C150396 Increase Approval Letter

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Northern Colorado Water Conservancy District Agenda Item 28b November 19-20,2014 Board Meeting (Updated November 21, 2014) Page 4 of 5 Updated Financial Analysis The Enterprise qualifies for a 2% Hydropower interest rate for a 30 year term. 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: The Enterprise has successfully constructed the $6.7M Carter Hydropower plant with the two loans shown in Table 3 and made two annual loan payments. TABLE 3: EXISTING ENTERPRISE DEBT Maturity Remaining Annual Collateral Loan Date Balance Payment CO Water Resources and Power Development Authority 2032 $1,918,000 $122,313 Pledge of System (Carter Lake Hydro Project) Revenues Northern Colorado Water Conservancy District 2032 $4,539,000 $289,516 Pledge of System (Carter Lake Hydro Project) Revenues TOTAL $6,457,000 $411,829 TABLE 4: FINANCIAL RATIOS11l Carter Lake (2) Granby Financial Ratio Hydro Hydro(3) Projections Projections Operating Ratio (revenues/expenses) 104% 109% weak: <100% - average: 100% - 120% - 'strong: >120%I (Average) (Average) $557K/$537K $349K/$320K Debt Service Coverage Ratio 105% 113% (revenues-expenses)/debt service (Average) (Average) weak: <100% - average: 100% - 120% - strong: >120°/I $557K $125K $349K-$91K $412K $229K Cash Reserves to Current Expenses weak: <50%II- average: 50% - 100% strong: >1001 N/A N/A(4) (1) The District provided audited financials for the Enterprise for 2012 and 2013 however staff has determined the information is not directly applicable since the Carter Lake project was under construction and not yet in repayment on its loans. It also did not reflect two full years of power production.