Citizens’ Academy Kathy Viehe GRU Interim General Manager November 12, 2014

The Basics  GRU is a multi-service, community- owned utility providing electric (93,000 customers), water, wastewater, natural gas and telecommunications services  Mission: To provide safe, reliable, competitively priced utility services in an environmentally responsible manner to enhance the quality of life in our community  Core Business Values: Delivering Customer Value through Safety, Efficiency, Environmental Responsibility and Professionalism

3 Measures of Success  Service reliability compares well  Safe drinking water  Responsive to customers – local call center, employees live here  Natural gas rates among lowest in the state  Electric rates are high, but aggressively pursuing cost reductions and revenue enhancement  Excellent financial standing

4 GRU is a Big Business  $413 million annual operating budget  $1.6 billion in assets  $948 million outstanding debt  Typical for a generating/multi-service utility  Among the highest bond ratings for municipal utilities from Fitch, Standard & Poor’s, and Moody’s

The Challenge: Electric Rates

How Did We Get Here?  Lower-than-forecast customer growth  Lower-than-forecast electric sales  Loss of wholesale sales  Seminole contract  Market sales  Lower energy use in Florida and nationally

How Did We Get Here?  Customer conservation combined with GRU conservation programs  Federal standards improving appliance efficiency and state building codes  Addition of distributed generation (Solar Net Metering)  Loss of Business Partners’ Rate discount  Increased expenses (O&M, personnel)  Integration of new generation (GREC PPA)

Electric Sales (MWh)

O&M Expenses: Past 10 Years

2015 Business Plan  Focuses on three key areas:  Maintaining our financial strength  Providing excellent service  Developing engaged and proficient employees  Major focus on cost containment and increasing revenues  South Energy Center expansion  Wholesale sales  Providing new services/products to customers

Hot Topics  EPA regulation of carbon dioxide  Managing water resources  Regulatory compliance with wastewater standards  General manager search

Carbon Regulation  EPA’s proposed “Clean Power Plan” calls for Florida utilities to reduce carbon emissions by 38 percent by 2030  Concerns among municipal utilities:  Technical issues  No credit for previous efficiency and emission control upgrades  Potential effect on customer bills  GRU is tracking the policy’s progress and working with other utilities to express concerns

Water Management Consumptive Use Permit  20-year permit approved in September authorizing groundwater withdrawals up to 30 mgd, which is the same amount permitted since 2009  Project 25 percent increase in customers over this period  Groundwater withdrawals mitigated due to customer conservation efforts, increased use of reclaimed water and aquifer recharge projects

Wastewater Regulatory Compliance Biosolids Recycling  Currently converted into fertilizer and applied to a local farm to supplement farming needs  Estimated cost of $23 million to change disposal method to comply with regulations  Dewatering facility under construction

General Manager Search  Job description approved by City Commission in July  Currently evaluating proposals from search firms  Hope to have new GM in place by spring

UF Energy Supply  GRU provides water and natural gas service to UF  Also provides electricity off- campus, making UF one of our largest customers  UF’s steam agreement with Duke Energy expires soon  GRU stands ready to assist UF with its on-campus electrical needs

The GRU Bill  Can include the following utility services:  Electric  Water  Wastewater  Natural gas  Also can include City of Gainesville services:  Stormwater  Garbage/refuse  The quiz – How many kWh did you use last month?  Know your bill

Join Our Advisory Committee  New advisory committee to help GRU with customer communication efforts  Accepting applications  Sign up at gru.com/ccag 19

Employee Recruitment & Retention  Currently more than 800 GRU employees  Challenges:  Many experienced, long-term employees set to retire  Lack of depth in workforce; expectation to do more with less  Goal:  Develop and implement ongoing succession-planning process to address current and future talent needs in order to continue providing safe, reliable service for our customers

Employees are the Core of the Services We Provide

Questions? 22