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Section 2
<br /> Cash Reserves
<br /> A summary of the impact of the projected operating results on ERMU's cash reserves for
<br /> the Study Period is shown at the end of Exhibit 2-A and in Table 2-4 below.
<br /> As shown below, under existing retail rates and estimated revenue requirements over the
<br /> Study Period, the cash reserves for the electric utility are projected to decrease from
<br /> approximately $12.7 million at the end of 2015 to approximately negative $5.1 million by
<br /> the end of 2020. Also shown in Table 2-4 is the reserve balance goal based on ERMU
<br /> policy. The end of year reserve balance is projected to decrease from 167% of reserve
<br /> goal to negative 64% of reserve goal.
<br /> Table 2-4
<br /> Projected Cash Reserves
<br /> Existing Rates
<br /> Year 2016 2017 2018 2019 2020
<br /> Beginning Balance $12,685,126 $10,810,388 $8,985,031 $7,033,784 $1,383,933
<br /> Plus Change in Net Position 69,791 (394,850) (1,090,957) (2,616,103) (3,672,601)
<br /> Plus Depreciation 2,325,000 2,375,000 2,425,000 2,497,750 2,572,683
<br /> Plus Bond Proceeds 10,000,000 10,000,000
<br /> Less Capital Improvements (13,756,468) (2,531,100) (11,901,122) (3,961,144) (3,731,167)
<br /> Less Loss of Revenue Pmts (31,754) (373,191) (465,916) (476,136) (486,356)
<br /> Less Debt Principal P (481,307) (901,216) (918,252) (1,094,217) (1,138,385)
<br /> Ending Balance $10,810,388 $8,985,031 $7,033,784 $1,383,933 $(5,071,894)
<br /> Reserve Goal $6,460,731 $6,568,436 $7,410,265 $7,673,218 $7,927,883
<br /> Reserves as %of Goal 167% 137% 95% 18% -64%
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