Otero County Electric Cooperative, Inc. P.O. Box 227 / Cloudcroft, New Mexico 88317 Phone:575-682-2521 / FAX: 575-682-3!09 / 1-800-548-4660 March 29, 2017 Please find enclosed the following for the New Mexico Public Regulatory Commission’s Annual Report for Otero County Electric Cooperative, Inc.: 1. NMPRC Rule 510 Form 1 2. RUS Financial and Operating Report Electrical Distribution, Form 7 3. NMAC Rule 17.3.510.12(B) report. NMAC Rules :~7.:~.2.51(E), and NMAC Rules 17.6.450.13(A)&(B) do not apply. Respectfully, Julia Walker-Grinder Manager of Finance (575) 682-2521 juliew@ote-coop.com RURAL ELECTRIC COOPERATIVES Annual Report Of Otero County Electric Cooperative, Inc. (Exact legal name of Respondent) TO THE NEW MEXICO PUBLIC REGULATION COMMISSION FOR THE YEAR ENDED DECEMBER 31, 20 1_.~.~ Form 1 New Mexico Jurisdictional Information Year Ending December 31,20 1__6 Otero County Electric Cooperative, Inc. Electric Company Name Address PO Box 227, Cloudcroft, NM 88317 Phone Number 505.682.2521 Person Completing Form Julia Walker-Grinder, Manager of Finance Customer Class Residential Other Total 15,669 3,520 19,189 98,155 85,826 183,982 17,841,484.00 13,180,571.00 31,022,055.00 Number of Customers KWH Sales (Thousands) Gross Revenues Avg. Annual KWH Per Customer (1) 6,264 24,382 9,588 Avg. Annual Bill per Customer (2) 1,138.65 3,744.48 1,616.66 Avg. Monthly Bill per Customer (3) 94.89 312.04 134.72 Avg. Gross Revenue per KWH sold (4) 0.18 0.15 0.17 Directions for the completion of (1), (2), (3), (4): (1) Divide KWH sales by number of customers. (2) Divide gross revenues by number of customers. (3) Divide (2) by 12 months. (4) Divide gross revenues by KWH sales. NMPRC Rule 510 Effective 01/01/89 Long Term debt (Accounts 221-228) Line No. Note Ident. To Whom Issued PRC Decision No. Date of Issued Date of Maturity Principal Amount Amount Outstanding Principal Deferred Interest Per Balance Sheet Interest for Year Rate Amount Fvam'corxoo 1B344 1B400 113402 13403 9006 9007 9008 9009 9010 9011006 9011007 9011008 9011009 9011010 9011011 2594878 2719187 2889327 H0010 H0015 H0020 RUS RUS RUS RUS CFC CFC CFC CFC CFC NCSC NCSC NCSC NCSC NCSC NCSC CoBank CoBank CoBank FFB FFB FFB 2267 03-00231-UT 03-00231-UT 03-00231-UT 1671 1851 05-19-89 07-01?08 07-01-08 07-01-08 12-81 15-83 01-88 1 1-92 10-26-2016 09-10 09-10 09?10 09-10 09-10 09-10 03-30-2012 06?28?201 3 04-22-2015 03-18-2013 09-10-2013 03-10-2016 500.00 11,106,000.00 9,241,000.00 1,000.00 376,000.00 918,000.00 750,000.00 1,316,000.00 500,000.00 356,523.00 296,085.00 286,612.00 180,409.00 177,526.00 167,045.00 35,000,00000 1,024,000.00 17,000,000.00 3,988,000.00 1,995,000.00 9,248,899.00 85,428.00 190,008.00 551,553.00 149,368.00 286,612.00 180,409.00 177,526.00 167,044.00 30,577,25500 323,507.00 16,526,401.00 3,813,614.00 1,918,127.00 9,107,051.00 85,428.00 190,008.00 551,553.00 149,368.00 286,612.00 180,409.00 177,526.00 167,044.00 30,577,255.00 323,507.00 16.526,401.00 3,813,614.00 1,918,127.00 9,107,051.00 5.0 5.0 5.0 5.0 5.94 2.7 3.1 3.7 2.5 3.35 3,60 3.80 4.0 4.15 4.25 4.5 2.72 4.29 2.852 3.557 2.327 3.34 9,498.07 108,062.74 1 1.61 213.64 3,238.21 6,643.82 21,863.48 2,294.52 2,252.83 10,001.81 10,891.24 7,216.36 7,367.32 7,099.36 1,422,210.77 1 1,900.04 727,268.77 1 15,917.10 71,997.07 184,445.44 Total 64,053 ,903.00 64,053,903.00 Less Advance Payments Unapproved (Account 227) 8,601,817.93 Total 55,452,085.07 2,730,397.54 Page 1 ELECTRIC OPERATION AND MAINTENANCE EXPENSES Enter in the space provided the operation and maintenance expenses for the year. 2. If the Increases and decreases are not derived from previously reported figures explain in footnotes. Increase or Decrease Account Amount for Current Line From Preceding Year Year No. (a) (c) (b) POWER PRODUCTION EXPENSES 2. STEAM POWER GENERATION 3. OPERATION 4. 500 Operation Supervision and Engineering 5. 501 Fuel 6. 502 Steam Expenses 7. 503 Steam From Other Sources 8. 504 Steam Transferred - Credit 9. 505 Electric Expenses 10. 506 Miscellaneous Steam Power Expenses 11. 507 Rents 0.00 12. Total Operation 13. MAINTENANCE 14. 510 Maintenance Supervision and Engineering 511 Maintenance of Structures 15. 16. 512 Maintenance of Boiler Plant 17. 513 Maintenance of Electric Plant 18. 514 Maintenance of Miscellaneous Steam Plant Total Maintenance 0.00 19. 0.0~ 20. Total Power Production Expenses-Steam Power 21. NUCLEAR POWER GENERATION 22. OPERATION 23. 517 Operation Supervision and Engineering 24. 518 Fuel 25. 519 Coolants and Water 26. 520 Steam Expenses 27. 521 Steam From Other Sources 28. 522 Steam Transferred - Credit 29. 523 Electric Expenses 30. 524 Miscellaneous Nuclear Power Expenses 31. 525 Rents 32. Total Operation 0.00 33. MAINTENANCE 34. 528 Maintenance Supervision and En~lineerin~ 35. 529 Maintenance of Structures 36. 530 Maintenance of Reactor Plant Equipment 37. 531 Maintenance of Electric Plant 38. 532 Maintenance of Miscellaneous Nuclear Power 0.00 39. Total Maintenance 0.00 40. Total Power Production Expenses-Nuclear Power 41. HYDRAULIC POWER GENERATION 42. OPERATION 43. 535 Operation Supervision and Engineering 44. 536 Water for power 45. 537 Hydraulic Expenses 46. 538 Electric Expenses 47. 539 Miscellaneous Hydraulic Power Generation Expenses 48. 540 Rents 0.00 49. Total Operation 50. MAINTENANCE 51. 541 Maintenance Supervision and Engineering 52. 542 Maintenance of Structures Line No. 1. 2. Page 2 ELECTRIC OPERATION AND MAINTENANCE EXPENSES (continued) Amount for Current Account Year (a) (b) Increase or Decrease From Preceding Year HYDRAULIC POWER GENERATION 543 Maintenance of Reservoirs, Dams and Waterways 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. 46. 47. 48. 49. 50. 51. 52. 53. 54. 55. 544 Maintenance of Electric Plant 545 Maintenance of Miscellaneous Hydraulic Plant Total Maintenance Total Power Production Expenses- Hydraulic Power OTHER POWER GENERATION OPERATION 546 Operation Supervision and Engineering 547 Fuel 0.00 0.00 548 Generation Expenses 549 Miscellaneous Other Power Generation Expenses 550 Rents Total Operation MAINTENANCE 551 Maintenance Supervision and Engineering 552 Maintenance of Structures 553 Maintenance of Generating and Electric Plant 554 Maintenance Miscellaneous Other Power Generation Plant Total Maintenance Total Power Production Expenses-Other Power OTHER POWER SUPPLY EXPENSES 555 Purchased Power 556 System Control and Load Dispatching 557 Other Expenses Total Maintenance Total Power Production Expenses TRANSMISSION EXPENSES OPERATION 560 Operation Supervision and Engineering 561 Load Dispatching 562 Station Expenses 563 Overhead Line Expenses 564 Underground Line Expenses 565 Transmission of Electricity by Others 566 Miscellaneous Transmission Expenses 567 Rents Total Operation MAINTENANCE 568 Maintenance Supervision and Engineering 569 Maintenance of Structures 570 Maintenance of Station Equipment 571 Maintenance of Overhead Lines 572 Maintenance of Underground Lines 573 Maintenance of Miscellaneous Transmission Plant Total Maintenance Total Transmission Expenses DISTRIBUTION EXPENSES OPERATION 580 Operation Supervision and Engineering 581 Load Dispatching 582 Station Expenses 583 Overhead Line Expenses 584 Underground Line Expenses 585 Street Lighting and Signal System Expenses 0.00 0.00 0.00 15,166,852.42 229~752.76 15,166,852.42 15,166,852.42 229,752.76 229,752.76 0.00 0.00 0.00 20,229.33 0.00 0.00 0.00 0.00 20,229.33 0.00 0.00 0.00 1,841.17 0.00 0.00 0.00 0.00 1,841.17 0.00 0.00 7,387.13 19,580.97 0.00 0.00 26,968.10 47,197.43 0.00 0.00 671.70 -9,139.22 0.00 0.00 -8,467.52 -6,626.35 149,182.84 0.00 56,514.19 396,249.83 -34,567.02 0.00 27,110.49 -36,994.60 74,237.44 -34,861.78 0.00 Line No. Page 3 ELECTRIC OPERATION AND MAINTENANCE EXPENSES (continued) Amount for Current Increase or Decrease Account Year From Preceding Year (a) (b) DISTRIBUTION EXPENSES (continued) 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. 46. 47. 48. 49. 50. 51. 52. 53. 54. 586 Meter Expenses 587 Customer Installations Expenses 588 Miscellaneous Distribution Expenses 589 Rents Total Operation MAINTENANCE 590 Maintenance Supervision and Engineering 591 Maintenance of Structures 592 Maintenance of Station Equipment 593 Maintenance of Overhead Lines 594 Maintenance of Underground Lines 595 Maintenance of Line Transformers 596 Maintenance of Street Lighting and Signal Systems 597 Maintenance of Meters 598 Maintenance of Miscellaneous Distribution Plant Total Maintenance Total Distribution Expenses CUSTOMER ACCOUNTS EXPENSES OPERATION 901 Supervision 902 Meter Reading Expenses 903 Customer Records and Collection Expenses 904 Uncollectible Accounts 905 Miscellaneous Customer Accounts Expenses Total Customer Accounts Expenses SALES EXPENSES OPERATION 911 Supervision 912 Demonstrating and Selling Expenses 913 Advertising Expenses 914 Revenues From Merchandising, Jobbing and Contract Work 915 Cost and Expenses of Merchandising, Jobbing and Contract Work 916 Miscellaneous Sales Expenses Total Sales Expenses ADMINISTRATIVE AND GENERAL EXPENSES OPERATION 920 Administrative and General Salaries 921 Office Supplies and Expenses 922 Administrative Expenses Transferred-Credit 923 Outside Services Employed 924 Property Insurance 925 Injuries and Damages 926 Employee Pensions and Benefits 927 Franchise Requirements 928 Regulatory Commission Expenses 929 Duplicate Charges-Credit 930Miscellaneous General Expenses 931 Rents Total Operation MAINTENANCE 932 Maintenance of General Plant Total Administrative and General Expenses Total Electric Operation and Maintenance Expenses 224,880.25 1,956.5~ 206,352.49 205,939.93 0.00 1,204,552.51 29,118.8= -7,726.6= 0.0( 52,840.3’ 56,561.26 0.00 75,974.62 2,473,306.44 273,002.91 51,176.19 0.00 19,169.69 38,129.00 2,987,320.11 4,191,872.62 578.1; 0.0( 16,012.01 357,477.5~ 64,663.31 25,249.8" 0.00 276,914.68 1,299,574.85 42,500.00 0.00 1,618,989.53 0.0( 12,982.5= 56,599.0: 7,500.0( 0.0( 77,081.5; 0.00 68,197.40 5,259.45 0.0( 18,403.0z 2,308.3~ 0.00 0.0( 0.00 0.0( 0.00 73,456.85 0.0( 16,094.6~. 1,356,927.46 415,148.21 0.00 55,307.63 0.00 389,964.33 0.00 0.00 162,165.90 0.00 423,862.98 0.00 2,803,376.51 -75,550.4~ -17,793.8; 0.0( -15,694.4~ -251.64 35,193.1C O.OC O.OC 11,972.6C O.OC -54,106.21 O.OC 116,230.9C 200,297.80 4,696,120.69 24,102,043.16 53,509.5J 30,454.8~ 771,643.9~ -9,033.6; 10,275.0! 465,222.3~ 518,062.6~ Page 4 ELECTRIC OPERATION AND MAINTENANCE EXPENSES (continued) SUMMARY OF ELECTRIC OPERATION AND MAINTENANCE EXPENSES Line No. 1. 2. 3. Functional Classification (a) Power Production Expenses Nuclear Power Hydraulic Power 6. 7. Other Power 9. 10. Other Power Supply Expenses Total Power Production Expenses 11. Transmission Expenses Distribution Expenses Customer Accounts Expenses 12. 13. Sales Expenses Administrative and General Expenses 14. 15. 16. 17. 18. Maintenance (c) Total Electric Generation: Steam Power 4. 5. 8. Operation (b) 15,166,852.42 15,166,852.42 20,229.33 1,204,552.51 26,968.10 2,987,320.11 1,618,989.53 2,803,376.51 20,887,457.15 Number of electric Department Employees, Payroll Period Ending 47,197.43 4,191,872.62 1,618,989.53 73,456.85 Total Electric Operation and Maintenance Expenses NUMBER OF ELECTRIC DEPARTMENT EMPLOYEES Total Regular Full-Time Employees Total Part-Time and Temporary Employees Total Employees 15,166,852.42 15,166,852.42 200,297.80 3,214,586.01 73,456.85 3,003,674.31 24,102,043.16 12/23/2016 64 6 70 The data on number of employees should be reported for the payroll period ending nearest to October 31, or any payroll period ending 60 days before or after October 31. If the respondent’s payrolls for the reported period include any special construction forces include such employees as part-time and temporary employees and show the number of such special construction employees so Included. The number of employees assignable to the electric department from joint functions of combination utilities may be determined by estimate, on the basis of employee equivalents. Show the estimated number of equivalent employees attributed to the electric department from joint functions. Page 5 DISTRIBUTION OF SYSTEM LOAD IN SERVICE AREA 1. Information is desired regarding the distribution of the system load within the territory served by the system. This information should be furnished on the basis used by respondent in maintaining load distribution data, such as by primary substations, operation divisions, communities, metropolitan areas, or other areas. 2. A sketch map showing the location and the approximate boundary of each of these areas, together with identification symbols, should be furnished. Designation of Map Annual Energy provided for the Area Actual or Estimated Date of Annual Area (Primary Symbol . . . . Peak Demand of Peak Load Subsga?on, Estimated Distribution - Percent Area Duringthe Factor operating division, I owa ours) Residential Commercial Industrial Public Streets Other Sales Irrigation Company Unaccounted Year (Kilowatts) or community) Sales anld' I-Il1itghway t: Phublic Sales Use For ig ing ut on Carrizo 104,586,278 49.03 13.69 28.48 0.32 0.38 0.00 0.13 7.97 21,425 07 55.57 Alamo 73,751,477 49.03 13.69 28.48 0.32 0.38 0.00 0.13 7.97 16,889 07 49.71 Blazer 11,031,650 49.03 13.69 28.48 0.32 0.38 0.00 0.13 7.97 2,172 01 57.82 Oro Grande 10,829,547 49.03 13.69 28.48 0.32 0.38 0.00 0.13 7.97 2,102 06 58.65 Alamo Solar -147194 -49.03 -13.69 -28.48 -0.32 -0.38 0 -0.13 ?7.97 0 0 0 Page 6 CONSTRUCTION OVERHEADS - ELECTRIC 1. Report below the information called for concerning construction overheads for the year. 2. List in column (a) the kinds of overheads according to the titles used by the respondent. Charges for outside professional services for engineering fees and management of supervision fees capitalized should be shown as separate items. 3. On the lower section of this schedule furnish the requested explanatory information concerning construction overheads. 4. A respondent should not report "none" to this schedule if no overhead apportionments are made, but rather should explain on the lower section of this schedule that only such engineering, supervisor, and administrative cost, etc., which are directly chargeable construction are charged to construction, if this is the case. Engineering, supervision, administrative and interest costs, etc., which are first assigned to a blanket work order and then prorated to construction jobs shall be considered overheads for the purposes of formulating a response to this schedule. Name of Overhead (a) Line No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. Indirect Labor Payroll Taxes Material/Stores Workers Comp IEmployee Benefits Transportation Miscellaneous Accrued Leave Spread Cash Disburstments WO#1 Totals Total Overheads Cleared to Construction (b) Cost of Construction to which Overheads were charged (exclusive of overhead charges) (c) Percent overheads to construction cost (d) 209,109.67 19,361.00 343,555.62 4,456.00 150,027.65 7,296.87 22,183.90 25,380.91 29,109.04 810,480.66 3,868,686.51 GENERAL DESCRIPTION OF CONSTRUCTION OVERHEAD PROCEDURE % 21.00 1. For each construction overhead for electric plant explain: (a) a. Nature of the engineering, supervisory, or administrative work, etc., the overhead charges are intended to cover. (b) The general procedure for determining the amount capitalized. (c) The method of distribution to construction jobs. (d) Percentages applied to different types of construction. (e) Basis of differentiation in percentages for different types of construction. (f) Amounts capitalized for each overhead for the year for which this report is submitted. 2. In addition to other information concerning engineering and superintendence or other such over heads, explain whether the amounts treated as overheads include all engineering and superintendence costs or only such portions as are not directly chargeable to specific jobs. 3. For interest during construction state the interest rate used. The basic charges to which applied, in addition to the amounts capitalized for the year for which this report is submitted. Overhead is distributed to work orders on a dollar ratio basis. Page 7 ELECTRIC DISTRIBUTION METERS AND LINE TRANSFORMERS Report below the information called for concerning distribution watt-hour meters and line transforms. Watt-hour demand distribution meters should be included below but external demand meters should not be included. Show in a footnote the number of distribution watt-hour meters or line transformers held by the respondent under lease from others, jointly owned with others, or held otherwise that by reason of sole ownership by the respondent. If 500 or more meters or line transformers are held under a lease, give name of lesser, date and period of lease and annual rent. If 500 or more meters or line transformers are held other than by reason of sole ownership or lease, five name of co-owner or other party, explain basis of accounting for expenses between the parties, and state amounts and accounts affected in respondent’s books of account. Specify in each case whether lesser, co-owner or other party is an associated company. Line No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. Item (a) Number at beginning of year Additions during year: Purchases Associated with utility plant acquired Total Additions Reductions during year: Retirements Associated with utility plant sold Total reductions Number at end of year In stock Locked meters on customers’ premises Inactive transformers on system In customers’ use In company’s use Total end of year (as above) Number of Watt-hour Meters LINE TRANSFORMERS Number Total Capacity (kva) (b) (c) 23,788 13,166 109 233 109 233 659 461 659 23,238 461 12,938 23,238 12,938 (d) Page 8 VERIFICATION The foregoing report must be verified by the oath of the office having control of the accounting of the respondent. The oath required may be taken before any person authorized to administer an oath by the laws of the State in which the same is taken. OATH (To be made by the officer having control of the accounting of the respondent.) State of New Mexico County of Otero Julia Walker-Grinder makes oath and says that he is (Insert here the name of the affiant.) of Manager of Finance (Insert here the official title of the affiant.) Otero County Electric Cooperative, Inc. (Insert here the exact legal title of name of the respondent.) that it is his duty to have supervision over the books of account of the respondent and that to the best of his knowledge and belief such books have, during the period covered by the foregoing report, been kept in good faith in accordance with the accounting and other orders of the New Mexico Public Regulation Commission, effective during said period, that has examined the said report, and to the best of his knowledge and belief the information contained in the said report is, insofar as it relates to matters of account, in accordance with the said books of account; that he believes that all other statements of fact contained in the said report are true, and that the said report is correct statement of the business and affairs of the above-named respondent in respect to each and every matter set forth Jan 1 therein during the period from and including to and including ,2016 , Dec 31 16 ., 20~, ~ffiant) Subscribed and sworn to before me, a County above named, this , is and for the State and day of My commission expires (Signature of officer authorized to-a~}minister oaths) Otero County Electric Cooperative, Inc. NMAC Rule 17.3.510.12(B) Revenues Earnings Return on Equity Debt Total Average Cost of Debt Capital Structure Generation Transmission Distribution O&M Purchased Power Other O&M Deferred Tax Reserves Peak Demand Energy Sales 2016 2006 $ 31,240,048.00 $ 17,722,365.00 3,571.00 $ 2,441,999.00 $ 7.6% 0.03% $ 56,297,554.00 $ 31,980,963.00 4.93% 5.09% $ 95,192,723.00 $ 58,543,457.00 $ $ $ 4,907,056.36 $ 3,542,216.00 $ 79,243,635.72 $ 47,075,522.00 $ 15,166,852.00 $ 9,199,669.00 $ 15,053,863.00 S 5,474,167.00 $ $ 41,710 183,981,707 32,536 163,338,416 According to the Paperwork Reduction Act of 1995, an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid OMB control number. The valid OMB control number for this information collection is 0572-0032. The time required to complete this information collection is estimated to average 15 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. UNITED STATES DEPARTMENT OF AGRICULTURE BORROWER DESIGNATION RURAL UTILITIES SERVICE NN0 012 PERIOD ENDED December, 2016 FINANCIAL AND OPERATING REPORT ELECTRIC DISTRIBUTION (Prepared with Audited Data) BORROWER NAME Otero County ELectric Cooperative, Inc. INSTRUCTIONS - See help in the online application. This information is analyzed and used to determine the submitter’s financial situation and feasibility for loans and guarantees. You are required by contract and applicable regulations to provide the information. The information provided is subject to the Freedom of Information Act (5 U.S.C. 552) CERTIFICATION" We recognize that statements contained herein concern a matter within the jurisdiction of an agency of the United States and the making of a false, fictitious or fraudulent statement may render the maker subject to prosecution under Title 18, United States Code Section 1001. We hereby certil~ that the entries in this report are in accordance with the accounts and other records of the system and reflect the status of the system to the best of our knowledge and belief. ALL INSURANCE REQUIRED BY PART 1788 OF 7 CFR CHAPTER XVII, RUS, WAS IN FORCE DURING THE REPORTING PERIOD AND RENEWALS HAVE BEEN OBTAINED FOR ALL POLICIES DURING THE PERIOD COVERED BY THIS REPORT PURSUANT TO PART 1718 OF 7 CFR CHAPTER XVII (check one of the following) [] All of the obligations under the RUS loan documents have been fulfilled in all material respects. Mario Romero [] There has been a default in the fulfillment of the obligations under the RUS loan documents. Said default(s) is/are specifically described in Part D of this report. 3/29/2017 DATE PART A. STATEMENT OF OPERATIONS ITEM 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 1. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. Operating Revenue and Patronage Capital Power Production Expense Cost of Purchased Power Transmission Expense Regional Market Expense Distribution Expense- Operation Distribution Expense- Maintenance Customer Accounts Expense Customer Service and Informational Expense Sales Expense Administrative and General Expense Total Operation & Maintenance Expense (2 thru 11) Depreciation and Amortization Expense Tax Expense- Property & Gross Receipts Tax Expense - Other Interest on Long-Term Debt Interest Charged to Construction - Credit Interest Expense - Other Other Deductions Total Cost of Electric Service (12 thru 19) Patronage Capital & Operating Margins (1 minus 20) 22. Non Operating Margins o Interest 23. Allowance for Funds Used During Construction 24. Income (Loss) from Equity Investments 25. Non Operating Margins - Other 26. Generation and Transmission Capital Credits 27. Other Capital Credits and Patronage Dividends 28. Extraordinary Items 29. Patronage Capitalor Margins (21 thru 28) RUS Financial and Operating Report Electric Distribution LAST YEAR (a) 29,551,434 0 14,937,100 53,824 0 1,140,230 2,500,610 1,553,018 270,726 56,555 3,004,277 23,516,340 2,739,558 71,565 0 2,872,582 0 6,318 33,254 29,239,617 311,817 503,339 0 0 (11,351) 714,349 547,235 0 2,065,389 YEAR-TO-DAT E THIS YEAR BUDGET THIS MONTI! 31,240,04B 0 15,166,852 47,197 0 1,241,075 2,952,753 1,618,990 323,621 73,457 3,003,674 24,427,619 2,955,044 31,954,720 0 15,547,517 36,622 0 1,317,428 2,388,953 1,573,460 247,527 13, 996 3,312,190 24,437,693 2,902,858 o o o o 2,773,854 2,946,168 o 7,623 56,575 3o,22o,715 I, o19,333 465,376 0 0 (40,841) 424,844 o 6,274 42,860 30,335,853 1,618,867 457,182 573,287 0 2,441,999 2,739,056 0 1,336,779 4,403 0 i02,059 468,733 141,017 25,444 5,480 252,900 2,336,815 374,705 0 0 208,580 0 638 14,396 2,935,134 (196,078) 46,672 0 0 (20) 424,844 565,974 0 0 0 0 865,107 438,361 0 3,379,517 841,392 Revision Date 2014 UNITED STATES DEPARTMENT OF AGRICULTURE RURAL UTILITIES SERVICE BORROWER DESIGNATION NM0012 FINANCIAL AND OPERATING REPORT ELECTRIC DISTRIBUTION PERIOD ENDED December, 2016 INSTRUCTIONS - See help in the online application. ITEM PART B. DATA ON TRANSMISSION AND DISTRIBUTION PLANT YEAR-TO-DATE ITEM LAST YEAR THIS YEAR 1. New Services Connected (a) 235] 2. Services Retired 3. Total Services in Place 4. Idle Services (Exclude Seasonals) 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 221 21, 169 2,013 ASSETS AND OTHER DEBITS Total Utility Plant in Service Construction Work in Prol~ress Total Utillt~ Plant (1 + 2) Accum. Provision for Depreciation and Amort. Net Utility Plant (3 - 4) 15. Non-Utility Property (Net) Investments in Subsidiary Companies Invest. in Assoc. OrS. - Patronase Capital Invest. in Assoc. Or[l. - Other - General Funds Invest. in Assoc. Org. - Other - Nongeneral Funds Investments in Economic Development Pro~ects Other Investments Special Funds Total Other Property & Investments (6 thru 13) Cash - General Funds 16. Cash - Construction Funds - Trustee 17. 18. 19. 20. 21. 22. Special Deposits Temporar’i Investments Notes Receivable (Net) Accounts Receivable - Sales of Energy (Net) Accounts Receivable - Other (Net) Renewable Enerl~~ Credits 23. Materials and Supplies - Electric & Other 14. 24. 25. Prepaunents Other Current and Accrued Assets Total Current and Accrued Assets 26. (15 thru 25) 27. Re~;ulato~ Assets 28. Other Deferred Debits Total Assets and Other Debits 29. (5+14+26 thru 28) RUS Financial and Operating Report Electric Distribution YEAR-TO-DATE THIS YEAR LAST YEAR (a) 5. Miles Transmission 102.00 6. Miles Distribution 2,533.97 Overhead 21,285 7. Miles Distribution 121.60 Underground 8. Total Miles Energized 2,083 2,757.57 (5+6+7) PART C. BALANCE SHEET LIABILITIES AND OTHER CREDITS 95,192 ,723 30. Memberships 16,086 ,835 31. Patronase Capital 111,279 55s 32. OperatinS Mar$ins - Prior Years 34,093 ,892 33. Operating Margins - Current Year 77,185 ,666 34. Non-Operating Margins 0 35. Other Mar$ins and Equities 0 36. Total Margins & Equities 00 thru 35) 10,283,84 7 37. Lons-Term Debt - RUS (Net) o 38. Lon$-Term Debt - FFB - RUS Guaranteed 81,603 39. Long-Term Debt - Other - RUS Guaranteed 0 40. Lons-Tenn Debt Other (Net) 0 41. Lon~;-Term Debt - RUS - Econ. Devel. (Net) 640,008 42. Paonents- Unapplied Total Long-Term Debt 11,005,458 43. (37 thru 41 - 42) 1,2 56,4 92 44. Obligations Under Capital Leases - Noncurrent Accumulated Operating Provisions 0 45. and Asset Retirement Oblisations 20 46. Total Other Noncurrent Liabilities (44 + 45) 649,616 47. Notes Payable 0 48. Accounts Payable 1,015,731 49. Consumers Deposits 292,942 0 50. Current Maturities Lon~-Term Debt Current Maturities Long-Term Debt 571,092 51. - Economic Devdopment 17,594 52. Current Maturities Capital Leases 2,881,692 53. Other Current and Accrued Liabilities Total Current & Accrued Liabilities 6,685,179 54. (47 thru 53) 2,834,285 55. Resulator~ Liabilities 1,455,706 56. Other Deferred Credits Total Liabilities and Other Credits 99,166,294 57. (36 + 43 + 46 + 54 thru 56) 102. oo 232 2,540.23 122.11 2,764.34 C 32,205,19( 2,017,462 424,535 (563,379) 34,083,805 14,838,792 C 47,709,612 0 8,601,81~ 53,946,587 939,386 3,039,051 3,978,437 C 2,092,067 504,24C 2,350,963 o 1,247,607 6,194,881 o 962,58o 99,166,294 Revision Date 2014 UNITED STATES DEPARTMENT OF AGRICULTURE RURAL UTILITIES SERVICE FINANCIAL AND OPERATING REPORT ELECTRIC DISTRIBUTION INSTRUCTIONS - See help in the online application. BORROWER DESIGNATION NM0012 PERIOD ENDED December, 2016 PART D. NOTES TO FINANCIAL STATEMENTS Deferred Charqes: Tri-State G&T Merger Costs$ 2,834,286 NRECA R&S PrepaymentS 1,432,271 Other $ 36 $ 4,266,593 Capital Leases: Line Equipment $ 2,274,242 Less: Accumulated Depreciation $ 912,208 $1,362,034 Deferred Credits: Ener.qy Efficiency Programs 555,045 Round-Up ProgramS 106,259 Consumers’ Advances for Const’n $ 300,609 $961,913 Pension Plan: Coop Contributions to R&S Plan $ 648,702 Pension ExpenseS 866,262 401 (k) Cooperative CostS 471,496 Related Party Transactions: The Cooperative purchases all of its power from Tri-State. As a member of Tri-State, the Cooperative has representation on the Board of Trustees. RUS Financial and Operating Report Electric Distribution Revision Date 2014 UNITED STATES DEPARTMENT OF AGRICULTURE RURAL UTILITIES SERVICE FINANCIAL AND OPERATING REPORT ELECTRIC DISTRIBUTION INSTRUCTIONS - See help in the online application. BORROWER DESIGNATION NM0012 PERIOD ENDED December, 2016 PART D, CERTIFICATION LOAN DEFAULT NOTES Otero County Electric Cooperative, Inc. (OCEC) did not meet the CFC/NCSC Average MDSC Ratio of 1.35 for 2014 or 2015. OCEC received a waiver from CFC/NCSC dated August 28, 2015 and July 1, 2016. OCEC completed a Cost of Service Study and implemented a rate increase November 2015. The rate increase had a favorable impacted to OCEC by achieving MDSC for 2016. Due to the low MDSC Ratios for 2015 and 2014, OCEC fell short of meeting the Average 2 of 3 highest years of MDSC Ratio for 2016. OCEC has already communicated the expected Average MDSC Ratio with CFC/NCSC. OCEC and !CFC/NCSC are currently in discussions regarding rebasing OCEC’s Average 2 of 3 highest years of !MDSC Ratio for 2016 by allowing OCEC to report the actual 2016 MDSC Ratio and will take the ~average 2 of 3 highest years of MDSC Ratios going forward. RUS Financial and Operating Report Electric Distribution Revision Date 2014 ~ UNITED STATES DEPARTMENT OF AGRICULTURE RURAL UTILITIES SERVICE ~MO012 _WER DESIGNATION FINANCIAL AND OPERATING REPORT ELECTRIC DISTRIBUTION [PERIOD ENDED December, 2016 INSTRUCTIONS - See help in the online application. PART E. CHANGES IN UTILITY PLANT BALANCE RETIREMENTS BEGINNING OF YEAR ADDITIONS PLANT ITEM lu) 1. Distribution Plant 2. General Plant 3. 4. 5. 6. Headquarters Plant Intangibles Transmission Plant Regional Transmission and Market Operation Plant All Other Utility Plant 13,245 I (a) (b) 20.500 Present Year Five-Year Average 46.600 Number of Full Time Employees Employee- Hours Worked - Regular Time Employee - Hours Worked - Ove,:time Capital Credits - Received ¯ Amount Due Over 60 Days Anticipated Loan Delinquency % Actual Loan Delinquency % 3 Total Loan Delinquency Dollars YTD o 2,551,599 95,192,723 16,086,835 111,279,558 BALANCE END OF YEAR SOLD (e) 13,596 0 984 567,421 3,671 31,276l (7,979) ] ALL OTHER TOTAL (e) (c) 40.700 6.500 126.140 3 .360 PART H. EMPLOYEE-HOUR AND PAYROLL STATISTICS 63 I Payroll - Expensed 135,377 Payroll - Capitalized Payroll - Other 6,458 PART I. PATRONAGE CAPITAL 417.500 485.200 441.120 265.020 2,888,681 l ITEM Capital Credits - Distributions 79,574,475 4,658,285 4, 377, 340 0 4,031,024 1,780,799 ] PART G. SERVICE INTERRUPTIONS AVERAGE MINUTES PER CONSUMER BY CAUSE MAJOR EVENT PLANNED POWER SUPPLIER le) 0 0 2,879 o BALANCE END OF YEAR 0 0 0 0 0 1,780,799 USED (NET) (c) I 12,985 1 ITEM 135,859 3,911,808 3,933,606 7,845,414 PART F. MATERIALS AND SUPPLIES SALVAGED ta) 323, 884 222,652 0 2,298 11,463 0 1,571 2,415,740 93,061,714 12,153,229 105,214,943 BALANCE BEGINNING OF YEAR [ ]PURCHASED I (a) 411,965[ Electric Other to) 1,231,965 3,470,792 292, 123 4,031,751 7. 8. Total Utility Plant in Service (1 thru 7) 9. Construction Work in Progress 10. Total Utility Plant (8 + 9) ITEM ~/,) 77,335,648 4,690, 046 4,588,529 0 ADJUSTMENTS AND TRANSFERS DESCRIPTION a. General Retirements b. Special Retirements c. Total Retirements (a + b) a. Cash Received From Retirement of Patronage Capital by Suppliers of Electric Power b. Cash Received From Retirement of Patronage Capital by Lenders for Credit Extended to the Electric System c. Total Cash Received (a + b) PART J. DUE FROM CONSUMERS FOR ELECTRIC SERVICE 15 75,669 ]2. Amount Written Off Durin~: Year ENERGY EFFICIENCY AND CONSERVATION LOAN PROGRAM Anticipated Loan Default % Actual Loan Default % 6. Total Loan Default Dollars YTD F’ RUS Financial and Operating Report Electric Distribution 1,o45,o28 539,565 THIS YEAR CUMULATIVE 7,276,300 355,754 7,632,054 636,778 25,976 662,754 o 379,124 379,124 59,072 5 L Revision Date 2014 UNITED STATES DEPARTMENT OF AGRICULTURE RURAL UTILITIES SERVICE BORROWER DESIGNATION NM0012 FINANCIAL AND OPERATING REPORT ELECTRIC DISTRIBUTION INSTRUCTIONS - See help in the online application No ITEM 1 Tri-State G & T Assn~ Inc (CO0047) 2 *Residential Renewable Supplier 3 *Miscellaneous Total PERIOD ENDED December, 2016 PART K. kWh PURCHASED AND TOTAL COST RENEWABLE kWh TOTAL FUEL PURCHASED COST PROGRAM TYPE NAME SUPPLIER RENEWABLE CODE ENERGY AVERAGE COST (Cents/kWh) 30151 200,051,758 15,128,467 7.56 700200 731,778 29,731 4,06 8~655 15,166~853 0.00 7.55 700000 RUS Financial and Operating Report Electric Distribution 0 200,783,536 INCLUDEDIN TOTAL COSTFUEL COST ADJUSTMENT INCLUDED IN TOTAL COST WHEELING AND OTHER CHARGES Revision Date 2014 UNITED STATES DEPARTMENT OF AGRICULTURE RURAL UTILITIES SERVICE BORROWER DESIGNATION FINANCIAL AND OPERATING REPORT ELECTRIC DISTRIBUTION INSTRUCTIONS - See help in the online application NM0012 PERIOD ENDED December, 2016 PART K. kWh PURCHASED AND TOTAL COST Comments No 1 3 RUS Financial and Operating Report Electric Distribution Revision Date 2014 UNITED STATES DEPARTMENT OF AGRICULTURE RURAL UTILITIES SERVICE FINANCIAL AND OPERATING REPORT ELECTRIC DISTRIBUTION INSTRUCTIONS - See help in the online application. No NAME OF LESSOR (a) BORROWER DESIGNATION NM0012 PERIOD ENDED December, 2016 PART L. LONG-TERM LEASES TYPE OF PROPERTY (b) RENTALTHISYEAR Ic) TOTAL RUS Financial and Operating Report Electric Distribution Revision Date 2014 UNITED STATES DEPARTMENT OF AGRICULTURE RURAL UTILITIES SERVICE BORROWER DESIGNATION NlVi0 012 FINANCIAL AND OPERATING REPORT PERIOD ENDED ELECTRIC DISTRIBUTION December, 2016 INSTRUCTIONS -Se¢ help in the online application. PART M. ANNUAL MEETING AND BOARD DATA 1. Date of Last Annual Meeting 2. Total Number of Members 3. Number of Members Present at Meeting 8/6/2016 5. Number of Members Voting by Proxy or Mail 6. Total Number of Board Members 0 RUS Financial and Operating Report Electric Distribution 7. Total Amount of Fees and Expenses for Board Members I0 4. Was Quorum Present? 428 13,932 $ 8. Does Manager Have Written Contract? 238,090 Revision Date 2014 N BORROWER DESIGNATION UNITED STATES DEPARTMENT OF AGRICULTURE RURAL UTILITIES SERVICE FINANCIAL AND OPERATING REPORT ELECTRIC DISTRIBUTION INSTRUCTIONS - See help in the online application. NM0012 PERIOD ENDED December, 2016 PART N. LONG-TERM DEBT AND DEBT SERVICE REQUIREMENTS No ITEM Rural Utilities Service (Excludes RUS Economic Development Loans) National Rural Utilities Cooperative Finance Corporation 3 CoBank~ ACB 4 Federal Financin~ Bank 5 RUS - Economic Development Loans 6 Payments Unapplied 7 Principal Payments Received from Ultimate Recipients of IRP Loans 8 Principal Payments Received from Ultimate Recipients of REDL Loans 9 Principal Payments Received from Ultimate Recipients of EE Loans 10 NCSC 11 Capital Lease CoBank I’OTAL RUS Financial and Operating Report Electric Distribution INTEREST BALANCEEND OF YEAR (Billed This Year) PRINCIPAL (Billed This Year) TOTAL (Billed This Year) 78,733 134,432 213,165 1,170,789 34,254 168,866 203,120 45~869~163I 14~838~7921 2f161r380 3721360 1~495,665 255~023 3~657r045 627~383 44r829 42r865 2,734~421 326~465 348~275 2~728~726 371~294 391r140 5,463,147 0 8~601~818 669r660 939r386 54,885,972 Revision Date 2014 UNITED STATES DEPARTMENT OF AGRICULTURE RURAL UTILITIES SERVICE FINANCIAL AND OPERATING REPORT ELECTRIC DISTRIBUTION BORROWER DESIGNATION N’~0 012 PERIOD ENDED December, 2016 INSTRUCTIONS - See help in the online application. PART O. POWER REQUIREMENTS DATABASE - ANNUAL SUMMARY Residential Sales (excluding seasonal) 2. Residential Sales - Seasonal Irrigation Sales 4. Comm. and Ind. 1000 KVA or Less AVERAGE NO. CONSUMERS SERVED CONSUMER SALES & REVENUE DATA CLASSIFICATION TOTAL YEAR TO DATE 15,604 I DECEMBER(a) a. No. Consumers Served b. kWh Sold 98,069,753 c. Revenue a. No. Consumers Served 17,807,832 ! b. kWh Sold c. Revenue a. No. Consumers Served b. kWh Sold c. Revenue a. No. Consumers Served b. kWh Sold 27,410,919 c. Revenue 4,748,702 5. Comm. and Ind. Over 1000 KVA a. No. Consumers Served kWh Sold Revenue 6. Public Street & Highway Lighting b. c. a. 7. Other Sales to Public Authorities b. c. a. kWh Sold Revenue No. Consumers Served b. c. kWh Sold Revenue a. No. Consumers Served b. kWh Sold c. Revenue a. No. Consumers Served b. kWh Sold 8. Sales for Resale - RUS Borrowers 9. Sales for Resale - Other 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. No. Consumers Served c. Revenue Total No. of Consumers (lines la thru 9a) Total kwh Sold (lines lb thru 9b) Total Revenue Received From Sales of Electric Energy (lines lc thru 9c) Transmission Revenue Other Electric Revenue kwh - Own Use Total kwh Purchased Total kwh Generated Cost of Purchases and Generation Interchange - kWh - Net Peak - Sum All kW Input (Metered) Non-coincident Coincident x RUS Financial and Operating Report Electric Distribution 227] 191 661 225 57,011,809 8,108,380 18 645,972 127,099 66 757,525 196,390 183,981,707 31,022,055 217,994 266,778 200,783,536 15,214,049 41,710 Revision Date 2014 UNITED STATES DEPARTMENT OF AGRICULTURE BORROWER DESIGNATION RURAL UTILITIES SERVICE FINANCIAL AND OPERATING REPORT ELECTRIC DISTRIBUTION NM0012 PERIOD ENDED December, 2016 INSTRUCTIONS - See help in the online application. CLASSIFICATION PART P. ENERGY EFFICIENCY PROGRAMS ADDED THIS YEAR No. of Amount Estimated Consumers Invested MMBTU Savings (q 2. 3. 4. 5. 6. 7. 8. 9. Residential Sales (excluding seasonal) Residential Sales - Seasonal Irrigation Sales Comm. and Ind. 1000 KVAor Less Comm. and Ind. Over 1000 KVA Public Street and Highway Lighting Other Sales to Public Authorities Sales for Resale- RUS Borrowers Sales for Resale Other Total RUS Financial and Operating Report Electric Distribution No. of Consumers 330 61,131 149 991 5 3,350 204,750 4 18,428 25 34,073 736 14 335 303,304 19,317 1,030 TOTAL TO DATE Amount Estimated MMBTU Sav~gs Invested 256,112 1,272 3,350 204,750 28,149 34,073 4 18,428 799 736 21,239 526,434 Revision Date 2014 UNITED STATES DEPARTMENT OF AGRICULTURE RURAL UTILITIES SERVICE BORROWER DESIGNATION NM0012 FINANCIAL AND OPERATING REPORT ELECTRIC DISTRIBUTION INVESTMENTS, LOAN GUARANTEES AND LOANS PERIOD ENDED December, 2016 INSTRUCTIONS - Reporting of investments is required by 7 CFR 1717, Subpart N. Investment categories reported on this Part correspond to Balance Sheet items in Part C. Identi~j all investments in Rural Development with an ’X’ in column (e), Both ’Included’ and ’Excluded’ Investments must be reported. See help in the ordine application. PART Q. SECTION I. INVESTMENTS {See Instructions for definitions of Income or Loss) EXCLUDED INCOME OR LOSS RURAL No DESCRIPTION INCLUDED DEVELOPMENT ($) ($) (d) (e) (h) (c) Investments in Associated Organizations ,CoBank Patronage 8431281 CFC Patronage 149r152 Federated Patronage 2791083 63~813 NISC Patronage NRTC Patronage 2~170 Touchtone Patronage 180 308 Western United Patronage TriState G&T Patronage 8~940~045 PVT Telephone Co Patronage 3r290 2~526 CRC Patronage Invest CFC CTC’s 81 ~603 Totals 1 ~080~340 Special Funds Employee Deferred Comp 640~008 Totals 640r008 Cash - General I st National Bank 65~967 Petty Cash 1 ~200 1st National Bank Money Market 31~885 Well Fargo Money Market I z034~925 122r557 CFC Daily Fund Tri-State Prepayment (42) Totals 1r066~810 189,682 Special Deposits 2O PVT Telephone Coop Totals 2O Temporary Investments CD I st National Bank 204~303 CD First American Bank 209~873 CD Bank 34 235~439 Totals 649~615 Accounts and Notes Receivable - NET Account Receivable Other 293~205 Garnishments 166 NRECA Life Insurance 1 t483 AFLAC 188 NRECA Loans 2~577 Fort Dearborn Dental Ins (322) BlueCross BlueShield Medical Ins 5~590 Returned Checks (356) Renewable Energy Credits (9~600) MetLife (30 Legal Shield (16 Washington National Ins 58 Totals 293~205 {263 TOTAL INVESTMENTS (1 thru 10) 10,645,126 2,559,402 RUS Financial and Operating Report Electric Distribution - Investments Revision Date 2014 UNITED STATES DEPARTMENT OF AGRICULTURE RURAL UTILITIES SERVICE I BORROWER DESIGNATION NM0012 FINANCIAL AND OPERATING REPORT ELECTRIC DISTRIBUTION INVESTMENTS, LOAN GUARANTEES AND LOANS PERIOD ENDED December, 2016 INSTRUCTIONS - Reporting of investments is required by 7 CFR 1717, Subpart N. Investment categories reported on this Pan correspond to Balance Sheet items in Par~ C. Identify all investments in Rural Development with an ’X’ in column (e). Both ’Included’ and ’Excluded’ Investments must be reported. See help in the online application. PART Q. SECTION II. LOAN GUARANTEES LOAN BALANCE RURAL No ORGANIZATION MATURITY DATE ORIGINAL AMOUNT DEVELOPMENT ($) ($) (b) TOTAL TOTAL (Included Loan Guarantees Only) RUS Financial and Operating Report Electric Distribution - Loan Guarantees Revision Date 2014 UNITED STATES DEPARTMENT OF AGRICULTURE RURAL UTILITIES SERVICE BORROWER DESIGNATION NM0012 FINANCIAL AND OPERATING REPORT ELECTRIC DISTRIBUTION INVESTMENTS, LOAN GUARANTEES AND LOANS PERIOD ENDED December, 2016 INSTRUCTIONS - Reporting of investments is required by 7 CFR 1717, Subpart N. Investment categories reported on this Part correslzond to Balance Sheet items in Part C. Identify all investments in Rural Development with an ’X’ in column (e). Both ’Included’ and ’Excluded’ Investments must be reported. See help in the online application. SECTION II1. RATIO ] 9.57 % RATIO OF INVESTMENTS AND LOAN GUARANTEES TO UTILITY PLANT [Total of Included Investments (Section I, 1 lb) and Loan Guarantees - Loan Balance (Section II, 5d) to Total Utility Plant (Line 3, Part C) of this report] SECTION IV. LOANS No ORGANIZATION MATURITY DATE ORIGINAL AMOUNT LOAN BALANCE RURAL DEVELOPMENT ($) ($) I ~b) ~) td) /e) TOTAL RUS Financial and Operating Report Electric Distribution - Loans Revision Date 2014