2009 APPA National Conference

1. 2009 APPA National Conference Dealing with Customers’ Inability to Pay in Tough Economic Times June 16, 2009, 1:30 – 2:30 pm William A. Johnson

2. KCBPU History • Established public water utility in 1909 • Formed electric utility in 1912 • First Board of Directors installed in 1929 • In 1970s expanded service area to cover 127.5 square miles • Unified Government created in April 1997 • Charter ordinance adopted

3. KCBPU’s Role as a Public Utility • Maintain Low Electric & Water Rates • Provide Quality Customer Service • Support Local Governments • Assist with Economic Development • Contribute to Charitable Organizations • Provide Jobs - Local Living Standards

4. KCBPU Challenges • Fewer Revenue Sources • Inability to Raise Rates • Changing Environmental Landscape • Aging Workforce • Depressed Economic Conditions • Aging Infrastructure • Shrinking Population Base

5. Customer Statistics • Electric Customers – 69,336 Meters • Water Customers – 56,809 Meters • Generating Capacity (Gross) – 613 MW • Summer Peak (Aug. 2007) – 529 MW • Substations – 29 • Transmission/Distribution Lines – 1402 Miles • Water Production – 45 Million Gals (Avg.) • Water Storage Capacity – 34 Million Gals.

6. Sales (Energy & Water)

7. 2009 Annual Budget (Revenue)$303,304,711 • Electric – $219,573,493 (72.4%) • Water – $35,683,670 (11.8%) • Non-Restricted Reserves – $24,390,869 (8.0%) • PILOT – $23,647,679 (7.8%)

8. Local Rate Comparison 1,000 kWh (Summer)

9. Population Trends

10. Socio-Economic Summary Per Capita Income • $24,838 (County) -vs.- $34,799 (State) Unemployment (Feb. 2009) • 12.6% (County) -vs.- 6.2% (State) Poverty • 20.2% (County) -vs.- 11.9% (State) Health • Lowest in the State

11. Customer Service Statistics • Walk in Lobby – 400 Customers Daily • Payment Arrangements – 14,000 Annually • Calls Answered – 18,000 Calls Monthly • Delinquent Disconnects – 43,200 Annually • Theft of Services – 292 Annually • Returned Checks – 2,756 ($1,446,487) • Write Offs - $1,783,883 Annually

12. Economic Impact on Customers Ability to Pay • Walk in lobby numbers up despite use of Kiosk in 31 locations • Accounts receivables up 16% • Energy sales down in all rate classes (3.5%) • Delinquent Accounts up 5% • Theft of services up 51%

13. Environmental Challenges • Climate Change • Cap & Trade Programs • Carbon Tax • Renewable Energy Standards

14. KCBPU Energy Portfolio • Coal – 61.4% • Gas – 28.5% • Hydro – 6.5% • Wind – 3.7% • Landfill Gas – (Future)%

15. Impacts of Ozone Programs • Ozone and BART on existing units will require added revenue • Three possibilities for responding to Ozone and BART: • Add AQC equipment to existing plants • Build new coal generation and retire older plants • Add combustion turbines and retire older plant

16. Existing Service Strategies • Maximize Use of Existing IT Systems • Improve Billing Options • Customer Self Service/Web Design • AMI/Smart Grid System Deployment • Demand Responses • Energy Audits/Weatherization • Promote Energy Efficiency Workshops • Continue to Discuss Environmental Issues

17. 2009 APPA National Conference Thank You Questions?