6.1a2 ERMUSR 05-09-2023 - Laserfiche WebLink

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Minnesota Municipal Power Agency Notes to Financial Statements December 31, 2022 and 2021 Note 8: Credit Facilities The Agency entered into a $20.0 million credit facility on May 1, 2016. The commitment fee is 0.50% per annum; interest on outstanding balances is tied to LIBOR through March 2022, when this index was changed to the Bloomberg Short -Term Bank Yield (BSBY). The facility was renewed on May 1, 2019 and again on April 1, 2022 and expires on May 6, 2025, and is secured by a pledge of the net revenues of the Agency. There were no amounts outstanding as of December 31, 2022 or 2021. Note 9: Risk Management The Agency is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters. The Agency participates in a public entity risk pool related to public officials' liability. The Agency has a $60,000 deductible per occurrence, with a $200,000 annual maximum deductible for its liability coverage. The Agency also purchases municipal automobile coverage from the same public entity risk pool with a $1,000 deductible per occurrence. The public entity risk pool has purchased a reinsurance policy to guard against excessive losses. The Agency also carries commercial insurance for its risks of property loss, business interruption, and general liability. The Agency's property loss has varying deductibles based on the equipment insured that range from $250,000 to $1,500,000. The Agency's business interruption insurance has a 60 day deductible. The Agency also has an umbrella policy related to its municipal automobile insurance and general liability insurance. Settled claims have not exceeded insurance coverage in any of the past three years for any of the Agency's insurance policies. Note 10: Contingencies The Agency is a party to various contracts for the sale, purchase, and transmission of power. In the ordinary course of business, contractual disputes sometimes occur between the Agency and its counterparties. The Agency does not expect the outcome of any existing dispute resolution proceedings to have a material adverse impact on financial position, results of operations, or cash flows. The Agency is a market participant in the MISO "Day 2" electricity markets. MISO does not provide final settlement results for a trading day until 105 days after a trading day. The financial statements reflect the Agency's best estimates of final settlement results. 28 166