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Northern Colorado Water Conservancy District Agenda Item 34b May 9,2014(Updated May 23,2014) Page 5 of 6 Schedule: The anticipated Project schedule is to finalize the LOPP and finalize the PPA with Mountain Parks Electric, Inc. by October 2014. The turbine equipment will be ordered by the end of 2014. Construction will occur in the summer/fall of 2015 and is expected to be operational by May 2016. Financial Analysis The District qualifies for the hydroelectric interest rate of 2.0% for a 30-year term. The District is requesting 90% of the Project costs be funded by the CWCB. The Colorado Water Resources and Power Development Authority (CWRPDA) also has a hydroelectric loan program and was considered as a loan source; however, its terms are 20-years at a 2.0%. Due to the shorter repayment period, the CWRPDA funding terms made the Project financially infeasible. CWRPDA has agreed to allow the CWCB to be the sole lender on this Project. (See attached letter from Michael Brod, CWRPDA Executive Director, dated May 7, 2014.) TABLE 2: FINANCIAL SUMMARY Total Project Cost $5,669,340 Borrower Contribution(approximately 10%) $585,000 CWCB Loan Amount(90%) $5,084,340 CWCB Loan Amount(Including 1% Service Fee) $5,135,183 Annual CWCB Loan Payment $229,286 Annual CWCB Loan Obligation(Including 10% Reserve) $252,214 Project Cost per kilo-watt hour(5.0 MW/year) $1.13 Creditworthiness: Northern Water's hydropower enterprise has two existing loans for the Carter Lake Hydropower Project as shown in Table 3. TABLE 3: EXISTING ENTERPRISE DEBT Maturity Remaining Annual Collateral Loan Date Balance Payment CWRPDA Carter Hydro Pledge of power Project 2032 $1,918,000 $122,313 revenues Pledge Northern Water 2032 $4,539,000 $289,516 revenues n power enues TOTAL $6,457,000 $411,829 Project Revenues and Expenses: Northern Water's PPA with Mountain Parks Electric, Inc. is a 30-year contract. The Project is designed to generate 4,800,000 to 5,000,000 kilowatt-hours per year. Therefore, revenues are projected to be approximately $350,000 to $390,000 annually. Project expenses include a Mountain Parks Electric, Inc. capacity charge of$2 per kilowatt per month($13,000 annually), Reclamation LOPP charge of 2 mills per kilowatt-hour(beginning at $11,774 annually and escalating at 1.5%per year) and operations and maintenance estimated at $50,000 annually (escalating at 1.5%per year).