6.1a ERMUSR 08-08-2017 - Laserfiche WebLink

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FINANCIAL HIGHLIGHTS VVPAs financial strengtn su000rts the Agency's aoility to orovice stao e Gnc COT oetitive rates Rating Outlook Improved Energy Adjustment Clause MMPA issued bonds in 2016 to finance the MMPA uses a forward-looking energy Shakopee Energy Park project. The bonds were adjustment clause (EAC) to help match the issued at a time of low interest rates-the yield timing of revenues and expenses. At the start to maturity for the 31-year bonds was 3.37%. of each month, MMPA reviews projected costs Both Moody's and Standard & Poor's affirmed and sets rates accordingly. our A2 bond rating while improving the rating Debt Service Coverage outlook from "Stable" to "Positive." Our Board of Directors has a policy of Rate Stabilization Fund approving an annual budget with debt service MMPA maintains a rate stabilization fund to coverage of at least 1.20 times debt service. promote our goal of providing competitive and This coverage policy is higher than the 1.15 stable rates to members based on long-term times debt service required by our bond energy price expectations-not short-term indenture. The policy results in stronger commodity price movements. As of the end of financial performance for the Agency and gives 2016, our rate stabilization fund balance was us flexibility to adjust to unexpected events. In $33.1 million. 2016, thanks to exceptionally strong financial performance, MMPA exceeded its debt service coverage target with a coverage ratio of 1.41 times debt service. Year-Ending Rate Debt Service Coverage Ratio Stabilization Balance in thousands of dollars 1.45— 35,000 _ 1.40_ 30,000 — $33,071 1.41 1.35— $30,450 $30,450 25,000— 1.30— 20,000— 1.25— 1.27 1.27 1.20 — 15,000 — 1.15— 10,000 _ u t 1� 1.10, i ,tt. �A flt' 5,000 — 1.05— 0_ 1.00- 2014 2015 2016 2014 2015 2016 26 2016 MMPA Annual Report 107