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

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 square miles Unified Government created in April 1997 Charter ordinance adopted

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

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

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. Customer Statistics

Sales (Energy & Water)

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%)

Local Rate Comparison 1,000 kWh (Summer) Utility RateFuel RiderDollars/$$ KCBPU 6.60 $ $93.89 Westar 8.00 $ $89.45 IPL 9.94 $ $ KCPL 7.93 $ $98.34

Population Trends

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 % (State) Health Lowest in the State

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

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%

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

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

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

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 Existing Service Strategies

2009 APPA National Conference Thank You Questions?