1. Ed Gerak, Executive Director
Arizona Power Authority
APA/Hoover 101
Ed Gerak, Executive Director
April 17, 2017

2. Apa past, present, and future (APA history)
March 27 - Arizona Power Authority created
$100,000 appropriated to operate APA
Hoover Dam construction begins
Contracted with reclamation for transmission from Davis Dam.
1928
1931
1936
1944
1948
1950
Boulder Canyon Act signed
Hoover Dam power produced for the first time (3 of the 17 units on line)
$150,000 appropriated
Arrangements to install two 82,500kw units at Hoover Dam and acquire transmission from Hoover

3. Apa past, present, and future (APA history)
Due to Colorado River Power being short, APA purchased thermal power and resold it to Nevada
Land purchased for APA headquarters building
APA directed to take steps to build Bridge Canyon Dam or other sites
April – First power delivered from Hoover Dam
1951
1952
1953
1954
Mid-1950’s
1956
APA moved from a planning to an operating organization
March - First Colorado River power (Davis Dam) delivered
APA executed a contract with APS to purchase 40,000kw from Saguaro Power Plant
APA agreed to wheel 180,000 kw for APS.
APA enters into thermal power contracts with its customers.
Completed statewide pooling of power generation and transmission

4. Apa past, present, and future (APA history)
Application to Federal Power Commission to build, operate and maintain Marble Canyon and Bridge Canyon Dams
Arizona, Nevada, and California negotiations over Bridge Canyon Dam lasted about 6 months
Marble Canyon Dam project on the Colorado River killed by the federal government
APA filed an application to construct the Montezuma Pumped Storage Project
1957
1958
1960
1962
1966
Poor hydro conditions so purchases of thermal power needed to deliver allocated Hoover Dam power to customers
Competition for hydro-generation is fierce and the APA made plans to expend in excess of $100 million for transmission facilities
Glen Canyon Dam completed

5. Apa past, present, and future (APA history)
Montezuma Pumped Storage Project abandoned (price/no peaking needed)
APA filed for an allotment of Colorado River Storage Project Power
Central Arizona Project authorized
1967
1968
1969
1971
1972
1982
Legislation enacted to establish Arizona’s first State water and power plan
APA continued efforts to develop Montezuma, Bridge canyon, and Havasu.
FPC granted APA license for construction of the Montezuma Pumped Storage Project
APA awarded permit to study the Havasu Project (portion of CAP)

6. Apa past, present, and future (APA history)
Shelved a plan to build a 500mw underground power plant at Hoover
Push by WAPA for Integrated Resource Planning (5-year updates)
Hoover Power Plant Act of 1984 signed by Ronald Reagan.
Increased the capacity by 528mw. APA share 377mw
SRP replaces Western as power scheduling agent
1983
1984
1987
1988
1990
1992
Hoover Dam spillways were used for the first and last time in history
ED5 Substation destroyed by flooding (APA rebuilt Feb 1984)
June 1 - Signed 30-year contracts with Western (power & transmission).
APA contracts with 39 customers (22 new).
Arizona, Nevada, and California reps attend first E&OC meeting

7. Apa past, present, and future (APA history)
Orders 888 and 889 (impacting transmission access) under review by AP and customers
APA and SRP sign a new scheduling entity agreement, expired 2011
50th annual report prepared by the APA staff
1994
1996
1997
2004
2005
2008
April 19th - APA celebrates its 50th birthday
APA worked with utilities, marketers, and customers from Arizona, New Mexico, Nevada, west Texas, Colorado to evaluate the feasibility of an ISO, Desert Southwest Transmission and Reliability Operator (Desert Star)
Voluntary lower Colorado River Multi-Species Conservation Program was adopted by the Secretary of the Interior for Arizona, California, and Nevada. This is a 50-year agreement, $626 million.

8. Apa past, present, and future (where are we today?)
Waiting for commissioner and customer input and direction for the future
Hoover power contract negotiations begin
2015
2016
2016
September 30 - USBR commemorated Hoover Dam’s 75th anniversary
May 2016 contract negotiations completed
September 16th - Contracts with customers and Western signed

9. What is “ARS Title 30”?
The authority is a body corporate and politic with an official seal
The purposes of the authority are effectuated through the commission
The commission consists of five members appointed by the governor for six year terms who take and subscribe to an official oath to perform duties of the office
The authority must cooperate with the state land department and the director of water resources and will cooperate in the planning of the hydroelectric power generation and use of the states water resources
All meetings of the commission are public

10. What is “ARS Title 30”?
The authority has the powers and duties formerly held by the Colorado river commission including:
Gathering of data regarding projects for the development and use in the state of power from the waters of the Colorado river
Discovery of the potential uses of power and encouragement of feasible enterprises looking at utilization of Colorado river power
Any other rights of the Colorado river commission pertaining to the development and sale of power, including a permit to construct Bridge Canyon Dam, Etc.

11. What is “ARS Title 30”?
The authority shall bargain for, take, and receive electric power developed on the Colorado river
The authority shall encourage activities deemed to be feasible for the production of electric power from solar, nuclear, or geothermal energy and shall take and receive this power in its own name on behalf of the state
The authority may acquire or construct and operate electric transmission systems, standby and auxiliary plants and facilities and generate, produce, sell at wholesale, transmit and deliver such electric power to qualified purchasers

12. What is “ARS Title 30”?
If conducive to efficiency and convenience the authority may enter into agreements for interconnection or pooling of projects, plants, systems, or facilities of other distributors of power
The authority may purchase, transmit, or deliver for the state, or any person or operating unit, power generated or produced from projects or works owned or operated by the united states
A purchaser under this title must obtain a power purchase certificate
The authority is not authorized to engage in retail distribution of power

13. What is “ARS Title 30”?
The authority shall formulate plans and development programs for the practical, equable, and economic utilization of electric power placed under its supervision and control
The authority may make application for, obtain, hold, and use permits and licenses from the united states or any of its agencies for power sites, rights-of- way, rights and uses and other privileges
The authority may exercise the privilege and right of eminent domain and may condemn private property for public use

14. What is “ARS Title 30”?
The authority shall take steps as may be necessary, convenient, or advisable to construct, operate, and maintain at the bridge canyon dam site or other sites, dams for the generation of electrical energy and in connection therewith the facilities in or at the site of said dams for the storage and diversion of water
The authority may establish appropriate rate schedules for its different classes of service or for different zones of service
The authority shall designate certain sections of main transmission lines and facilities in the state for delivery of Colorado river power to distribution centers including lines constructed or acquired by the authority

15. What is “ARS Title 45 – chapter 10”?
Development of an adequate water supply for agricultural, municipal, industrial, and fish and wildlife uses within Arizona is vital to the well being, health, and prosperity of the people of the state
Development of the states power resources is an essential and integral part of utilizing state water resources
Development of Power resources and the use of energy therefrom promotes general welfare, health, safety, and prosperity of the people of Arizona
Note: Construction of a dam or enlargement of an existing dam shall not be commenced until a written approval of plans and specification has been obtained from the director of water resources

16. What is “ARS Title 45 – chapter 10”?
Established a state water and power plan consisting of (naming only a few):
Central Arizona Project
Granite reef aqueduct from lake havasu to central Arizona
Salt-gila aqueduct from Granite Reef to Tucson
Alternates to Orme dam: New Waddell, Cliff, Mods to Roosevelt/st. mtn. dams
Montezuma pumped storage project
The authority’s rights to hoover dam power, including the uprating
See (also see Issuance of bonds and notes)

17. Apa past, present, and future (where are we today?)
2011 – Legislation passed to proceed with Hoover Power allocation
2012 – APA allocation process started
2015 – July 19th allocation process completed
2015 – July contract negotiations began
2016 – May contract negotiations completed
2016 – September 16th 50-year Contracts signed by APA and customers

18. Arizona power authority
Established by the State of Arizona in 1944 to acquire and market Hoover power and other renewable resources
5 Commissioners appointed by the Governor to serve six year non-concurrent terms
Seasoned Board of Commissioners with extensive experience in Arizona power, water, agricultural and business issues
Consistent delivery of low cost hydro power to customers.

19. Arizona power authority
Hoover power provided to 63 Arizona customers
Electrical Districts
Irrigation Districts
Water Conservation Districts
Power and Water Districts
Municipalities
Serve residential, commercial, agricultural and
irrigation loads throughout Arizona
Current Hoover Power allocation
50-year take Or Pay contracts
Terminate September 30, 2067

20. Largest APA Power Customers
Arizona power authority
Largest APA Power Customers
Central Arizona Water Conservation District
- Largest APA customer
- Manages Central Arizona Project water resources
- Delivered 1.6 million acre feet of water in 2012
- Hoover is lowest cost pumping energy resource
- Accounts for 30% of APA’s customer sales revenue
Salt River Project
-2nd largest APA customer
- Among largest public power utilities in the nation
- Serves 1 million customers in greater Phoenix area
- Provides scheduling and seasonal power banking
arrangements for Authority and customers
- Hoover is a low cost supplemental power resource
- Accounts for 13% of APA’s customer sales revenue

21. APA Customer Delivery Points & Contract Transmission System
Hoover Generators
Mead Sub 230 kV
APA Customer Delivery Points & Contract Transmission System
Parker Sub 230 kV
Davis Sub 230 kV
Wellton-Mohawk
CAP
Aguila & McMullen
Northeast
Phoenix
CAP
Buckeye Sub
230 kV
Westwing Sub 230 kV
West Central Arizona
Buckeye Recipients*
Pinnacle Peak Sub 230 kV
Liberty Sub 230 kV
Pinnacle Peak Recipients**
CAP
*Buckeye Recipients:
Buckeye WCD, ED 7, ED 8, Harquahala PD, Maricopa WD, Roosevelt ID, Tonopah ID
ED 6
Maricopa Sub 115 kV
Coolidge Sub 230 kV
ED 1 & ED 3
ED 2
ED 4
ED 2
**Pinnacle Peak (PPK) Recipients:
CAP, ED 5 Maricopa, Chandler Heights ID, ED 6, RID, OWCD, Page, QCID, RWCD, SRP, STID, Wickenburg
CAP
ED 5p
C-M & ED 5p
C-M, Avra, Silverbell
CAP
Southeast Arizona
Safford Thatcher

22. Arizona power authority
Hoover Power Allocation Act of 2011
Allocated Hoover Power to current Hoover Contractors to September 30, 2067
95% of existing capacity and energy entitlement allocated proportionately to AZ, CA and NV
5% of capacity and energy entitlement (Schedule D power) to be allocated to new entities in states
APA engaged in allocation process with existing customers and new applicants

23. Hoover Dam Power Production Data
Arizona power authority
Hoover Dam Power Production Data
Generator Description
17 turbine generators
61.5 MW – 130 MW unit capability
2,074 MW combined installed capacity
Power Production
4.2 billion kWh average annual production
Dispatched as peaking power
100 MW per min. ramp-up to full capability
590 ft.(1,220 ft. AMSL) max. hydraulic head
303 ft.(950 ft. AMSL) min. hydraulic head
Continuous power production since 1936
Ranked first in peer hydro generation study

24. Reclamation and Western Revenue Requirements at Hoover Dam
Arizona power authority
Reclamation and Western Revenue Requirements at Hoover Dam
Capital projects, O&M, debt service (Uprating Project, Visitor Center/Air Slots, other)
APA Review and Input on Hoover Budget and Rates:
- Implementation Agreement
- Technical Review Committee
- Engineering and Operations
Committee
- 10-Year Plan

25. Competitive Rate Position
Arizona power authority
Competitive Rate Position
Among lowest power costs in United States
Rates significantly below other power providers
Low projected escalation
Favorable comparison with Palo Verde spot market
On-peak firm prices
Palo Verde prices exclude transmission
Projected future APA rates are below current Palo Verde rates
Renewable hydro resource base
Authority has direct input into Hoover power costs

26. APA Power Rate Components
Arizona power authority
APA Power Rate Components
Hoover Purchased Power Costs
Administrative and General Expenses
Lower Colorado River Basin Development Fund

27. Arizona power authority
Visitor Center Financial Overview
Completed in 1995 at cost of $126,265,344
Paid for by Federal appropriations evidenced by loans to Bureau of Reclamation
Hoover Contractors obligated to repay loans
Loan repayment embedded in Hoover power rate
Completed in 1987 at cost of $11,324,291
Paid for by Federal appropriations evidenced by loans to Bureau of Reclamation
Air Slots Financial Overview
January 6, 2016

28. Contract Mgmt & Cust. Relations (1) Admin & Finance (2)
Executive Director
(11 Total)
Executive Secretary
Deputy Director
(1)
(1)
Executive Secr
Assist APA Staff
Notary
Reception
Legal
(2) IT
(1)
Power Operations
(2)
Contract Mgmt & Cust. Relations
(1)
Admin & Finance
(2)
Data Bases
Communication
Monitor
Tech Support
APA Website
Planning
Budget
Hoover Gen Tracking
E&OC Support
Approve Dam &
Transmission Work
Supplemental Energy
Power Accounting
Maintain Contracts
Customer Liaison
Schedule Mtgs:
Customers
Legislatures
ACC Staff
Commissioner Mtgs
Customer Allocation/
Entitlement
Budgets
Commission Mtgs
Records Mgmt
Personnel/HR
Finances/Accounting
Audits
Liaison to Agencies
Annual Report IT
Buy/Sell Supplemental
Legal Issues
Billing/Financing
Power Development
Rate Setting
Customer Relations
Audits
Legislature
FERC, NERC, WECC, ACC
Contract Administration
Bonds

29. Arizona Power Authority?