earnings $2,018,294 $ 196,605 $ 2,273,158

City of Hannibal Electric Enterprise Net Revenues Available for Debt Service(1)

2015 2016 2017 Total Gross Revenue $29,440,163 $28,761,589 $29,777,397 Operating Expenses 26,163,639 27,314,400 26,160,038 Net Revenue Available for Coverage 3,276,524 1,447,189 3,617,359

Principal and Interest Payments 1,500,693 1,005,964 1,047,573 Debt Service Coverage 2.2 1.4 3.5

_________________ (1) Calculation may differ from specifics contained in any bond ordinance, indenture or capital lease agreement.

Litigation

There is no material pending litigation relating to the BPW Electric Fund or its operations.

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City of Columbia, Missouri

Unit Power Purchaser: Iatan Unit 2 and Prairie State Projects

701 E. Broadway Columbia, MO 65201

573-874-7325 Fiscal Year Ending September 30, 2017

Organization

The City of Columbia, Missouri (the “City”) was incorporated in 1826 and became a Constitutional Charter City in 1949. The City is located near the center of the state, and is joined by interstate with Kansas City, Missouri, to the west and St. Louis, Missouri, to the east. The City is located in Boone County. The City’s utility is Columbia Water & Light (“CWLD”), which was formed in 1904. The City is home to the University of Missouri, Columbia College and Stephens College.

The City is organized under the laws of the State of Missouri and operates under a Constitutional Charter approved by the citizenry in 1949. The City is governed according to a Council–Manager form of government. The Mayor and six council members are elected by the citizens of Columbia for three years with staggered terms of service. The City Council appoints a City Manager to implement its policies and direct operations of City departments, including CWLD.

All decisions concerning CWLD are made by the City Council. Recommendations are made to the Council by the Water and Light Advisory Board (the “Board”). The Board is a five member advisory board created by the City Charter. Board members serve overlapping four year terms. The Board’s powers and duties are solely advisory. The Board performs duties according to the City Charter and Code of Ordinances of the City of Columbia, Missouri, and reports its findings and recommendations at least annually to the residents of Columbia and the City Council.


CWLD serves retail customers inside and outside the limits of the City. The CWLD electric service area is approximately 60 square miles. CWLD serves over 50,200 retail electric customers and over 49,200 retail water customers.

CWLD’s transmission system is comprised of approximately 70 miles of 161 kV lines and 69 kV lines. CWLD’s transmission system is interconnected to transmission facilities owned by Associated Electric Cooperative, Ameren, City of Fulton, and the University of Missouri.

As of September 30, 2017, CWLD’s distribution system consisted of over 852 circuit miles of overhead and underground lines. The City maintains eight distribution substations.

Power Supply

The City provides power and energy to its customers from a combination of owned generating resources and purchased power. See “Operating Statistics” below for certain historical information regarding CWLD’s demand and energy requirements. CWLD owns and operates the Columbia Municipal Power Plant which has one natural gas boiler and one gas turbine. The plant has a net rated capacity of 47.5 MW and the last unit was placed in service in 1970. In addition, a 22 MW solid-fuel boiler is being evaluated as a potential biomass option with a final decision within the next

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year. The plant is used primarily for load following and contributed approximately 0.4% of system energy during the previous year. CWLD also owns five distributed generators, totaling 8MW, located at three customer sites around Columbia. The generation, which runs on diesel oil, was installed primarily for reliability and peaking purposes. The customers pay a monthly standby power charge. CWLD also owns 3MW of landfill gas generation. This facility began operation in June 2009 with two 1 MW generators. In 2013, a third 1 MW generator began operation. The facility was built to allow the addition of another 1MW of generation as the landfill gas supply develops, which is planned for 2019. In 2010, CWLD purchased a 25% (36 MW) interest in the 144 MW natural gas fired Columbia Energy Center peaking facility. Columbia purchased the remaining 75% of Columbia Energy Center in May 2011. The majority of CWLD’s energy is purchased from market participants under long-term contracts. The City has long term purchase agreements in place with the City of Sikeston, Missouri, MJMEUC, Associated Electric Cooperative and Ameresco. The amount and term of these contracts is as follows:

Columbia Water & Power Long Term Power Supply Contracts

Capacity (MW)

Contract Expiration

City of Sikeston, Missouri 66 Plant Life MJMEUC – Prairie State 50 Plant Life MJMEUC – Iatan 2 20 Plant Life Associated Electric Cooperative (Wind) 6.3 20 Years Ameresco 3 20 Years NextEra (Wind) 21 20 Years NextEra (Wind) – January 2017 27 End Date Prior Contract

CWLD expects to utilize market purchases for short-term requirements and arrange additional power supply contracts to provide sufficient capacity and energy to meet customer loads into the foreseeable future. In 2015, CWLD entered into a capacity-only contract with Dynegy Marketing and Trade, LLC. The contract started this year (planning year 2017-2018) with 5 MW’s of capacity and runs for ten years. Capacity amounts increase to 45 MW’s in planning year 2023-2024 and remain at that level until termination.

The City has contracted with The Energy Authority (“TEA”) to act as the MISO market participant for the City. All short-term purchased power arrangements are handled by TEA, with prior approval by the CWLD. In addition, the CWLD has contracted with TEA for power supply risk management services. CWLD’s portfolio is modeled and monthly status updates are held to review current status and future options.

Environmental and Regulatory Factors

The Columbia Municipal Power Plant had the capability to burn coal, gas, and wood. Low sulfur coal was used to reduce air emissions. Because of regulations related to coal ash and increasing regulations on emissions, coal combustion was discontinued in September 2015.

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Other measures have also been installed at the plant to accurately measure and reduce air emissions produced by the remaining natural gas units. The system is in full compliance with air quality standards set forth by the Missouri Air Conservation Commission and approved by the Federal Environmental Protection Agency. During 2008, CWLD received a temporary permit to test burn wood as a fuel source. Missouri Department of Natural Resources subsequently informed CWLD that no further permitting would be required in order to continue burning wood as a fuel source. Final evaluations are underway to determine the viability of biomass only combustion in one of the units that previously burned coal.


Current estimates indicate that CWLD will invest up to $57.2 million in capital improvements over the next 5 years. Bond funding, authorized by voters in early 2015, will fund $26.2 million. All other investment will come from cash. Planned capital improvements include additions to the transmission system; additions to the landfill gas plant; and improvements and updates to the distribution system.

Electric Rates

The City Council has sole authority to establish electric rates. The City reviews these rates and charges annually. The City Council has also granted CWLD the authority to automatically adjust energy rates included in its electric class rate schedules in accordance with a fuel adjustment rider (the “Fuel Adjustment Rider”).

As provided in its bond indentures, the City covenants to charge and collect rates for the electric power and energy supplied by CWLD’s electric system shall be required to provide the greater of (i) net revenues sufficient to cover 110% of CWLD’s aggregate debt service, or (ii) revenues and income sufficient to pay operating expenses, 100% of aggregate debt service on all bonds of the City and any other charges required to be paid out of revenues of CWLD’s electric system. Other charges to be paid out of revenues are generally defined by the City to include payments of in lieu of taxes to the City, capital improvements and replacements that are not bond financed and system working capital requirements. In addition, the City covenants to review the sufficiency of its rates for electric service annually.

In September 2017, the City Council did not approve a rate increase. While CWLD has the authority to use a Fuel Adjustment Rider, every effort is made to maintain a zero fuel adjustment. The last time the Fuel Adjustment Rider was utilized was for three months in the summer of 2004.

The City’s electric service rate schedules are designed to encourage energy conservation and the efficient use of energy. All customer classes are subject to seasonal rates that increase during peak summer months.


The City continues to experience growth in its energy requirements. Due to the national economic situation, CWLD’s customer growth has slowed from a 3%-4% annual growth to a 1%-2% growth. Forecasts of peak loads and annual energy requirements have been adjusted. CWLD updated an Integrated Resource Plan (“IRP”) in 2013.


Peak Load (in MW)


2013 263 1,115,526 2014 264 1,167,473 2015 262 1,151,190 2016 265 1,202,453 2017 269 1,189,383

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CWLD’s service area is primarily residential in nature. As of September 30, 2017, 86.7% of CWLDs customers were residential, 13.2% were commercial and 0.1% were industrial or other classifications.

Customers by Class


Residential 41,601 42,229 43,460 Commercial 6,618 6,704 6,637 Industrial 30 28 31

Total Customers: 48,249 48,961 50,128

CWLD’s sales are dispersed among all customer classes. As of September 30, 2017, 36.4% of CWLD’s energy sales were made to residential customers, 41.2% were made to commercial customers and 22.3% were attributable to industrial and other customers. Large commercial and industrial customers represent the full spectrum of CWLD’s business. Food processing, electronics, car parts, insurance, and health care represent major areas of the large customer base.


2015 2016 2017

Residential 416,658 408,872 421,978 Commercial 480,037 474,890 477,695 Industrial 254,495 166,645 258,904

Total Retail Sales (MWh) 1,151,190 1,133,857 1,158,577

As of September 30, 2017, 40.7% of CWLD’s revenues from the sale of energy were made to residential customers, 40.7% were made to commercial customers and 18.6% were attributable to industrial and other customers.


2015 2016 2017 Residential $ 49,649,481 $ 50,519,892 $ 46,795,374 Commercial 48,766,406 48,978,893 46,862,395 Industrial 21,064,398 21,372,767 21,343,781

Total Retail Sales $119,480,286 $120,871,552 $115,001,550 Regional Transmission Organization (“RTO”)

CWLD became a member of MISO in 2005. CWLD is a Transmission Owner (“TO”) and has contracted with TEA for market participant services. CWLD receives revenue as a TO and by selling energy in the market when not needed for local requirements. TEA also provides energy risk management services for CWLD. CWLD’s portfolio is modeled and monthly telephone status update meetings are held to assess current and long-term positions. Energy sales are from existing supplies that are not needed for native load and benefit CWLD’s customers by mitigating rate changes.

Revenues from RTO Transactions 2015 2016 2017 Energy Revenues $ 1,168,782 $ 1,072,511 $ 832,964 Transmission Revenues 2,542,391 3,787,624 1,884,354 Total RTO Revenues $ 3,711,173 $ 4,860,135 $ 2,717,318

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Financial Condition

The following Condensed Balance Sheet and Condensed Statement of Operations for the last fiscal year has been prepared by CWLD based on audited financial statements. Copies of the City’s audited financial statements may be obtained from City of Columbia, Finance Department, P. O. Box 6015, Columbia, MO 65205 or on the web at www.gocolumbiamo.com.

Columbia Water & Light Condensed Balance Sheet

2015 2016 2017 Assets and Deferred Outflows

Net Plant in Service $263,556,935 $278,418,494 $274,497,850 Cash and Marketable Securities 42,431,816 49,290,444 55,353,738 Other Assets 123,505,119 106,843,006 96,265,082

Total Assets 429,493,870 434,551,944 426,116,670 Deferred Outflows 14,201,698 20,266,086 13,782,467

Total Assets and Deferred Outflows $443,695,568 $454,818,030 $439,899,137 Liabilities, Equity and Deferred Inflows

Net Position $199,735,212 $208,088,407 $202,693,195 Revenue Bonds Payable, Noncurrent 219,634,676 212,169,024 202,413,373 Other Noncurrent Liabilities 0 0 0 Current Liabilities from Restricted 15,484,769 23,627,407 20,459,935 Current Liabilities 8,840,911 9,210,743 12,379,719

Total Liabilities and Retained Earnings 443,401,565 453,095,581 437,946,222 Deferred Inflows 294,003 1,722,449 1,952,915

Total Liabilities, Equity & Deferred Inflows

$443,695,568 $454,818,030 $439,899,137

Columbia Water & Light Condensed Statement of Operations

2015 2016 2017 Revenues Sale of Electricity Retail $120,426,345 $123,926,993 $122,809,576 Other Revenues(1) 31,054,493 31,285,900 28,321,013 Total Revenues $151,480,838 $155,212,893 $151,130,589 Operating Expenses Fuel and Purchased Power 69,641,609 68,616,338 70,560,710 Other Electric Production Expenses 6,498,933 5,432,139 6,862,649 Electric Distribution & Transmission 13,140,428 15,312,081 14,787,856 Other Operating Expenses(2) 21,054,920 23,004,952 25,549,156 Total Operating Expenses 110,335,890 112,365,510 117,760,371 Other Expenses Depreciation 14,822,021 15,069,433 15,608,709 Interest Expense 6,951,636 8,145,631 7,798,825 Other 16,560,701 16,738,654 19,028,829 Total Other Expenses 38,334,358 39,953,718 42,436,363 Contributed Capital 409,131 2,300,466 175,966 Net Earnings $ 3,219,721 $ 5,194,131 $ (8,890,179)

________________ (1) Does not include unrealized gains. (2) Includes operating revenues or expenses associated with the operation of the City’s water system

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Columbia Water & Light Net Revenues Available for Debt Service(1)

2015 2016 2017 Total Gross Revenue $151,480,838 $159,224,682 $151,130,589 Operating Expenses (110,335,890) (112,365,510) (117,760,371) Net Revenue Available for Coverage $ 41,144,948 $ 46,859,172 $ 33,370,218

Principal and Interest Payments

$13,696,635

$15,814,381

$14,908,750 Debt Service Coverage 3.00 2.96 2.24

_______________ (1) Calculation may differ from specifics of City ordinances. Litigation

There is no material pending litigation relating to CWLD or its operations.


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City of Independence, Missouri

Unit Power Purchaser: Iatan Unit 2 Project

21500 E. Truman Road Independence, MO 64056

(816) 325-7500

Fiscal Year Ending June 30, 2017

Organization

Incorporated in 1849, the City of Independence, Missouri (“City”) is the county seat of Jackson County and adjoins Kansas City, Missouri, to the west. The City is the fourth largest city in Missouri and the City’s Electric Department (“Department”) operates the second largest municipal electric utility in the state.

The City is organized under the laws of the State of Missouri and operates under a Constitutional Charter approved by the citizenry in December 1961 and amended in 1972 and 1979. The City is governed according to a Council-Manager form of government. The City Council consists of seven members: four council members from single member districts, two council members elected at large, and a Mayor elected at large. Non-partisan elections are held every two years to provide for staggered terms of office. The Mayor and two at-large council members are elected to four year terms and, in alternating elections, the four district council members are elected to four year terms. The City Council appoints a City Manager to implement its policies and direct operations of City departments, including the Department.

The Public Utilities Advisory Board (“Board”) is a seven member advisory board created by the City Charter and appointed by the City Council for overlapping four year terms. The Board’s powers and duties are solely advisory. The Board is empowered to inspect or investigate all public utilities owned and operated by the City and all public utilities operating under franchises or permits granted by the City. The Board “shall report its findings and recommendations at least annually to the City Council, the people of the City, the City Manager, and the respective director(s) of the public utilities operated within the City to which such findings and recommendations apply.” As a matter of practice, the Board meets regularly, typically monthly, with the Electric Utility Director (as well as the Water Department and Wastewater Department Directors), receives reports from the Director on the status of operations, financial condition, or other operational aspects of the electric system and considers policy recommendations of the staff on important utility matters.


The Department serves retail customers only within the limits of the City. The City limits consist of a 78 square mile area. The Department serves all the retail customers within the City limits except for the area occupied by the Lake City Arsenal, a United States Government Reservation (approximately 6.5 square miles). This area is currently served by Kansas City Power & Light Company (“KCPL”) through a 20-year non-exclusive franchise.

The Department’s transmission system is comprised of approximately 26 miles of 161 kV lines and approximately 67 miles of 69 kV lines. One 161 kV line interconnects the Department’s Substation A with its Eckles Road Switching Station and provides the interconnection with Associated Electric Cooperative, Inc. The Department’s 161 kV line from Eckles Road to KCPL-GMO’s Sibley Power Station provides an interconnection with KCPL-GMO. The Department has three additional 161 kV interconnections with KCPL. One 161 kV line connects the Department’s Substation M to KCPL’s Hawthorn Power Station, another 161 kV line connects the Department’s Substation N with KCPL’s Blue Valley Substation and the third 161 kV interconnection is with KCPL’s Blue Mills Substation. In addition to these 161 kV interconnections, the Department maintains three 69 kV interconnections with KCPL at various locations on the Department’s 69 kV transmission system. The Department’s distribution

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system consists of approximately 564 circuit miles of 13 kV overhead lines, and 231 circuit miles of 13 kV underground lines.

Power Supply

Currently, the Department has 192 MW of accredited generating capacity (nine generating units) which is owned and operated by the Department. The amount of accredited capacity is based on the capacity accreditation rules of the SPP, in which the Department is a member. In addition, the Department has accredited generating capacity as described below.

Dogwood Generating Facility. On April 5, 2012, pursuant to an Asset Purchase Agreement with Dogwood Energy, LLC, the Department purchased a 12.3% undivided interest (approximately 75 MW) in the Dogwood Generating Facility (“Dogwood”), a nominal 610 megawatt natural gas-fired combined cycle generating plant located in Pleasant Hill, Missouri. Dogwood was originally developed as a joint venture between Aquila, Inc. and Calpine Corporation and placed into commercial operation in two phases: first as a peaking facility during the summer of 2001 and then as a combined cycle plant on February 27, 2002. In addition to the Department, the Kansas Power Pool, Missouri Joint Municipal Electric Utility Commission (MJMEUC), and the Unified Government of Wyandotte County (KCBPU) also purchased 10.3%, 8.2%, and 17.0% shares, respectively, of Dogwood in 2012. Dogwood Energy, LLC maintains the remaining ownership share (52.2%) in the facility.

Each of the owners of Dogwood has entered into certain project agreements that provide for the joint ownership and operation of Dogwood. Under these project agreements, each owner of Dogwood is responsible for its respective share of the fixed operation and maintenance costs, the variable operating costs including fuel, and renewals and replacements of Dogwood. In addition, the owners of Dogwood share in any revenues from sales of unused capacity and energy in the facility. The Department utilized tax-exempt bonds to finance the purchase price of the facility and is responsible for payment of the debt service on these bonds.

Participation Power Agreement with OPPD. In January 2004, the Department entered into a participation power agreement with Omaha Public Power District (the “OPPD Participation Agreement”). Under the OPPD Participation Agreement, the Department purchases an 8.33% share (approximately 57 megawatts) of a 682 megawatt coal-fired baseload generating unit built at OPPD’s existing Nebraska City power station site (“Nebraska City Unit 2”). The OPPD Participation Agreement provides that OPPD is the owner/operator of Nebraska City Unit 2 and OPPD sells the Department’s share of the output on an actual cost-based approach. OPPD issued tax-exempt bonds to pay for the construction of Nebraska City Unit 2 and the Department is obligated to pay its appropriate share of the debt service on those bonds; fixed operation and maintenance costs; variable operating costs, including fuel; and renewals and replacements of Nebraska City Unit 2. Nebraska City Unit 2 began commercial operation on May 1, 2009. The term of the OPPD Participation Agreement is 40 years from the commercial operation date and can be extended by the Department for the life of Nebraska City Unit 2.

Unit Power Purchase Agreement with MJMEUC. In July 2005, the Department executed their Unit Power Purchase Agreement with Missouri Joint Electric Utility Commission (MJMEUC), which was further amended and restated in June 2006. Under the Unit Power Purchase Agreement, the Department purchases approximately 53 MW of capacity and energy from MJMEUC’s ownership interest in Iatan Unit 2. In June 2006, MJMEUC entered into an Ownership Agreement with KCPL for an 11.76 percent undivided ownership share (nominal 106 MW) in the nominal 870 MW Iatan Unit 2. Under the Unit Power Purchase Agreement, MJMEUC sells 50 percent (nominal 53 MW) of its capacity and energy in Iatan Unit 2 to the Department on a cost-based approach. Iatan Unit 2 began commercial operations on December 31, 2010, and the term of the Unit Power Purchase Agreement is designed to be for the life of Iatan Unit 2.

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Renewable Energy Purchase Agreement with Smoky Hills Wind Project II, LLC. In August 2008, the Department executed a certain renewable energy purchase agreement with Smoky Hills Wind Project II, LLC (the “Smoky Hills Agreement”) for a 15 MW purchase from a wind generation project located in central Kansas (the “Smoky Hills Wind Farm”). The Department’s purchase pursuant to the Smoky Hills Agreement is from Phase II of the Smoky Hills Wind Farm, which added 148 MW of wind generation to the existing 100 MW Phase I. Energy deliveries from the Smoky Hills Wind Farm began on December 8, 2008 and will continue for a term of 20 years with certain renewal options at the mutual agreement of the parties to the Smoky Hills Agreement.

Renewable Energy Purchase Agreement with Marshall Wind Energy, LLC. In May 2015, the Department executed a certain renewable energy purchase agreement with Marshall Wind Energy LLC (The “Marshall Wind Agreement”). The Marshall Wind Agreement is for a 20 MW purchase from a wind generation project located in north central Kansas (the “Marshall Wind Farm”). Energy deliveries from the Marshall Wind Farm began on March 22, 2016 and will continue for a term of 20 years with certain renewable options at the mutual agreement of the parties.

Renewable Energy Purchase Agreement with MCP-Independence, LLC. In November 2015, the Department executed a certain renewable energy purchase agreement with MCP-Independence, LLC. This agreement is for the energy produced from a 3 MW solar farm located on the Department’s Distribution system. The term is for 25 years with the first delivery of energy on March 15, 2017.

The Department believes that its total accredited generating capacity resources, including the Department’s interest in Dogwood and the other capacity purchases, is sufficient to meet its projected annual system peak load, including the SPP requirement of 12 percent reserves, through 2025.

A breakdown of Department-owned and jointly-owned generating facilities are shown in the following table: Generating Unit Characteristics Plant

Accredited Net Capacity (MW)

Year of Initial Operation

Fuel Type

Blue Valley Steam Power Plant Unit No. 1 22 1958 Natural Gas Unit No. 2 22 1958 Natural Gas Unit No. 3 54 1965 Natural Gas

Total Steam Units 98

Jointly Owned Units

Dogwood Energy Facility 76 2001 Natural Gas Substation Generations

J- I (Substation J) 13 1968 Oil J-2 (Substation J) 13 1968 Oil 1-1 (Substation 1) 17 1972 Oil 1-2 (Substation 1) 16 1972 Oil H- I (Substation H) 17 1972 Gas/Oil H-2 (Substation H) 18 1974 Gas/Oil

Total Combustion Turbine Units 94 Contract Resources

MJMEUC – Iatan Unit No. 2 52 2010 Coal OPPD – Nebraska City Unit No. 2 57 2009 Coal Smoky Hills Wind Farm Phase 2 4 2008 Wind Marshall Wind Farm 1 2016 Wind

Total Contract Resources 114 Total System 382

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Environmental and Regulatory Factors The Department operates its generation in accordance with the applicable federal and state emission rules and regulations. Blue Valley Unit No. 3 is subject to the Phase II requirements of the federal Acid Rain Program (ARP). Blue Valley Units No. 1 and No. 2 and the Missouri City units are exempt from the ARP requirements. Currently Blue Valley Unit No. 3 is allocated 4,670 tons of sulfur dioxide (SO2) stack emission allowances annually. The Department has utilized this unit in a least cost manner while considering the cost of the SO2

emissions. As of January 1, 2017, the accumulated available SO2 emission allowances carried forward into calendar year 2017 was 32,588 tons. These allowances are of little compliance or economic value due to the passage of the Cross State Air Pollution Rule in 2014, and Blue Valley’s cessation of coal firing on September 9, 2015. In addition to the ARP requirements for Blue Valley Unit No. 3, the Department is restricted to SO2 emissions (three hour average basis) of 6.3 pounds per million Btu for all three units at Blue Valley station and 8.0 pounds per million Btu for both units at its Missouri City station in accordance with the State of Missouri environmental regulations. During the fiscal year ending June 30, 2016, the Department was in compliance with such SO2 regulations. Blue Valley Unit No. 3 is also regulated for nitrogen oxide (NOX) emissions. The unit is limited to 0.35 pounds per million Btu during the defined ozone season (May 1 through September 30) and 0.40 pounds per million Btu during the rest of the year. Low NOX burners were installed on this unit to comply with this regulation. The average NOX emission rate was 0.0 pounds per million Btu during the 2016 ozone season and 0.129 pounds per million Btu for the entire calendar year 2016. Blue Valley Unit No. 3 was also subject to the federal/state regulations in conjunction with the Clean Air Interstate Rule (“CAIR”) which was to further regulate SO2 and NOX emissions. Blue Valley Unit No. 3 was also subject to the Clean Air Mercury Rule (“CAMR”) which was to regulate mercury emissions. Both the CAIR and CAMR rules were vacated by the United States Court of Appeals for the District of Columbia. The proposed CAIR replacement rule was published in the federal register on July 6, 2010 and finalized as the Cross-State Air Pollution Rule (“CSAPR”) on August 8, 2011. Scheduled to be effective January 1, 2012, CSAPR would have limited the Blue Valley Unit No. 3 to an annual total of 587 tons of SO2 emissions and 147 tons of NOX emissions. In addition, it would have limited emissions of NOX during the ozone season to a combined total of 77 tons. CSAPR was vacated by the D.C. Court on August 21, 2012, and CAIR left in-place. The Environmental Protection Agency (“EPA”) appealed this decision to the Supreme Court and the Court upheld CSAPR, overruling the lower court’s ruling, on April 29, 2014. The CSAPR limits mentioned above are in effect for the 2017 operating season and beyond (i.e., 464 tons SO2, 126 tons NOX, and 22 tons NOX ozone season). Compliance options for CSAPR include the addition of pollution control equipment, fuel switch to natural gas, or early retirement. The installation of pollution control equipment is not cost effective and the units are still an essential part of our power portfolio; consequently, the compliance plan for the next few years will be to run on natural gas. The proposed CAMR replacement rule (i.e., Mercury and Air Toxics Standards or MATS rule for power plants) was proposed on May 3, 2011. The final rule was published February 16, 2012. Compliance will be required three years and 60 days after publication of the rule in the Federal Register, thus Blue Valley 3 became compliant on April 16, 2015. Compliance options for Blue Valley Unit 3 include the addition of pollution control equipment, fuel switch to natural gas, or early retirement. The installation of pollution control equipment is not cost effective; consequently, the compliance plan after April 16, 2015 is to run the unit on natural gas.

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The Blue Valley Units No. 1 and No. 2 and the Missouri City units were to be subject to the National Emission Standards for Hazardous Air Pollutants for Industrial, Commercial, and Institutional Boilers and Process Heaters (“Industrial Boiler MACT”) which was to regulate the emitted amount of mercury, hydrogen chloride, particulates, and carbon monoxide. On June 8, 2007, the Industrial Boiler MACT rule was vacated by the United States Court of Appeals for the District of Columbia. On July 30, 2007 the vacature was mandated making the rule void. The EPA published the proposed revised Industrial Boiler MACT (“IB-MACT”) rule in the federal register on June 4, 2010 and the rule was finalized on February 21, 2011. On May 18, 2011, the EPA published a notice delaying the effective date of the rule pending the completion of reconsideration or judicial review, whichever is earlier. The EPA completed its reconsideration and published the final rule on January 31, 2013. Compliance with the IB-MACT rule is now required by January 31, 2016. Compliance options include the addition of pollution control equipment, fuel switch to natural gas, or early retirement. The installation of pollution control equipment is not cost effective. Consequently, the compliance plan for Blue Valley Units 1 and 2 will be to run on natural gas after January 30, 2016. The Missouri City units ceased generation on September 19, 2015. The Blue Valley and Missouri City Units are subject to the Missouri Department of Natural Resources’ (“MDNR”) Kansas City Ozone Maintenance Plan. The goal of the Maintenance Plan is to ensure the ozone levels do not increase to the point of causing a violation of the ozone air quality standard. Under Section 110(a)(1) of the Clean Air Act, one required element of the Maintenance Plan is a set of contingency measures with trigger levels based on measured regional ozone levels. The MDNR’s contingency control measures for the Missouri portion of the maintenance area have been designed as a two-phased approach with implementation occurring when the trigger of a specific phase occurs. The Phase I contingency measures have been triggered based on ozone levels in the years 2005 through 2007. Phase I includes early implementation of control devices (e.g., Low NOX Burners) on CSAPR affected coal-fired electric generating units (“EGU”) as a means to reduce NOX at several major NOX point sources. Blue Valley Unit 3 is a CSAPR-affected EGU. MDNR Air Pollution Control Program is currently working with the Department in developing the most appropriate set of NOX emission reductions for the Maintenance Plan contingency measures. The EPA published the final Greenhouse Gas (“GHG”) Tailoring Rule on June 3, 2010. The GHG Tailoring rule regulates GHG emissions (i.e., carbon dioxide (“CO2

”), methane, etc.) under Prevention of Significant

Deterioration (PSD) and Title V permitting programs and will be implemented in phases. Beginning January 2, 2011, the Blue Valley units must comply with the PSD provisions of the rule. Under these provisions, any construction project on the units must be evaluated for potential significant GHG emission increases. If any construction project produces a significant increase in GHG emissions then best available control technology (BACT) must be installed. As part of the Tailoring Rule, the USEPA released technical guidelines on what constitutes BACT for GHGs in October 2010. As of July 1, 2011 (Phase II), a new source with potential GHG emissions above 100,000 tons per year is subject to PSD permitting requirements for GHGs. With respect to the Title V permitting program, beginning January 2, 2011, new or existing Title V major sources are subject to Title V requirements for GHGs. The Department is monitoring the activities of the EPA and the MDNR will take the necessary action to comply with any future compliance rules regarding GHG emissions and how it will impact the Blue Valley units. On June 2, 2014, the EPA proposed the Greenhouse Gas Standards for Existing Power Plants, aka the Clean Power Plan. This proposed rule seeks to cut carbon dioxide emissions for existing plants 30 percent nationwide and 21 percent for the State of Missouri from 2005 levels by 2030. The proposed rule would require the State of Missouri to meet CO2 emission targets of 1,621 lbs/MWH by 2020 and 1,544 lbs/MWH by 2030. The comment period on this proposed regulation ended December 1, 2014. On August 3, 2015 the final Clean Power Plan was released with deeper CO2 cuts than those in the proposed plan. The final rule requires Missouri to meet CO2

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emission targets of 1,621 lbs/MWH by 2022 and 1,272 lbs/MWH by 2030. On February 9, 2016, the Supreme Court stayed the implementation of the Clean Power Plan (CPP) pending judicial review. In March 2017, President Donald Trump signed an executive order calling for EPA to review the CPP. Currently, the Court has suspended the CPP and asked the EPA for a plan on how it will proceed with CO2 regulation. The Department is monitoring the activities of the EPA and will take the necessary action to comply with any future compliance rules regarding CO2. The Department has been in compliance with the current regulations and expects to comply with future regulations through a combination of unit commitment strategy, use of compliant fuel, participation in cap and trade programs, and/or future environmental equipment enhancements on the units.

Projected Capital Projects

Current estimates indicate that the Department will invest approximately $20 million in capital projects over the next 5 fiscal years. The capital projects will be dedicated to improving and updating the distribution system and projects for generation, transmission and other facilities. It is expected that the City will fund these projects with a combination of cash reserves and proceeds of municipal revenue bonds.

Electric Rates

The City Council has sole authority to establish electric rates. The Council has adopted electric class rate schedules by ordinance after receiving recommendations from the Department and consideration of rate studies performed by outside consultants. The City Council has also granted the Department the authority to automatically adjust the monthly energy rates of its electric class rate schedules in accordance with a Power Supply Fuel - Energy Cost Adjustment Schedule (“FCA”). The Department reviews the rate structure at least annually to determine if modifications are needed.

As provided in its bond indentures, the City covenants to charge and collect rates for the electric power and energy supplied by the Department’s electric system as shall be required to provide revenues and income sufficient to pay the cost of the following: operating expenses, 100% of aggregate debt service on all bonds of the City and any other charges required to be paid out of revenues of the Department’s electric system. Other charges to be paid out of revenues are generally defined by the City to include the payment in lieu of taxes to the City, the financing of system capital improvements and replacements that are not bond financed by the City, and system working capital requirements. In addition, the City covenants to review the sufficiency of its rates for electric service annually.

In November 2008, the City Council adopted multiple schedules of rate increases following a 5-year cost-of-service study and rate plan performed by Sawvel and Associates, Inc. Under the adopted rate plan, base rates were increased by 9% beginning January 1, 2009, 5% on July 1, 2009, 5% on July 1, 2010, 5% on July 1, 2011, and 5% on July 1, 2012. In addition to any base rate increases, customer billing increases/decreases may result from changes in fuel and purchased power costs which are passed along to customers pursuant to the FCA.

The City’s electric service rate schedules are generally similar in type and number to the rate schedules of other electric utilities adjoining its service territory.


The City has experienced moderate reductions in its peak load and energy requirements over the last five years. The actual system peak load and energy requirements are significantly influenced by the variation in the number of summer season cooling degree days incurred in each annual period.

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Historical Peak Load and Energy Sales Fiscal Year Ending June 30

Peak Load (in MW)

Total Energy Requirements

(MWh)

Summer Cooling Degree Days (May – Sept.)

2013 304.6 1,086,487 1,524 2014 272.4 1,082,302 1,416 2015 276.1 1,029,407 1,251 2016 276.9 1,036,593 1,464 2017 289.0 1,063,952 1,410

The Department’s Service area is residential in nature. As of June 30, 2017, 91.1% of the Department’s customers were residential and 8.9% were commercial and industrial or other classifications.

Customers by Class Fiscal Year Ending June 30


Residential 51,604 51,817 52,043 Commercial 5,030 5,016 5,005 Industrial 11 11 12 Other 64 64 63

Total Retail Sales 56,709 56,908 57,123

As of June 30, 2017, 50% of the Department’s retail energy sales were made to residential customers and 50% were made to commercial customers, industrial and other customers. Commercial customers are primarily in the business of general retail, professional services and food service.

Energy Sales (MWh) by Class Fiscal Year Ending June 30

2015 2016 2017 Residential 488,009 483,477 514,711 Commercial 451,830 446,415 445,155 Industrial 51,422 53,096 60,772 Other 4,224 4,095 3,756

Total Retail Sales 995,485 987,083 1,024,394 Wholesale 86,075 162,068 80,003

Total Energy Sales 1,081,560 1,149,151 1,104,397

As of June 30, 2017, 54% of the Department’s retail revenues from the sale of energy were made to residential customers and 46% were made to commercial, industrial and other customers.

Energy Revenues by Class Fiscal Year Ending June 30

2015 2016 2017 Residential $ 70,622,000 $ 68,081,000 $ 71,367,859 Commercial 58,251,000 54,249,000 55,066,557 Industrial 4,727,000 4,187,000 4,463,759 Other 493,000 367,000 237,508

Total Retail Sales 134,093,000 126,884,000 131,135,683 Wholesale 2,369,000 3,298,000 1,751,022

Total Energy Sales $ 136,462,000 $ 130,182,000 $ 132,886,705

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Financial Condition

The following Condensed Balance Sheet and Condensed Statement of Operations for the last three fiscal years have been prepared by the Department based upon audited financial statements. Copies of the City’s audited financial statements may be obtained from the City’s website at www.independencemo.org or by submitting a written request to the City Clerk, 111 E. Maple Street, P.O. Box 1019, Independence, MO 64051.

Condensed Balance Sheet Fiscal Year Ending June 30

2015 2016 2017 Assets Net Utility Plant Current Assets

$ 221,724,615 87,410,690

$ 225,353,906 79,040,698

$ 230,948,288 94,955,310

Deferred Charges & Other Assets 19,035,416 30,903,502 42,094,437 Total Assets & Deferred Outflows $ 328,170,721 $ 335,298,106 $ 367,998,035 Liabilities and Equity Current Liabilities

$ 14,950,930

$ 21,240,023

$ 18,159,470

Long Term Liabilities & Deferred Credits 163,911,656 177,545,648 217,226,965 Total Equity 149,308,135 136,512,435 132,611,600 Total Liabilities and Equity $ 328,170,721 $ 335,298,106 $ 367,998,035

Condensed Statement of Operations

2015 2016 2017 Total Operating Revenue $ 139,078,098 $ 134,747,475 $ 137,945,902 Operating & Maintenance Expenses:

Fuel 7,923,687 8,283,604 5,096,159 Purchased Power 45,365,460 42,690,233 47,313,899 Production 12,285,668 16,607,755 9,951,847 Transmission & Distribution 20,451,270 20,796,769 20,738,240 Customer Service 4,163,095 4,247,247 4,122,449 General & Administrative 20,079,178 21,869,347 21,891,928

Total O&M 110,268,358 114,494,955 109,114,522 Other Expenses 34,243,922 30,193,757 26,596,429 Total Operating Revenue Deductions 144,512,280 144,688,712 135,710,951 Net Operating Income (5,434,182) (9,941,237) 2,234,951 Total Non-Operating Deductions (net) (6,005,541) (3,989,597) (6,204,837) Net Income (11,439,723) (13,930,834) (3,969,886) Capital Contributions 518,197 1,135,134 69,051 Change in Net Position $ (10,921,526) $ (12,795,700) $ (3,900,835)

Net Revenues Available for Debt Service

2015 2016 2017 Total Gross Revenue $ 139,687,551 $ 135,479,674 $ 138,833,335 Revenue Available for Coverage of

Electric Revenue Bonds 31,788,300 25,097,750 38,075,223 Principal and Interest Payments 8,935,556 8,934,957 10,137,430 Debt Service Coverage 3.56 2.81 3.76

Litigation

There is no material pending litigation relating to the Department or its operations.

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MJMEUC 2017 AUDITED FINANCIAL STATEMENTS

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REPORT OF

MISSOURI JOINT MUNICIPAL ELECTRIC UTILITY COMMISSION

DECEMBER 31, 2017 and 2016

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.:$WILLIAMS .::::KEEPERS LLC

CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS

2005 West Broadway, Suite 100, Columbia, MO 65203 OFFICE (573) 442-6171 FAX (573) 777-7800

3220 West Edgewood, Suite E, Jefferson City, MO 65109 OFFICE (573) 635-6196 FAX (573) 644-7240

www.williamskeepers.com

INDEPENDENT AUDITORS' REPORT

To the Board of Directors of Missouri Joint Municipal Electric Utility Commission

We have audited the accompanying combined and combining financial statements of the Missouri Joint Municipal Electdc Utility Commission (MJMEUC), which comprise the combined and combining statements of net position as of December 31, 2017; the related combined and combining statements of revenues, expenses and changes in net position, and cash flows for the year then ended; and the related notes to the financial statements.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with U.S. generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

American Institute of Certified Public Accountants I Missouri Society of Certified Public Accountants I Member, Allinial Global 78

Opinions

In our opinion, the combined and combining financial statements referred to above present fairly, in all material respects, the combined financial position of the Missouri Joint Municipal Electric Utility Commission and each of its funds as of December 31, 2017, and the combined and individual results of the funds' operations and cash flows for the year then ended in accordance with U.S. generally accepted accounting principles.

Other Matters

Required Supplementary Information

U.S. generally accepted accounting principles require that the management's discussion and analysis on pages 3 to 11 and the pension plan schedules on pages 52 and 53 be presented to supplement the financial statements. Such information, although not a part of the financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential pmt of financial reporting for placing the financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with U.S. generally accepted auditing standards, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the financial statements, and other knowledge we obtained during our audit of the financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Information

Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The combining non-major fund financial statements and schedule of changes in restricted bond accounts (the supplemental information) on pages 54 to 60 is presented for purposes of additional analysis and is not a required part of the financial statements.

The supplemental information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with U.S. generally accepted auditing standards. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole.

()y'~J~LLL May 9, 2018

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MANAGEMENT'S DISCUSSION AND ANALYSIS

Management of the Missouri Joint Municipal Electric Utility Commission ("MJMEUC") offers all persons interested in the financial position and results of MJMEUC's operations this discussion and analysis of the financial performance ofMJMEUC, which provides an overview ofMJMEUC's financial activities for the fiscal years ended December 31, 2017 and 2016. Please read this narrative in conjunction with the accompanying financial statements and notes thereto, which follow this section.

Overview ofMJMEUC

MJMEUC was formed with the main purpose of providing dependable, sufficient and economical electric power and energy for the benefit of member municipalities and their residents. There are three full requirements energy pools within MJMEUC. The Missouri Public Energy Pool #1 ("MoPEP") consists of35 municipal members, the Mid-Missouri Municipal Public Energy Pool ("MMMPEP") consists of 13 municipal members, and the Southwest Missouri Public Energy Pool (''S WMPEP") consists of two municipal members; however, SWMPEP will not start receiving power from MJMEUC until 2020. Each municipal member of the pools has entered into a power purchase contract with MJMEUC for the full power requirements of their respective municipality. MJMEUC provides the electric power and energy requirements of the pool members pursuant to their respective pool agreement. Additionally, MJMEUC has take-or-pay unit power purchase agreements with certain other MJMEUC members by where the agreement entitles the member to a specific percentage share of capacity and electric output ofMJMEUC joint ownership interest in power generating facilities with other entities.

Overview of the Financial Statements

This rep01t consists of three parts; Management's Discussion and Analysis (this section), the Financial Statements, and Supplementary Information. The Financial Statements are comprised of the Government-wide Financial Statements; the Fund Financial Statements; and the Notes to Financial Statements. These statements are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America ("GAAP"). MJMEUC applies GAAP that pertains to regulated operations and uses the Uniform System of Accounts prescribed by the Federal Energy Regulatory Commission.

The Government-wide Financial Statements provide a broad overview ofMJMEUC's finances. These financial statements include the Combined Statements ofNet Position, The Combined Statements of Revenues, Expenses, and Changes in Net Position, and the Combined Statements of Cash Flows.

The Fund Financial Statements are used to aid financial management by segregating transactions related to ce1tain functions or activities and to ensure compliance with contractual and finance-related legal requirements. These financial statements include the Combining Statements of Net Position, Combining Statements of Revenues, Expenses, and Changes in Net Position, and the Combining Statements of Cash Flows.

The financial statements are prepared using proprietary or enterprise fund accounting. Proprietary funds account for operations that are designed to be self-supporting from fees charged to consumers for the provision of goods and services where the government has decided that the periodic determination of revenues, expenses, and net income is appropriate for capital maintenance, public policy, management control, accountability or other purposes. The accounting and financial reporting practices of proprietary funds are similar to those used for business enterprises and focus on capital maintenance and the flow of economic resources using accrual accounting.

The supplemental information is separated into two sections; the first section is referred to as Required Supplementary Information and its presentation is required by GAAP. The second section is referred to as Supplementary Information and is not required by GAAP to be presented. The Required Supplementary Information includes two schedules regarding MJMEUC's pension plan and are the Schedule of Changes in Net Pension Liability and the Schedule of Contributions - Last Ten Fiscal Years. The Supplemental Information section includes statements for non-major funds consisting of Combining Statements of Net Position, Combining Statements of Revenues, Expenses, and Changes in Net Assets, and Combining Statements of Cash Flows. In addition, the Supplemental Information section includes a Schedule of Changes in Restricted Bond Accounts. The Supplemental Information section is presented to provide additional information on the individual funds comprising MJMEUC's financial statements for the purposes of additional analysis.

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The Combined and Combining Statements ofNet Position presents MJMEUC's financial position as of the end of the year presented. Information is displayed on assets, deferred outflows of resources, liabilities, and deferred inflows of resources, with the difference reported as net position. The net position of MJMEUC reflects the resources available as of the end of the year to support member activities. Over time, increases and decreases in MJMEUC's net position are one indicator of whether MJMEUC's financial health is improving or deteriorating. Other factors to consider include MJMEUC's wholesale electric rates and its ability to maintain or exceed debt coverage levels and other covenants required by its bond indentures.

The Combined and Combining Statements of Revenues, Expenses and Changes in Net Position present information detailing the revenues, expenses, and deferred inflows and outflows that resulted in the change in net position that occurred during the years presented. All revenues, expenses, and defetTed inflows and outflows are reported on an accrual basis, following GAAP for regulated operations. This means that the revenue, expense, or defelTed inflows and outflows are recognized as soon as the underlying event giving rise to when the change occurs, regardless of when the actual cash is received or paid. Thus, revenues, expenses, and deferred inflows and outflows are repmted in these statements for some items that will not result in cash flows until future periods. For example, power purchases that occutTed during the year will be reflected as an expense, whether or not they have been paid as of the end of the fiscal year. Further, GAAP for regulated operations require a matching of revenues and expenses for when costs are recoverable in MJMEUC's rates.

The Combined and Combining Statements of Cash Flows presents the cash inflows and outflows ofMJMEUC categorized by operating, capital and related financing, and investing activities. It reconciles the beginning and end-of-year cash and cash equivalents balances contained in the Statements of Net Position. The effects of accrual accounting are adjusted out and non-cash activities, such as depreciation, are removed to supplement the presentation in the Statements of Revenues, Expenses and Changes in Net Position.

The Notes to Financial Statements follow the above financial statements and provide additional infommtion that is essential to have a full understanding of the information provided in the financial statements.

Financial Highlights

2017 2016- 2015 Net Position (equity) $ 63,366,740 $ 53,693,510 $ 44,627,110

Change in Net Position (net income) $ 9,673,230 $ 9,066,400 $ 6,475,153

Capital Improvements $ 17,750,786 $ 18,627,702 $ 12,396,957

Coincident Peak Demand

Mo PEP 531 megawatts 53 2 megawatts 526 megawatts

MMMPEP 107 megawatts 107 megawatts 111 megawatts

Electric Sales (in megawatt hours)

Mo PEP 2,517,758 2,609,294 2,588,340

MMMPEP 544,765 557,859 554,239

Plum Point 802,144 1,015,813 931,605

Iatan 2 675,718 542,927 664,291

Prairie State 1,335,885 1,312,755 1,371,408

Revenue Bond Credit Ratings

MoPEP (Moody's/Fitch) A2/A A2/A A2/A

Plum Point (Moody's/Fitch/S&P) A3 I A I A- A3 I A I A- A3 I A-/ A-Iatan 2 (Moody's/Fitch) A2/A A2/ A A2/A Prairie State (Moody's/Fitch) A2/ A A2/A A2/A

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Financial Analysis

The following tables present summarized financial position and operating results as of and for the years ended December 31, 2017, 2016 and 2015. Additional details are available in the accompanying financial statements.

Combined Statements of Net Position as of December 31, 2017, 2016 and 2015

2017 2016 2015 ASSETS

Capital Assets $ 1,210,821,203 $ 1,235,702,824 $ 1,255,429,095 Other Noncurrent Assets 203,458,491 173,977,944 177,391,295 Current Assets 123,676,508 128,926,581 130,916,514

Total Assets 1,537,956,202 1,53 8,607 ,349 1,563,736,904 DEFERRED OUTFLOWS OF RESOURCES 38,230,479 39,187,572 35,193,366 Total Assets and Deferred Outflows of Resources $ 1,576,186,681 $1,577,794,921 $ 1,598,930,270

LIABILITIES

Long-Term Debt $ 1,381,720,679 $ 1,387,355,420 $ 1,431,856,673 Other Long-term Liabilities 684,950

Unearned Revenue 15,430,125 13,335,781 19,302,099 Net Pension Liability 656,460 903,727 4,491 Accrued Interest Payable 22,444,934 23,795,630 29,477,921 Accounts Payable and Accrued Liabilities 19,807,421 22,202,386 18,776,782 Current Maturities of Long-Term Debt 33,336,000 42,145,000 33,394,000

Total Liabilities 1,474,080,569 1,489,737,944 1,532,811,966

DEFERRED INFLOW OF RESOURCES 38,739,372 34,363,467 21,491,194

NET POSITION

Net Investment in Capital Assets (77 ,996,3 54) (92,394,746) (102,326,948) Restricted 49,939,311 56,557,149 54,787,462 Unrestricted 91,423,783 89,531,107 92,166,596

Total Net Position 63,366,740 53,693,510 44,627,110 Total Liabilities, Deferred Inflow of Resources, and Net Position $ 1,576,186,681 $1,577,794,921 $ 1,598,930,270

Financial Position Analysis - 2017

MJMEUC issued two advance refunding revenue bond issues in December 2017 to take advantage of favorable interest rates and to lower total future debt service requirements. One advance refunding issue was MoPEP Facilities Revenue Refunding Bonds, which pattially advance refunded certain other MoPEP Facilities Revenue Bonds relating to the Fredericktown and Dogwood power generation facilities. Total future debt service savings from this advance refunding is approximately $3.7 million with net present value savings of approximately $2.8 million. The refunded bonds were removed from the Statement of Net Position as they were legally defeased and the Mo PEP Series 2017 refunding revenue bonds were added to the Statement of Net Position.

MJMEUC's other advance refunding issue in December 2017 was Prairie State Project Revenue Bonds issued to advance refund certain other Prairie State Project Revenue Bonds. Total future debt service savings from this advance refunding is approximately $4.8 million with net present value savings of approximately $3.9 million. This advance refunding is classified as a crossover refunding, and as such, legal defeasance did not occur and the new and old debt are included in MJMEUC's Statement ofNet Position as well as the net proceeds of the new debt

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issue, which is used to make debt service interest payments on the Prairie State Series 2017 Bonds until the crossover date. On the crossover date the advance refunded bonds will be called and retired with the remaining net proceeds of the new debt issue.

Assets and Deferred Outflows of Resources

Capital assets before depreciation increased $13. 7 million ( 1 % ) as a result of continued capital improvements of the utility plants. Capital assets, net of depreciation, decreased $24.9 million (2%) in 2017 due to depreciation expense exceeding capital improvement expenditures. Construction work in progress decreased slightly from $6.9 million to $6.6 million at the end of2017 compared to 2016.

Other noncmTent assets consist of investments, restricted bond accounts, other restricted cash and investments, contractual deposits, and regulatory assets. Other noncurrent assets increased by $29 .5 million ( 16.9%) due to the addition of bond escrow funds from the Prairie State advance refunding in 2017. Current assets decreased $5 .3 million (4.1%) due to decreases in the current po1tion of restricted bond accounts, investments, and prepaid expenses, which were pattially offset by increases in cash and cash investments, accounts receivable, fuel stock and material inventory.

Deferred Outflows of Resources represents a consumption of net position that applies to a future period(s) and will not be recognized as an outflow of resources (expense) until then. The Deferred Outflows of Resources in MJMEUC financial statements as of December 31, 2017 and 2016 include refunding bond costs, which is am01tized into MJMEUC's expenses over the life of the refunding bonds, and certain costs related to MJMEUC's defined benefit pension plan. Deferred Outflows of Resources decreased approximately $957 ,000, primarily due to amortization of refunding bond costs.

Liabilities and Deferred Inflows of Resources

Long-term debt, including the current portion, had a net decrease of $14.4 million ( 1 % ) as a of result principal payments made on debt. Accrued interest payable decreased approximately $1.4 million (5.7%) and consists of interest accrued on MoPEP, Plum Point, Iatan 2 and Prairie State capital projects. This reduction was the result of bond refunding issues that lowered interest rates and large principal payments made that lowers interest costs. The current portion of unearned revenue increased by approximately $2. l million ( 15. 7% ), which primarily has to do with the timing of payments and the associated costs of the power generation projects. The net pension liability decreased approximately $250,000 from 2016, see Note 10 to these financial stater.nents for more information. Accounts payable and accrued liabilities decreased approximately $2.4 million from the 2016 amounts.

Deferred Inflows of Resources represents an acquisition of net position that applies to a future period(s) and will not be recognized as an inflow of resources (revenue) until then. MJMEUC has two financial statement items that qualify for re potting in the category, which are regulatory credits and unamo1tized deferred gain on refunded debt, which is deferred and amortized over the shorter of the life of the refunded debt or the new debt. Regulatory credits are reductions in earnings (or costs recovered) to cover future expenses. These amounts are being amortized or otherwise recognized in revenue in accordance with MJMEUC's rate making policy. Deferred Inflows of Resources increased $4.4 million from an increase in regulatory credits.

Net Position

MJMEUC' s Total Net Position increased $9. 7 million (18% ), which is primarily attributable to amounts collected for rate covenants according to debt agreements and investment return. The approximate $78 million deficit portion of net position decreased from 2016 figures by approximately $14.4 million and is primarily attributable to the reduction in debt in 2017. This deficit reflects the investments in capital assets less any outstanding debt net of unspent debt project funds that were issued to acquire those assets. Restricted net position decreased $6.6 million from 2016, which consists of funds held by either MJMEUC for operations ai1d maintenance reserves or held by MJMEUC's bond trustees that are to be used for payment of debt service and as debt service reserves, less the current portion of related liabilities as of the end of the fiscal year that are to be settled with these funds. Unrestricted Net Position increased $1.9 million in 2017.

6 83

Financial Position Analysis - 2016

MJMEUC advance refunded certain Prairie State Project Revenue Bonds to take advantage of favorable interest rates and to lower total future debt service requirements. Total future debt service savings from the advance refunding is approximately $56.2 million with net present value savings of approximately $31.9 million. The refunded bonds were removed from the Statement ofN et Position as they were legally defeased and the series 2016 refunding revenue bonds were added to the Statement of Net Position.

Assets and Deferred Outflows of Resources

Capital assets before depreciation increased $17 .2 million (1.2%) as a result of continued capital improvements of the utility plants. Capital assets, net of depreciation, decreased $19.7 million (1.6%) in 2016 due to depreciation expense exceeding capital improvement expenditures. Construction work in progress decreased slightly from $7 .5 million to $6.9 million at the end of2016 compared to 2015.

Other noncurrent assets consist of investments, restricted bond accounts, other restricted cash and investments, contractual deposits, and regulatory assets. Other noncurrent assets decreased by $3 .4 million ( 1.9%) due to the use of bond project funds for capital projects, and from a reduction in restricted bond accounts resulting from a bond refunding and the release of restricted bond funds after the retirement of two bond issues. These reductions were partially offset by an increase in unrestricted investments. Current assets decreased $2.0 million (2.0%) due to decreases in the current portion ofrestricted bond accounts and fuel stock and material inventory, which were partially offset by increases in cash and cash investments, investments, and accounts receivable

The Deferred Outflows of Resources in MJMEUC financial statements as of December 31, 2016 and 2015 include refunding bond costs, which is amortized into MJMEUC's expenses over the life of the refunding bonds, and certain costs related to MJMEUC's defined benefit pension plan. Deferred Outflows of Resources increased $4.0 million, primarily due to additional refunding bond costs from a refunding bond issuance in 2016.

Liabilities and Deferred Inflows of Resources

Long-term debt, including the current portion, had a net decrease of $35.6 million (2.4%) as a ofresult principal payments made on debt. Accrued interest payable decreased approximately $5. 7 million (19 .3%) and consists of interest accrued on MoPEP, Plum Point, Iatan 2 and Prairie State capital projects. This reduction was the result of bond refunding issues that lowered interest rates and large principal payments made that lowers interest costs. Unearned revenue decreased by approximately $6.0 million (30.9%), which primarily has to do with the timing of payments and the associated costs of the power generation projects. The net pension liability increased approximately $900,000 from 2015, this increase is the result of a change in assumptions used by the pension plan's actuary MJMEUC pmticipates in, see Note 10 to these financial statements for more information. Accounts payable and accrued liabilities increased approximately $3.4 million from the 2015 amounts.

MJMEUC has two financial statement items that qualify for repotting in the catego1y, which m·e regulatory credits and unamortized deferred gain on refunded debt, which is deferred and am01tized over the shmter of the life of the refunded debt or the new debt. Regulatory credits are reductions in earnings (or costs recovered) to cover future expenses. These mnounts are being amortized or otherwise recognized in revenue in accordance with MJMEUC' s rate making policy. Deferred Inflows of Resources increased $12.9 million from an increase in regulatory credits.

Net Position

MJMEUC's overall net position increased $9. l million (20%), which is primarily attributable to amounts collected for rate covenants according to debt agreements and investment return. The approximate $92 million deficit portion of net position decreased from 2015 figures by approximately $9.9 million and is primarily attributable to the reduction in debt in 2016. This deficit reflects the investments in capital assets less any outstanding debt net of unspent debt project funds that were issued to acquire those assets. Restricted net position increased $1.8 million from 2015, which consists of funds held by either MJMEUC for operations and maintenance reserves or held by MJMEUC's bond trustees that are to be used for payment of debt service and as debt service reserves, less the current pottion of related liabilities as of the end of the fiscal year that are to be settled with these funds.

7 84

Combined Statements of Revenues, Expenses, and Changes in Net Position for 2017, 2016 and 2015

2017 2016 2015

Operating Revenues:

Power Sales and Related Charges $ 321,837,345 $ 322,401,937 $ 326,088,187

Transmission 17,124,886 16,960,869 16,144,680

Transfers from MAMU and MGCM 112,511 105,448 97,376

Other 1,077,362 968,563 713,140

Total Operating Revenues 340,152,104 340,436,817 343,043,383

Operating Expenses:

Power Purchases and Generation 188,791,583 189,602,940 192,704,020

Member Capacity and Generation Credits 9,838,349 10,209,217 10,688,906

Transmission 17,104,145 16,939,815 16,123,555

Depreciation 38,814,587 36,457,575 34,852,128

Net Costs Recoverable in Future Years 8,629,588. 13,598,722 12,773,271

Other Pool and Project Expenses 4,519,781 4,343,165 4,189,609

Administrative, General, and Training 3,474,522 3,162,934 2,297,901

Total Operating Expenses 271,172,555 274,314,368 273,629,390

Operating Income 68,979,549 66,122,449 69,413,993

Nonoperating Income Net of Expenses (59,306,319) (57,056,049) (62,938,840)

Increase in Net Position 9,673,230 9,066,400 6,475,153

Net Position, Beginning of Year 53,693,510 44,627,110 38,151,957

Net Position, End of Year $ 63,366,740 $ 53,693,510 $ 44,627,110

Operating Results Analysis - 2017

MJMEUC power sales are primarily collections from members engaged in the agency's full-requirements power pools services (MoPEP and MMMPEP) and from members patiicipating in the Plum Point, Iatan Unit 2, and Prairie State power generation projects. Overall, power sales and related charges decreased approximately $565,000 (0.2%). For the 2017 and 2016 fiscal years, combined power sales and related charges to MJMEUC members were $321.8 million and $322.4 million, respectively, on a consolidated basis and $382.2 million and $382.l million on a nonconsolidated basis, refer to pages 18 and 19 for the combining statements ofrevenues, expenses and changes in net position. Unit sales for 2017 and 2016 were 4,949 ,208 megawatt hours (MWh) and 5, 132,994 MWh, respectively, on a consolidated basis and 5,876,270 MWh and 6,038,648 MWh on a nonconsolidated basis.

MJMEUC bills member municipalities monthly for power and energy based on the cost ofMJMEUC's power and energy purchases and generation plus a mark-up for associated MJMEUC overhead and to build MJMEUC's reserves. The cost structure ofMJMEUC's power supply has shifted more from energy to capacity with the baseload from Plum Point, Iatan Unit 2, and Prairie State operations. Paiiicularly, MoPEP's reliance on power supply contracts has reduced over the years and replaced with output from the aforementioned projects and the Dogwood facility. MMMPEP receives all of its power supply through power purchase agreements and does not have any city owned or generating capacity for itself. MJMEUC's combined power purchases and generation reflect power purchases increasing $279 ,000 in 2017 while MJMEUC' s power generation costs related to power sales decreased $1. l million in 2017. Member capacity and generation credits decreased approximately $371,000.

8

85

Net costs recoverable in future years expense of $8.6 million represents a net of certain Mo PEP funds collected from MoPEP members related to refunds received from positive dispute settlements and RTO refunds. Additionally, it includes project expenses incurred that will be recovered in future years and debt service payments collected from members in excess of current interest and depreciation expense. This is the result of applying MJl\tlEUC's rate making policy to revenue and expense transactions.

Nonoperating income (net of expenses) decreased by approximately $2.3 million and is comprised of returns on investments, which decreased approximately $100,000, bond interest subsidies received, interest expense, which decreased $1.5 million, an approximate $3 .6 million loss on disposal of capital assets in 2018, and an approximate $1.0 million return of net position to members from MoPEP.

Operating Results Analysis - 2016

Overall, power sales and related charges decreased $3.7 million (1.1%). For the 2016 fiscal year, combined power sales and related charges to MJMEUC members were $322.4 million on a consolidated basis and $382.1 million on a nonconsolidated basis, refer to page 19 in the Notes for the combining statement of revenues, expenses and changes in net position. Unit sales for 2016 and 2015 were 5,132,994 megawatt hours (MWh) and 5,178,671 MWh, respectively, on a consolidated basis and 6,038,648 MWh and 6,109,883 MWh on a nonconsolidated basis.

MJMEUC' s combined power purchases and generation reflect power purchases increasing $1. l million in 2016 while MJMEUC's power generation costs related to power sales decreased $2.0 million in 2016. Member capacity and generation credits decreased approximately $480,000, mostly due to some MoPEP members retiring units.

Net costs recoverable in future years expense of $13 .6 million represents a net of certain Mo PEP and project expenses incurred that will be recovered in future years and debt service payments collected from members in excess of cunent interest and depreciation expense. This is the result of applying MJMEUC' s rate making po !icy to revenue and expense transactions.

Nonoperating income (net of expenses) decreased by approximately $5.9 million and is comprised of returns on investments, which increased approximately $700,000, bond interest subsidies received, interest expense, which decreased $4.4 million, an approximate $200,000 gain on disposal of capital assets in 2016, and an approximate $1.2 million return of net position to members from Mo PEP.

Financial Outlook for 2018 and Beyond

MJMEUC foresees its continued development of increasingly diverse services and power supply relationships with municipal utilities and energy industry organizations. Transitions in the utility environment, technologies, and customer expectations provide certain advantages to the municipal community utility model, and also amplify the value of inter-utility collaboration to achieve economic scale and specialized expertise. MJMEUC and its MPUA family are positioned to host and implement that collaboration through staff services, collective outsourcing, and coordinating member capabilities that can be shared.

For the benefit of its members, MJMEUC has entered into an agreement with Clean Line Energy Partners for up to 200 MW of transmission on the Grain Belt Express transmission line extending from Kansas to near Indiana. MJMEUC has also entered into an agreement with Iron Star Wind Project, LLC for up to 200 MW from a wind generation facility in Kansas to match with the beforementioned transmission contract. Both contracts contain contingencies on final completion of the Grain Belt Express transmission line. Clean Line Energy Pminers are waiting for all final approvals by the Missouri Public Service Commission and comi appeals before proceeding with actual construction. The case is currently at the Missouri Supreme Court. Upon receipt of all required approvals, construction for both projects are expected to be completed in 2021.

9 86

MoPEP

MJMEUC continues to increase its renewable resources of power supply. Three 3.2 MW solar farm projects in Chillicothe, Lebanon, and Higginsville, Missouri were placed into commercial operation in 2017. In 2016, three 3 .2 MW solar farm project went into operation, in Rolla, Waynesville, and Marshall, Missouri. In 2015, two 3 .2 MW solar farm projects went into commercial operation, one in Macon and one in Trenton, Missouri. The initial solar farm project went into commercial operation in Butler, Missouri in 2014. Two additional solar farm projects, in the cities of Farmington and Eldorado Springs, Missouri, are expected to enter commercial operations in the summer of 2018.

By May 31, 2018, MJMEUC expects to have consummated the purchase of an additional 8.2% interest (50 MW) in the Dogwood Energy Center ("Dogwood") with an approximate $26,605,000 Power Supply System Revenue Bonds (MoPEP Facilities) Series 2018A bond issuance. Upon completion of its additional ownership acquisition, MJMEUC will have dedicated approximately 100 MW of Dogwood Generating Facility output of capacity and energy as a resource obligation for MoPEP. Until 2021 when a power purchase contract currently being used to supply Mo PEP expires, MoPEP does not fully need 100 MW of capacity and energy from the Dogwood Generating Facility. MoPEP members have directed MJMEUC to use 50 MWs of capacity and energy from the Dogwood Generating Facility to serve MMMPEP. In September 2017, MJMEUC and the respective pools approved through a joint resolution the power supply agreement among the parties, entitling MMMPEP to purchase 50 MW of Mo PEP' s 100 MW capacity and energy output from MoPEP' s Dogwood Generating Facility resource obligation beginning June 1, 2018 through May 31, 2021, at which time the 50 MW p01tion is reduced to 25 MW until May 31, 2024, when the contract expires. Revenues received by MJMEUC from MMMPEP related to the NlMMPEP Dogwood Resource will be credited against MoPEP's obligations to pay for resource obligations. In the event of a shortfall in revenues received by MJMEUC from MMMPEP, the power supply agreement provides that MoPEP will remain obligated to pay any such shortfall to MJMEUC required to make payments on the Series 2018 Bonds.

Megawatt hour costs for MoPEP are expected to remain relatively stable in the foreseeable future, assuming no significant modifications are made to federal and state environmental regulations affecting MJMEUC's power generation units. MoPEP believes the additional output from Dogwood will provide long-term price and performance stability to MoPEP's overall cost of power supply and will continue with its strategic policy to achieve economical and reliable power supply to its members with a well-positioned power supply portfolio of coal-fired, gas-fired, and renewable resources.

ML\1MPEP

The contract between MJMEUC and the MMMPEP group of municipalities was extended and provides the MMMPEP group with their full power requirements through May 31, 2028.

As discussed above, MMMPEP entered into a jointly approved power purchase agreement for MJMEUC to provide 50 MW of capacity from the Dogwood Energy Center beginning June 1 through May 31, 2021, at which time the 50 MW is reduced to 25 MW until May 31, 2024, when the contract expires.

A thirteenth city joined MMMPEP as a member in 2016 and this additional member started receiving power from MJMEUC on January 1, 2018.

SWMPEP

Two cities in southern Missouri being served by The Empire District Electric Company joined MJMEUC in 2017 and formed an energy pool named Southwest Missouri Public Energy Pool ("SWMPEP"). The municipal members ofSWMPEP have entered into power purchase contracts with MJMEUC for the full power requirements of their respective municipality. The power purchase contracts call for S\V11PEP to start receiving power from MJMEUC on June 1, 2020 and the power purchase contracts expire on May 31, 2030. There are currently two members of SWMPEP with the possibility for additional members to join the pool at a later date. Until 2020, when SWMPEP begins to receive power from MJMEUC, the financial transactions relating to SWMPEP are minimal and are accounted for within the General Fund.

10

87

Debt Retimdings

In addition to the debt refunding MJMEUC undertook in 2016, MJMEUC successfully advance refunded $30.8 million of Prairie State project revenue bonds in December 2017 with future debt service savings of$4.8 million and a net present value savings of $3 .9 million. MJMEUC also successfully advance refunded $37 million of MoPEP facilities revenue bonds related to the Fredericktown and Dogwood generation plants with future debt service savings of $3.7 million and a net present value savings of$2.8 million. Due to provisions of the new federal Tax Cuts and Jobs Act, advance refundings of tax-exempt debt or other federal subsidized debt such as MJMEUC's Build America Bonds are no longer allowed. However, the ability to issue current refundings of debt has not been changed and management will monitor interest rates to take advantage of current refunding opportunities as they arise.

Requests for Information

This financial report is designed to provide the reader a general overview and analysis of the financial activities of MJMEUC and is available at vvww.mpua.org. Questions or requests for more information concerning any of the information provided in this report should be directed to Duncan Kincheloe, CEO, President, and General Manager, Missouri Joint Municipal Electric Utility Commission, 1808 I-70 Drive, Columbia, Missouri 65203, (573-445-3279).

11 88


COMBINED STATEMENTS OF NET POSITION December 31, 2017 and 2016

ASSETS AND DEFERRED OUTFLOWS OF RESOURCES

CAPITAL ASSETS Plant, Buildings, and Equipment in Service

Construction Work in Progress

Total Capital Assets, Net

RESTRICTED ASSETS

Bond Accounts Cash and Investments

Other Cash, Cash Equivalents and Investments

Total Restricted Assets

OTHER ASSETS

Investments Prepaid Expenses Contractual Deposits Regulatory Assets

Total Other Assets

CURRENT ASSETS Cash and Cash Equivalents

Investments Accounts Receivable, Net Prepaid Expenses Fuel Stock and Material Invent01y

Restricted Assets:

Bond Accounts, Current Portion

Total Current Assets

Total Assets

DEFERRED OUTFLOWS OF RESOURCES

Total Assets and Deferred Outflows of Resources

2017

$1,204,224,596

6,596,607 1,210,821,203

130,821,345

17,084,995

147,906,340

19,844,051

474,991 8,272,401

26,960,708 55,552,151

41,168,155

. 5,580,988

16,307,802 3,582,327

10,764,973

46,272,263

123,676,508

1,53 7 ,9 56,202

38,230,479

$1,576,186,681

2016

$1,228,781,136

6,921,688 1,235,702,824

97,634,914

16,642,288

114,277,202

20,060,949

543,362 8,483,301

30,613,130

59,700,742

35,482,452

7,528,689

15,782,621 4,237,602

10,534,945

55,360,272

128,926,581

1,538,607,349

39,187,572

$ 1,577 '794,921

Continued on next page

See accompanying notes to financial statements. 12

89


COMBINED STATEMENTS OF NET POSITION December 31, 2017 and 2016

LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND NET POSITION

NON CURRENT LIABILITIES Long-Term Debt, Net of Current Maturities

Net Pension Liability

Other Long-Term Liabilities

Unearned Revenue

Total Noncurrent Liabilities

CURRENT LIABILITIES

Accounts Payable Accrued Payroll and Payroll Taxes

Unearned Revenue Current Maturities, Long-Term Debt

Payable From Restricted Assets: Accrued Interest Payable on Debt

Total Current Liabilities

Total Liabilities

DEFERRED INFLOWS OF RESOURCES

Net Position Net Investment in Capital Assets

Restricted Unrestricted

Total Net Position

Total Liabilities, Deferred Inflows of Resources and Net Position

2017

$1,381,720,679

656,460

684,950

10,730,721

1,393,792,810

19,477,773

329,648 4,699,404

33,336,000

22,444,934

80,287,759

1,474,080,569

38,739,372

(77,996,354)

49,939,311 91,423,783

63,366,740

$1,576,186,681


2016

$1,387,355,420

903,727

10,730,721

1,398,989,868

21,929,453

272,933 2,605,060

42,145,000

23,795,630

90,748,076

1,489,737,944

34,363,467

(92,394,746)

56,557,149 89,531, 107

53,693,510

$1,577,794,921

90


COMBINED STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION

Years Ended December 31, 2017 and 2016

OPERA TING REVENUES Power Sales and Related Charges

Transmission

Energy Services Transfers From MAMU and MGCM

Conferences and Member Training

Other Total Operating Revenues

OPERA TING EXPENSES

Pool and Project Expenses

Power Purchases Member Capacity and Generation Credits

Power Generation Transmission Personnel Services and Staff Support

Professional Services Rental and Maintenance SCADA Communications

Energy Services

Depreciation Net Costs Recoverable in Future Years

Other Operating Expenses

Conferences and Member Training

Administrative and General Total Operating Expenses

Operating Income

NONOPERATING REVENUES (EXPENSES)

Investment Return

Bood Interest Subsidy Return of Equity to Members Gain (Loss) on Disposal of Capital Assets

Interest and Fees Expense Net Nonoperating Expenses

Increase in Net Position

Net Position, Beginning of Period

Net Position, End of Period

$

2017

321,837,345

17,124,886

195,564 112,511

572,427 309,371

340,152,104

107,481,986

9,838,349 81,309,597

17,104,145 2,445,842

881,804 249,410 375,743

12,863

38,814,587 8,629,588

554,119 284,576

3,189,946

271,172,555

68,979,549

2,387,953

7,017,026 (958,845)

(3,643,774) (64, 108,679)

(59,306,319)

9,673,230

53,693,510

$ 63,366,740


2016

$ 322,401,937

16,960,869

104,071 105,448

554,825

309,667

340,436,817

107 ,202, 771

10,209,217 82,400, 169

16,939,815 2,281,056

1,068,330 146,343

298,385 15,727

36,457,575 13,598,722

533,324 259,783

2,903,151

274,314,368

66,122,449

2,491,662

7,104,102

(1,211,745)

188,155 (65,628,223)

(57,056,049)

9,066,400

44,627,110

$ 53,693,510

91


COMBINED STA TEiVIENTS OF CASH FLOWS Years Ended December 31, 2017 and 2016

OPERA TING ACTIVITIES Receipts from Power and Transmission Sales Receipts from Other Revenue Sources Payments for Power Purchases and Other Goods and Services Payments to Employees for Services and Benefits

Net Cash Provided by Operating Activities

CAPITAL AND RELATED FINANCING ACTIVITIES

Proceeds from Long-Term Debt

Bond Interest Subsidy Received

Proceeds from Disposal of Capital Assets

Payment of Bond Issuance Costs Payment of Bond Advance Refunding Costs Principal Payments on Long-Term Debt Payments ofinterest and Fees on Debt Return ofNet Position to Members Acquisition and Construction of Capital Assets

Net Cash Used by Capital and Related Financing Activities

INVESTING ACTIVITIES Purchases of Restricted Cash and Investments Proceeds from Sales and Maturities of Restricted Cash and Investments Investment Income Received

Net Cash Provided (Used) by Investing Activities

Net Increase in Cash and Cash Equivalents

Cash and Cash Equivalents at Beginning of Year

Cash and Cash Equivalents at End of Year

RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES

Operating Income Adjustments to Reconcile Operating Income to Net Cash Provided by Operating Activities:

Depreciation Adjustments for (Increases) Decreases in Assets and

Increases (Decreases) in Liabilities: Accounts Receivable Prepaid Expenses Fuel Stock and Material Inventory Contractual Deposits Regulatory Assets Accounts Payable Accrued Payroll and Payroll Taxes Deposits Held Unearned Revenue Net Pension Liability Deferred Outflows of Resources Deferred Inflows of Resources

Net Cash Provided by Operating Activities

2017

$ 342,458,597 1,647,510

(223,403,406) (3,738,046)

116,964,655

72,386,488

7,017,026

87,400

(l,848,840) (l,471,041)

(79, 130,000) (69,621,777)

(958,845) (17,750,786)

(91,290,375)

(189,568,318) 165,553,02 l

4,026,720

(19,988,577)

5,685,703

35,482,452

$ 41,168,155

$ 68,979,549

39,086,183

(525,181) 723,646

(230,028) 210,900

5,501,262 (2,451,680)

56,715 500,000

2,094,344 (247,267) 407,449

2,858,763

$ 116,964,655


2016

$ 334,972,999 860,340

(212,907,226) (3,233,264)

119,692,849

281,751,850

7,104,102

1,828,825

(1,566,418) (9,765,256)

(306,869,000) (75,385,755)

(l,211,745) (18,627,702)

(122,741,099)

(138,697,275) 141,322,202

3,581,285

6,206,212

3,157,962

32,324,490

$ 35,482,452

$ 66,122,449

36,713,303

(672,228) 274,207

2,782,959 105,000

3,823,478 3,390,887

34,717

(5,966,318) 899,236

(738,250) 12,923,409

$ 119,692,849

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62.4

69

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144

3,26

2,77

1 2,

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223

6,59

6.60

7 6.

596,

607

Tot

al C

:i.pi

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Ass

ets.

Net

50

.734

.837

24

3.65

3.25

2 23

1.75

0,59

5 68

3.20

3.14

2 1.

479.

377

1.21

0.82

1.20

3 1.

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821.

203

RE

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Bon

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3,97

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19

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82

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7.

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4.63

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6 5.

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17.0

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95

17.0

84.9

95

Tot

al R

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979.

204

3l.8

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336

23.9

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75

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Pr

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28,9

55

474,

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474,

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Con

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9 2

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7 26

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55

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55

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Cns

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Inve

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465,

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280,

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13

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2,

980,

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132,

694

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Due

from

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2 1

571,

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13,7

33

269,

543

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(2,8

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Prep

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569,

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55,6

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10

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Tot

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Tot

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156,

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3.56

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52,9

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9 78

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0 2.

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3,79

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0 1,

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Tot

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Tot

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26

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R

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See

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4 1,

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19

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O

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T

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0 31

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R

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1,73

8,60

8 14

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6,10

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1,83

7,61

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Tot

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1,94

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176

$

825,

810,

360

$ 4,

557.

171

$ 1,

581,

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145

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$ 1,

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Net

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47,5

70,7

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302,

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3,70

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387,

355,

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$ $

1,38

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903,

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903,

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Une

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5,92

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6 2.

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3 10

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T

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53,4

98,8

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2,09

8,52

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8 26

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0 77

2,91

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9,86

8 1,

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868

CU

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Acc

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s Pa

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4 5,

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402.

185

21,9

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53

21,9

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Acc

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Pay

roll

and

Payr

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148,

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9,14

6 9,

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5,40

3 10

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27

2,93

3 27

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3

Due

to O

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1,03

5,76

8 32

2,27

0 88

9,22

1 50

7,87

0 88

4,09

5 3,

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(3,6

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Une

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1,19

9,78

6 1,

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Paya

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From

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8,60

6, 1

57)

(138

,697

,275

) (1

38,6

97,2

75)

Proc

eeds

from

Sal

es a

nd M

atur

ities

of

Inve

stm

ents

6,

235,

833

31,7

13,8

65

29,0

81,6

07

74,2

90,8

97

141,

322,

202

141,

322,

202

Inve

stm

ent

Inco

me

378,

932

7,55

7 41

5,86

1 46

8,90

1 2,

295,

973

14,0

61

3,58

1,28

5 3,

581,

285

Net

Cas

h P

rovi

ded

(Use

d)

by I

nves

ting

Act

ivit

ies

(4,5

44,3

14)

7,55

7 2,

521.

019

227.

176

7,98

0,71

3 14

,061

6,

206,

212

6,20

6,21

2

Net

Inc

reas

e (D

ecre

ase)

in C

ash

and

Cas

h E

quiv

alen

ts

1,94

2,99

8 (8

0,56

1)

3,45

7,87

0 1,

291,

012

(3,6

92,6

78)

239,

321

3,15

7,96

2 3,

157,

962

Cas

h an

d C

ash

Equ

ival

ents

at B

egin

ning

of Y

ear

16,5

81,6

98

2,46

4,03

6 2.

362,

166

1,74

6,92

0 8,

563.

312

606,

358

32,3

24,4

90

32,3

24,4

90

Cas

h an

d C

ash

Equ

ival

ents

at E

nd o

f Yea

r $

18,5

24,6

96

$ 2,

383,

475

$ 5,

820,

036

$ 3,

037,

932

$ 4,

870,

634

$-84

5,67

9 $

35,4

82,4

52

$ $

35,4

82,4

52

RE

CO

NC

ILIA

TIO

N O

F O

PE

RA

TIN

G I

NC

OM

E T

O N

ET

CA

SH

P

RO

VID

ED

BY

OP

ER

AT

ING

AC

TIV

ITIE

S

Ope

ratin

g In

com

e $

9,03

6,48

5 $

269,

949

$ 14

,977

,038

$

11,0

61,5

67

$ 32

,980

,011

$

(2,2

02,6

01)

$ 66

,122

,449

$

$ 66

,122

,449

Adj

ustm

ents

to

Rec

onci

le O

pera

ting

Inco

me

to N

et C

ash

Prov

ided

by

Ope

ratin

g A

ctiv

ities

: D

epre

ciat

ion

2,50

4,08

8 8,

139,

057

6,10

2,39

0 19

,831

,729

13

6,03

9 36

,7I3

,l03

36

,713

,303

Adj

ustm

ents

for

(Inc

reas

es)

Dec

rens

es in

Ass

ets

and

Incr

ease

s (D

ecre

ases

) in

Lia

bilit

ies:

A

ccou

nts

Rec

eivo

ble

(12,

246)

(5

81,7

05)

(193

,453

) 11

5,17

6 (6

72,2

28)

(672

,228

)

Due

from

Oth

er F

unds

41

,131

(l

,035

,768

) (2

66,0

17)

(l.2

60,6

54)

1,26

0,65

4

Prep

aid

Exp

ense

s (4

49, 1

31)

·-1,

255,

722

(2

47,6

01)

(238

,2I6

) (4

6,56

7)

274,

207

274,

207

Fuel

Sto

ck u

nd M

ater

ial

[nve

ntor

y 2,

522,

729

206,

277

53,9

53

2,78

2,95

9 2,

782,

959

Con

trac

tual

Dep

osits

10

5,00

0 I0

5,00

0 10

5,00

0

Reg

ulat

ory

Ass

ets

711,

381

1,23

3,93

5 18

0,64

7 1,

697,

515

3,82

3,47

8 3,

823,

478

Acc

ount

s Pu

yabl

e 18

7,42

5 49

7,56

6 93

0,65

0 (1

05,2

79)

1,73

8,88

7 14

1,63

8 3,

390,

887

J,39

0,88

7

Acc

rued

Pay

roll

and

Payr

oll T

axes

(1

4,65

2)

2,44

7 2,

176

613

1,82

.2

42,3

11

34,7

17

34,7

17

Due

to O

ther

Fun

ds

I,03

5,76

8 (4

,933

) (1

2,50

0)

255,

659

(13,

340)

1,

260,

654

(1,2

60,6

54)

Une

arne

d R

even

ue

(5,3

70,6

26)

862,

905

(1,4

55,0

48)

(3,5

49)

(5,9

66,3

18)

(5,9

66,3

18)

Net

Pen

sion

Lia

bilit

y 89

9,23

6 89

9,23

6 89

9,23

6

Def

erre

d O

utflo

ws

of R

esou

rces

(7

38,2

50)

(738

,250

) (7

38,2

50)

Def

erre

d In

Jlow

s o

f Res

ourc

es

1,09

7,06

7 10

2,85

3 6,

882,

011

4,84

1,47

8 12

,923

.409

12

,923

,409

Net

Cas

h Pr

ovid

ed (

Use

d) b

y O

pera

ting

Act

iviti

es

$ 14

.137

,316

$

183,

324

$ 23

,781

,034

$

25,3

04, l

89

$ 58

,209

,570

$

(1,9

22,5

84)

$ 16

,857

,097

$

$ 11

9,69

2,84

9

See

acco

mpa

nyin

g no

tes

to f

inan

cial

sta

tem

ents

. 21

98


NOTES TO FINANCIAL STATEMENTS As of and for the Years Ended December 31, 2017 and 2016

NOTE 1: ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Nature of the Organizatio!l

Missouri Joint Municipal Electric Utility Commission ("MJMEUC") is a joint action agency and political subdivision formed under the Joint Municipal Utility Commission Act, Revised Statutes of Missouri Sections 393.700-393.770, to obtain sufficient and economical electric power and energy for the benefit of member Missouri municipalities and their residents and out of-state advisory members. MJMEUC provides full power purchase requirements to members, and arranges purchases for members in need of supplemental power and the sale of members' excess power under joint contracts with the members in both the State of Missouri and in the State of Arkansas. Each regular member ofMJMEUC appoints a representative to MJMEUC's Board of Directors.

Within MJMEUC there are three full requirements pools. The first pool is called the Missouri Public Energy Pool #1 ("MoPEP"). The 35 municipal members ofMoPEP entered into joint agreements committing their current and future electric generating facilities and purchase power contracts to the pool of members to facilitate joint planning, scheduling, dispatching, power purchases, and acquisition ownership interests in electric power facilities. The joint agreements under MoPEP entail certain obligations by the members, including maintaining adequate customer rates and maintenance of power facilities and contracts in order to meet the members' commitments to the pool.

The second pool is called the Mid-Missouri Municipal Public Energy Pool ("MMMPEP"). The original twelve municipal members of MMMPEP have entered into power purchase contracts with MJMEUC for the full power requirements of their respective municipality. These contracts were originally for five years and were set to expire on May 31, 2018. MJMEUC and MMMPEP entered into a new contract in 2016 that extended the commitment of services for an additional ten years, now expiring on May 31, 2028. A thirteenth city joined MMMPEP as a member in 2016 and this additional member began receiving power from MMMPEP on January 1, 2018.

The third pool is called the Southwest Missouri Public Energy Pool ("SWMPEP") and was created in 2017. The municipal members of SWMPEP have entered into power purchase contracts with MJMEUC for the full power requirements of their respective municipality. The power purchase contracts call for SWMPEP to start receiving power from MJMEUC on June 1, 2020 and the power purchase contracts expire on May 31, 2030. There are currently two members of the S\.VMPEP with the possibility for additional members to join the pool at a later date. Until 2020, when SWMPEP begins to receive power from MJMEUC, the financial transactions relating to SWMPEP are minimal and are accounted for within the General Fund. A separate SWMPEP fund will be created in 2020 to account for SWMPEP operations.

As of December 31, 2017, MJMEUC has several long-term commitments for power purchase contracts and operating costs of jointly owned power generating facilities, as explained elsewhere in these notes. MJMEUC's acquisition of ownership interests generally includes commitments under loan or bond financing arrangements. Through participation in the joint agreements with other MJMEUC members, each member has an allocated share of the various long-term commitments under these contracts, including its allocated portion of costs with MJMEUC's ownership interest in power generating facilities and take-or-pay power purchase commitments. MJMEUC also has a second category of"advisory" members to allow rural electric cooperatives and non-Missouri municipalities to paiiicipate in these power supply programs and projects. MJMEUC's membership includes four cities located in the State of Arkansas who also receive power from MJMEUC. There are various cancellation provisions under these contracts.

22 99

MJMEUC is a party to a joint operating agreement with the Missouri Association of Municipal Utilities ("MAMU") and the Municipal Gas Commission of Missouri ("MGCM") for the purpose of coordinating resources to improve efficiency and reduce costs. The resulting alliance, known as the Missouri Public Utility Alliance ("MPUA"), is managed by a Joint Operating Committee comprised of three representatives from the governing boards of each member. This committee reviews and recommends annual budgets for each member, determines the allocation of expenses on a cost reimbursement basis to members, consults on employee issues, and recommends contractual arrangements with joint consultants to each member.

Government-wide Financial Statements

The Government-wide Financial Statements provide a broad overview ofMJMEUC' s finances. These financial statements include the Combined Statements of Net Position, The Combined Statements of Revenues, Expenses, and Changes in Net Assets, and the Combined Statements of Cash Flows.

Fund Accounting

MJMEUC uses funds to repmt its financial position and results of its operations in its fund financial statements. Fund accounting is designed to aid financial management by segregating transactions related to certain functions or activities.

MJMEUC reports the following proprietary funds as major funds:

The MoPEP Fund is used to account for financial resources related to power sales and the costs of power sales for the member municipalities ofMoPEP.

The MMMPEP Fund is used to account for financial resources related to power sales and the costs of power sales for the member municipalities ofMMMPEP.

The Generation Project Funds are used to account for revenues and expenses of three MJivIEUC jointlyowned power plant projects. The generation project funds include Plum Point, Iatan 2, and Prairie State. See Note 3 for a complete description of each of these projects.

MJMEUC reports the following proprietmy funds as non-major funds:

The Alliance Fund is used to account for all revenues and expenses associated with MPUA. The Alliance Fund pays for various administrative costs of MPUA members and receives payments from members to cover the costs.

The General Fund is used to account for general operations beneficial to all members and projects. Power and transmission transactions not related to MoPEP and MMMPEP members or the project funds are accounted for in the General Fund. The General Fund receives reimbursements from the other funds for costs incurred that are allocable to the other funds.

1Vleasurement Focus, Basis of Accounting, and System of Accounts

These financial statements are prepared using the economic resources measurement focus and the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or the economic asset is used. Revenues, expenses, gains, losses, assets and liabilities resulting from exchange and exchange-like transactions are recognized when an exchange takes place.

MJMEUC's accounts are maintained in accordance with the Uniform System of Accounts of the Federal Energy Regulatory Commission and MJMEUC maintains its accounting records in conformity with U.S. generally accepted accounting principles ("GAAP"), as applicable to governmental entities. MJMEUC applies the accounting principles of Governmental Accounting Standards Board Statement No. 62 (GASB 62), Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989

23 100

FASB and AICPA Pronouncements, that pertain to regulated operations. Accordingly, revenues and expenses are matched to current and future periods in which the revenues are earned or the expenses are recovered through the rate-making process that is under the control ofMJMEUC's Board of Directors.

MJMEUC distinguishes operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods and services in connection with MJMEUC's ongoing operations. Operating expenses include the costs of sales and services, member training, administrative and general expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.

Restricted Resources

MJMEUC uses restricted resources first to fund expenditures when both restricted and unrestricted resources are available.

Revenue and Expense Recognition for Transactions with Regional Transmission Organizations

MJMEUC sells electric power on the market through Regional Transmission Organizations ("RTOs"), either from generation resources or through power purchase agreements, and MJMEUC purchases energy from the RTOs where MJMEUC economically needs to receive the power. MJMEUC records the sales and purchases of power through RTOs on a net basis. This revenue recognition policy avoids the recording of revenues and expenses on essentially the same energy multiple times.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.

Income T<LYes

MJMEUC is a body public and corporate of the State of Missouri and is exempt from federal and state income taxes.

Utility Plant in Service and Other Buildings and Equipment

Utility plant in service and other buildings and equipment are recorded at cost. Interest incurred during the constmction phase is reflected in the capitalized amount of the asset constructed, net of interest earned on the invested debt proceeds over the same period. MJMEUC capitalizes fixed assets that have useful life of more than one year and an initial individual cost of at least $5,000, except for computer equipment and furniture for which the minimum threshold amount is $1,500. Costs incurred for MJMEUC's jointly owned investments in utility power plant projects have been capitalized. Capitalization thresholds may be set by individual projects; however, MJMEUC analyzes the costs of each project to apply its capitalization policies consistently. MJMEUC's share of utility plant betterments and major replacements in excess of $5,000 are capitalized and depreciated. The purchase of capital spares, which consist of critical equipment component spares for a utility plant, are capitalized and depreciated as part of the utility plant. The costs of normal maintenance and repairs are charged to operations as incurred. Property, plant and equipment financed by capital leases are recorded as capital assets and as corresponding liabilities. Am01tization expense related to assets acquired with capital leases are recorded as a component of depreciation expense on the same basis as assets financed with other resources. Depreciation is expensed using the straight-line method over the estimated useful lives of the assets.

24

101

Following are the estimated useful lives for capital assets:

Asset class

Computer Equipment

Office Furniture

Other Equipment

Office Buildings

Railcars

Utility Plant in Service

Years

5

7-10

7-10

40

15

5-60

Bond Issuance Costs and Bond Premiums and Discounts

Financing costs incurred in connection with issuance of bonds and other long-term debt have been recognized as a regulatory asset and are recovered through MJMEUC's future rates. Premiums and discounts in connection with issuance of long-term debt have been recognized and repmted as a component of the outstanding debt balance. The financing costs and premiums and discounts are being amortized over the life of the respective debt in accordance with MJMEUC's rate-making policy.

Investments

Investments are reported at fair value. Investment return includes interest income and realized and unrealized gains or losses. See Note 2 for further information on MJMEUC's investments.

Fuel Stock and J'viaterial Inventory

Fuel stock and material are valued at average costs. The cost of fuel and materials used in production are expensed as used and are recovered through rates.

Prepaid Expenses

Ce1tain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid expenses in the financial statements. The costs of prepaid items are recorded as expenses when consumed rather than when purchased.

Accounts Receivable

Accounts receivable are stated at the amount billed to members. All receivable balances are considered fully collectible and an allowance for doubtful accounts is not deemed necessary.

Interftmd Receivables/Payables

During the course of operations, numerous transactions occur between individual funds for energy provided or services rendered. These receivables and payables are classified as "Due from Other Funds" or "Due to Other Funds" on the combining statement of net position. These balances between funds are eliminated in the combined financial statements.

Regulat01y Assets and Regulatory Credits

MJMEUC applies the accounting principles GASB 62 that pertain to regulatory operations. Billing rates are established by MJMEUC's Board of Directors and are designed to fully recover each pool's and project's cost over the life of the pool or project. Paiticipant billing rates are structured to recover current debt services requirements, operating costs, capital costs, and to fund certain other items. Accordingly, certain costs or revenues are deferred and repotted as regulatory assets or regulatory credits until they are recovered in future rates or costs.

25

102

Regulatory assets are rights to additional revenues or deferred expenses, which are expected to be recovered through customer rates over some future period. Regulatory credits are reductions in earnings (or costs recovered) to cover future expenses. Regulatory credits are rep01ted as deferred inflows of resources, which is discussed below. MJMEUC is not a public utility subject to rate regulation by the Federal Energy Regulatory Commission or by the Missouri Public Service Commission.

Regulatory assets and regulatory credits consist of the following as of December 31:

Regulatory Assets

Interest, Depreciation and Capital Costs in Excess of Billings Unamortized Debt Issuance Costs

Regulatory Credits

Billings in Excess of Interest, Depreciation and Capital Costs

Advance Billings for Fuhll'e Costs

Deferred Outflows and Inflows of Resources

$

$

$

$

2017

7,304,560 $ 19,656,148

26,960,708 $

2017

36,714,165

1,053,621

37,767,786 $

2016

10,533,820

20,079,310

30,613,130

2016

31,978,747

1,361,998

33,340,745

In addition to assets, the statement of financial position reports a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s), and as such, will not be recognized as an outflow ofresources (expense) until then. MJMEUC's items that qualify for reporting in this category are the unamortized deferred charge on refunded debt, which is deferred and amottized over the shorter of the life of the refunded debt or the new debt, and deferred outflows relating to MJMEUC's defined pension plan for its employees. These amounts are being amortized in accordance with GAAP and MJMEUC' s rate making policy.

In addition to liabilities, the statement of financial position reports a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s), and as such, will not be recognized as an income or resources (revenue) until that time. The MJMEUC items that qualify for repotting in this category are regulatory credits discussed above and the unamortized deferred gain on refunded debt, which is defetTed and amortized over the shorter of the life of the refunded debt or the new debt. These amounts are being ammtized in accordance with GAAP and MJMEUC's rate making policy.

Deferred outflows and inflows of resources consist of the following as of December 31:

Deferred Outflows of Resources 2017 2016

Unamortized Deferred Charge on Refunded Debt $ 37,412,750 $ 37,962,394 Defined Benefit Pension Plan Costs 817,729 1,225,178

$ 38,230,479 $ 39,187,572

Deferred Inflows of Resources 2017 2016

Regulato1y Credits $ 37,767,786 $ 33,340,745 Unamortized Deferred Gain on Refunded Debt 971,586 1,022,722

$ 38,739,372 $ 34,363,467

26 103

Pensions

For purposes of measuring the net pension liability, deferred outflows ofresources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Missouri Local Government Employees Retirement System (LAGERS) and additions to/deductions from LAGERS fiduciary net position have been determined on the same basis as they are reported by LAGERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Pension plan investments are reported at fair value.

Arbitrage Rebate Liability

MJMEUC's tax-exempt bonds are subject to Federal rebate requirements. Generally, any excess of earnings from investing bond proceeds over the amount that would have been earned at the yield rate of the bonds must be rebated to the Federal government. Arbitrage rebate liability, if any, has been determined based upon rebate calculations performed by MJivIEUC's rebate analyst. Refunds of past arbitrage rebate paid to the Federal government from subsequent rebate calculations are reported when the actual refund amounts are either acknowledged by the Internal Revenue Service or received by MJMEUC due to the uncertainly of the actual refunds to be received. MJMEUC received a $1,403,000 arbitrage rebate refund in 2016.

Net Position

Net position is classified into three components. Net investment in capital assets consists of capital assets net of accumulated depreciation less the outstanding balances of debt incurred to finance those assets. Restricted net position consists of the balance of cash and investment accounts required to be maintained by bond indentures or by contract less any amounts currently payable from these accounts. The remaining balance of net position is classified as unrestricted.

Sometimes MJMEUC will find outlays for a particular purpose to be available from both restricted and unrestricted resources. It is MJMEUC's policy to generally use restricted resources first when both restricted and unrestricted resources are available.

Bond Interest Subsidy

This amount represents the 35% subsidy for interest costs on the Plum Point 2009A and for Prairie State 2009A and 201 OA Series Revenue Bonds issued under the Build America Bond ("BAB") Program. However, effective with its budget year ended September 30, 2013 and scheduled to continue through 2021, the United States ("U.S.") Federal government is subject to the process of sequestration, which reduces spending for many Federal programs, including the BAB program. MJMEUC's BAB's federal subsidies were reduced by approximately 8.7%, 7.3%, 7.2%, 6.8%, 6.9%, and 6.6% for the U.S. Federal government's years ended September 30, 2013, 2014, 2015, 2016, 2017, and 2018 respectively. The sequestration rate for future years through 2021 will be set by the U.S. Federal government from time to time in the future.

Transmission Revenue and Transmission Expense

Transmission revenue represents the costs of transmission services provided to MJMEUC members that are directly allocable and billed to specific members. Transmission costs that are not directly allocable and billed to specific members are allocated to all members of the respective pool or project and are recovered as a component of power sales and related charges. Transmission expense represents the costs of transmission services provided to MJMEUC members that are directly allocable and billed to specific members and all other transmission related costs are repo1ted as a component of power purchases expense.

27

104

1ltJA1vIU and Jl!IGCM Transfers

A po1tion ofMAMU's and MGCM's income is transferred to the Alliance Fund maintained by MJMEUC to pay for MPUA expenses. Transfers from l'vIAMU and MGCM (see Note 9) to the Alliance Fund are recognized as revenue in the calendar year to which they pe1tain. Transfers billed or received in advance of the year to which they pertain are reported as unearned revenue.

Risk Jl!lanagement

MJMEUC manages it risks through insurance coverage provided by private insurers for workers' compensation, officers and directors liability, boiler/machinery, business interruption, and other property and business risks. There were no significant reductions in coverage over the past three years.

NOTE 2: CASH, CASH EQUIVALENTS, AND INVESTMENTS

Cash Equivalents

For the purpose of the Statements of Cash Flows, MJMEUC considers unrestricted cash and highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents.

Investments

Missouri State Statutes authorize political subdivisions of the state to invest funds in obligations of the United States or its agencies; ce1tain obligations of the State of Missouri or its political subdivisions and municipalities; certificates of deposit; repurchase agreements; bankers' acceptances; and certain domestic corporation debt instruments, including commercial paper. Restricted cash and investments held by trustees under bond and trust indentures are managed in accordance with the applicable legal documents. With respect to restricted investments of bond funds held in trust, MJMEUC's Board of Directors has obtained the opinion of legal counsel in further defining t~e types of investments permitted, which also includes investment agreements (including guaranteed investment contracts, or "GI Cs") and certain other investment agreements which are either collateralized or are provided by an entity that is rated, or whose guarantor is rated, in at least the two highest rating categories by Standard and Poor's and Moody's.

Fair Value - MJMEUC holds investments that are measured at fair value on a recurring basis. MJMEUC categorizes its fair value measurements within the fair value hierarchy established by GAAP. The fair value hierarchy requires information on the inputs used to dete1mine the fair value of any assets reported at fair value as described below.

Level I investments are those where the fair value is determined based upon quoted prices in active markets for identical investments.

Level 2 investments are those where the fair value is determined using other significant observable inputs. The investments that fall into this category are fixed income securities where the inputs include interest rates, investment term, credit ratings and sales of similar investments.

Level 3 investments include any investments that don't fall in levels 1 or 2 and include significant unobservable inputs.

28 105

The following is a summary of the inputs used as of December 31, in valuing investments carried at fair value:

2017 Total Level 1 Level2 Level3

Money Market Funds $ 49,201,355 $ $ 49,201,355 $ U.S. Agency Securities 44,472,907 44,472,907 Municipal Securities 96,218,868 96,218,868 Corporate Bonds 23,333,463 23,333,463 Asset Backed Securities 129,780 129,780 Mortgage Backed Securities 20,280 20,280 Certificates of Deposit 4,190,364 4,190,364

$217,567,017 $ $217,567,017 $

2016 Total Level 1 Level2 Level 3

Money Market Funds $ 56,429,591 $ $ 56,429,591 $ U.S. Agency Securities 19,515,868 19,515,868 Municipal Securities 91,884,506 91,884,506 Corporate Bonds 11,452,154 11,452,154 Asset Backed Securities 145,317 145,317 Mmtgage Backed Securities 20,109 20,109 Certificates of Deposit 11,257,674 11,257,674

$190,705,219 $ $190,705,219 $

Investment Risk - While MJMEUC does not have a formal investment policy that specifically addresses each of the following types ofrisks, the following describes MJMEUC's practices and exposures with respect to these risks:

Interest Rate Risk- MJMEUC manages its exposure to declines in fair values by only investing in _ obligations that return the initial investment and the interest earned and by generally holding investments to maturity or only selling investments for a realized or other short-term gain.

As of December 31, MJMEUC had the following investments:

2017 Cash and Cash Investment Maturities (in years) Eguivalents Less than 1 1-5 Over 5

Money Market Funds $ 49,201,355 $ $ $ U.S. Agency Securities 1,702,644 42,770,263 Municipal Securities 17,466,787 59,741,802 19,010,279 Corporate Bonds 232,680 23,001,450 99,333 Asset Backed Securities 19,957 109,823 Mortgage Backed Securities 20,280 Certificates of Deposit 1,498,478 2,691,886 Total Bond Accounts Cash

and Investments $ 49,201,355 $ 20,920,546 $128,315,224 $ 19,129,892

Classified on the Balance Sheet as: Current Assets (includes portion of debt service accounts for bond payments through June 1, 2018)

Noncurrent Assets

29

Fair Value

$ 49,201,355 44,472,907 96,218,868 23,333,463

129,780 20,280

4,190,364

$217,567,017

$ 49,816,626 167,750,391

$217,567,017

106

2016 Cash and Cash Eguivalents

Money Market Funds $ 56,429,591 U.S. Agency Securities Municipal Securities 2,348,960 Corporate Bonds Asset Backed Securities Mortgage Backed Securities Certificates of Deposit Total Bond Accounts Cash

and Investments $ 58,778,551

Classified on the Balance Sheet as:

Investment Maturities (in ~ears) Less than 1 1-5 Over 5

$ $ $ 4,558,033 14,957,835

12,154,405 61,622,493 15,758,648 9,009,882 2,442,272

145,317 20,109

2,504,068 8,511,059 242,547

$ 19,216,506 $ 94,246,586 $ 18,463,576

Fair Value

$ 56,429,591 19,515,868 91,884,506 11,452,154

145,317 20,109

11,257,674

$190,705,219

Current Assets (includes portion of debt service accounts for bond payments through June I, 2017) Noncurrent Assets

$ 56,367,068 134,338,151

$190,705,219

Credit Risk- Credit risk is the risk that the issuer or the counterparty to an investment will not fulfill its obligations. Credit risk is measured using credit quality ratings of investments in debt securities as described by nationally recognized rating agencies such as Standard and Poor's and Moody's Investor Service ("Moody's"). MJMEUC's practice is to only invest in investment grade securities as permitted by Missouri State Statutes as explained above.

The following is a summary of the credit quality ratings by investment type, as listed by Moody's, or by its equivalent rating if rated by a different rating service, as of December 31:

Quality Fair Value Fair Value Type oflnvestment Rating 2017 2016

Money Market Funds Aaa $ 47,420,119 $ 55,835,847 Money Market Funds Not Rated 1,781,236 593,744 U.S. Agency Securities Aaa 44,472,907 19,515,868 Municipal Securities Aaa 13,681,254 17,081,620 Municipal Securities Aal 30,119,844 28,151,865 Municipal Securities Aa2 33,155,515 29,423,552 Municipal Securities Aa3 18,489,798 15,676,363 Municipal Securities Al 303,287 1,307,312 Municipal Securities A2 469, 170 243,794 Corporate Bonds Aaa 11,152,004 5,158,142 Corporate Bonds Aal 223,427 Corporate Bonds Aa2 2,604,769 2,132,209 Corporate Bonds Aa3 871,239 225,887 Corporate Bonds Al 2,570,442 1,027,082 Corporate Bonds A2 3,854,410 1,815,764 Corporate Bonds A3 2,057,172 l,093,070 Asset Backed Securities Aaa 70,219 65,407 Asset Backed Securities Aal 34,706 39,863 Asset Backed Securities Aa2 24,855 24,919 Asset Backed Securities Aa3 15,128 Mortgage Backed Securities Aa2 10,063 9,839 Mortgage Backed Securities Aa3 10,217 10,270 Certificates of Deposit Not Rated 4,190,364 11,257,674

$217,567,017 $190,705,219

The money market funds and certificates of deposit listed above as not rated were either fully insured by FDIC insurance or collateralized by securities.

30

107

Concentration of Credit Risk- This is the risk of loss attributed to the magnitude of investment in a single issuer. MJMEUC does not place limits on the amount that may be invested in any one issuer, except investments in certificates of deposit must be fully insured or collateralized by the financial institution with pledged securities held in MJMEUC' s name. As of December 31, 2017 and 2016, MJMEUC had investments in the Blackrock Federal Fund totaling 21 % and 27%, respectively, ofMJMEUC's total investments.

Custodial Risk for Deposits - This is the risk that, in the event of a financial institution failure, deposits may not be returned. MJMEUC's practice is to utilize bank depositories that pose little or no risk of loss of principal balance. Bank checking accounts are maintained so that excess funds are swept each night into overnight repurchase agreements, into governmental money market accounts with a AAA rating, or the financial institution pledges securities held in MJMEUC' s name with a fair value of at least 100% of the uninsured bank balance of deposits. MJMEUC requires that securities underlying repurchase agreements must have a fair value of at least 100% of the cost of the repurchase agreement.

Custodial Credit Risk for Investments - This is the risk that in the event of failure of the issuer or other counterparty to an investment, the investor will not be able to recover the value of its investment or collateral securities that are in the possession of an outside party. As of December 31, 2017 and 2016, all MJMEUC's investments were held by the counterpaity's trust department or agent in MJMEUC's name.

Restricted Cash, Cash Equivalents and Investments -A summary ofrestricted cash, cash equivalents and investments held by MJMEUC under bond indentures as of December 31 is as follows:

Operating and Maintenance Accounts Contingency Reserve Accounts

2017 $ 9,962,727

7,122,268

2016 $ 9,544,996

7,097,292

$ 17,084,995 $ 16,642,288

NOTE 3: UTILITY PLANT PROJECTS

Plum Point Energy Station Plant (placed in service during 2010)

In March 2006, MJMEUC entered into agreements to acquire a 22.11 % undivided interest (or approximately 147 MW) in the Plum Point Energy Station, a 665-megawatt (MW) coal-fired generating plant near Osceola, Arkansas. Initially, MJMEUC entered into life of unit, take-or-pay unit power purchase agreements with four of its Missouri member municipalities and three Arkansas municipalities which are Advisory Members. In June 2011, MJMEUC's MoPEP members accepted assignment of20 MW from one of the original Missouri member municipality's unit power purchase agreements. MJMEUC's capitalized project expenditures for its share of the costs are recovered through rates and charges from MJMEUC's MoPEP members and from the participating municipalities under life-of-unit take or pay unit power purchase agreements. MJMEUC is required to pay its propo1iionate share of plant operation costs, operating reserves, working capital requirements and plant closure costs and in return MJMEUC receives its proportionate share of the energy generated by the plant.

31 108

Iatan Unit 2 (placed in service during 2011)

MJMEUC paid its proportionate share of construction costs for an 11.76% undivided interest (or approximately 100 MW) in a second unit of the Iatan Generating Station, an 850 MW coal-fired generating plant constructed at the Iatan Station site in Platte County, Missouri. MJMEUC allocated 30% of its Iatan Unit 2 interest to Mo PEP and has entered into power purchase agreements with two of its member municipalities for the sale of the remaining capacity and energy. MJMEUC's capitalized project expenditures for its share of the costs are recovered through rates and charges from MJMEUC's MoPEP members and from the patticipating municipalities under power purchase agreements. MJMEUC is required to pay, through rates, its allocable share of common facilities upgrade costs, common facilities additions and retirements, and plant operation costs and in return, MJMEUC receives its propottionate share of the energy generated by the plant.

Prairie State Energy (units 1and2 placed in service during 2012)

In February 2005, MJMEUC joined a consortium known as the Prairie State Generating Company, LLC to patticipate in the development and construction of a two-unit 1,582 MW (combined) pulverized coal-fueled power generating facility in Washington County, Illinois. MJMEUC's capitalized project expenditures for its share of the costs, including coal reserves, are being recovered from MJMEUC's MoPEP members through rates and charges and from six other MJMEUC members under power purchase agreements. MJMEUC is authorized to take up to 12.33% of the total facility capacity. MoPEP takes 44.l % of the electric power generated by MJMEUC's share in the facility. MJMEUC is required to pay its proportion~te share of plant operation costs, operating reserves, working capital requirements and plant closure costs.

In 2013, a power purchase agreement was reached between Mo PEP and a MJMEUC member who contracted for 4 MW of the capacity and energy. Under this agreement, MoPEP purchased this member's 4 MW of capacity and energy until June 1, 201 7, at which time the 4 MW of capacity was permanently assigned to MoPEP and the member was discharged from all obligations of the project.

Laddonia Ethanol Co-Generation Plant (placed ill service during 2007)

In 2006 and 2007, MJMEUC entered into lease-purchase agreements with MAMU to obtain funding under MAMU's finance program for Missouri municipal utilities for development of a natural gas fired, electric co-generation facility linked to an ethanol plant near Laddonia, Missouri. The project is for the energy needs ofMoPEP members and MJMEUC will recover all costs incurred from those members through rates and charges. See Note 5 regarding capital lease financing for this project.

Dogwood Energy Center (acquired ownership interest in 2012)

On March 26, 2012, MJMEUC acquired an 8.2% interest in the Dogwood Energy Center, a 610 MW combined-cycle natural gas plant located in Pleasant Hill, Missouri. MJMEUC's ownership interest in the plant is for the energy needs of Mo PEP members and MJMEUC will recover all costs incurred from those members through rates and charges. The combined cycle plant was originally placed in service in 2002.

Fredericktown Power Generation Plant (placed in service during 2015)

In October 2010, MJMEUC approved the development, construction and installation of a two-unit natural gas fired generating facility, with approximately nominal net 24 MW (combined) capacity, in Fredericktown Missouri, a member city ofMoPEP. The output of the generating station primarily serves electric peaking loads ofMJMEUC's members patticipating in MoPEP; however, the units are called to run at different times by the market operator. MJMEUC recovers all costs incurred from MoPEP members through rates and charges. The plant was placed in service on July 1, 2015.

32 109

NOTE 4: UTILITY PLANT IN SERVICE AND OTHER CAPITAL ASSETS

A summary of changes in utility plant in service and other capital assets for the years ended December 31 is as follows:

Balance Balance

1/1/2017 Additions Transfers Disposals 12/31/2017

Capital Assets not Being Depreciated:

Land

Office Building $ 68,500 $ $ $ $ 68,500

Plum Point 2,538,009 2,538,009

Iatan 2 3,619 3,619

Praitie State 3,939,953 3,939,953

MoPEP Units

Dogwood 23,001 23,001

Total Land 6,573,082 6,573,082

Construction in Process

Plum Point 1,236,741 5,476,389 (5,999,986) 713, 144

Iatan 2 1,268,705 3,226,943 (1,230,297) (2,580) 3,262,771

Prairie State 4,416,242 7,503,148 (9,361,167) 2,558,223

MoPEP Units

Fredericktown 42,008 42,008

Dogwood 215,517 (195,056) 20,461

Total Construction in Process 6,921,688 16,464,005 (16,786,506) (2,580) 6,596.607

Total Capital Assets not Being

Depreciated $ 13,494,770 $ 16,464,005 $ (16,786,506) $ (2,580) $ 13,169,689

Capital Assets Being Depreciated:

Plum Point

Utility plant $ 281,167,250 $ 649,757 $ 5,999,986 $ (1,174,988) $ 286,642,005

Railcars 9,915,339 (61,534) 9,853,805

Iatan 2

Utility P !ant 267,708,299 895,382 1,230,297 (2,179,955) 267,654,023

Prai1ie State

Utility Plant 735,683,545 8,564,379 (911,172) 743,336,752

Coal lvline and Mine Equipment 37,619,978 796,788 38,416,766

MoPEP Units

Laddonia Utility Plant 11,307, 168 11,307,168

Dogwood Utility Plant 34,242,577 5,848 195,056 34,443,481

Fredericktown 19,732,450 19,732,450

Administrative

Office Building 1,594,279 6,970 1,601,249

Furniture and Equipment 496,612 13,324 509,936

Transportation and Other Equip. 34,762 22,550 57,312

Computer Software 422,000 422.000

Total Capital Assets Being

Depreciated 1,399,924,259 1,593,831 16,786,506 (4,327,649) 1,413,976,947

Accumulated Depreciation ( 177' 716,205) (39,088,876) 479,648 (216,325,433)


Depreciated, net of Depreciation $ 1,222,208,054 $ (37,495,045) $ 16,786,506 $ (3,848,001) $ 1, 197,651,514

33

110

Balance Balance

111/2016 Additions Transfers Disposals 12/31/2016

Capital Assets not Being Depreciated:

Land

Office Building $ 68,500 $ $ $ $ 68,500

Plum Point 2,538,009 2,538,009

Iatan 2 3,619 3,619

Prairie State 3,892,356 47,597 3,939,953

MoPEP Units

Dogwood 23,001 23,001

Total Land 6,525,485 47,597 6,573,082

Construction in Process

Plum Point 247,510 2,486,952 (1,497,721) 1,236,741

Iatan 2 3,083,900 4,557,931 (6,373, 126) 1,268,705

Prairie State 3,464,767 8,460,669 (7,509,194) 4,416,242

MoPEP Units

Laddonia Utility Plant

Fredericktown 18,859 (18,859)

Dogwood 715,911 1,207,625 (1,923,536)

Total Construction in Process 7,512,088 16,732,036 (17,322,436) 6,921,688

Total Capital Assets not Being Depreciated $ 14,037,573 $ 16,779,633 $ ( 17 ,322,436) $ $ 13,494,770

Capital Assets Being Depreciated:

Plum Point

Utility plant $ 280,323,551 $ 748,978 $ 1,497,721 $ (1,403,000) $ 281,167,250

Railcars 9,915,339 9,915,339

fatan 2

Utility Plant 260,614,168 721,005 6,373,126 267,708,299

Prairie State

Utility Plant 728,995,923 132,858 6,798,604 (243,840) 735,683,545

Coal Mine and Mine Equipment 36,774,876 134,512 710,590 37,619,978

MoPEP Units

Laddonia Utility Plant 11,296,977 10,191 11,307,168

Dogwood Utility Plant 32,319,041 1,923,536 34,242,577

Fredericktown 19,975,001 47,890 18,859 (309,300) 19,732,450

Administrative

Office Building 1,582,579 11,700 1,594,279

Furniture and Equipment 490,440 6,172 496,612

Transportation and Other Equip. 34,762 34,762

Computer Software 422,000 422,000


Depreciated 1,382,709,895 1,848,068 17,322,436 (1,956,140) 1,399,924,259

Accumulated Depreciation (141,318,373) (36,713,300) 315,468 (177,716,205)

Total Capital Assets Being Depreciated, net of Depreciation $ 1,241,391,522 $ (34,865,232) $ . 17,322,436 $ (l,640,672) $ 1,222,208,054

34

111

Following is the gross amount of assets recorded under capital leases and the accumulated depreciation recognized as of December 31:

2017 Gross Accumulated Net Book Amount Depreciation Value

Utility Plant in Service $ 11,148,820 $ 5,002,406 $ 6,146,414

Office Building 1,457,263 369,068 1,088,195

Land - Office Building 68,500 68,500 $ 12,674,583 $ 5,371,474 $ 7,303,109

2016 Gross Accumulated Net Book Amount Depreciation Value

Utility Plant in Service $ 11,148,820 $ 4,524,418 $ 6,624,402

Office Building 1,457,263 332, 175 1,125,088

Land - Office Building 68,500 68,500 $ 12,674,583 $ 4,856,593 $ 7,817,990

The Prairie State Energy project includes contiguous coal reserves and a mine portal to supply coal to the power plant. The following is a schedule of the changes in MJMEUC's ownership interest in the coal reserves, measured in tons:

Estimated Recoverable Reserves, as of December 31, 2015 2016 Changes in Reserve Estimate Reserve Acquisitions in 2016

Amount Mined During 2016 Estimated Recoverable Reserves, as of December 31, 2016

2017 Changes in Reserve Estimate

Reserve Acquisitions in 2017

Amount Mined During 2017 Estimated Recoverable Reserves, as of December 31, 2017

35

23,536,801

(729,089)

22,807,712

1,234

(764,733) 22,044,213

112

NOTE 5: LONG-TERM DEBT

Changes in Long-term Debt

The following is a summary of changes in long-term debt for the year ended December 31, 2017:

Balance Payments or Balance Principal Due 1/1/2017 Additions Amortization 12/31/2017 in One Year

Utility plant projects: Plum Point Energy Station - Bonds $ 283,305,000 $ $ 6,865,000 $ 276,440,000 $ 7,215,000

Add Bond Premium 25,666,463 1,509,792 24,156,671 Deduct Bond Discount (50,458) (2,522) (47,936)

Iatan Unit 2 - Bonds 242,785,000 6,940,000 235,845,000 7,225,000 Add Bond Premium 27,975, 169 1,559,409 26,415,760 Deduct Bond Discount ( 114,489) (60,708) (53,781)

Prairie State Energy Campus - Bonds 740,630,000 26,640,000 25,995,000 741,275,000 16,445,000 Add Bond Premium 58,281,009 5,364,307 3,130,756 60,514,560

Fredericktown - Bonds 14,610,000 12,435,000 2, 175,000 695,000 Add Bond Premium 222,035 189,557 32,478

Dogwood - Bonds 29,935,000 26,085,000 3,850,000 900,000 Add Bond Premium 1,571,691 1,373,946 197,745

MoPEP Facilities - Bonds 35,600,000 35,600,000 Add Bond Premium 4,782,182 4,782,182

2005A Capital Lease for Laddonia 3,233,000 700,000 2,533,000 736,000 2006A Capital Lease for Laddonia 296,000 62,000 234,000 72,000 Revolving Credit Line - MoPEP Other: 2006A Capital Lease, Office Building 1, 155,000 48,000 1,107,000 48,000

Total Long-term Debt $1,429,500,420 $ 72,386,489 $ 86,830,230 $1,415,056,679 $33,336,000

The following is a summary of changes in long-term debt for the year ended December 31, 2016:

Balance Payments or Balance Principal Due 1/1/2016 Additions Amortization 12/31/2016 in One Year

Utility plant projects: Plum Point Energy Station - Bonds $ 290,450,000 $ $ 7,145,000 $ 283,305,000 $ 6,865,000

Add Bond Premium 27,176,255 1,509,792 25,666,463 Deduct Bond Discount (52,981) (2,523) (50,458)

Iatan Unit 2 - Bonds 249,670,000 6,885,000 242,785,000 6,940,000 Add Bond Premium 29,534,576 1,559,407 27,975,169 Deduct Bond Discount (175,195) (60,706) (114,489)

Prairie State Energy Campus - Bonds 778,460,000 252,745,000 290,575,000 740,630,000 25,995,000 Add Bond Premium 36,808,830 29,006,851 7,534,672 58,281,009

Fredericktown - Bonds 15,255,000 645,000 14,610,000 670,000 Add Bond Premium 235,913 13,878 222,035

Dogwood - Bonds 30,780,000 845,000 29,935,000 865,000 Add Bond Premium 1,650,275 78,584 1,571,691

2005A Capital Lease for Laddonia 3,899,000 666,000 3,233,000 700,000 2006A Capital Lease for Laddonia 356,000 60,000 296,000 62,000 Revolving Credit Line - MoPEP Other: 2006A Capital Lease, Office Building 1,203,000 48,000 1, 155,000 48,000

Total Long-te1m Debt $1,465,250,673 $281,751,851 $317,502,104 $1,429,500,420 $42, 145,000

36

113

Summary of Long-term Debt

The following is a description of long-term debt. Amounts are presented inclusive of unamortized bond premiums or discounts totaling $115,997,679 and $113,551,420 as of December 31, 2017 and 2016, respectively.

$521,760,000 Series 2007A and $28,045,000 Series 2007B MHvIEUC Power Project Revenue Bonds (Prairie State Project). (a)

$48,600,000 Series 2009A and $4,860,000 Series 2009B MJMEUC Power Project Revenue Bonds (Plum Point Project). (b)

$99,975,000 Series 2009A and $3, 160,000 Series 2009B MJMEUC Power Project Revenue Bonds (Iatan 2 Project). (c)

$193,720,000 Series 2009A and $14,200,000 Series 2009B MJMEUC Power Project Revenue Bonds (Prairie State Project). (d)

$73,420,000 Series 2010A and $4,585,000 Series 2010B MJMEUC Power Project Revenue Bonds (Prairie State Project). (e)

$17,060,000 Series 2011 Power Supply System Revenue Bonds (Fredericktown Project). (f)

$32,950,000 Series 2012 Power Supply System Revenue Bonds (Dogwood Project). (g)

$155,730,000 Series 2014A MJMEUC Power Project Revenue Refunding Bonds (Iatan 2 Project). (h)

$192,605,000 Series 2014A MJMEUC Power Project Revenue Refunding Bonds (Plum Point Project). (i)

$215,105,000 Series 2015A MJMEUC Power Project Revenue Refunding Bonds (Prairie State Project). U)

$80,685,000 Series 2015A MJMEUC Power Project Revenue Refunding Bonds (Iatan 2 Project). (k)

$37,240,000 Series 2015A MJMEUC Power Project Revenue Refunding Bonds (Plum Point Project). (I)

$252,745,000 Series 2016A MJMEUC Power Project Revenue Refunding Bonds (Prairie State Project). (m)

$26,640,000 Series 2017 MJMEUC Power Project Revenue Refi.mding Bonds (Prairie State Project) (n) $35,600,000 Series 2017 MJMEUC Power Supply System Revenue Refi.mding Bonds (MoPEP Facilities) (o)

$8,715,000 Capital Lease Financing under the Missouri Association of Municipal Utilities Lease Financing Program Series 2005A. (p)

$781,000 Capital Lease Financing under the Missouri Association of Municipal Utilities Lease Financing Program Series 2006A. (q)

$1,523,000 Capital Lease Financing under the Miss6uri Association of Municipal Utilities Lease Financing Program Series 2006A. (r)

$48,000,000 Line of Credit Agreement with a Financial Institution. (s)

Total Long-te1m Debt Less Current Maturities

Total Long-term Debt, Net of Current Maturities

37

$

2017

53,460,000

4,431,218

184,890,000

72,214,099

2,207,478

4,047,745

171,277,306

209,921,671

232,994,517

86,498,456

37,167,064

279,686,636

32,004,307

40,382,182

2,533,000

234,000

1,107,000

1,415,056,679 (33,336,000)

$

2016

10,240,000

53,460,000

6,460,511

189,120,000

73,772,694

14,832,036

31,506,690

177,173,700

218,271,463

244,965,197

87,011,469

37,189,542

280,813,118

3,233,000

296,000

1,155,000

1,429 ,500,420 (42,145,000)

$ 1,381,720,679 $ 1,387,355,420

114

(a) Prairie State Project- Series 2007: Principal due annually on January 1 through 2042. Interest is payable semiannually. Interest on the Series 2007A tax-exempt bonds is at S.0%, except for bonds of$121,080,000 which are at 4.SO% and $1 l,28S,000 at 4.0%. Interest on the Series 2007B taxable bonds ranges from S.22% to S.3S%. The Series 2007 A bonds maturing in 2018 and thereafter are subject to early redemption without a premium on and after January 1, 2017. A portion of the Series 2007 A bonds were refunded with refunding bonds issued in 201S with the remainder of the bonds refunded in 2016; except for the final principal payment made on January 1, 2017; see U) and (m) below.

(b) Plum Point Project- Series 2009: Principal due annually beginning on January 1, 2037 through 2039. Interest is payable semi-amrnally. Interest on the Series 2009A taxable "Build America Bonds" is at 7.73%. Interest on the Series 2009B taxable bonds is at 7.73%. Under the Build America Bonds program, the U.S. Federal government makes semi-annual bond interest subsidy payments to reduce the effective interest rates of the taxable bonds.

(c) Iatan 2 Project- Series 2009: Principal due annually on January 1through2039. Interest is payable semiannually. Interest on the Series 2009A tax-exempt bonds range from 3.SO% to 6.0%. Interest on the Series 2009B taxable bonds is at 6.2S%. The Series 20098 bonds matured on January 1, 2013. A portion of the Series 2009 bonds were refunded with refunding bonds issued in 2014 and 201S, see (h) and (k) below.

( d) Prairie State Project - Series 2009: Principal due annually beginning on January 1, 2014 through 2042. Interest is payable semi-annually. Interest on the Series 2009A taxable "Build America Bonds" range from 3.87% to 6.89%. Interest on the Series 2009B taxable bond ranges from 3.87% to 4.69%. Under the Build America Bonds program, the U.S. Federal government makes semi-annual bond interest subsidy payments to reduce the effective interest rates of the taxable bonds. A portion of the Series 2009A bonds were refunded, on a crossover basis, with refunding bonds issued in 2017, see (n) below.

(e) Prairie State Project- Series 2010: Principal due annually on January 1, 2014 through 2042. Interest is payable semi-annually. Interest on the Series 20 lOA taxable "Build America Bonds" range from 4.88% to 7 .9%. Interest on the Series 2010B taxable bonds is at S.0%. Under the Build America Bonds program, the U.S. Federal government makes semi-annual bond interest subsidy payments to reduce the effective interest rates of the ta.'<:able bonds.

(f) MoPEP Facilities Fredericktown Project - Series 2011: Principal due ammally on December 1 through 2032. Interest on the Series 2011 tax-exempt bonds range from 2.50% to 4.S%. A portion of the Series 2011 bonds were refunded with refunding bonds issued in 2017, see (o} below.

(g) MoPEP Facilities Dogwood Generating Facility Project- Series 2012: Principal due annually on January 1, through 2037. Interest on the Series 2012 tax-exempt bonds range from 2.SO% to S.0%. A portion of the Series 2012 bonds were refunded with refunding bonds issued in 2017, see ( o) below.

(h) Iatan 2 Project - Series 20 l 4A Refunding: Proceeds were used to refund a portion of the Series 2006A and a portion of the 2009A Iatan 2 Project Revenue Bonds. Principal due annually on January 1, 2017 through 2034. Interest is payable semi-annually. Interest on the Series 2014A tax-exempt bonds range from 4.0% to S.0%.

(i) Plum Point Project- Series 20 l 4A Refunding: Proceeds were used to refund a portion of the Series 2006 Plum Point Project Revenue Bonds. Principal due annually on January 1, 2017 through 2034. Interest is payable semi-annually. Interest on the Series 2014A tax-exempt bonds range from 4.2% to S.0%.

U) Prairie State Project- Series 20 ISA Refunding: Proceeds were used to refund a portion of the Series 2007 A Prairie State Project Revenue Bonds. Principal due annually on December 1, 2016 through 2038. Interest is payable semi-amrnally. Interest on the Series 201SA tax-exempt bonds range from 3.2S% to S.0%.

(k) Iatan 2 Project- Series 20 lSA Refunding: Proceeds were used to refund the remaining Series 2006A Iatan 2 Project Revenue Bonds, except for the principal payment scheduled for January 1, 2016, and a portion of the Series 2009A Iatan 2 Project Revenue Bonds. Principal due annually on December 1, 2016 through 2038. Interest is payable semi-annually. Interest on the Series 201SA tax-exempt bonds range from 3.0% to S.0%.

(I) Plum Point Project- Series 201 SA Refunding: Proceeds were used to refund the remaining Series 2006 Plum Point Project Revenue Bonds, except for the principal payment scheduled for January 1, 2016. Principal due annually on January 1, 2017 through 2036. Interest is payable semi-annually. Interest on the Series 20 ISA taxexempt bonds range from 2.0% to S.0%.

(m) Prairie State Project- Series 2016A Refunding: Proceeds were used to refund a po1tion of the Series 2007A Prairie State Project Revenue Bonds. Principal due annually on December 1, 2032 through 2041. Interest is payable semi-annually. Interest on the Series 2016A tax-exempt bonds range from 4.0% to 5 .0%.

38 115

(n) Prairie State Project- Series 2017 Refunding: Proceeds were used to refi.md, on a crossover basis, a portion of the Series 2009A Prairie State Project Revenue Bonds. Principal due annually on January 1, 2025 through 2029. Interest is payable semi-annually. Interest on the Series 2017 tax-exempt bonds are 5.0%.

( o) Mo PEP Facilities - Series 2017 Refunding: Proceeds were used to refund a portion of the Series 2011 -Fredericktown Project Revenue Bonds and a portion of the Series 2012 - Dogwood Project Revenue Bonds. Principal due annually on December 1, 2021 through 2034. Interest is payable semi-annually. Interest on the Series 2017 tax-exempt bonds range from 3.375% to 5.0%.

(p) MAMU Lease Financing Program Series 2005A: Proceeds were used to fund construction of the Laddonia CoGeneration Plant and related equipment. Payments are due monthly through March 2021, and include principal, interest and ce1tain fees. Interest is at a rate of 4.122%. The lease is secured by the property financed with the lease proceeds. ·

( q) IVIAMU Lease Financing Program Series 2006A: Proceeds were used to fund additional construction costs of the Laddonia Co-Generation Plant and related equipment. Payments are due monthly through March, 2021, and include principal, interest and certain fees. Interest is at a rate of3.685%. The lease is secured by the property financed with the lease proceeds.

(r) IVIAMU Lease Financing Program Series 2006A: Proceeds were used to fund the purchase ofMJIVIEUC's office building and associated remodeling costs. Payments are due monthly through November, 2032, and include principal, interest and certain fees. Interest is at a rate of3.82%. The lease is secured by the property financed with the lease proceeds.

(s) Line of Credit: MJIVIEUC has a $48 million line of credit agreement with a financial institution. Interest is due quarterly with a final maturity on June 30, 2020. Proceeds can be used for any purpose consistent with MJIVIEUC's operations. The interest rate is variable based on the one-month LIBOR rate plus the applicable spread (0.95% at December 31, 2017). The applicable spread ranges from 0.95% to 2.20% depending on any downgrades to MJMEUC's debt. MJMEUC used $7 .5 million of its available credit under this line for two irrevocable standby letters of credit issued by the same financial institution totaling $7.5 million, which MJIVIEUC posted as collateral at two RTO's. The line of credit is used as collateral for the letters of credit and no amount was drawn on the line of credit for this or any other purpose in 2017 and 2016.

The revenue bonds are spec.ial, limited obligations ofMJMEUC, payable solely out of the net revenues relating to the ownership and operation of the project funded with the bonds, and the ownership and a pledge and security interest in the respective bond sale proceeds and assets held by trustees under each respective bond indenture. The net revenues include sales to participating MJMEUC members and other municipalities pursuant to unit-specific, life-of-unit, take-or-pay power purchase agreements between MJMEUC and each of the municipalities participating with MJMEUC in the respective project.

The bond indentures contain certain financial and other covenants, including a rate covenant to provide sufficient revenues for payments into the various accounts held by bond trustees for reserves and for payment of principal and interest. Management ofMJMEUC is not aware of any instances of default with respect to the bonds' covenants.

Refunding Debt Issues

MJMEUC periodically, among other factors, reviews the current interest rates in the municipal bond markets compared to the interest rates MJMEUC is currently paying on its debt, and other debt terms, to determine if debt service savings can be achieved through a refunding of debt. If significant debt service savings can be achieved and if other parameters established by MJMEUC are met, MJMEUC may unde1iake a debt refunding. MJMEUC's refunding debt issues are discussed individually below.

Prairie State Project

Current Year Refimding

In December 2017, MJMEUC issued Series 2017 MJMEUC Power Project Revenue Refunding Bonds (Prairie State Project) to generate resources to advance refund on a crossover basis $30,845,000 of outstanding Series 2009A Power Project Revenue Bonds (Prairie State Project). The net proceeds related to the advance refunding were used to purchase U.S. government securities (SLGS) in an irrevocable trust with

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an escrow agent. These proceeds provide funds to make future scheduled debt service interest payments on the Series 2017 Refunding Bonds until the crossover date, which is January 1, 2019. On the crossover date, the funds held by the escrow agent will be used to refund the 2009A Series Bonds and they will be removed from MJMEUC's statements of net position. As a crossover refunding, legal defeasance did not occur and the new and old debt are included in MJMEUC's statement of net position as well as the net proceeds of the new debt issue deposited with the escrow agent.

MJMEUC advance refunded the Series 2009A Power Project Revenue Bonds (Prairie State Project) to reduce its total debt service payments over 11 years by $4,823,407 and to obtain an economic gain (the difference between the present values of the debt service payments on the old and new debt) of $3,913,228.

MoPEP

Current Year Refimding

During 2017, MJMEUC issued Series 2017 MJMEUC Power Supply System Revenue Refunding Bonds (MoPEP Facilities) to generate resources to refund a total of $36,985,000 of outstanding Series 2011 and 2012 Power Supply System Revenue Bonds (MoPEP Facilities). The net refunding proceeds were deposited in an irrevocable trust with an escrow agent to provide funds to refund the bonds on December 1, 2020 for the 2011 series bonds and on January 1, 2021 for the 2012 series bonds. As a result, the portion of the Series 2011and2012 Power Supply System Revenue Bonds (MoPEP Facilities) that were refunded are considered defeased and the liability for those bonds has been removed from the statement of net position.

MJMEUC advance refunded the Series 2011 and 2012 Power Supply System Revenue Bonds (MoPEP Facilities) to reduce its total debt service payments over 17 years by $3,730,880 and to obtain an economic gain (the difference between the present values of the debt service payments on the old and new debt) of $2,806,190. The net refunding proceeds exceeded the net carrying amount of the old debt by $1,568,278. This amount is reported as a deferred outflow of resources in the statement of net position and is amortized over the remaining life of the refunding debt.

Fixed Rate Capital Leases

MJMEUC had the option of fixed or variable interest rate leases under MAMU's financing program. MJMEUC selected fixed rates to protect against the potential of rising interest rates. The trustee for MAMU's financing program entered into interest rate exchange agreements with a financial institution to effectively convert the variable interest rates into fixed interest rates for the three capital leases previously mentioned. Although MJMEUC is not a direct party to these interest exchange agreements, ifMJMEUC elects to prepay a capital lease obligation, its optional prepayment price under the lease is roughly equal to the fair value of the interest rate exchange agreement plus unpaid principal, and as such, corresponds directly to the termination payment the trustee would receive or pay under the terms of the interest rate exchange agreement. MJMEUC does not bear any counterparty credit risk of the interest rate exchange agreements and instead the financial institution and the financing pool trusts wh9 are parties to the interest rate exchange agreements bears all counterparty credit risk.

If elected, the additional early termination payment under the te1ms of the lease and interest rate exchange agreements at December 31, 2017 would have been as follows:

Capital Lease Issue Laddonia Series 2005A Capital Lease Obligation Laddonia Series 2006A Capital Lease Obligation Office Building Series 2006A Capital Lease Obligation

40

Payment $ 111,766

8,411 158,476

$ 278,653

117

Total Interest Costs

Total interest costs incurred on long-term debt, excluding bond premiums, bond discounts, and the amortization of advance bond refunding costs, was $68,112,913 and $69,644,666 for 2017 and 2016, respectively.

Future Debt Service Payments

Future payments due on long-term debt as of December 31, 2017 are as follows:

Bonds and Notes Payable Capital PrinciEal Interest Total Leases

2018 $ 32,480,000 $ 67,427,177 $ 99,907,177 $ 1,037,826 2019 33,960,000 66,524,066 100,484,066 1,046,158 2020 35,515,000 64,792,203 100,307,203 1,041,487 2021 38,160,000 62,946,182 101,106,182 336,835 2022 38,915,000 60,969,997 99,884,997 100,000 2023 40,790,000 58,905,334 99,695,334 105,133 2024 42,775,000 56,721,440 99,496,440 105,911 2025 49,710,000 54,285,150 103,995, 150 102,682 2026 52,140,000 51,588,689 103,728,689 100,450 2027 54,745,000 48,760,578 103,505,578 107,831 2028 57,090,000 45,803,887 102,893,887 104,070 2029 64,080,000 43,072,116 107,152,116 100,306 2030 56,805,000 39,960,920 96,765,920 108,186 2031 59,605,000 36,872,316 961477,316 103,886 2032 62,805,000 33,717,696 96,522,696 93,431 2033 63,270,000 30,627,725 93,897,725 2034 77,420,000 27,473,929 104,893,929 2035 73,320,000 23,645,655 96,965,655 2036 64,115,000 20,150,007 84,265,007 2037 62,000,000 16,757,769 78,757,769 2038 65,880,000 12,847,831 78,727,831 2039 61,355,000 8,797,955 70,152,955 2040 44,685,000 5,601,153 50,286,153 2041 46,870,000 3,008,916 49,878,916 2042 16,695,000 599,663 17,294,663

Total Payments $ 1,295,185,000 $ 941,858,354 $ 2,237,043,354 4,594,192

Less Interest (720,192) Present Value ofMininmm Lease Payments $ 3,874,000

NOTE 6: LETTERS OF CREDIT

MJMEUC obtained standby letters of credit totaling $7 .5 million in December 2014 to replace $6,489 ,500 of deposits MJMEUC had with two regional transmission operators. $7.5 million ofMJMEUC's line of credit is pledged as collateral for these letters of credit, which expire when the line of credit matures on June 30, 2020.

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NOTE 7: INTERFUND TRANSACTIONS

lnterfund Receivables and Payables

Interfund receivable and payable balances at December 31, 2017 and 2016, resulting from interfund transactions were as follows:

2017 2016 Receivable Payable Receivable Payable

General Fund $ 269,543 $ $ 744,979 $

MoPEPFund 2,571,636 13,733 1,858,477 1,035,768

MMMPEPFund 129,953 322,270 Plum Point Fund 13,733 755,965 889,221

Iatan 2 Fund 379,371 507,870 Prairie State Fund 1,575,890 1,035,768 884,095

Total $ 2,854,912 $ 2,854,912 $ 3,639,224 $ 3,639,224

The balances due to the General Fund from the other funds are for cost incurred by the General Fund that are allocable to the other funds and not paid as of December 31, 2017 and 2016. The amounts due to MoPEP, Plum Point, Iatan 2 and Prairie State are for energy sales, or for over payment of energy sales, from the respective fund, according to power purchase agreements. The interfund balances are normally repaid monthly.

Interfimd Transfers

A summary of interfund transfers for the years ended December 31 were as follows:

2017 2016

Alliance General Alliance General Fund Fund Fund Fund

Transferred from: General Fund $ 641,070 $ $ 573,440 $

MoPEPFund 961,834 981,175

MMMPEP Fund 274,457 271,442 Plum Point Fund 365,942 368,563

Iatan 2 Fund 257,148 261,481 Prairie State Fund 496,989 503,039

Total Transfers $ 641,070 $ 2,356,370 $ 573,440 $ 2,385,700

Transfers are made to the Alliance and General Funds by the other funds for costs incurred by these funds that are allocable to the other funds. Amounts paid by a fund to another fund for energy and other services as part of its normal operations are included in operating revenues and expenses and are not considered interfund transfers; however, these transactions are eliminated in the government-wide financial statements.

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NOTE 8: RESTRICTED ASSETS AND NET POSITION

Restricted assets were as follows as ofDecember 31, 2017 and 2016:

For Utility Plant Projects: Held by Trustees for Payment of Construction Costs:

Plum Point Energy Station Held by Trustees for Regular Debt Service Payments:

Plum Point Energy Station Iatan Unit 2 Prairie State Energy Campus Fredericktown Dogwood

Held by Trustees for Debt Service Reserve:

Plum Point Energy Station Iatan Unit 2 Prairie State Energy Campus Fredericktown Dogwood

Held by Trustees for Debt Service Payments on Refunded Debt:

Prairie State Energy Campus Held by Trustees for Debt Financing Costs:

Prairie State Energy Campus MoPEP Facilities

Held by MJMEUC for Utility Plant Operations and Maintenance

Plum Point Energy Station Iatan Unit 2 Prairie State Energy Campus

$

2017

92

14,945,945 11,444,065 18,127,893

126, 162 1, 124,885

24,705,534 19,293,599 51,496,524

1,358,124 2,464,578

31,645,428

204,277 156,502

7,160,710 4,631,326 5,292,959

$ 194, 178,603

Net position pertaining to the above accounts is restricted for the following purposes: 2017

Debt Service and Debt Service Reserves Operation and Maintenance of Power Plants

NOTE 9: RELATED ENTITY TRANSACTIONS

$ 43,167,433 6,771,878

$ 49,939,311

$

2016

92

14,698,369 11,215,546

27,707,749 122,522

1,616,086

24,332,359 19,143,143 50,408,160

1,332,677 2,418,483

7,136,673 4,606,257 4,899,358

$ 169,637,474

2016

$ 50,227,978 6,329,171

$ 56,557,149

Significant transactions among the three-member entities of the MPUA reported in the accompanying financial statements are as follows:

MAMU and MGCM reimburse MJMEUC's Alliance Fund for time spent by MJMEUC employees on MAMU and MGCM matters. Salary reimbursements received from MAMU totaled $501,515 for 2017 and $502,097 for 2016. Salary reimbursements received from MGCM totaled $121,818 for 2017 and $109,341 for 2016. Expenses reported in the accompanying Statements of Revenues, Expenses, and Changes in Net Position are net of these reimbursements.

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A majority of telephone, utility, postage and other miscellaneous office expenses not directly attributable to a specific program or member are charged to MJMEUC's Alliance Fund. MAMU and MGCM together transfetTed $112,511 and $105,448 in 2017 and 2016, respectively, to MJMEUC to pay their allocated share of Alliance expenses.

A fomih MPUA related entity, MPUA Resource Services, Corporation ("RSC"), was created in 2017. RSC is a non-profit and tax-exempt corporation formed to provide services to governmental entities that have utilities. RSC does not share office and other expenses with the other three entities on a joint operating basis and instead will be charged for services provided to it by the other MPUA entities beginning in 2018. MJMEUC, through the Alliance Fund, assisted RSC in its entity development process; however, MJMEUC has not been reimbursed for any costs inctmed or services performed in 2017. MJMEUC has agreed to invest up to $6,000,000 in RSC to provide RSC with funds as necessary to develop future RSC's programs and services. As of December 31, 2017, MJMEUC has not invested any funds in RSC.

NOTE 10: PENSION PLAN

General Information about the Pension Plan

The following information is presented in accordance with Governmental Accounting Standards Board Statement 68, Accounting and Financial Reporting/or Pensions, as amended by GASB Statement 71, Pension Transition for Contributions Made Subsequent to the Measurement Date.

Plan Description

MJMEUC's defined benefit pension plan provides certain retirement, disability and death benefits to plan members and beneficiaries. MJMEUC paiiicipates in the Missouri Local Government Employees Retirement System ("LAGERS"). LAGERS is an agent multiple-employer, statewide public employee pension plan established in 1967 and administered in accordance with RSMo. 70.600-70.755. As such, it is LAGERS' responsibility to administer the law in accordance with the expressed intent of the General Assembly. The plan is qualified under the Internal Revenue Code Section 40l(a) and is tax exempt. The responsibility for the operations and administration of LAGERS is vested in the LAGERS Board of Trustees consisting of seven persons. LAGERS issues a publicly available financial report that includes financial statements and required supplementary information. This report may be obtained by accessing the LAGERS website at W\NW.molagers.org.

Benefits Provided

LAGERS provide retirement, death and disability benefits. Benefit provisions are adopted by the governing body of the employer, within the options available in the state statutes governing LAGERS. All benefits vest after 5 years of credited service. Employees who retire on or after age 60 (55 for police and fire) with 5 or more years of service are entitled to an allowance for life based upon the benefit program information provided below. Employees may retire with an early retirement benefit with a minimum of 5 years of credited service and after attaining age 55 and receive a reduced allowance.

Benefit Multiplier Final Average Salary Member Contributions

2.0% 3 years 0.0%

Benefit terms provide for annual post retirement adjustments to each member's retirement allowance subsequent to the member's retirement date. The annual adjustment is based on the increase in the Consumer Price Index and is limited to 4% per year.

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Employees Covered by Benefit Terms

At June 30, the following employees were covered by the benefit terms:

Inactive Employees or Beneficiaries Currently Receiving Benefits

Inactive Employees Entitled to but not yet Receiving Benefits

Active Employees Total

Contributions

2017

9

1

30 40

2016

7 2

28 37

The employer is required to contribute amounts at least equal to the actuarially determined rate, as established by LAGERS. The actuarially determined rate is the estimated amount necessary to finance the cost of benefits earned by employees during the year, with an additional amount to finance an unfunded accrued liability. Full-time employees of the employer do not contribute to the pension plan. The Employer contribution rate for 2017 and 2016 was 14.5% and 13.5% respectively, of annual covered payroll.


The employer's net pension liability was measured as of June 30, 2017 and 2016, and the total pension liability used to calculate the net pension liability was determined by actuarial valuations as of February 28, 2017 and February 29, 2016, as applicable.

Actuarial Assumptions

The total.pension liability in the February 28, 2017 and February 29, 2016, actuarial valuations were determined using the following actuarial assumptions, applied to all periods included in the measurement:

Inflation

Salary Increase Investment Rate of Return

3 .25% wage; 2.5% price inflation

3.25% to 6.55%, including inflation 7.25%, net of expenses

The actuarial assumptions used in the February 28, 2017, valuation were based on the results of an actuarial experience study for the period March 1, 2010 through February 28, 2015. ·

New assumptions were adopted in 2016 based on a 5-year experience study for the period March 1, 2010 through February 28, 2015.

The healthy retiree m01iality tables, for post-retirement mo1iality, were the RP-2014 Healthy Annuitant mortality table for males and females. The disabled retiree mortality tables, for post-retirement mortality, were the RP-2014 disabled morality tables for males and females. The pre-retirement mmiality tables used were the RP-2014 employees mortality table for males and females.

Both the post-retirement and pre-retirement tables were adjusted for mortality improvement back to observation period base year 2006. The base year for males was then established to be 2017. Mortality rates for a particular calendar year are determined by applying the MP-2015 mo1iality improvement scale to the above described tables.

The long-term expected rate of return on pension plan investments was determined using a model method in which the best-estimate ranges of expected future real rates of return (expected returns, net of investment expenses and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation.

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The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following tables:

Asset Class

Equity Fixed Income

Real Assets I Real Return

Asset Class

Equity Fixed Income

Real Assets Strategic Investments

Discount Rate

Target

Allocation 48.00%

28.50% 23.50%

Target

Allocation 43.00%

26.00%

21.00% 10.00%

Long-Tetm

Expected Real

Rate of Return 4.81%

1.72% 3.42%

Long-Term

Expected Real

Rate of Return 5.29% 2.23%

3.31% 5.73%

The discount rate used to measure the total pension liability for 2017 and 2016 is 7.25%. The projection of cash flows used to dete1mine the discount rate assumes that employer and employee contributions will be made at the rates agreed upon for employees and the actuarially determined rates for employers. Based on these assumptions, the pension plan's fiduciary net position was projected to be available to pay all projected future benefit payments of current active and inactive employees. Therefore, the long-te1m expected rate of return on pension plan investments was applied to all periods of projected benefit payment to determine the total pension liability.

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Changes in the Net Pension Liability

Increase (Decrease)

Total Pension Plan Fiduciary Net Pension

Liability (a) Net Position (b) Liability (a) - (b)

Balances at June 30, 2015 $ 5,182,637 $ 5,178,146 $ 4,491

Changes for 2016: Service Cost 289,867 289,867

Interest 383,108 383,108

Difference Between Expected and

Actual Experience 180,411 180,411

Contributions - Employer 351,572 (351,572)

Contributions - Employee Net Investment Income (18,952) 18,952 Changes of Assumptions 360,249 360,249

Benefit Payments, Including Refunds (83,027) (83,027)

Administrative Expenses (3,030) 3,030 Other Changes (15,191) 15, 191

Net Changes 1,130,608 231,372 899,236

Balances at June 30, 2016 6,313,245 5,409,518 903,727 Changes for 2017:

Service Cost 313,892 313,892 [nterest 461,799 461,799 Difference Between Expected and

Actual Experience 25,663 25,663 Contributions - Employer 402,480 (402,480)

Contributions - Employee Net Investment Income 664,100 (664,100)

Changes of Assumptions (56,982) (56,982)

Benefit Payments, Including Refunds (90,916) (90,916)

Administrative Expenses (3,541) 3,541 Other Changes (71,400) 71,400

Net Changes 653,456 900,723 (247,267)

Balances at June 30, 2017 $ 6,966,701 $ 6,310,241 $ 656,460

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Sensitivitv ofthe Net Pension Liability (Asset) to Changes in the Discount Rate

The following presents the net pension liability ofMJMEUC as ofJune 30, calculated using the discount rate of7.25%, as well as what the MJMEUC's net pension liability would be using a discount rate that is 1 percentage point lower or 1 percentage point higher than the respective discount rate.

Current Single Discount

Total Pension Liability Plan Fiduciary Net Position


Total Pension Liability Plan Fiduciary Net Position


Pension Plan Fiduciary Net Position

$

$

$

$

1% Decrease (6.25%)

8,004,902 6,310,241

1,694,661

1% Decrease (6.25%)

7,246,644 5,409,518

1,837, 126

Rate Assumption 1% Increase (7.25%) (8.25%)

$ 6,966,701 $ 6,104,087 6,310,241 6,310,241

$ 656,460 $ (206,154)

Current Single Discount Rate Assumption 1% Increase

(7.25%) (8.25%) $ 6,313,245 $ 5,537,452

5,409,518 5,409,518 $ 903,727 $ 127,934

Detailed information about the pension plan's net position is available in the separately issued LAGERS financial report.

Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions

For the years ended June 30, 2017 and 2016, MJMEUC recognized pension expense of $605, 118 and $518,676, respectively. MJMEUC reported deferred outflows of resources related to pensions from the following sources:

Differences in Experience Differences in Assumptions Excess Investment Returns Contributions Subsequent to the Measurement Date*

Total

$

$

2017 2016 234,780 $ 248,671 224,437 317,185

134,829 478,095 223,683 181,227 817,729 $ 1,225,178

========== * The amount reported as deferred outflows of resources resulting from contributions subsequent to the measurement date will be recognized as a reduction in the net pension asset for the years ending June 30, 2018 and 2017.

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The remaining amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows:

Year Ending June 30: 2018

2019 2020 2021 2022 Thereafter

Total

NOTE 11: COMMITMENTS AND CONTINGENCIES

Power Supply and Related Contracts

$

$

378,787 155,104 103,279 22,622 75,320 82,617

817,729

To ensure adequate power supplies for its members, MJMEUC enters into contracts with electric energy suppliers. These contracts have various terms covering minimum required megawatts of power to be purchased, prices to be paid and period covered.

Nonrenewable Resources

As of December 31, 2017, MJMEUC has long-term contracts with the Southwestern Power Administration and with Illinois Power Marking Co. ("IPM"), a subsidiary of Dynegy, Inc., and unit-specific contracts of 5-year lengths with the Sikeston Board of Municipal Utilities. IPM purchased certain power generation facilities from Ameren Energy Marketing Company ("Ameren") on December 2, 2013 and took over the power supply contract from Ameren. MJMEUC and IPM entered into an amended power supply contract on February 19, 2014.

In 2006, MJMEUC executed a long-term power purchase contract with Plum Point Energy Associates ("PPEA"), to purchase a share of the capacity and energy of PPEA' s interest in the Plum Point Energy Station. This is separate from MJMEUC's ownership interest in the plant (see Note 3). The power purchase contract entitles MJMEUC to 7 .52% (approximately 50 MW) of capacity and energy from Plum Point. The contract obligates MJMEUC to pay a monthly capacity payment which is based on the availability of the unit. MJMEUC has committed all of the capacity and energy from this power purchase contract to Mo PEP.

In January 2004, MJMEUC entered into a 40 year take-or-pay "Participation Agreement" with the Omaha Public Power District ("OPPD") to purchase a share of the capacity and energy of OPPD' s Nebraska City Unit 2 (''NC2"). The NC2 unit is a 663-megawatt (MW) coal-fired generating station solely owned by OPPD. MJMEUC is entitled to 55.23 MW, or 8.33%, of capacity and energy from NC2 and is committed to pay 8.33% ofNC2 project costs, including debt service, whether the unit is operating or not. MJMEUC's prorata share of the original total project costs, is being financed by OPPD via a revenue bond issuance, which was and may be pa1tially refunded from time to time. MJMEUC has pledged the revenues from sales of its share ofNC2 power generation output to its share ofNC2's capacity and energy, including bond debt service. MJMEUC also has certain limited step-up obligations for additional capacity and energy costs in the event another of the six other pmticipating public power districts and municipal utilities fail to pay obligations under its respective Participation Agreement. MJMEUC has committed all the capacity and energy from this Participation Agreement to MoPEP.

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In August 2013, MJMEUC executed a power purchase agreement with the City of Marceline, Missouri ("Marceline") for the purchase of 4 MW capacity and energy from Marceline's unit power purchase agreement for the energy it received from the Prairie State Energy Campus. On June 1, 2017, Marceline's unit power purchase agreement was transferred to MJMEUC and assigned to MoPEP.

Renewable Resources

In 2006, MJMEUC executed a long-term power purchase agreement with Loess Hills Wind Farm, located in the City of Rock Poti, Missouri, for the purchase of 5 MW of capacity and energy. MJMEUC has rights to purchase the entire capacity and energy from this wind generation facility, which is fully dedicated to MoPEP. MJMEUC has the right, but not the obligation, to extend this agreement through 2027.

In September 2008, MJMEUC executed a long-term power purchase agreement to purchase energy from a landfill gas-powered electric generating facility located near the City of Lamar, Missouri. The City of Lamar, a member ofMoPEP, is responsible for installing and operating the gas turbines with a total generating facility output of 3.2 MW that commenced commercial operation in June 2010. In December 2012, the capacity of the facility output was increased by an additional 2.4 MW to a total of 5.6 MW. The capacity of the facility output is again expected to increase by an additional 2.0 MW to 7.6 MW in the summer of2018. MJMEUC's power purchase agreement provides for MJMEUC to receive additional capacity added by the facility. The take-or-pay agreement provides for MJMEUC to receive the entire capacity and energy until the agreement expires in 2022. The capacity and energy are fully dedicated to MoPEP.

In February 2013, MJMEUC executed a long-term power purchase agreement to purchase all the capacity and energy from a solar power generating facility in the City of Butler, Missouri. MC Power Companies, Inc. is responsible for construction and operation of the 3.2 MW facility. MJMEUC has certain option rights to purchase the facility at the end of the seventh contract year, or at the end of any subsequent contract year thereafter. The facility went into commercial operation in March 2014. The capacity and energy are fully dedicated to MoPEP.

In September 2013, MJMEUC executed a long-term power purchase agreement with Marshall Wind Energy LLC for the purchase of 20.0 MW capacity and energy from its wind farm. The facility officially entered commercial operation on May 1, 2016. The capacity and energy are dedicated to MoPEP.

In January 2014, MJMEUC executed a long-term power purchase agreement with Black Oak Power Producers, LLC for the purchase of3.8 MW capacity and energy from its landfill-gas-powered electric generating facility located in Hartville, Missouri. The facility began generating power in October 2014. The capacity and energy are fully dedicated to MoPEP.

In August 2014, MJMEUC executed a long-term power purchase agreement for the rights to purchase all the capacity and energy from multiple solar power generating facilities in Missouri. The power generating facilities were constructed in five cities that are members ofMoPEP. MC Power Companies, Inc. is responsible for operation of the approximate total 12.8 MW of the five facilities. MJMEUC has ce1tain option rights to purchase each facility on or after the end of the seventh contract year of each facility. The capacity and energy are fully dedicated to MoPEP. Following is a summary of the five facilities:

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MoPEP Member City of Macon, Missouri

City of Trenton, Missouri

City of Rolla, Missouri City of Waynesville, Missouri

City of Marshall, Missouri

Facility Status

Commercial Operation May 2015 Commercial Operation October 2015

Commercial Operation May 2016 Commercial Operation August 2016

Commercial Operation December 2016

In May 2016, MJMEUC executed a long-term power purchase agreement for the rights to purchase all the capacity and energy from multiple solar power generating facilities in Missouri. The power generating facilities were to be constructed in up to seven cities that are members of MoPEP. MC Power Companies, Inc. is responsible for construction and operation of the approximate total 16 MW of the facilities. MJMEUC has certain option rights to purchase each facility on or after the end of the seventh contract year. The capacity and energy of each facility is fully dedicated to MoPEP. Below is a summary of the five facilities constructed or under construction, which make up the 16 MW:

MoPEP Member

City of Chillicothe, Missouri City of Lebanon, Missouri

City of Higginsville, Missouri City of Farmington, Missouri

City of El Dorado Springs, Missouri

Facility Status

Commercial Operation June 2017 Commercial Operation August 2017

Commercial Operation December 2017 Expected Commercial Operation in Summer 2018

Expected Commercial Operation in Summer 2018

In June 2016, MJMEUC executed a long-term agreement with Grain Belt Express Clean Line LLC ("Grain Belt Express") to deliver energy up to 200 MW of wind generated power in Kansas into a MISO interconnection located in Missouri. This contract is contingent on the approval of the Missouri Public Service Commission ("MOPSC") of the Grain Belt Express project, which was denied by the MOPSC and is currently in front of the Missouri Supreme Court. Grain Belt Express won it case in the appeals court and MJMEUC is waiting for final project approval. This agreement will begin when the transmission project begins commercial operations and can provide the transmission service to MJMEUC. The initial term of this agreement is for 15 years and MJMEUC has the option to extend the agreement up to an additional 10 years.

In January 2017, MJMEUC executed a long-term agreement with Iron Star Wind Project, LLC for the purchase of a minimum of 100 WM and up to 300 MW capacity and energy from its Iron Star Project. The Project is in Kansas and the energy generated by the project will be transmitted to a MISO interconnection point in Missouri via the Grain Belt Express project discussed above. This agreement is contingent upon the approval of the Grain Belt Express program by the MOPSC and its construction. The initial delive1y date of energy is within 3 days of the available date of the Grain Belt Express project. The initial term of this agreement is for 20 years and MJMEUC has the option to extend the agreement for two additional 5-year periods.

NOTE 12: SUBSEQUENT EVENTS:

MJMEUC expects to complete a $26,605,000 of Power Supply System Revenue Bonds (Mo PEP Facilities) Series 2018A issuance for the purchase of an additional 8.2% interest (50 MW) in the Dogwood Energy Center, which is scheduled to occur by May 31, 2018. This brings MJMEUC's ownership interest to 16.4% or 100 MW. This additional ownership interest in Dogwood, along with MJMEUC's initial ownership interest, is for the energy needs of Mo PEP members and MJMEUC will recover all costs incurred from through rates and charges.

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128

REQUIRED SUPPLEMENTARY INFORMATION

129


LAGERS (PENSION PLAN) SCHEDULE OF CHANGES IN NET PENSION LIABILITY

AND RELATED RATED RATIOS Years Ended December 31, 2017, 2016 and 2015

Total Pension Liability 2017 2016

Service Cost $ 313,892 $ 289,867

Interest on the Total Pension Liability 461,799 383,108

Benefit Changes Difference Between Expected and Actual Experience 25,663 180,411

Assumption Changes (56,982) 360,249

Benefit Payments (90,916) (83,027)

Refunds

Net Change in Total Pension Liability 653,456 1,130,608

Total Pension Liability, Beginning 6,313,245 5,182,637

Total Pension Liability, Ending $ 6,966,701 $6,313,245

Plan Fiduciary Net Position Contributions - Employer $ 402,480 $ 351,572

Contributions - Employee Pension Plan Net Investment Income 664,100 (18,952)

Benefit Payments (90,916) (83,027)

Refunds Pension Plan Administrative Expense (3,541) (3,030)

Other (71,400) (15,191)

Net Change in Plan Fiduciary Net Position 900,723 231,372

Plan Fiduciary Net Position, Beginning 5,409,518 5,178,146

Plan Fiduciaiy Net Position, Ending $ 6,310,241 $5,409,518

Employer's Net Pension Liability $ 656,460 $ 903,727

Plan Fiduciary Net Position as Percentage of Total Pension Liability 90.58% 85.69%

Covered Employee Payroll $ 2,730,938 $2,484,808

Net Pension Liability as a Percentage of Covered Employee Payroll 24.04% 36.37%

Note: This schedule will ultimately contain ten years of data as it becomes available.

52

2015 $ 262,790

335,167

119,228

(55,925)

661,260

4,521,377

$ 5,182,637

$ 359,868

92,005

(55,925)

(3,169)

177,079

569,858

4,608,288

$ 5, 178, 146

$ 4,491

99.91%

$2,399,441

0.19%

130

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131

SUPPLEMENTARY INFORMATION

132


COMBINING STATEMENT OF NET POSITION Non-Major Funds December 31, 2017

Alliance General

Fund Fund Total

ASSETS AND DEFERRED OUTFLOWS OF RESOURCES CAPITAL ASSETS

Plant, Buildings, and Equipment in Service $ 1,310,418 $ 168,959 $ 1,479,377 Total Capital Assets, Net 1,310,418 168,959 1,479,377

CURRENT ASSETS Cash and Cash Equivalents 339,005 1,275,094 1,614,099 Accounts Receivable, Net 1,960 130,734 132,694 Due from Other Funds 269,543 269,543 Prepaid Expenses 2,020 70,126 72,146

Total Current Assets 342,985 1,745,497 2,088,482

Total Assets 1,653,403 1,914,456 3,567,859

DEFERRED OUTFLOWS OF RESOURCES 817,729 817,729

Total Assets and Deferred Outflows of Resources $ 1,653,403 $ 2,732,185 $ 4,385,588


NONCURRENT LIABILITIES Long-Term Debt, Net of Current Maturities $ 1,059,000 $ $ 1,059,000 Security Deposits Held 500,000 500,000 Net Pension Liability 656,460 656,460

Total Noncurrent Liabilities 1,059,000 1,156,460 2,215,460

CURRENT LIABILITIES

Accounts Payable 51,707 99,959 151,666 Accrued Payroll and Payroll Taxes 40,952 54,880 95,832 Current Maturities, Long-Term Debt 48,000 48,000 Accrued Interest Payable on Debt 1,528 1,528

Total Current Liabilities 142,187 154,839 297,026 Total Liabilities 1,201,187 1,311,299 2,512,486

Net Position Net Investment in Capital Assets 203,418 168,959 372,377 Unrestricted 248,798 1,251,927 1,500,725

Total Net Position 452,216 1,420,886 1,873,102 Total Liabilities, Deferred Inflows of Resources and Net Position $ 1,653,403 $ 2,732,185 $ 4,385,588

54 133


COMBINING STATEMENT OF NET POSITION Non-Major Funds December 31, 2016

Alliance General

Fund Fund Total

ASSETS AND DEFERRED OUTFLOWS OF RESOURCES CAPITAL ASSETS

Plant, Buildings, and Equipment in Service $ 1,347,602 $ 237,672 $ 1,585,274 Construction Work in Progress

Total Capital Assets, Net 1,347,602 237,672 1,585,274

CURRENT ASSETS Cash and Cash Equivalents 289,041 556,638 845,679 Accounts Receivable, Net 57,680 57,680 Due from Other Funds 744,979 744,979 Prepaid Expenses 14,480 83,901 98,381

Total Current Assets 303,521 1,443,198 1,746,719

Total Assets 1,651,123 1,680,870 3,331,993

DEFERRED OUTFLOWS OF RESOURCES 1,225,178 1,225,178

Total Assets and Deferred Outflows of Resources $ 1,651,123 $ 2,906,048 $ 4,557,171


NONCURRENT LIABILITIES Long-Term Debt, Net of Current Maturities $ 1,107,000 $ $ 1,107,000 Net Pension Liability 903,727 903,727

Total Noncunent Liabilities 1,107,000 903,727 2,010,727

CURRENT LIABILITIES

Accounts Payable 8,109 394,076 402,185 Accrued Payroll and Payroll Taxes 40,753 49,202 89,955 Unearned Revenue 4,569 4,569 Current Maturities, Long-Term Debt 48,000 48,000

Accrued Interest Payable on Debt 1,591 1,591 Total Current Liabilities 103,022 443,278 546,300

Total Liabilities 1,210,022 1,347,005 2,557,027

Net Position Net Investment in Capital Assets 192,602 237,672 430,274 Restricted Unrestricted 248,499 1,321,371 1,569,870

Total Net Position 441,101 1,559,043 2,000, 144 Total Liabilities, DefetTed Inflows of Resources and Net Position $ 1,651,123 $ 2,906,048 $ 4,557,171

55 134


COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION Non-Major Funds

Year Ended December 31, 2017

Alliance General Fund Fund Total

OPERA TING REVENUES

Transmission $ $ 983,707 $ 983,707

Energy Services 195,564 195,564

Transfers from 1'1Afv'IU and MGCM 112,511 112,511

Conferences and Member Training 120,060 452,367 572,427

Other 20,805 164,891 185,696

Total Operating Revenues 253,376 1,796,529 2,049,905

OPERATING EXPENSES Transmission 962,537 962,537

Personnel Services and Staff Support 292,942 1,216,159 1,509,101

Professional Services 749,762 749,762

Rental and Maintenance 117,235 3,833 121,068

Utilities 58,536 58,536



Depreciation 52,696 96,044 148,740

Other Operating Expenses 209,358 393,381 602,739

Total Operating Expenses 830,677 3,619,245 4,449,922

Operating Income (577,301) (1,822,716) (2,400,017)

NONOPERATING REVENUES (EXPENSES)

Investment Return 51,384 51,384 Interest and Fees Expense (52,654) (82,125) (134,779)

Net Nonoperating Revenues (Expenses) (52,654) (30,741) (83,395)

OTHER FINANCING SOURCES (USES) Interfund Operating Transfers 641,070 1,715,300 2,356,370

Increase in Net Position 11,115 (138, 157) (127,042)

Net Position, Beginning of Period 441,101 1,559,043 2,000,144

Net Position, End of Period $ 452,216 $ 1,420,886 $ 1,873,102

56 135


COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION Non-Major Funds



OPERA TING REVENUES

Transmission $ $ 1,036,533 $ 1,036,533


Transfers from lvIA1vIU and MGCM 105,448 105,448


Other 20,788 169,700 190,488

Total Operating Revenues 247,281 1,744,084 1,991,365

OPERA TING EXPENSES Transmission 1,015,305 1,015,305

Personnel Services and Staff Support 249,082 898,829 1,147,91 l

Professional Services 883,572 883,572

Rental and Maintenance 104,737 61,420 166,157

Utilities 54,803 54,803



Depreciation 50,582 85,457 136,039

Other Operating Expenses 173,886 340,783 514,669

Total Operating Expenses 749,950 3,444,016 4,193,966

Operating Income (502,669) (1,699,932) (2,202,601)

NONOPERA TING REVENUES (EXPENSES)

Investment Return 14,061 14,061 Interest and Fees Expense (54,826) (82,350) (137,176)

Net Nonoperating Revenues (Expenses) (54,826) (68,289) (123,115)

OTHER FINANCING SOURCES (USES) Inte1fund Operating Transfers 573,440 1,812,260 2,385,700

Increase in Net Position 15,945 44,039 59,984

Net Position, Beginning of Period 425,156 1,515,004 1,940, 160

Net Position, End of Period $ 441,101 $ 1,559,043 $ 2,000,144

57 136


COMBINING STATEMENT OF CASH FLOWS Non-Major Funds



OPERA TING ACTIVITIES

Receipts from Power and Transmission Sales $ $ 921,923 $ 921,923

Receipts from other Revenue Sources 246,847 1,276,988 1,523,835

Payments for Power Purchases and Other Goods and Services ( 428,981) (2,087,384) (2,516,365)

Payments to Employees for Services and Benefits (292,743) (1,050,299) (l,343,042)

Net Cash (Used) by Operating Activities (474,877) (938,772) (1,413,649)

NONCAPITAL FINANCING ACTIVITIES Interfund Operating Transfers 641,070 1,715,300 2,356,370

Net Cash Provided by Noncapital Financing Activities 641,070 1,715,300 2,356,370

CAPITAL AND RELATED FINANCING ACTIVITIES

Principal Payments on Long-Tenn Debt (48,000) (48,000)

Payments oflnterest and Fees on Debt (52,717) (82, 125) (134,842)

Acquisition and Construction of capital Assets (15,512) (27,331) (42,843)

Net Cash Used by Capital and Related Financing Activities (116,229) (109,456) (225,685)

INVESTING ACTIVITIES

Investment Income 51,384 5l,384

Net Cash Provided by Investing Activities 51,384 51,384

Net Increase in Cash and Cash Equivalents 49,964 718,456 768,420

Cash and Cash Equivalents at Beginning of Year 289,041 556,638 845,679

Cash and Cash Equivalents at End of Year $ 339,005 $ 1,275,094 $ 1,614,099

RECONCILIATION OF OPERATING INCOME TO NET

CASH PROVIDED BY OPERATING ACTIVITIES

Operating Income $ (577,301) $ (1,822,716) $ (2,400,017)

Adjustments to Reconcile Operating Income

to Net Cash Provided by Operating Activities:

Depreciation 52,696 96,044 148,740

Adjustments for (Increases) Decreases in Assets and

Increases (Decreases) in Liabilities:

Accounts Receivable ( 1,960) (73,054) (75,014)

Due from Other Funds 475,436 475,436

Prepaid Expenses 12,460 13,775 26,235

Accounts Payable 43,598 (294,117) (250,519)

Accrued Payroll and Payroll Taxes 199 5,678 5,877

Deposits Held 500,000 500,000

Unearned Revenue (4,569) (4,569)

Net Pension Liability (247,267) (247,267)

Deferred Outflows of Resources 407,449 407,449

Net Cash Used by Operating Activities $ (474,877) $ (938,772) $ (1,413,649)

58 137


COMBINING STATEMENT OF CASH FLOWS Non-Major Funds



OPERATING ACTIVITIES

Receipts from Power and Transmission Sales $ $ 1,095,814 $ 1,095,814

Receipts from other Revenue Sources 250,645 490,516 741,161

Payments for Power Purchases and Other Goods and Services (459,796) (2,355, 149) (2,814,945)

Payments to Employees for Services and Benefits (215,815) (728,799) (944,614)

Net Cash Used by Operating Activities (424,966) (l,497,618) (l,922,584)

NONCAPITAL FINANCING ACTIVITIES Interfund Operating Transfers 573,440 1,812,260 2,385,700

Net Cash Provided by Noncapital Financing Activities 573,440 1,812,260 2,385,700

CAP IT AL AND RELATED FINANCING ACTIVITIES

Principal Payments on Long-Tem1 Debt (48,000) (48,000)

Payments ofinterest and Fees on Debt (54,873) (82,350) (137,223)

Acquisition and Construction of capital Assets (17,871) (34,762) (52,633)

Net Cash Used by Capital and Related Financing Activities (120,744) (117,112) (237,856)

INVESTING ACTIVITIES

Investment Income 14,061 14,061

Net Cash Provided by Investing Activities 14,061 14,061

Net Increase in Cash and Cash Equivalents 27,730 211,591 239,321

Cash and Cash Equivalents at Beginning of Year 261,311 345,047 606,358

Cash and Casli Equivalents at End of Year $ 289,041 $ 556,638 $ 845,679

RECONCILIATION OF OPERATING INCOME TO NET

CASH PROVIDED BY OPERA TING ACTIVITIES

Operating Income $ (502,669) $ (1,699,932) $ (2,202,601)

Adjustments to Reconcile Operating Income

to Net Cash Provided by Operating Activities:

Depreciation 50,582 85,457 136,039

Adjustments for (Increases) Decreases in Assets and

Increases (Decreases) in Liabilities:

Accounts Receivable 6,913 108,263 115,176

Due from Other Funds (266,017) (266,017)

Prepaid Expenses (8,455) (38, 112) (46,567)

Accounts Payable (1,055) 142,693 141,638

Accrued Payroll and Payroll Taxes 33,267 9,044 42,311

Unearned Revenue (3,549) (3,549)

Net Pension Liability 899,236 899,236

Deferred Outflows of Resources (738,250) (738,250)

Net Cash Provided (Used) by Operating Activities $ (424,966) $ ( 1,497 ,618) $ (l ,922,5 84)

59 138


SCHEDULE OF CHANGES IN RESTRICTED BOND ACCOUNTS HELD IN TRUST BY THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.


Change in

Fair Value Change in Interest Fair Value 12/3112016 Receipts Disbursements Fair Value Receivable 12/31/2017

Power Project Revenue Bonds (Plum Point Project) Series 2006, Series 2009A, Series 2009B, Series 2014A and Series 2015A

Project Fund $ 92 $ $ $ $ $ 92 Debt Service Fund 14,698,369 22,130,660 21,900,208 17,124 14,945,945

Debt Service Reserve Account 24,332,359 482,861 (109,686) 24,705,534

Total $ 39,030,820 $ 22,613,521 $ 21,900,208 $ (109,686) $ 17,124 $ 39,651,571

Power Project Revenue Bonds (Iatan 2 Project) Series 2006A, 2006B, 2009A, 2009B, Series 2014A and Series 2015A

Debt Service Fund Tax Exempt $ 11,215,546 $ 18,632,527 $ 18,447,581 $ $ 43,573 $ 11,444,065


Total $ 30,358,689 $ 18,885,166 $ 18,447,58 l $ (102,183) $ 43,573 $ 30,737,664

Power Project Revenue Bonds (Prairie State Project ) Series 2007 A, 2007B, 2009A, 2009B, 2010A, 2010B, 2015A and 2016A

Cost of Issuance Fund $ $ 204,277 $ $ $ $ 204,277

Escrow Bond Fund 31,666,503 (30,672) 9,597 31,645,428

Debt Service Fund Tax Exempt 27,707,749 56,358,087 66,148,716 210,773 18,127,893

Debt Service Reserve Accounts 50,408,160 1,223,991 (135,627) 51,496,524 Total $ 78,115,909 $ 89,452,858 $ 66,148,716 $ (166,299) $ 220,370 $ 101,474,122

Power Supply System Revenue Bonds (Fredericktown) Series 2011

Debt Service Fund $ 122,522 $ 1,277,082 $ l,273,363 $ $ (79) $ 126,162


Total $ 1,455,199 $ 1,305,421 $ 1,273,363 $ (2,892) $ (79) $ 1,484,286

Power Supply System Revenue Bonds (Dogwood Energy Center) Series 2012

Debt Service Fund $ 1,616,086 $ 2,322,523 $ 2,814,050 $ $ 326 $ 1,124,885

Debt Service Reserve Account 2,418,483 51,918 (5,823) 2,464,578 Total $ 4,034,569 $ 2,374,441 $ 2,814,050 $ (5,823) $ 326 $ 3,589,463

Power Supply System Revenue Bonds (Mo PEP Facilities) Series 2017

Cost ofissuance Fund $ $ 203,502 $ 47,000 $ $ $ 156,502

Total $ $ 203,502 $ 47,000 $ $ $ 156,502

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