1. Monitoring Organizational Performance for Utility Governing Boards APPA National Conference June 16, 2009 Carl A. Mycoff

2. A headhunter discussing Monitoring Organizational Performance for Governing Boards? It’s what we do.

3. Driving Metric: Stakeholder Value Quantitative Qualitative It’s first and foremost about the money, but CEO’s can just as easily lose their jobs over tree trimming.

4. Quantitative: Balancing conflicting forces Price Power Supply Finance Return Customer relations Economic Development Staff Development

5. Price competitiveness Regional National Global

6. Power supply: THE largest component of price Large and vertically integrated Distribution/joint action agency - All requirements - Project

7. Financial condition Debt/equity: Rating agency ratings optimized to minimize interest expense. Life of asset Customers deriving benefit Debt service impact on price Where should the equity reside? - Distribution - Joint action

8. Return Cash transfer to general fund; Payment- in-lieu of taxes Shared service allocation Free services Street paving

9. San Antonio City Public Service (CPS) Annual electric revenue$1.2 Billion Residential Revenue$672 Million Residential Revenue under AEP$882 Million Revenue Saving$210 Million Transfer to the General Fund$245 Million Franchise Fee and Property Tax$57 Million CPS customer residents save annually$398 Million

10. Tacoma Public Utilities Annual Retail Electric Revenue$267 Million Annual Retail Electric Revenue Under Puget Energy$404 Million Retail Revenue Savings$137 Million Gross Revenue Tax$30 Million Support Service Allocation$6 Million Franchise Fee and Property Tax$13 Million Tacoma Public Utility Customers save annually$160 Million

11. Customer Relations Customer satisfaction Reliability; CAIDI/SAIDI Power quality/price Chip manufacturer/irrigator

12. Economic Development Build load and revenue - Load factor - Incremental cost to serve. Mitigate customer dependence Local job creation Tax base

13. Staff Development Turnover Successor development Internal promotions Cost/benefit Safety OSHA Recordable Lost time Unions Grievances Arbitrations

14. Quantitative and Qualitative factors Green resources: College/capital city or coal mining town Subscription rate/premium price Energy efficiency: Community culture: High tech/packing house Staff impact on community relations: Local hires/market compensation forces:

15. Qualitative Factors Relationships/Communication: NO SURPISES Governing body Customers Staff Joint venture partners Community Legislature, administration, and regulatory

16. Questions?