ML20323A234

Southern California Public Power Authority Report of Independent Auditors and Combined Financial Statements

ML20323A234
Person / Time
Site:	Palo Verde
Issue date:	11/17/2020
From:	Arizona Public Service Co, MOSSADAMS, Southern California Public Power Authority
To:	Office of Nuclear Material Safety and Safeguards, Office of Nuclear Reactor Regulation
Shared Package
ML20323A230	List: ML20323A231 ML20323A232 ML20323A233 ML20323A234
References
102-08184-MDD/MSC
Download: ML20323A234 (164)

Text

REPORT OF INDEPENDENT AUDITORS AND COMBINED FINANCIAL STATEMENTS SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY June 30, 2019 and 2018 MOSSADAMS

Table of Contents PAGE Report of Independent Auditors 1-3 Managements Discussion and Analysis A-B Financial Statements Combined and individual financial statements 9-44 Notes to combined financial statements45-123 Required Supplemental Information Schedule of proportionate share of the net pension liability as of June 30, 2019 124 Schedule of contributions as of June 30, 2019 125 Schedule of changes in net OPEB liability 126 Supplementary Information Power Purchase Agreements combining statement of net position as of June 30, 2019 127-128 Power Purchase Agreements combining statement of net position as of June 30, 2018 129-130 Power Purchase Agreements combining statement of revenues, expenses, and changes in net position for the year ended June 30, 2019 131-132 Power Purchase Agreements combining statement of revenues, expenses, and changes in net position for the year ended June 30, 2018 133-134 Power Purchase Agreements combining statement of cash flows for the year ended June 30, 2019 135-136 Power Purchase Agreements combining statement of cash flows for the year ended June 30, 2018 137-138 Power Purchase Agreements investments for the year ended June 30, 2019 139-140 Power Purchase Agreements investments for the year ended June 30, 2018 141-142 Other Information Supplemental schedule of receipts and disbursements in funds required by the bond indenture for the year ended June 30, 2019 Palo Verde Project 143 San Juan Project 144 Magnolia Power Project 145 Canyon Power Project 146 Apex Power Project 147 Tieton Hydropower Project 148 Milford I Wind Project 149 Milford II Wind Project 150 Windy Point Project 151 Linden Wind Energy Project 152 Southern Transmission System Project 153 Mead-Phoenix Project 154 Mead-Adelanto Project 155 Pinedale Project 156 Barnett Project 157 Prepaid Natural Gas Project 158

MOSSADAMS Report of Independent Auditors The Board of Directors and Participants of Southern California Public Power Authority Report on Financial Statements We have audited the accompanying combined and individual projects financial statements of Southern California Public Power Authority (the Authority), which comprise the combined and individual projects statements of net position as of June 30, 2019 and 2018, and the related combined and individual projects statements of revenues, expenses and changes in net position, and cash flows for the years then ended, and the related notes to the financial statements.

Managements Responsibilityfor the Financial Statements Management is responsible for the preparation and fair presentation of these combined and individual projects financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of combined and individual project financial statements that are free from material misstatement, whether due to fraud or error.

Auditors Responsibility Our responsibility is to express an opinion on these combined and individual projects financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the California Code of Regulations, Title 2, Section 1131.2, State Controllers Minimum Audit Requirements for California Special Districts. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the combined and individual projects financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the combined and individual projects financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the combined and individual projects financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entitys preparation and fair presentation of the combined and individual projects financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion.

An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the combined and individual projects financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Opinions In our opinion, the combined and individual projects financial statements referred to above present fairly, in aii materiai respects, the financial position of Southern California Public Power Authority and each of the Authoritys projects: Paio Verde Project, San Juan Project, Magnoiia Power Project, Canyon Power Project, Apex Power Project, Tieton Hydropower Project, Milford I Wind Project, Milford II Wind Project, Windy Point Project, Linden Wind Energy Project, Southern Transmission System Project, Mead-Phoenix Project, Mead-Adelanto Project, Pinedale Project, Barnett Project, Prepaid Natural Gas Project, Power Purchase Agreements, Project Development Fund, Projects Stabilization Fund and SCPPA Fund as of June 30, 2019 and 2018 and Hoover Uprating Project as of June 30, 2018, and the combined and individual results of the projects operations and cash flows for the years then ended in accordance with accounting principies generally accepted in the United States of America.

Emphasis ofMatter As discussed in Note 1 to the financial statements, the Authority adopted the provisions of Governmental Accounting Standards Board (GASB) No. 83, Certain Asset Retirement Obligations, effective July 1,2018. The beginning of year net position has been adjusted for this change. Our opinion is not modified with respect to this matter.

Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the managements discussion and analysis. Schedule of Proportionate Share of the Net Pension Liability as of June 30, 2019 and the Schedule of Contributions as of June 30, 2019 be presented to supplement the financial statements. Such information, although not a part of the financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures in the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with managements responses to our inquiries, the financial statements, and other knowledge we obtained during our audit of the financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Authority's basic financial statements. The Power Purchase Agreements combining statements of net position as of June 30, 2019 and 2018, and the related Power Purchase Agreements combining statements of revenues, expenses, and changes in net position, and cash flows for the years then ended, and the Purchase Power Agreements investments as of June 30, 2019 and 2018 (collectively, supplementary information) are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The supplementaty information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such infonnation directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Ir\formation Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The supplemental schedules of receipts and disbursements in funds for the year ended June 30, 2019, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it.

Portland, Oregon October 31, 2019 V

Southern California Public Power Authority Managements Discussion and Analysis The following discussion and analysis of the financial performance of Southern California Public Power Authority (the Authority or SCPPA), provides an overview of the Authoritys financial activities for the fiscal years ended June 30, 2019 and 2018. Please read this discussion and analysis in conjunction with the Authority's Combined Financial Statements, which begin on page 9. Description and other details pertaining to the Authority are included in the Notes to Combined Financial Statements.

The Authority is a joint powers authority whose primary purpose has been to provide joint financing and oversight for large joint projects for its member agencies that consist of eleven municipal electric utilities and one irrigation district in California. On a combined basis, these entities provide electricity to more than two million retail electric customers. A Board of Directors (the Board) governs the Authority, which consists of one representative from each member agency.

Using This Financial Report This annual financial report consists of a series of financial statements and reflects the self-supporting activities of the Authority that are funded primarily through the sale of energy, natural gas, and transmission services to member agencies under project specific take-or-pay contracts that require each member agency to pay its proportionate share of operating and maintenance expenses and debt service with respect to such projects. The contracts cannot be terminated or amended in any manner that will impair or adversely affect the rights of the bondholders as long as any bonds issued by the specific project remain outstanding. The Authority also established take-and-pay contracts for the participants of the prepaid natural gas project where the payments received from the sale of gas will be sufficient to pay debt service. In addition, the Authority has entered into various power purchase agreements. These agreements are substantially take-and-pay contracts but there may be other costs not associated with the delivery of energy that the participants may be obligated to pay.

See accompanying notes.

Southern California Public Power Authority Managements Discussion and Analysis Combined Summary of Financial Condition and Changes in Net Position (in thousands)

June 30.

2019 2018 (Restated) 2017 (Restated)

Assets S 1,441,741 S 1,507,609 1,567,960 Net utility plant Investments 693,454 648,816

$ 740,656 Cash and cash equivalents 247,855 277,645 224,652 Prepaid and other 784,532 842,175 916,328 Total assets 3,167,582 3,276,245 3,449,596 Deferred outfloMS of resources 154,827 167,606 190,934

$ 3,322,409 3,443,851 Total assets and defened outflows of resources s $ 3,640,530 Liabilities

$ 2,769,102 2,934,274 3,135,884 Noncurrent liabilities 426,088 s 427,036 Current liabilibes 432,349 Total liabilities 3,195,190 3,361,310 3,568,233 Deferred inflows of resources 61 50 87 Net position Net investment in capital assets (138,447) (189,747) (142,599)

Restricted 385,434 404,782 393,361 Unrestricted (119,829) (132,544) (178,552)

Total net position 127,158 82,491 72,210 Total liabilities, deferred inflows of resources, S 3,322,409 3,640,530 and net position S 3,443,851 $

Revenues, expenses and changes in net position for the year ended June 30

$ 1,012,325 970,156 995,236 Operating revenues (903,743) s (836,888)

Operating expenses (832,403)

Operating income 108,582 133,268 162,833 Investment and other income 41,672 10,237 13,973 Derivative gain (loss) (3,485) 8,632 7,569 Inflation of ARO Liability (3,004) (5,086) (3,469)

Debt expense (111,313) (116,543) (126,895)

Change in net position before special items 32,452 30,508 54,011 Special Items (3,261) (61,839)

Change in net position 32,452 27,247 (7,828)

Net position, beginning of year 82,491 72,210 (48,951)

Cumulative effect of restatement of GASB 83 142,633 Net position - beginning of year, as adjusted 82,491 72,210 93,682 Net contributions/(withdrawals) by participants 12,215 (16,966) (13.644)

$ 127,158 82,491 S 72,210 Net positon, end of year s See accompanying notes.

Southern California Pubiic Power Authority Managements Discussion and Analysis Net Position - The Authority's net position increased by $45 million mainly due to the decrease in assets and deferred outflows of resources of $121 million offset by the decrease in liabilities and deferred inflows of resources of $166 million.

Assets - The decrease of $121 million in the Authority's assets and deferred outflows of resources is due to the following:

• Net Utility Plant - decreased by $66 million The decrease is primarily due to the $91 million scheduled depreciation in Generation and Transmission Project and $6 million depletion in the Natural Gas Reserves Projects; offset by the $31 million ongoing capital improvements in the Apex Power Project (APP), Palo Verde Project (PV) and Canyon Power Project (CPP).

• Investments - Increased by $45 million The increase is largely due to $16 million transfer of funds to Projects' Stabilization Fund (PSF) for the Participants' share of the prior years over-collection in the San Juan Project (SJ); Invested $12 million accumulated overbillings in various Projects; $15 million transfer of short-term investments to long-term investments; $3 million reinvestment of interest earnings and $3 million increase in market value of investment securities in the PV Decommissioning Trust Fund. The increases were offset by the $4 million withdrawal from the Project Funds for capital improvement in CPP.

• Cash and cash equivalents - decreased by $30 million The decrease is mainly due to the $16 million transfer of funds to the PSF for the Participants share of the prior years over collection in SJ Project, and $15 million transfer of cash and cash equivalent to long-term investments; offset by the $1 million accumulated overbillings in various Projects invested in short term investments.

• Prepaid and other assets - decreased by $57 million The decrease is mainly due to the $60 million scheduled amortization of the prepaid assets in the Natural Gas Prepaid Project (NGPP), Milford I, Milford II, and Windy Point/Windy Flats Projects (Windy Point); offset by $1 million change in the fair value of the derivative instruments in the Mead-Adelanto Project (MA) and $2 million increase in inventories in various generation projects.

• Deferred outflows of resources - decreased by $13 million The decrease is mainly due to the $21 million amortization of loss on refunding in various debt-funded projects and $2 million amortization of Asset Retirement Obligation (ARO) in the PV, Linden, Tieton Hydropower Project (THP) and Pinedale and Barnett Natural Gas Projects. The decreases were offset by the $10 million increase in the reported fair value of the derivative instruments in the Magnolia Power Project (MPP) and NGPP.

See accompanying notes.

Southern California Public Power Authority Managements Discussion and Analysis Liabilities - The decrease in the Authority's liabilities of $166 million is primarily due to the following:

• $186 million of principal maturities and related amortizations for all debt-funded projects, the return of $16 million prior years over-collection in SJ and the $4 million release of Reserve and

.'S.'?.'

Contingency Fund for the initial deposit in SJ Decommissioning Trust Fund. The decreases were offeet by the $19 million accumulated overbillings and accruals in various Projects: $17 million net increase in the reported fair market values of derivative instruments in MPP and NGPP; and $4 million increase in the recognition of ARO in the PV, APP, THP, Linden, and Pinedale and Barnett Natural Gas Projects in accordance with GASB 83, Certain Asset Retirement Obligations.

During fiscal year 2018, the Authoritys assets and deferred outflow of resources, as restated, decreased by $197 million largely due to the scheduled depreciation in the generation and transmission Projects, and depletion in the Natural Gas Reserves Project; offset by $207 million decrease in liabilities mainly due to the scheduled principal maturities and related amortizations for all debt-funded projects, resulted an increase in the Authoritys net position of $10 million. In addition, the PV decommissioning obiigation was adjusted to recognize the current value and effects of general inflation or deflation to conform to the requirements of GASB 83.

Operating Income - Operating income decreased by $25 million mainly attributable to the $32 million unbudgeted expenditures in the Adelanto Converter Station in Southern Transmission System Project (STS), $8 million additional major maintenance expenses for the GE upgrades in MPP, and $1 million increase in the depletion rate due to the new reserve study conducted for Barnett Natural Gas Project.

The expenses were offset by the $16 million return of prior years over-collection in SJ Project.

During fiscal year 2018, the net operating income, as restated, decreased by $29 million primarily due to the $14 million reduction in billings in the PV Project resulted from the final debt service requirement that ended in July 2017; $10 million prior years overbillings contributed to the issuance STS 2017A for the refunding of STS 2009A Bonds, and the issuance of 2018A&B Bonds for the refunding of the 2017A Bonds in CPP; $4 million release of Reserve and Contingency Fund for the scheduled major maintenance in MPP; and $1 million recognition of other post-employment benefits (OPEB) expense.

Investment and Other Income - Investment and other income increased $31 million due to the $15 million reimbursement of fire insurance settlements in STS Project and $16 million increase in market values and higher interest earnings of the investment securities held in various Projects primarily in PV Decommissioning Trust Fund.

Derivative Gain (Loss) - In June 2008, GASB issued Statement No 53, Accounting and Financial Reporting for Derivative Instruments, effective for financial statements for periods beginning after June 15, 2009. GASB 53 requires that the fair value of derivative instruments be reported in the financial statements as investment income or loss if the derivative fails to effectively hedge the risk of rising or falling cash flows or fair values. $3.5 million derivative loss and $8.6 million derivative gain were reported related to the Authoritys derivative instruments that were deemed investment instruments as of June 30, 2019 and 2018, respectively. The $12.1 million increase in derivative loss is mainly due to the effect of changes in fair values of Magnolia Power Project Swaps. (See Note 5) 7 See accompanying notes.

Southern California Public Power Authority Managements Discussion and Analysis SCPPA has three basis swaps that make variable payments based on SIFMA and receive variable payments based on a percentage of LIBOR. Their purpose is to reduce the interest expense on the Mead-Adelanto Project, and the Magnolia Power Project Bonds. Pursuant to GASB 53, there is no identified risk being hedged by a basis swap, and therefore they are all deemed investment instruments.

These investment instruments were strategically placed by management to reduce interest expense and they continue to serve this purpose.

Inflation of ARO Liability - A decrease in inflation loss of $2 million was recognized due to the implementation of GASB 83, Certain Asset Retirement Obligations, which requires the current value of an entitys ARO to be adjusted for the effects of general inflation or deflation at least annually and it requires entities to evaluate all relevant factors to determine whether the effects of one or more of the factors are expected to significantly change the estimated asset retirement outlays.

Debt Expense - Debt expense decreased by $5 million primarily due to lower interest expense from the refunding of the 2008A and 2009A Bonds in the STS Project, and the cost of issuance recognized in fiscal year 2018 associated with the issuance of Magnolia Power Project 2017-1 and Canyon Power Project 2018A&B Refunding Bonds.

Special Items - Special items for fiscal year 2018 pertain to the $3 million net write-off of inventories, prepaid accounts, and liabilities due to the divesting of ownership interests of the SJ Unit 3 plant on December 31,2017.

See accompanying notes.

Southern California Public Power Authority Combined Statements of Net Position (Amounts in Thousands)

June 30, 2019 2018 (Restated)

ASSETS Noncurrsnt assets 1,507,609 Net utility plant $ 1.441.741 $

Investments - restricted 619,889 608,142 Investments - unrestricted 7.3,565 40,674 Advance to IPA - restricted 10,930 10,930 Fair value of derivative instruments 1,094 Prepaid and other assets 669,903 729.736 .

Total noncurrent assets 2,817,122 2,897,091 Current assets Cash and cash equivalents - restricted 152,245 181,059 Cash and cash equivalents - unrestricted 95,610 96,566 Interest receivable 2,295 2,257 Accounts receivable 13,310 13,517 Materials and supplies 23.973 23,787 Prepaid and other assets 63,027 61,948 Total cun^nt assets 350,460 379,154 DEFERRED OUTFLOWS OF RESOURCES Defened items related to pensions 559 660 Unamortizod loss on refunding 81,896 102,712 Asset retirement obligation 42,842 44,561 Accumulated decrease in fair value of hedging derhrativss 29.528 19,673 Total deferred outflows of resources 154,827 167,606 3,443,851 Total assets and deferred outflows of resources $ 3,322,409 $

LIABILmES Norwurrent llabHities 2,674,562 Long-term debt $ 2,491,059 $

Fair value of derivative instruments 39,620 25,185 Notes payable, net pension and other liabilities 4.546 2,301 Advances from participants 19,027 20,956 Reclamation and det>>mmtssion obligation 214,850 211,270 Total noncurrent liabilities 2,769,102 ^934,274 Current liabilities Debt due within one year 160,265 163,185 Notes payable and other liabilities due within one year 21,127 20,142 Advances from participants due within one year 54,594 67,364 Accrued interest 50,241 53,005 Accounts payable and accruals 136,649 119,872 Accrued property tax 3,212 3,468 Total current liabilities 426,088 427,036 Total liabilities 3,195,190 3,361,310 DEFERRED INFLOWS OF RESOURCES Defened items related to pensions 61 50 61 50 Total deferred inflows of resources NET POSITION Net investment in capital assets (138,447) (189,747)

Restricted 385,434 404,782 Unrestricted (119,829) (132,544) 127,158 82.491 Total net position 3,443,851 Total liabilities, deferred inflows of resources and net position $ 3.322,409 $

See accompanying notes.

Southern California Public Power Authority Combined Statements of Revenues, Expenses, and Changes in Net Position (Amounts in Thousands)

Years Ended June 30, 2019 2018 (Restated)

Operating revenues Vf Sales of electric energy $ 831,242 $ 779,764  !! '

Sales of transmission services 145,911 155,304 Sales of natural gas 35,172 35,088 Total operating revenues 1,012,325 970,156 Operating expenses Operations and maintenance 784,907 715,298 Depreciation, depletion and amortization 103,874 104,827 Amortization of nuclear fuel 13,102 13,924 Decommissioning 1,720 1,720 Pension and other benefits expense (credit) 140 1,119 Total operating expenses 903,743 836,888 Operating income 108,582 133,268 Non operating revenues (expenses)

Investment and other income 41,672 10,237 inflation of ARO Liability (3,004) (5,086)

Derivative gain (loss) (3,485) 8,632 Debt expense (111,313) (116,543)

Net non operating revenues (expenses) (76,130) (102,760)

Net increase before special items 32,452 30,508 Special items Asset impairment - net (3,261)

Total special Items . (3,261)

Change in net position 32,452 27,247 Net position - beginning of year 82,491 (83,198)

Cumulative effect of restatement of GASB 83 _ 155,408 Net position - beginning of year, as restated 82,491 72,210 Net contributions (distributions) by participants 12,215 (16,966)

Net position - end of year $ 127,158 $ 82,491 See accompanying notes.

Southern California Public Power Authority Combined Statements of Cash Flows (Amounts in Thousands)

Years Ended June 30, 2019 2018 (Restated)

Cash flows from operating activities Receipts from participants $ 833,169 $ 834,482 Receipts from sale of oil and gas 8,165 15,130 Payments to operating managers (547,641) (527,988)

Other disbursements and receipts 18,006 12,210 Net cash flows provided by (used for) operating activities 311,699 333,834 Cash flows from noncapital financing activities Advances by participants, net 9,916 (15.170)

Cash flows from capital financing activities Additions to plant and prepaid projects, net (53,953) (57,234)

Debt interest payments (111,539) (121.328)

Proceeds from sale of bonds 53,211 338,870 Payment for defeasance of revenue bonds (53,574) (108,966)

Payments for swap termination fee - (7,334)

Transfer of funds from (to) escrow - (232,407)

Transfer of funds from (to) Mine Reclamation Trust Fund (500) (17,790)

Principal payments on debt (163,185) (172.210)

Payment for bond issue costs (529) (1.696)

Net cash used for capital and related financing activities (330,069) (380,095)

Cash Bows from investing activities Interest received on investments 9,863 7,019 Purchases of investments (475,064) (391,063)

Proceeds from sale/maturity of investments 443,865 498,468 Net cash provided by (used for) investing activities (21,336) 114,424 Net change in cash and cash equivalents (29,790) 52,993 Cash and cash equivalents, beginning of year 277,645 224,652 Cash and cash equivalents, end of year $ 247,855 S 277,645 Reconciliation of operating income to net cash provided by operating activities 108,582 $ 133,268 Operating income Adjustments to reconcile operating income to net cash provided s

by operating activities Depreciation, depletion and amortization 151,228 152,181 Decommissioning 1,720 1,720 Advances for capacity and energy . 682 Amortization of nuclear fuel 13,102 13,924 Pension and other benefits expense 140 1,119 Changes in assets and liabilities Accounts receivable (150) 8,908 Accounts payable and accruals 10,472 12,376 Other 26,605 9,656

' trrtrji>> :'

Net cash provided by operating activities $ 311,699 333,834 Cash and cash equivalents as stated in the Combined Statements of Net Position Cash and cash equivalents - restricted $ 152,245 $ 181,059 Cash and cash equivalents - unrestricted 95,610 96,586

$ 247,855 s 277,645 See accompanying notes.

I.K ipWlilW Southern California Public Power Authority Individual Statements of Net Position June 30, 2019 (Amounts in Thousands)_____________________

GENERATION Magnolia Canyon Palo Verde San Juan Power Power Apex Power ASSETS Noncurrent assets

$ 281,173 $ s 168,719 214.944 278,762 Net utility plant 196,363 29,683- 64,362 s 7,259

$ 21,834 Investments - restricted Investments - unrestricted 15,225 12,745 Advance to IPA - restricted Fair value of derivative instruments Prepaid and other assets Total noncunent assets 492,761 29,883 245,826 222,203 300,596 Current assets Cash and cash equivalents - restricted 4,768 9,291 11,578 11,806 Cash and cash equivalents - unrestricted 9,501 217- 3,546 3,272 3,531 Interest receivable 898 221 233 46 39 Accounts receivable 1,570 12 203 1 Materials and supplies 10,348 8,510 938. 4.177 Prepaid and other assets 1,155 4- 396 49 361 Total current assets < 28,240 454 22,179 15.883 19,915 DEFERRED OUTFLOWS OF RESOURCES Unamortized loss on refunding 8,099 43,653 Asset retirement obligation 34,139- - 7,239-Accumulated decrease in fair value of hedging derivativos

- 19,028. -

Total deferred outflows of resources 34,139 27,127 43,653 7,239 S 555,140 30,337 295,132 281,739 Total assets and deferred outflows of resources $ $ s s 327,750 LIABILITIES Noncurrent liabilities

$ 282,297 316.182 282.547 Long-tenn debt Fair value of derivative instruments

- $ 29,120 s s Notes payable and other liabilities

- - 2,219 -

Advances from participants Reclamation and decommission obligation 172,040- 29,624- - - 9.933-Total noncunent liabilities 172,040 29.624 313,636 316,182 292,480 Cunent liabillttes Debt due within one year 7,560 7,835 9,710 Notes payable and other liabilities due within one year

- - 21,127 Advances from participants due within one year

- - 17,244 9,421- 4,589-Accrued Interest

- - 4,027 3,608 6.117 Accounts payable and accruals 18,855- 259- 3,896 294 9,567 Accrued property tax 1,500 Total current liabilities 20,355 259 53,854 21,158 29,983 Total liabnities 192,395 29,883 367,490 337,340 322,463 NET POSITION Net investment in capital assets 281,173 (113,038) (65,418) (4,257)

Restricted 64,059 356- 39,994 5,848 11,035 Unrestricted 17,513 98 686 3.969 (1.491)

Total net position 362,745 454 (72,358) (55,601) 5,287

$ 555,140 S 30,337 295.132 281,739 Total liabilities and net position $ $ $ 327,750 See accompanying notes.

Southern California Public Power Authority Individual Statements of Net Position June 30, 2018 (Restated)

(Amounts in Thousands)

GENERATION Magnolia Canyon Palo Verde San Juan Power Power Apex Power ASSETS Noncurrent assets Net utility plant S 288,516

$ $ 179,285 $ 220,614 $ 276,341 Investments - restricted 192,198 29.237- 57,474 13,630 17,642 Investments - unrestricted 16,383 2,976 Advance to I PA - restricted Fair value of derivative instmments Prepaid and other assets Total noncurrent assets 497,097 29,237 239,735 234,244 293.983 Currerrt assets Cash and cash equivalents - restricted 4,761 9,840 20,373 8,477 13,734 Cash and cash equivalents - unrestricted 7,857 6,709 8,276 1,510 1,117 Interest receivable 764 180 515 35 36 Accounts receivable 1,867 1,148 Materials and supplies 10,253 . 8,590 1,186 3,758.

Prepaid and other assets 626 . 200 45 15 Total current assets 26,328 16,729 39,102 11,253 18,660 DEFERRED OUTFLOWS OF RESOURCES Unamortized loss on refunding 12,571 47,598 Asset retirement obligation 35,399- - 7,606-Accumulated decrease in fair value of hedging derivatives

- 12,248- -

Total defemed outflows of resources 35,399 24.819 47,598 7,606 S 558,624 45,966 303,656 S 293.095 Total assets arxi deferred outflows of resources $ $ $ 320.249 LIABILITIES Noncurrent liabilities

$ S 291,139 326,042 Long-term debt s $ 293.004 Fair value of derivative instruments

- 16.542 Notes payable and other liabilities Advances from participants Reclamation and decommission obligation 169,250- 29,050- - - 9,772-Total noncurrent liabilities 169,250 29,050 307,681 326,042 302,776 Current liabilities Debt due within one year 7,210 7,540 9,545 Notes payable and other liabilities due within one year

- 20,142 Advances from participants due within one year

- 19,954- 17,204 - 3,451-Accrued interest 4,103 2,865. 6,199 Accounts payable and accruals 19,940- 8.254. 5,400 1,613 4,396 Accrued property tax 1,602 Total current liabilities 21,542 28,208 54,059 12,018 23,591 Total liabilities 190.792 57,258 361,740 338,060 326,367 NET POSITION Net investment in capital assets 288,516 (106,494) (61,844) (16,016)

Restricted 63,804 45,497 15,748 9,388 Unrestricted 15,712 -

(11,292) 2,913 1,131 510 Total net position 368,032 (11,292) (58,084) (44,965) (6,118) 558,824 S 45,966 303,656 293,095 320,249 Total liabilities and net position s $ $ $

See accompanying notes.

Southern California Public Power Authority Individual Statements of Net Position June 30, 2019 (Amounts in Thousands) ____

GREEN POWER Tleton Milford 1 Linden Wind Wind MIfordllWind Energy Windy Point ASSETS Noncutrent assets 35,034 95,402 Net utility plant $ $ - s $ - $

Investments - restricted 5,686 27,023 8,907 32,176 4,387 Investments - unrestricted 1,700 Advance to IPA - restricted _ _ . .

Pair value of derivative instruments

- 106,930- 97,103 - 279,692 . .

Prepaid and other assets Total noncurient assets 40,720 133,953 106,010 311,868 101,489 Current assets Cash and cash equivalents - restricted 1,934 9,697 4,131 10,403 5,217 60S 13 3.988 5,857 698 Cash and cash equivalents - unrestricted 23 88 12 39 2 Interest receivable 146 3,263 Accounts receivable Materials and supplies 179- 11,408 - 8,701- 27,854 - 27-Prepaid and other assets c

2.887 24,469 16,832 44,153 5,944 Total cunent assets DEFERRED OUTFLOWS OF RESOURCES Unamortized loss on refundirrg 479 - - - 372-Asset retirement obligation Total deferred outflows of resources 479 372 Total assets and deferred outflows of resources s 44.086 i 158,422 s 122,842

$ 356,021

$ 107,805 LIABILITIES Noncurrent liabilities 45,943 161,336 118,470 358,591 Long-term debt $ $ $ $ $ 108,479 Fair value of derivative instruments Notes payable and other liabilities Advances from participants Reclamation and decommission obligation 853- - . . 699.

Total noncurrent liabilities 46.796 161,336 118,470 358.591 109,178 Current liabilities Debt due within one year 1,000 10,570 6,665 23,040 4,335 or>e year Advances from participants due witNn one year 202- 250- 250- .

1,000 2,004-Accrued interest 1,181 4,150 3,098 9,002 2,910 Accounts payable and accruals 583 546 2.516 4,734 924 Accrued property tax 529 204 Total current liabilities 2,966 15,516 12,529 38,305 10,377 Total liabilities 49,762 176,852 130,999 396,896 119,555 NET POSITION Net investment in capital assets (11,909) (17,412)

Restricted 6,089 - - 6,370 Unrestricted 144 (18,430)- (8,157) -

(40,875) (708)

Total net position (5,676) (18,430) (8.157) (40,875) (11.750) 44,086 i Total liabilities and net position $ 158,422

$ 122,842

$ 356.021

$ 107,805 See accompanying notes.

Southern California Pubiic Power Authority Individual Statements of Net Position June 30, 2018 (Restated)

___________ (Amounts in Thousands)

GREEN POWER Tieton Milford 1 Milford M Linden Wind Hydropower Wind Wind Energy Windy Point ASSETS Noncurrent assets Net utility plant $ 36,233 $ 1 $ $ 101,215 Investments - restricted 5,722 32,931 7,418 28,011 6,317 Investments - unrestricted 3,680 2,486 Advance to IPA - restricted Fair value of derivative instruments Prepaid and other assets 118,331 105,800 307,142 Total noncurrent assets 41,955 151.262 116,898 337,639 107,532 Current assets 1,814 5,607 5.354 13,781 5,202 Cash and cash equivalents - restricted Cash and cash equivalents - unrestricted 762 2,713 2,542 3,715 143 16 94 11 43 2 Interest receivable Accounts receivable 45 Materials and supplies 26- 11,408 8.701 - 27,832 - -

28 Prepaid and other assets Total current assets 2,618 20,022 16,608 45,396 5,375 DEFERRED OUTFLOWS OF RESOURCES UnamortIzed loss on refunding Asset rebrement obligation 395 Accumulated decrease in fair value of hedging derivatives Total deferred outflows of resources 502 395 45.075 17U84 383,035 113,302 Total assets and defened outflows of resources $ $ $ 133,506 $ $

LIABILITIES Noncument liabilities 47,008 Long-term debt $ $ 172.747

$ 126.427 $ 385,446

$ 113,442 Fair value of derivathro instruments Notes payable and other liabilitiaa Advances from participants Reclamation and decommission obligation 839- . . . 686.

47,847 172,747 126,427 385.446 114.128 Total noncurrent liabilities Current liabilities 950 10.085 6,370 22,020 4,170 Debt due within one year Notes payable and other liabilibes due within one year 202- 250 - 250- 1,000 2.004-Advances from parbcipants due within one year 1,204 4.395 3,247 9,513 2,993 Accrued interest 442 2,529 4.746 5.010 646 Accounts payable and accruals 623 244 Accrued property tax - - -

2.798 17.259 14,613 38,166 10,057 Total current liabilities 50,645 190,006 141,040 423,612 124,185 Total liabilities NET POSITION (11,724) (16,396)

Net investment in capital assets Restricted 6,010 . - - 8,234 Unrestricted 144 (18,722) -

(7.534) (40,577) (2,721)

(5,570) (18,722) (7,534) (40,577) (10,883)

Total not posibon 45.075 171.284 383.035 113,302 Total liabilibes and net posibon $ $ $ 133,506 $ $

See accompanying notes.

Southern California Public Power Authority Individual Statements of Net Position June 30, 2019 (Amounts in Thousands)

TRANSMISSION Southern T ransmission System Mead-Phoenix Mead-Adelanto ASSETS Noncurrent assets S 147,997 S 46,808 96,686 Net utility plant 45,051 3,700

$ 17,400 Investments - restricted Investments - unrestricted 9,486 Advance to IPA - restricted 10,930 - .

Fair value of derivative instruments

_ 1,094_

Prepaid and other assets Total noncurrent assets 213,464 50,508 115,180 Current assets Cash and cash equivalents - restricted 25,225 4,747 11,625 Cash and cash equivalents - unrestricted 1,272 906 805 Interest receivable 75 1 1 Accounts receivable 2,939 186 825 Materials and supplies Prepaid and other assets 35- 2- 580-Total current assets 29,546 5,842 13,836 DEFERRED OUTFLOWS OF RESOURCES UnamortIzed loss on refunding 28,921 317 908 Asset retirement obligation Accumulated decrease in fair value of hedging derivatives Total deferred outflows of resources 28,921 317 90S

$ 271.931 56,667 S 129,924 Total assets and defened outflows of resources s LIABILITIES Noncunent liabilities

$ 411,623 26,461 42,593 Long-term debt $ $

Fair value of derivative instruments Notes payable and other liabilities Advances from participants Reclamation and decommission obligation Total noncurrent liabilities 411,623 26,461 42,593 Cunent liabilities Debt due within one year 48,730 7.365 21,565 Notes payable and other liabilities due within one year Advances from participants due within one year Accnjed interest 9,912- 677- 1,488-Accounts payable and accruals 11,231 725 1,496 Accrued property tax Total current liabilities 69,873 8,767 24,549 Total liabilities 481,496 35,228 67,142 NET POSITION Net Investment In capital assets (283,436) 12,982 33,436 Restricted 71,368 8,088 27,327 Unrestricted 2,503 369 2,019 Total net position (209,565) 21,439 62,782 S 271,931 56,667 Total liabilities and net position $ s 129,924 See accompanying notes.

Southern California Public Power Authority Individual Statements of Net Position June 30, 2018

_____________________ (Amounts in Thousands)

TRANSMISSION Southern Transmission System Mead-Phoenix Mead-Adelanto ASSETS Noncurrent assets Net utility plant s 170,751 S 49.538 $ 102,806 Investments - restricted 61,635 4,940 21,021 Investments - unrestricted Advance to IPA - restricted 10,930, _

Fair value of derivative instruments Prepaid and other assets Total noncunent assets 243,316 54,478 123,827 Current assets Cash and cash equivalents - restricted 28,689 3,444 8,213 Cash and cash equivalents - unrestricted 1,132 913 951 Interest receivable 63 6 33 Accounts receivable 1,377 87 Materials and supplies Prepaid and other assets ' 31- 166- 571-Total current assets 31,292 4,529 9,855 DEFERRED OUTFLOWS OF RESOURCES Unamortized loss on refunding 40,093 634 1,816 Asset retirement obligation Accumulated decrease in f^r value of hedging derivatives Total deferred outflows of resources 40,093 634 1,816 Total assets and deferred outflows of resources $ 314,701 s 59,641 S 135,498 LIABILITIES Noncurrent liabilities Long-term debt $ 470,191 s 34,583 $ 65,877 Fair value of derivative instnjments 1,218 Notes payable and other liabilities -

Advances from participants Reclamation and decommission obligation - - -

Total noncurrent liabilities 470,191 34,583 67,095 Current liabilities Debt due within one year 56.100 7.185 20,705 Notes payable and other liabilities due within one year - - 1,100-Advances from participants due within one year Accnjed interest 11,468- 793- 1,942 Accounts payable and accruals 3,913 733 505 Accrued property tax - - -

Total current liabilities 71,481 8,711 24,252 Total liabilities 541,672 43,294 91,347 NET POSITION Net investment In capital assets (315,447) 7,769 18,040 Restricted 89,849 8,222 26,211 Unrestricted (1,373) 356 (100)

Total net position (226,971) 16,347 44,151 Total liabilities and net position s 314,701 s 59,641 $ 135,498 See accompanying notes. 1i

Southern California Pubiic Power Authority Individual Statements of Net Position June 30, 2019 (Amounts in Thousands)

NATURAL GAS Prepaid Pinedale Barnett Natural Gas ASSETS Noncurrent assets Net utility plant $ 30,997 $ 38,821 $

Investments - restricted 32,118 12,679 Investments -unrestricted Advance to IPA - restricted Fair value of derivative instruments Prepaid and other assets 126 - 186,052 Total noncurrent assets 31,123 70,939 198,731 Current assets Cash and cash equivalents - restricted 3,740 8,878 4,995 Cash and cash equivalents - unrestricted 5,095 2,641 78 Interest receivable 7 129 56 Accounts receivable 453 538 1,575 Materials and supplies Prepaid and other assets 511 2 11,635 Total current assets 9,806 12,188 18,339 DEFERRED OUTFLOWS OF RESOURCES Unamortized loss on refunding Asset retirement obligation 497 116 -

Accumulated decrease in fair value of hedging derivatives 10,500 Total deferred outflows of resources 497 116 10,500

$ 41,426 $ 83,243 227,570 Total assets and deferred outflows of resources $

LIABILITIES Noncunent liabilities

$ 14,864 $ 34,961 286,712 Long-term debt s 10,500 Fair value of derivative instruments Notes payable and other liabilities Advances from participants 12,458 6,569 Reclamation and decommission obligation 1.404 297 Total noncunent liabilities 28,726 41,827 297,212 Current liabilities Debt due within one year 1,627 3,818 6,445 Notes payable and other liabilities due within one year Advances from participants due within one year 3,549 1,951 Accrued interest 477 1,120 2,474 Accounts payable and accruals 2,034 2,410 570 Accrued property tax 979 Total current liabilities 8,666 9,299 9,489 Total liabilities 37,392 51,126 306,701 NET POSITION Net investment in capital assets 696 22,343 Restricted 800 8,998 Unrestricted 2,538 776 -

(79.131)

Total net position 4,034 32,117 (79,131)

$ 41,426 S 83,243 227,570 Total liabilities and net position $

See accompanying notes.

Southern California Pubiic Power Authority Individual Statements of Net Position June 30, 2018 (Restated)

_____________________ (Amounts in Thousands)

NATURAL GAS Prepaid Pinedale Barnett Natural Gas ASSETS Noncurrent assets

$ 34,113 S 41,663 Net utility plant 28,947 s

Investments - restricted 12,183 Investments - unrestricted Advance to IPA - restricted Fair value of derivative instruments Prepaid and other assets 126 - 198.337 Total noncurrent assets 34,239 70,610 210,520 Current assets Cash and cash equivalents - restricted 4,332 11,534 4,789 Cash and cash equivalents - unrestricted 7,341 2,022 110 Interest receivable 7 89 56 Accounts receivable 519 618 1,514 Materials and supplies Prepaid and other assets 511 2 11,477 Total current assets 12.710 14,265 17,946 DEFERRED OUTFLOWS OF RESOURCES Unamortized loss on refunding Asset retirement obligation 535 124 -

Accumulated decrease in fair value of hedging derivatives 7,425 Total defemed outflows of resources 535 124 7,425 s 47,484 s 84,999 235,891 Total assets and deferred outflows of resources s LIABILITIES Noncurrent liabilities

$ 16,490 $ 38,780 293,386 Long-term debt s 7,425 Fair value of derivative instruments Notes payable and other liabilities Advances from participants 13,682 7,274 Reclamation and decommission obligation 1,381 292 _

Total noncurrent liabilities 31,553 46,346 300,811 Current liabinties Debt due within one year 1,770 4,150 5,385 Notes payable and other liabilites due within one year Advances from participants due wrthin one year 6,136 1,743 Accrued interest 526 1,238 2,519_

Accounts payable and accruals 2,275 2,150 573 Accrued property tax 999 Total current liabilities 11,706 9,281 8,477 Total liabilities 43,259 55,627 309,288 NET POSITION Net investment in capital assets 704 16,611 Restricted 12,266 Unrestricted 3,521- 495 (73,397)-

Total net position 4,225 29,372 (73,397)

Total liabilities aid net position 47,484 s 84,999 s 235,891 See accompanying notes.

Southern California Public Power Authority Individual Statements of Net Position June 30, 2019 and 2018 (Amounts in Thousands) _______

POWER PURCHASE AGREEMENTS 2019 2018 ASSETS Noncurrent assets Investments - unrestricted $ 34,409 $ 15,149 Total noncurrent assets 34,409 15,149 Current assets Cash and cash equivalents - restricted 34 Cash and cash equivalents - unrestricted 48,384 48,773 Interest receivable 87 18 Accounts receivable 1,086 6,342 Prepaid and other assets 125 109 Total current assets 49,716 55,242 Total assets $ 84,125 $ 70,391 LIABILITIES Current liabilities Advances from participants due within one year $ 12,163 $ 13,563 Accounts payable and accruals 71,787 56,747 Total current liabilities 83,950 70,310 Total liabilities 83,950 70,310 NET POSITION Unrestricted 175 81 Total net position 175 81 Total liabilities and net position $ 84,125 $ 70,391 See accompanying notes.

Southern California Public Power Authority Individual Statements of Net Position June 30, 2019 (Amounts in Thousands)

MISCELLANEOUS Project Projects' Development Stabilization Total Fund Fund SCPPA Fund Combined ASSETS Noncurrent assets Net utility plant $ 1

- $ 6.39B

$ 1.441,741 Investments - restricted 111,061 619,889 Investments - unrestricted

. 73,565

. . 10,930 Advance to (PA - restricted Fair value of derivative instruments

_ 1,094 Prepaid and other assets

. _ 669,903 Total noncurrent assets 111,061 - 6,398- 2,817,122 Current assets Cash and cash equivalents - restricted 470 23,705 1 152,245 Cash and cash equivalents - unrestricted 5,201 95,610 Interest receivable 2 336- - 2,295 Accounts receivable 513 . 13,310 Materials and supplies

. . 23,973 Prepaid and other assets 3- - - 63,027 Total current assets 6,189 24,041. 1- 350,460 DEFERRED OUTFLOWS OF RESOURCES Deferred Items related to pensions 559 559

- - 81,898 Unamortized loss on refunding - - - 42,842 Asset retirement obligation - - - 29,528 Accumulated decrease in fair value of hedging derivatives

- - 559- 154,827 Total deferred outflows of resources S 6,189 135,102 6,958 3,322,409 Total assets and deferred outflows of resources $ $ $

LIABILITIES Noncurrent liabilities Long-term debt $ - $ $ - $ 2,491,059 Fair value of derivative instruments 39,620

- 2.327- 4,546 Notes payable, other, net pension and OPEB liabilities - 19,027 Advances from participants - - 214,850 Reclamation and decommission obligation

- 2,327 - 2,769,102 Total noncurrent liabilities Current liabilities Debt due within orre year 160.265 Notes payable and other liabilities due 21,127 within one year - - -

Advances from participants due 1,970 1 54,594 within one year

. 50,241 Accrued Interest 4,216- - 6. 136,649 Accounts payable and accruals - 3,212 Accrued property tax 6,186 - - 7- 426,068 Total current liabilities -

6,186 ^334 3,195,190 Total liabilities DEFERRED INFLOWS OF RESOURCES 61 61 Deferred items related to pensions - 61 61 Total deferred inflows of resources - -

NET POSITION 6,393 (138,447)

Net investment in capital assets Restricted - 135,102 - 385,434 Unrestricted 3- (1,830)- (119,829) 3 135,102 - 4,563 127,158 Total net position Total liabilities, deferred Inflows of resources.

6,189 135,102 S 6,958 3,322,409 and net position s $ $

See accompanying notes.

Southern California Public Power Authority Individual Statements of Net Position June 30, 2018 (Restated)

(Amounts in Thousands)

MISCELLANEOUS Project Projects' Development Stabilization SCPPA Fund Fund Fund Total Combined ASSETS Noncurrent assets 6,534 Net utility plant $ - $ $ $ 1,507,609 88,836 608,142 Investments - restricted

- 40,674 Investments - unrestricted . . . 10,930 Advance to 1 PA - restricted Fair value of derivative instruments

- - - 729,736 .

Prepaid and other assets

- 88,836- 6.534. 2,897,091 Total noncurrent assets Current assets 470 30,428 37 181,059 Cash and cash equivalents - restricted Cash and cash equivalents - unrestricted 96,586

- 289- 2,257 Interest receivable

• 13,517 Accounts receivable

- - 23,787 Materials and supplies

- . 61,948 Prepaid and other assets Total current assets 470- 30,717- 37 379,154 DEFERRED OUTFLOWS OF RESOURCES Deferred items related to pensions 660 660

- - 102,712 Unamortized loss on refunding

- - - 44,561 Asset Retirement Obligation

. - - 19,673 Accumulated decrease in fair value of hedging derivatives Total deferred outflows of resources 660 167,606 470 S 7.231 Total assets and deferred outflows of resources $ $ 119,553 $ 3.443.851 LIABILITIES Noncurrent liabilities Long-term debt $ - $ $ - $ Z674,562 Fair value of derivative instruments 25,185

. - Z301. Z301 Notes payable, other, net pension and OPEB tiabllties

- - 20,956 Advances from participants

- - . 211,270 Reclamation and decommission obligation Total noncurrerrt liabilities

- , Z301 _ Z934.274 Current liabilities Debt due within one year 163,185 Notes payable and other liabilities due within one year 20.142 Advances from participants due 470 37 67,364 within one year

- 53,005 Accrued interest Accounts payable and accruals

- - - 119.872

- - 3,468 Accrued property tax Total current liabilities 470- - .

37 427,036 470 2,338 3,361,310 Total liabilities DEFERRED INFLOWS OF RESOURCES Deferred Items related to pensions 50 50 Total defened inflows of resources

- - 50 50 NET POSITION Net investment in capital assets 6,534 (189,747)

Restricted - 119.553 404,782 Unrestricted . .

(1.691) (132,544)

Total net position

- 119,553 - 4,843 82,491 Total llablirties. deferrad inflow of resources, and net position 470 119,553 7.231 3,443.851 See accompanying notes.

Southern California Public Power Authority Individual Statements of Revenues, Expenses, and Changes in Net Position for the Year Ended June 30, 2019 (Amounts in Thousands)

GENERATION Magnolia Canyon Palo Verde San Juan Power Power Apex Power Operating revenues Sales of electric energy $ 66,182 $ 11,558 $ 107,267 $ 31,057 $ 137,004 Sales of transmission services Saies of natural gas Total operating revenues 66,182 11,558 107,267 31,057 137,004 Operating expenses Operations and maintenance 40,210 86 95,147 21,639 99,166 Depreciation, depletion and amortization 22,634 10,988 9,685 15,156 13,102 Amortization of nuclear fuel Decommissioning 1,260

- - - 367 Total operating expenses 77,206 86 106,135 31,324 114,689 Operating income (loss) (11,024) 11,472 1.132 (267) 22,315 Non operating revenues (expenses)

Investment and other income 8,527 274 2,203 458 737 (2.790) (161)

Inflation of ARO Liability - -

(5,797)

Derivative gain (loss) - - (11.812)

(10.827) (11.486)

Debt expense - -

Net non operating revenues (expenses) 5,737 274 (15,406) (10,369) (10,910)

Net Increase before special items (5,287) 11,746 (14,274) (10,636) 11,405 Special Items Asset impairment Total special Items .

Change in net position (5,287) 11,746 (14,274) (10.636) 11,405 Net position - beginning of year 368.032 (11,292) (58,084) (44.965) (6,118)

Cumulative effect of restatement of GASB 83 Net position - beginning of year, as restated 368,032 (11,292) (58,084) (44,965) (6.118)

Net contributions (distributions) by participants Net position - end of year $ 362,745 $ 454 $ (72,358) S (55,601) S 5,287 See accompanying notes.

Southern California Public Power Authority Individual Statements of Revenues, Expenses, and Changes in Net Position for the Year Ended June 30, 2018 (Restated)

(Amounts in Thousands)

GENERATION Magnolia Canyon Palo Verde San Juan Power Power Apex Power Operating revenues Sales of electric energy S 67,561 $ 26.757  % 81,368 S 27.636 $ 123,288 Sales of transmission services - . - - -

Sales of natural gas - - - - -

Total operating revenues 67.561 26.757 81,368 27,636 123,288 Operating expenses Operations and maintenance 41,819 27,488 63.069 11,999 94,060 Depreciation, depletion and amortization 21,982 3,917 10.978 9.602 13,516 Amortization of nuclear fuel 13,924 Decommissioning 1,260 - . - 367.

Total operating expenses 78,985 31,405 74,047 21,601 107,943 Operating income (loss) (11.424) (4,648) 7,321 6.035 15,345 Non operating revenues (expenses)

Investment and other income 1,327 797 841 256 368 Inflation of ARO Liability (4,724) (273)

- 11,021- -

Derivative gain (loss) - - - -

Debt expense (5) (12,922) (12.085) (11,651)

Net non operating revenues (expenses) (3,402) 797 (1,060) (11.829) (11,556)

Net Increase before special Items (14.826) (3.851) 6.261 (5.794) 3.789 Special items Asset impairment (3,261)

Total special items (3,261)

Change in net position (14,826) (7,112) 6,261 (5,794) 3,789 Net position - beginning of year 224,463 (4.180) (64,345) (39.171) (8.381)

Cumulative effect of restatement of GASB 83 158,395 (1.526)

Net position - beginning of year, as restated 382.858 (4.180) (64.345) (39.171) (9.907)

Net contributions (distributions) by participants - - - - -

Net position - end of year $ 368.032 $ (11,292) $ (58.084) $ (44,965) $ (6,118)

See accompanying notes.

Southern California Public Power Authority Individual Statements of Revenues, Expenses, and Changes In Net Position for the Year Ended June 30, 2019 (Amounts in Thousands)

GREEN POWER Tleton Milford 1 Milford II Unden Wind Hydropower Wind VVind Windy Point Energy Operating revenues Sales of electric energy $ 6,060 S 33,698 $ 19,750 $ 81,117 $ 15,990 Sales of transmission services Sales of natural gas Total operating revenues 6,060 33,698 19,750 81,117 15,990 Operating expenses Operations and maintenance 2,477 26,675 15,771 68,016 6,805 Depreciation, depletion and amortization 1,553 5,814 Amortization of nuclear fuel Decommissioning 23 23 Total operatirtg expenses 4,053 26,675 15,771 68,016 12,642 Operating income (loss) 2,007 7,023 3,979 13,101 3,348 Non operating revenues (expenses)

Investment and other income 198 791 356 868 987 Inflation of ARO Liability (14) (11)

Derivative gain (loss)

Debt expense (2,297) (7.522) (4,958) (14.267) (5,191)

Net non operating revenues (expenses) (2,113) (6,731) (4,602) (13,399) (4.215)

Net increase before special items (106) 292 (623) (298) (867)

Special items Asset impairment Total special Items . . . . .

Change in net positian (106) 292 (623) (298) (867)

Net position - beginning of year (5,570) (18,722) (7,534) (40,577) (10,883)

Cumulative effect of restatement of GASB 83 Net position - beginning of year, as restated (5.570) (18,722) (7.534) (40.577) (10,883)

Net contributions (distributions) by participants Net position - end of year $ (5.676) $ (18,430) $ (8,157) S (40,875) S (11,750)

See accompanying notes. _

Southern California Public Power Authority Individual Statements of Revenues, Expenses, and Changes in Net Position for the Year Ended June 30, 2018 (Restated)

(Amounts in Thousands)

GREEN POWER Hoover Tleton Milford 1 Milford II Unden Wind Upratinq Hydropower Wind Wind Windy Point Energy Operating revenues Sales of electric energy $ 585 $ 6.153 $ 36,512 $ 19,392 $ 79,830 $ 16,596 Sales of transmission services - - - - - -

Sales of natural gas - - - - - -

Total operating revenues 585 6,153 36,512 19,392 79,830 16,596 Operating expenses Operations and maintenance 728 2,805 29,314 15,311 66,527 7,317 Depreciation, depletion and amortization 1,526 5,814 Amortization of nudear fuel - - -

[Recommissioning - 23- 23-Total operating expenses 728 4,354 29,314 15,311 66,527 13,154 Operating income (loss) (143) 1,799 7,198 4,081 13,303 3,442 Non operating revenues (expenses)

Investment and other income 25 96 293 139 311 899 Inflation of ARO Liability (23) (19)

Derivative gain (loss)

Debt expense 250- (2.344)- -

(7.923) (5.095)- -

(14,799) (5,298)-

Net non operating revenues (expenses) 275 (2,271) (7,630) (4,956) (14.488) (4,418)

Net increase before special items 132 (472) (432) (875) (1,185) (976)

Special items Asset impairment - - - - - -

Total special items . . . . .

Change in net position 132 (472) (432) (875) (1,185) (976)

Net position - beginning of year 2,839 (4,807) (18,290) (6,659) (39,392) (9,657)

Cumulative effect of restatement of GASB 83 (291) (250)

Net position - beginning of year, as restated 2,839 (5,098) (18,290) (6,659) (39,392) (9.907)

Net contributions (distributions) by participants (2,971)

Net position - end of year $ $ (5,570) $ (18,722) $ (7,534) $ (40,577) $ (10,883)

See accompanying notes.

Southern California Pubiic Power Authority Individual Statements of Revenues, Expenses, and Changes in Net Position For the Year Ended June 30, 2019 (Amounts in Thousands)

TF?ANSMISSION Southern Transmission System Mead-Phoenix Mead-Adelanto Operating revenues Sales of electric energy S S $

Sales of transmission services 107,675 10,514 27,722 Sales of natural gas Total operating revenues 107,675 10,514 27,722 Operating expenses Operations and maintenance 63^33 1,851 3,538 Depreciation, depletion and amortization 22,754 2,784 6,237 Amortization of nuclear fuel Decommissioning Total operating expenses 85,987 4,635 9,775 Operating income Ooss) 21,688 5,879 17,947 Non operating revenues (expenses)

Investment and other income 17,144 127 429 Inflation of ARO Liability Derivative gain (loss) 2,312 Debt expense (21,426) (914) (2,057)

Net non operating revenues (expenses) (4,282) (787) 684 Net increase before special items 17,406 5,092 18,631 Special items Asset impairment Total special Items . .

Change in net position 17,406 5,092 18.631 Net position - beginning of year (226,971) 16,347 44,151 Cumulative effect of restatement of GASB 83 Net position - beginnirrg of year, as restated (226,971) 16,347 44.151 Net contributions (distributions) by participants Net position - end of year $ (209,565) $ 21,439 $ 62,782

__ . See accompanying notes.

Southern California Public Power Authority Individual Statements of Revenues, Expenses, and Changes in Net Position For the Year Ended June 30, 2018 (Amounts in Thousands)

TRANSMISSION Southern Transmission System Mead-Phoenix Mead-Adeianto operating revenues Sales of electric energy $ $ S Sales of transmission services 116.080 10,955 28,269-Sales of natural gas - - -

Total operating revenues 116.080 10,955 28,269 Operating expenses Operations and maintenance 38,058 2.167 3,898 Depreciation, depletion, and amortization 22,754 2,972 6,262 Amortization of nuclear fuel - - -

Decommissioning Total operating expenses 60.812 5,139 10,160 Operating income (loss) 55.268 5,816 18,109 Non operating revenues (expenses)

Investment and other income 1,199 62 311 Inflation of ARO Liability - - -

(2,389)

Derivative gain (loss)

Debt expense (22.805) -

(1.000) (1,731)

Net non operating revenues (expenses) (21.606) (938) (3,809)

Net Increase before special items 33,662 4,878 14,300 Special Items Asset impairment - - -

Total special items - - -

Change in net position 33,662 4,878 14,300 Net position - beginning of year (260,633) 11,469 29,851 Cumulalive effect of restatement of GASB 83 - - -

Net position - beginning of year, as restated (260,633) 11,469 29,851 Net contributions (distributions) by participants Net position - end of year S (226.971) $ 16,347 S 44,151 See accompanying notes.

Southern California Public Power Authority Individual Statements of Revenues, Expenses, and Changes in Net Position for the Year Ended June 30, 2019 (Amounts in Thousands)________________

NATURAL GAS Prepaid Natural Rnedale Barnett Gas Operating revenues Sales of electric energy $ $ $ .

Sales of transmission services Sales of natural gas 5.488 9,103 20,581 Total operating revenues 5.488 9,103 20,581 Operating expenses Operations and maintenance 1.602 2,612 11.754 Depreciation, depletion and amortization 3,156 2,937 Amortization of nuclear fuel Decommissioning 38 9 Total operating expenses 4,796 5,558 11,754 Operating income (loss) 692 3,545 8,827 Non operating revenues (expenses)

Investment and other income 93 1,446 801 Inflation of ARO Liability (23) (5)

Derivative gain (loss)

Debt expense (953) (2,241) (15,362)

Net non operating revenues (expenses) (883) (800) (14,561)

Net Irxxease before special Kerns (191) 2,745 (5,734)

Special items Asset Impairment Total special Items Change in net position (191) 2,745 (5.734)

Net position - beginning of year 4,225 29,372 (73,397)

Cumulative effect of restatement of GASB 83 Net position - beginning of year, as restated 4,225 29,372 (73,397)

Net contributions (distributions) by participants Net position - end of year $ 4,034 $ 32,117 $ (79,131)

See accompanying notes^__

alifornia Public Power Authority penses, and Changes in Net Positioi Year Ended June 30, 2018 (Restated (Amounts in Thousands NATURAL GAS Prepaid Pinedale Barnett Natural Gas Operating revenues Sales of electric energy $ $ $

Sales of transmission services Sales of natural gas 5,617 9,576 19,895 Total operating revenues 5,617 9,576 19,895 Operating expenses Operations and maintenance 1,355 2,720 11.645 Depreciation, depletion and amortization 3,422 1,963 Amortization of nuclear fuel Decommissioning 38 9 Total operating expenses 4,815 4,692 11,645 Operating income (loss) 802 4,884 8,250 Non operating revenues (expenses)

Investment and other income 56 318 755 Inflation of ARO Liability (39) (8)

Derivative gain (loss)

Debt expense (1,052) (2,473) (15,610)

Net non operating revenues (expenses) (1.035) (2,163) (14,855)

Net increase before special Items (233) 2,721 (6.605)

Special items Asset Impairment Total special items Change in net position (233) 2,721 (6,605)

Net position - beginning of year 5,227 26,802 (66,792)

Cumulative effect of restatement of GASB 83 <769) (151)

Net position - beginning of year, as restated 4,458 26,651 (66,792)

Net contributions (distributions) by participants Net position - end of year $ 4,225 $ 29,372 $ (73,397)

See accompanying notes.

Southern California Public Power Authority Individual Statements of Revenues, Expenses, and Changes in Net Position For the Years Ended June 30, 2019 and 2018 (Amounts in Thousands)

POWER PURCHASE AGREEMENTS 2019 2018 Operating revenues Sales of electric energy $ 321,103 $ 294,086 Total operating revenues 321,103 294,086 Operating expenses Operations and maintenance 322,482 294,710 Total operating expenses 322,482 294,710 Operating income (loss) (1.379) (624)

Non operating revenues (expenses)

Investment and other income 1,473 676 Net non operating revenues (expenses) 1,473 676 Change in net position 94 52 Net position - beginning of year 81 29 Cumulative effect of restatement of GASB 83 Net position - beginning of year, as restated 81 29 Net position - end of year $ 175 $ 81 See accompanying notes.

Southern California Public Power Authority Individual Statements of Revenues, Expenses, and Changes in Net Position For the Year Ended June 30, 2019 (Amounts in Thousands)

MISCELLANEOUS Project Projects' Development Stabilization Fund Fund SCPPA Fund Total Combined Operating revenues Sales of electric energy S 456 $ S S 831,242 Sales of transmission services 145,911

- - - 35,172 Saies of naturai gas -

Total operating revenues 456 1.012,325 Operating expenses Operations and maintenance 1,508 335 784,907 Depreciation, depletion and amortization 176 103,874

_ 13,102 Amortization of nuclear fuel - .

Decommissioning 1,720

- - 140- 140 Pension and other benefits expense (credit) . -

Total operating expenses 1,508 651 903,743 Operating irxxime (loss) ' (1,052) (651) 108,582 i

Non operating revenues (expenses)

Investment and other income 1,055 3,370 335 41,672 Inflation of ARO Liability (3,004)

- (3,485)

Derivative gain (loss)

- - (111,313)

Debt expense - - -

Net non operating revenues (expenses) 1,055 3,370 335 (76,130)

Net increase before special items 3 3,370 (316) 32,452 Special items Asset impairment Total special Items Change In net position 3 3,370 (316) 32,452 Net position - beginning of year 119,553 4,843 82,491 Cumulative effect of restatement of GASB 83 Net position - beginning of year, as restated 119,553 4,843 82,491 Net contributions (distributions) by participants 12,179 36 12,215 Net position - end of year S 3 $ 135,102 $ 4,563 $ 127,158 See accompanying notes.._

Southern California Public Power Authority Individual Statements of Revenues, Expenses, and Changes in Net Position For the Year Ended June 30, 2018 (Restated)

(Amounts in Thousands)

MISCELLANEOUS Project Projects Development Stabilization SCPPA Fund Fund Fund Total Combined Operating revenues S 779,764

- $ - s

• s 155,304 Sales of transmission services Sales of natural gas

- . . 35,088 Total operating revenues 970,156 Operating expenses Operations and maintenance 308 715,298 Depreciation, depletion, and amortization 119 104,827 Amortization of nuclear fuel

. 13,924 Decommissioning - - 1,720 Pension and other benefits expense (credit)

- 1,119- 1,119 Total operating expenses 1,546 836,888 Operating income (loss) (1,546) 133,268 Non operating revenues (expenses) investment and other income 1,200 308 10,237 Inflation of ARO Liability (5,086)

Derivative gain (loss)

- - 8,632 Debt expense

- - (116,543)

Net nonoperating revenues (expenses) 1,200 308 (102,760)

Net increase before special items 1,200 (1.238) 30,508 Special items Asset impairment (3,261)

Total special items (3,261)

Change in net position 1,200 (1,238) 27,247 Net position - beginning of year 133,941 4,488 (83,198)

Cumulative effect of restatement of GASB 83 155,408 Net position - beginning of year, as restated 133,941 4,488 72,210 Net contributions (distributions) by participants (15,588) 1,593 (16,966)

S 82,491 Net position - end of year - $ 119,553 S 4,843 $

See accompanying notes.

Southern California Public Power Authority Individual Statements of Cash Flows For the Year Ended June 30, 2019 (Amounts in Thousands)_______________________

GENERATION Magnolia Canyon Apex Palo Verde San Juan Power Power Power Cash flows from operating activities Receipts from participants $ 66,141 $ 156 $ 48,238 $ 21,941 S 85,288 Receipts from sale of oil and gas - - - - -

Payments to operating managers (39,532) (16,164) (35,828) (4,119) (41,522)

Other disbursements and receipts 693 (25) 2 (2) 675 Net cash flows from (used for) operating activities 27,302 (16,033) 12,412 17,820 44,441 Cash flows from noncapital financing activities Advances (withdrawals) by participants, net - - - - -

Cash flows from capital financing activities Additions to plant and prepaid projects, net (30,291) (310) (4.021) (18,639)

- (6,301) (8.191) (12,316)

Debt Interest and swap payments -

Proceeds from sale of bonds . -

Payment for defeasance of revenue bonds - .

Payments for swap termination fee - -

Transfer of funds from (to) escrow - -

Transfer of funds from (to) Mine Reclamation Trust Fund (SOO)

(7,210)

(7.540) (9,545)

Principal payments on debt -

Payment for bond issue costs (1)

Net cash used for capital and related financing activities (30,291) (500) (13,821) (19,753) (40,500)

Cash flows from investing activities Interest received on investments 732 184 1,327 297 344 Purchases of investments (14,092) (1.983) (73,935) (10,616) (21,099)

Proceeds from sale/maturity of investments 18,000 2,000 58,205 17,115 17,300 Net cash provided by (used for) investing activities 4,640 201 (14,403) 6,796 (3,455)

Net increase (decrease) in cash and cash equivalents 1,651 (16,332) (15,812) 4,863 486 Cash and cash equivalents, beginning of year 12,618 16,549 28,649 9,987 14,851 Cash and cash equivalents, end of year s 14,269 t 217 $ 12,837 $ 14,850 s 15.337 Reconciliation of operating income (loss) to net cash provided by operating activities Operating income (loss) $ (11,024) $ 11,472 $ 1,132 $ (267) $ 22,315 Adjustments to reconcile operating income (loss) to net cash provided by operating activities Depreciation, depletion and amortization 22,634 10,988 9,685 15,156 Decommissioning 1,260

- 367 Advances for capacity and energy - - - . .

Amortization of nuclear fuel 13,102 Changes in assets and liabilities Accounts receivable (17) 945 (1) 1,078 (27.551) (1,503) 8,384 7,329 Accounts payable and accruals Other 269 46 850 18 (725)

$ 27,302 (16,033) $ 12,412 $ 17,820 Net cash provided by (used for) operating activities _L $ 44,441 Cash and cash equivalents as stated in the Combined Statements of Net Position Cash and cash equivalents - restricted S 4,768 $ s 9,291 $ 11,578 $ 11,806 Cash and cash equivalents - unrestricted 9,501 217 3.546 3,272 3,531

$ 14,269 s 217 $ 12,837 $ 14,850 $ 15,337 See accx)mpanying notes.

Southern California Public Power Authority Individual Statements of Cash Flows For the Year Ended June 30, 2018 (Restated)

_____________________ (Amounts in Thousands)

GENERATION Magnolia Canyon Palo Verde San Juan Powrer Power Apex Power Cash flows from operating activities Receipts from participants $ 67,374 $ 25,476 $ 45,476 $ 22,840 $ 66,294 Receipts from sale of oil and gas Payments to operating managers (43,367)- (26.745)- (27,342) - (3,857)- (34,346)-

Other disbursements and receipts 536 (1) 2 7 Net cash flows from (used for) operating activities 24,543 (1.269) 18,133 18,985 31,955 Cash flows from noncapital financing activities Advances (withdrawals) by participants, net 2,000 Cash flows from capital financing activities Additions to plant and prepaid projects, net (25,636) (161) (615) (29,002)

(ir)

- (9,007) (8,339) (12,453)

Debt interest and swap payments

- 109,657 229,213 Proceeds from sale of bonds Payment for defeasance of revenue bonds (108,966) -

- - (7,334) - -

Payment for swap termination fee - (17,790). (232,407) . .

Transfer of funds from (to) Mine Reclamation Trust Fund -

(12.410) (7,230) - (7,185) -

(9.435)

Principal payments on debt Payment for bond issue costs

- (712) (983)

Net cash used for capital and related finanang activities (38,063) (17,790) (23,753) (20,316) (50,890)

Cash flows from Investing activities Interest received on investments 231 333 861 189 392 Purchases of investments (41,638) (4,990) (39,830) (13,630) (18,334)

Prxtceeds from sale/maturity of Investments 48,305 36,165 45,474 18,149 42,016 Net cash provided by (used for) Investing activities 6,898 31,508 6,505 4,708 24,074 Net increase (decrease) in cash and cash equivalents (6,622) 12,449 885 3,377 7,139 Cash and cash equivalents, beginning of year 19,240 4,100 27,764 6,610 7,712 Cash and cash equivalents, end of year $ 12,618 $ 16,549 $ 28,649 $ 9,987 S 14,851 Reconciliation of operating income (loss) to net cash provided by operating activities Operating income (loss) $ (11,424) $ (4,648) $ 7,321 $ 6,035 $ 15,345 Adjustments to reconcile operating income (toss) to net cash provided by operating activities Depreciation, depletion, and amortization 21,962 3,917 10,978 9,602 13,516 Decommissioning 1,260 367 Advances for capacity and energy -

Amortization of nuclear fuel 13,924- - - -

Changes in assets and liabilities Accounts receivable 282 70 (53) 591 2,378 Accounts payable and accruals (2,261) (2,106) 2,152 2,793 307 Other 780 1,498 (2.265) (36) 42 Net cash provided by (used for) operating activities $ 24,543 $ (1,269) $ 18,133 $ 18,985 $ 31,955 Cash and cash equivalents as stated in the Combined Statements of Net Position Cash and cash equivalents - restricted $ 4,761 $ 9,840 $ 20,373 $ 8,477 $ 13,734 Cash and cash equivalents - unrestricted 7,857 6,709 8,276 1,510 1,117

$ 12,618 $ 16,549 $ 28,649 $ 9,987 $ 14,851 See accompanying notes.

Southern California Public Power Authority Individual Statements of Cash Flows For the Year Ended June 30, 2019 (Amounts in Thousands)

GREEN POWER Tieton Milford I Milford II Linden Wind Hydropower Wind Wind Energy Windy Point Cash flows from operating activitios Receipts from participants

• 6,017 $ 28,992 $ 17,409 $ 79,760 $ 16,293 Receipts from sale of oil and gas (2.587) (15,877) (7,017) (39,634) (6,867)

Payments to operating managers (1) (1)

Other disbursements and receipts Net cash flows from operating activities 3.430 13.114 10,391 40.126 9.426 Cash flows from noncapital financing activities Advances (withdrawais) by participants, net Cash flows from capital financing activities (354)

Additions to piant and prepaid projects, net Debt interast and swap payments (2,385) (8,545) (6,346) (18,515) (5,095)

Proceeds from sale of bonds Payment for defeasance of revenue bonds Transfer of furvfs from (to) escrow Transfer of funds from (to) Mine Reclamation Trust Fund Principal payments on debt (950) (10,085) (6,370) (22,020) (4,170)

Payment for bond issue costs Net cash used for capital and related fimncing activities (3,689) (18,630) (12,716) (40,535) (9,265)

Cash flows from investing activities Interest received on investments 117 399 168 341 111 (3.905) (25.751) (8,820) (36,873) (8.522)

Purchases of investments 4,010 32,058 11,200 35,725 8,820 Proceeds from sale/maturity of investments 222 6,706 2,548 (807) 409 Net cash provided by (used for) investing activities Net increase (decrease) in cash and cash equivalerrts (37) 1,190 223 (1.216) 570 Cash and cash equivalents, beginning of year 2,576 8,520 7,896 17.476 5,345 Cash and cash equivalents, end of year S 2,539 $ 9,710 S 8,119 $ 16,260 $ 5,915 Reconciliation of operating income (loss) to net cash provided by operating activities Operating income (loss) 2,007 $ 7,023 $ 3,348 3,979 $ 13,101 $

Adjustments to reconcile operating income floss) to not cash provided by operating activities Depreciation, depletion and amortization 1,553 11,338 8,643 27,373 5,814 Decommissioning 23 23 Advances for capacity and energy Amortization of nuclear fuel Changes In assets and liabilities Accounts receivable (146) (3,264) 45 Accounts payable and accruals 142 (371)

(1,983) (2,231)

Other (149) (22)

Net cash provided by operating activities S 3,430 $ 13,114 $ 10,391 $ 40,126 $9,426 Cash and cash equivalents as stated in the Combined Statements of Net Position Cash and cash equivalents - restricted $ 1,934 $ 9,697 $ 4,131 $ 10,403 $ 5,217 Cash and cash equivalents - unrestricted 60513 3,988 5,857 698

$ 2.539 $ 9,710 $ 8,119 S 16,260 $ 5,915 See accompanying notes.

Southern California Public Power Authority Individual Statements of Cash Flows For the Year Ended June 30, 2018 (Restated)

_____________________ (Amounts in Thousands)

GREEN POWER Hixrver Tieton Milford 1 Milford II Linden Wind Uprating Hydropower Wind Wind Energy Windy Point Cash flows from operating activities Receipts from participants $ 594 $ 6,238 $ 39,367 $ 22,751 $ 82,475 $ 17,314 Receipts from sale of oil and gas Payments to operating managers (99) (3,325) (18,594) (7,077) (40,653) (7,473)

Other disbursements and receipts 1 1 98 (1) 2 Net cash flows from operating activities 495 2,914 20,774 15,772 41.821 9,843 Cash flows from noncapital financing activities Advances (withdrawals) by participants, net (2,970)

Cash flows from capital financing activities Additions to plant and prepaid projects, net (128)

Debt interest and swap payments (56) (2,429) (9,022) (6,646) (19,513) (5,281)

Proceeds from sale of bonds Payment for defeasance of revenue bonds Transfer of funds from (to) escrow Transfer of funds from (to) Mine Reclamation Trust Fund Principal payments on debt (2,135) (910) (9.615) (6.065) (21,045) (3,970)

Payment for bond Issue costs Net cash used for capital and relatad financing activities (2.191) (3,467) (18,637) (12,711) (40,556) (9.251)

Cash flows from investing activities Interest received on investments 20 104 310 108 267 62 Purchases of investments (2.256) (3,795) (17,557) (13,223) (38,079) (8.127)

Proceeds from sale/maturity of investments 5,912 4,430 15,386 12,700 40,760 8,450 Net cash provided by (used for) Investing activities 3,676 739 (1.861) (415) 2,948 385 Net Increase (decrease) in cash and cash equivalents (990) 186 276 2,646 4,211 977 990 2,390 8,244 5.250 13,265 4,368 Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year 2,576 $ 8,520 $ 7,896 $ 17,476 $ 5,345 Reconciliation of operating income (loss) to net cash provided by operating activities 3,442 Operating income (loss) $ (143)

• 1,799 $ 7,198 S 4,081 6 13,303 6 Adjustments to teconciie operating income (loss) to net cash provided by operating activities 1,526 11,338 8,643 27,373 5,814 Depreciation, depletion, and amortization Elerrommissioning 23 23 882- - - -

Advances for capacity and energy - - - - -

Amortization of nuclear fuel - . - - - -

Changes in ass^ and liabilities 1,530 1,200 796 643 Accounts receivable (44) (464) 708 1,847 305 (79)

Accounts payable and accruals Other 30 1 44 Net cash provided by operating activities $ 495 S 2,914 $ 20,774 $ 15,772 $ 41,621 $ 9,843 Cash and cash equivalents as stated in the Combined Statements of Not Position Cash and cash equivalents - restricted $ 1,614 $ 5,807 $ 5,354 $ 13,761 $ 5,202 Cash and cash equivalents - unrestneted _ _ _ _ _ 762 2,713_ _ _ _ _ 2,542_ _ _ _ _ 3,715 _ _ _ _ 143 2,576 $ 8,520 $ 7,896 $ 17,476 $ 5,345 See accompanying notes.

Southern California Public Power Authority Individual Statements of Cash Flows For the Year Ended June 30, 2019 (Amounts in Thousands)_______________

TRANSMISSION Southern Transmission System Mead-Phoenix Mead-Adelanto Cash flows from operatirrg activfties Receipts from participants $ 106,113 $ 9,722 $ 28,674 Receipts from sale of oil and gas (40,505) (1,719) (5,588)

Payments to operating managers 5 631 200 Other disbursements and receipts 65,613 8.634 23.286 Net cash flows from operating activities Cash flows from noncapital financing activitias Advances (withdrawals) by participants, net Cash flows from capital financing activities Additions to plant and prepaid projects, net (52) (117)

(20,755) (1,471) (3,280)

Debt interest and swap payments 53,211 Proceeds from sale of bonds (53,574)

Payment for defeasance of revenue bonds Transfer of funds from (to) escrow Transfer of funds from (to) Mine Reclamation Trust Fund (56,100) (7,185) (20,705)

Principal payments on debt (526)

Payment for bond issue costs (77,746) (8,708) (24,102)

Net cash used for capital and related financing activities Cash flows from investing activities 1,013 65 174 Interest received on investments (60^01) (5,623) (24,452)

Purchases of investments 67,997 6,928 28,360 Proceeds from sale/maturity of investments Net cash provided by (used for) Investing activitias 8,809 1.370 4,082 (3,324) 1,296 3,266 Net increase (decrease) in cash and cash equivalents 29,821 4,357 9,164 Cash and cash equivalents, beginning of year S 26,497 5,653 Cash and cash equivalents, end of year s $ 12,430 Reconciliation of operating Income (loss) to net cash provMod by operating activities 21.688 5.879 17,947 Operating income (loss) s $ s Adjustments to reconcile operating income (loss) to net cash provided by operating activities Depredation, depletion and amortization 22,754 2,784 6^7 Decommissioning Advances for capacity and energy Amortization of nudear fuel Changes in assets and liabilities (1.562) (186) (737)

Accounts receivable 7,314 (7) (111)

Accounts payable and accruals Other 15,419 164 (50) 65,613 8,634 Net cash provided by operating activities $ $ $ 23,286 Cash and cash equivalents as stated In the Combined Statements of Net Position 25,225 Cash and cash equivalents - restricted $ $ 4.747

$ 11,625 Cash and cash equivalents - unrestricted 1,272 906 805 26,497 s $ 5,653

$ 12,430 See accompanying notes.

Southern California Public Power Authority Individual Statements of Cash Flows For the Year Ended June 30, 2018 TRANSMISSION Southern Transmission System Mead-Phoenix Mead-Adelanto Cash flows from operating activities Receipts from participants s 115,845 S 10,893 S 27,966 Receipts from sale of oil and gas Payments to operating managers (37,458)- (2,560)- .

(3,927)

Other disbursements and receipts (3) 28 22 Net cash flows from operating activities 78,384 8,361 24,061 Cash flows from noncapital financing activities Advances (withdrawals) by participants, net Cash flows from capital financing activities Additions to plant and prepaid projects, net 8 Debt interest and swap payments (23,540)- (1.740) (4,359)_

Proceeds from sale of bonds Payment tor defeasance of revenue bonds Transfer of funds from (to) escrow Transfer of funds from (to) Mine Reclamation Tmst Fund Principal payments on debt ' (54.315) - (6,850)- (19,820) -

Payment for bond issue costs (1)

Net cash used for capital and related financing activities (77,856) (8,582) (24,179)

Cash flows from investing activities Interest received on investments 827 33 102 Purchases of investments (59,495) (4,922) (22,205)

Proceeds from sale/maturity of investments 62,520 5,401 19,700 Net cash provided by (used for) investing activities 3,852 512 (2,403)

Net increase (decrease) in cash and cash equivalents 4,380 291 (2,521)

Cash and cash equivalents, beginning of year 25,441 4,066 11,685 Cash and cash equivalents, end of year $ 29,821 S 4,357 s 9,164 Reconciliation of operating income (loss) to net cash provided by operating activities Operating income (loss) s 55,268 $ 5,816 $ 18,109 Adjustments to reconcile operating Income (loss) to net cash provided by operating activities Depreciation, depletion, and amortization 22,754 2,972 6,262 Decommissioning Advances for capacity and energy - - -

Amortization of nuclear fuel - .

Changes in assets and liabilities Accounts receivable (233) 737 Accounts payable and accruals 592 (367) (1.099)

Other 3 (60) 52 Net cash provided by operating activities $ 78,384 s 8,361 s 24,061 Cash and cash equivalents as stated in the Combined Statements of Net Position Cash and cash equivalents - restricted $ 28,689 s 3,444 s 8,213 Cash and cash equivalents - unrestricted 1,132 913 951 s 29,821 s 4,357 $ 9,164 See accompanying notes. 39

Southern California Public Power Authority Individual Statements of Cash Flows For the Year Ended June 30, 2019 (Amounts in Thousands)_____________________

NATURAL GAS Prepaid Pinedale Barnett Natural Gas Cash flows from operating activities Receipts from participants $ 2,950 $ 6,627 $ 15,874 Receipts from sale of oil and gas 886 2,613 4,666 Payments to operating managers (1,393) (2,635) (308)

Other disbursements and receipts Net cash flows from operating activities 2,443 6,605 20,232 Cash flows from noncapital financing activities Advances (withdrawals) by participants, net (2,568) (30)

Cash flows from capital financing activities Additions to plant and prepaid projects, net (36) (97)

Debt interest and swap payments (1,003) (2,357) (14,979)

Proceeds from sale of bonds Payment for defeasance of revenue bonds Transfer of funds from (to) escrow Transfer of funds from (to) Mine Reclamation Tnjst Fund Principal payments on debt (1,770) (4,150) (5,385)

Payment for bond issue costs Net cash used for capital and related financing activities (2,809) (6,604) (20,364)

Cash flows from investing activities Interest received on investments 96 645 802 Purchases of investments (24,533) (16,963)

- 21,880 16,467 Proceeds from sale/maturity of investments -

Net cash provided by (used for) investing activities 96 (2,008) 306 Net increase (decrease) in cash and cash equivalents (2,838) (2,037) 174 Cash and cash equivalents, beginning of year 11,673 13,556 4,899 Cash and cash equivalents, end of year $ 8,835 $ 11,519 $ 5,073 Recondliation of operating income (loss) to net cash provided by operating activities Operating income (loss) $ 692 $ 3,545 $ 8,827 Adjustments to reconcile operating income (loss) to net cash provided by operating activities Depreciation, depletion, and amortization 3,156 2,937 Decommissioning 38 9 Advances for capacity and energy Amortization of nuclear fuel Changes in assets and liabilities Accounts receivable 11 82 (61)

Accounts payable and accruals (280) 566 (4)

Other (1,174) (534) 11,470

$ 2,443 6,605 S 20,232 Net cash provided by operating activities s Cash and cash equivalents as stated in the Combined Statements of Net Position Cash and cash equivalents - restricted $ 3,740 $ 8,878 S 4,995 Cash and cash equivalents - unrestricted 5,095 2,641 78 8,835 11,519 5,073 s s s See accompanying notes.

Southern California Public Power Authority Individual Statements of Cash Flows For the Year Ended June 30, 2018 (Restated)

_______________________ (Amounts in Thousands)

NATURAL GAS Prepaid Pinedale Barnett Natural Gas Cash flows from operating activities s 3,046 7,236 S 8,054 Receipts from participants 861

$ 2,489 11,780 Receipts from sale of oil and gas Payments to operating managers (1,301) (2,928) (240)

Other disbursements and receipts Net cash flows from operating activities 2,606 6,797 19,594 Cash flows from noncapital financing activities Advances (withdrawals) by participants, net 1,118 (3)

Cash flows from capital financing activities Additions to plant and prepaid projects, net (9) (98)

Debt interest and swap payments (1,104) (2,596) (15,226)

Proceeds from sale of bonds Payment for defeasance of revenue bonds Transfer of funds from (to) escrow Transfer of funds from (to) Mine Reclamation Trust Fund Principal payments on debt (1,980) (4,640) (4,605)

Payment for bond issue costs Net cash used for capital and related financing activities (3,093) (7,334) (19,831)

Cash flows from Investing activities Interest received on investments 50 448 733 Purchases of investments (24,683) (17,709)

Proceeds from sale/maturity of investments 998- 27,486 17,371 Net cash provided by (used for) investing activities 1,048 3,251 395 Net increase (decrease) In cash and cash equivalents 1,679 2,711 158 Cash and cash equivalents, beginning of year 9,994 10,845 4,741 s 11,673 S 13,556 4,899 Cash and cash equivalents, end of year $

Reconciliation of operating income (loss) to net cash provided by operating activities 802 4,884 S 8,250 Operating income (loss) s $

Adjustments to reconcile operating income (loss) to net cash provided by operating activities Depreciation, depletion, and amortization 3,422 1,963 Decommissioning 38 9 Advances for capacity and energy Amortization of nuclear fuel Changes in assets and liabilities Accounts receivable 12 5 (46)

Accounts payable and accruals (206) 267 13 Other (1,462) (331) 11,377 Net cash provided by operating activities $ 2,606 $ 6,797 $ 19,594 Cash and cash equivalents as stated in the Combined Statements of Net Position

$ 4,332 $ 11,534 4,789 Cash and cash equivalents - restricted 7,341 2,022 s 110 Cash and cash equivalents - unrestricted s 11,673 s 13,556 $ 4,899 See accompanying notes. 41.

Southern California Public Power Authority Individual Statements of Cash Flows For the Year Ended June 30, 2019 and 2018 (Amounts in Thousands)

POWER PURCHASE AGREEMENTS 2019 2018 Cash flows from operating activities Receipts from participants $ 288,312 $ 265,243 Receipts from sale of oil and gas Payments to operating managers (286,877) (266,696)

Other disbursements and receipts 16,164 11,826 Net cash flows from operating activities 17,599 10,373 Cash flows from noncapital financing activities Advances (withdrawals) by participants, net Cash flows from investing activities Interest received on investments 1,098 480 Purchases of investments (44,052) (20,096)

Proceeds from sale/maturity of investments 25,000 19,400 Net cash provided by (used for) investing activities (17,954) (216)

Net increase (decrease) in cash and cash equivalents (355) 10,157 Cash and cash equivalents, beginning of year 48,773 38,616 Cash and cash equivalents, end of year $ 48,418 $ 48,773 Reconciliation of operating income (loss) to net cash provided by operating activities Operating income (loss) $ (1,379) $ (624)

Changes in assets and liabilities Accounts receivable 5,254 996 Accounts payable and accruals 13,743 10,020 Other (19) (19)

Net cash provided by operating activities $ 17,599 $ 10,373 Cash and cash equivalents as stated in the Combined Statements of Net Position Cash and cash equivalents - restricted $ 34 $

Cash and cash equivalents - unrestricted 48,384 48,773

$ 48,418 $ 48,773 See accompanying notes.

Southern California Public Power Authority Individual Statements of Cash Flows For the Year Ended June 30, 2019 (Amounts in Thousands)

MISCELLANEOUS Project Projects' Development Stabilization Total Fund Fund Combined SCPPA Fund Cash flows from operating activities 4.662 Receipts from participants $ . $ 833,169 8.165 Receipts from sale of oil and gas Payments to operating managers 531- - - (547,641)

Other disbursements and receipts

- (335)- 18,006 Net cash flows from operating activities 5,193 (335) 311,699 Cash flows from noncapital financing activities Advances (withdrawals) by participants, net 12,179 335 9,916 Cash flows from capital financing activities Additions to plant and prepaid projects, net (36) (53,953)

Debt interest and swap payments (111,539)

Proceeds from sale of bonds

- 53,211 Payment for defeasance of revenue bonds (53,574)

Payments for swap termination foe Transfer of funds from (to) escrow 'I Transfer of funds from (to) Mine Reclamation Trust Fund Y (500)

V Principal payments on debt (163,185)

Payment for bond issue costs (529)

Net cash used for capital and related financing activities (38) (330,069)

Cash flows from investing activities Interest received on investments 8 1,942 9,863 Purchases of investments (93,644) (475,064)

Proceeds from sale/maturity of investments

- 72.800 - 443,865 8 (18,902) (21,336)

Net cash provided by (used for) investing activities 5,201 (6,723) (36) (29,790)

Net Increase (decrease) in cash and cash equivalents 470 30,428 37 277,645 Cash and cash equivalents, beginning of year 23,705 j. 1 247,855 Cash and cash equivalents, end of year $ $

Reconciliation of operating income (loss) to net cash provided by operating activities (1,052) (651) 108,582 Operating income (loss) s $ - $ $

Adjustments to reconcile operating income (loss) to net cash provided by operating activities Depreciation, depletion and amortization 176 151,228 Decommissioning . . 1,720 Advances for capacity and energy 13,102 Amortization of nuclear fuel Pension and other berrefits expense

. - 140. 140 Changes in assets and liabilities (513) (150)

Accounts receivable Accounts payable and accruals 5,716 . . 10,472 Other 1,042 - - 26,605 5,193 5 (335) 5 311,699 Net cash provided by operating activities $ $ .

Cash and cash equivalents as stated in the Combined Statemerrts of Net Position i 470 23,705 1 152,245 Cash and cash equivalents - restricted 5,201

$ $ $ 95,610 Cash and cash equivalents - unrestricted 5.671 23.705 1 S 247,855

.$ =-- sa See accompanying notes.

Southern California Public Power Authority Individual Statements of Cash Flows For the Year Ended June 30, 2018 (Restated)

_______________________ (Amounts in Thousands)

MISCELLANEOUS Project Development Projects Total Fund Stabilization Fund SCPPA Fund Combined Cash flows from operating activities 834,482 Receipts from participants $ - $ $ - $ 15,130 Receipts from sale of oil and gas - - - (527,988)

Payments to operating managers - - -

(308) 12,210 Other disbureements arxi receipts - -

(308) 333,834 Net cash flows from operating activities Cash flows from noncapital financing activities (35) (15,588) 308 (15.170)

Advances (withdrawals) by participants, net Cash flows from capital firtancing activities (1.593) (57,234)

Additions to plant and prepaid projects, net Debt interest and swap payments (121.328) 338,870 Proceeds from sale of bonds - (108,966)

Payment for defeasance of revenue bonds - (7,334)

Payments for swap termination fee - (232,407)

Iransfer of funds from (to) escrow - (17,790)

Transfer of funds from (to) Mine Reclamation Trust Fund

- (172,210)

Principal payments on debt - (1.696)

Payment for bond issue costs Net cash used for capital and related financing activities (1,593) (380,095)

Cash flows from investing activities 1,469 7,019 Interest received on investments - (40,494) - (391,063)

Purchases of investments

- 67,845 - 498.468 Proceeds from sale/maturity of investments 28,820 114,424 Net cash provided by (used for) investing activities . .

(35) 13,232 (1,593) 52,993 Net increase (decrease) in cash and cash equivalents Cash and cash equtvalants, beginning of year 505 17,196 1,630 224,652 i 470 30,428 37 277,645 Cash and cash equivalents, end of year $ $ $

Reconciliation of operating income (loss) to not cash provided by operating activities (1,546)

Operating income (loss) $ $ << $ 133,268 Adjustments to reconcile operating income (loss) to net cash provided by operating activities Depredation, depletion, and amortization 119 152,181 Decommissioning - - 1,720

- . - 682 Advances for capacity and energy - - - 13,924 Amortization of nudear fuel - - 1,119- 1,119 Pension expense -

Changes in assets and liabilities Accounts receivable 8,908

- - . 12,378 Accounts payable and accruals Other - * - 9,654 Net cash provided by operating activities $ . $ $ (308)

$ 333,834 Cash and cash equivalents as stated in the Combined Statements of Net Position 470 Cash and cash equivalents - restricted $ $ 30,428

$ 37

$ 181,059 Cash and cash equivalents - unrestricted 96,586 470 30.428

$ $ $ 37

$ 277,645 See accompanying notes.

Southern California Public Power Authority Notes to Combined Financial Statements Note 1 - Organization and Purpose The Southern California Public Power Authority (the Authority or SCPPA), a public entity organized under the laws of the State of California, was formed by a Joint Powers Agreement dated as of November 1, 1980 pursuant to the Joint Exercise of Powers Act of the State of California. The Authoritys participants consist of eleven municipal electric utilities and one irrigation district in the State of California. The Authority was formed for the purpose of planning, financing, developing, acquiring, constructing, operating and maintaining projects for the generation, transmission, and procurement of electric energy and natural gas for sale to its participants. The Joint Powers Agreement has a term expiring in 2030 or such later date as all bonds and notes of the Authority and the interest thereon have been paid in full or adequate provision for payments have been made.

The Authority has interests in the following projects:

GENERATION PROJECTS Palo Verde Project- On August 14,1981, the Authority purchased a 5.91% interest in the Palo Verde Nuclear Generating Station (PVNGS), a 3,810 MW nuclear-fueled generating station near Phoenix, Arizona, a 5.44% ownership interest in the Arizona Nuclear Power Project High Voltage Switchyard (ANPP HVS), and a 6.55% share of the right to use certain portions of the Arizona Nuclear Power Project Valley Transmission System (collectively, the Palo Verde Project). Units 1, 2 and 3 of the Palo Verde Project began commercial operations in January 1986, September 1986, and January 1988, respectively.

Since inception of the ANPP HVS capital additions, new terminations, and other events have successively changed the respective ownership interests in the ANPP HVS. In fiscal year 2011, the PVNGS fourth transformer became the 14th termination in the ANPP HVS, and caused the Authoritys proportional ownership percentage to change from 5.56% to 5.44%. This change became effective on April 1,2011.

Units 1,2, and 3 each operated under a 40-year Full-Power Operating License from the Nuclear Regulatory Commission (NRC), expiring in 2025, 2026, and 2027, respectively. In April 2011, after a detailed, two-year process, the NRC approved the application to extend the operating licenses for all three units for an additional 20 years, allowing Unit 1 to operate through 2045, Unit 2 through 2046, and Unit 3 through 2047.

San Juan Project - On July 1,1993, the Authority purchased a 41.80% interest in Unit 3 and related common facilities of the San Juan Generating Station (SJGS) from Century Power Corporation. Unit 3, a 497-MW unit, is one unit of a four-unit coal-fired power generating station in New Mexico.

Southern California Public Power Authority Notes to Combined Financial Statements Note 1 - Organization and Purpose (continued)

On July 31,2015, the SCPPA Board of Directors approved Resolution No. 2015-076 authorizing the San Juan Generating Station Restructuring Agreement (the Restructuring Agreement). The Restructuring Agreement required the SJGS owners to shut down SJGS Units 2 and 3 on December 31, 2017, per an agreement with the Environmental Protection Agency (EPA) and allowed those SJGS owners wishing to divest coal ownership in Units 3 and 4, to transfer their ownership interests to the plant operator and largest SJGS owner. Public Service Company of New Mexico (PNM).

To consummate the necessary transactions to enable the Authority and other SJGS owners to divest or terminate their ownership in the Project and allow other SJGS owners to retain or increase their ownership in the Project, the SJGS owners have negotiated and developed a comprehensive set of binding agreements collectively called SJGS Restructuring Agreements, including:

Restructuring Agreement, whereby, among other things, the Authority and the SJGS owners divest their ownership interests in the Project and the other SJGS owners retain or increase their ownership in the Project; Amended and Restated Mine Reclamation and Trust Funds Agreement (the Mine Reclamation Agreement), whereby the Authority and the other SJGS owners agree to amend the current Mine Reclamation and Trust Funds Agreement to provide for additional trust funds by means of a trust arrangement wherein such funds shall be held in trust for the purpose of funding the mine reclamation costs; San Juan Decommissioning and Trust Funds Agreement (the Decommissioning Agreement),

whereby the Authority and other SJGS owners agreed to establish a methodology for planning and approving Decommissioning Work and funding and allocating the cost of Decommissioning Work; Restructuring Amendment Amending and Restating the Amended and Restated San Juan Project Participation Agreement (the SJPPA Restructuring Amendment) regarding rights and obligations in respect of the ownership and operation of the San Juan Project for the period prior to the divestiture on or after December 31,2017; and Exit Date Amendment Amending and Restating the Amended and Restated San Juan Project Participation Agreement (the SJPPA Exit Date Amendment), whereby the Authority and the other SJGS owners will amend certain provisions of the SJPPA regarding rights and obligations in respect of the ownership and operation of the San Juan Project for the period after the divestiture on or after December 31,2017.

On July 20, 2017, the SCPPA Board of Directors approved Resolution No. 2017-073 authorizing the final closing of San Juan Unit 3 on December 31,2017. To complete the divestiture of SCPPAs SJGS ownership under the Restructuring Agreement, SCPPA executed nine agreements collectively called SJGS Divestiture Agreements, including:

Assignment Assumption Termination and Release Agreement (AATRA), whereby, SCPPA and the other SJGS owners are approving the transfer of PNMR Development and Management Corporation (PNMR-D) shares to PNM; L.

Southern California Public Power Authority Notes to Combined Financial Statements Note 1 - Organization and Purpose (continued)

• New Exit Date Amendment to the SJPPA, amendment to the document governing all operations of SJGS to reflect the change in ownership from PNMR-D to PNM approved in the AATRA;

• Amended and Restated Designated Representative Agreement (ARDA), to restate the designation to PNM as the representative to report the emissions from the SJGS under the Clean Air Act programs after the Exit Date. The Authority and the other Exiters signed the ARDA for the sole purpose of acknowledging that, while they are parties to the Prior Designated Representative Agreement, they are not parties to the ARDA for operations past the exit date, December 31,2017;

• Amended and Restated North American Electric Reliability Corporation (NERC) Delegation Agreement, to amend the Original Delegation Agreement to reflect the Exiters leaving ownership positions in the SJGS, and the Remainers affirming their delegation to PNM to comply with the generator operator reliability standards;

• SCPPA-Tucson Electric Power Company (TEP)-Tri-State Generation and Transmission Associations, Inc. (Tri-State) Interconnection Agreement Termination (ITA), whereby among other things; the agreement terminates SCPPAs rights in interconnection to the TEP System at the SJGS that had been transferred to SCPPA for the life of Unit 3;

• SCPPA-TEP-TRI-State Assumption Agreement Termination (AAT), whereby, among other things, the AAT terminates SCPPA's use rights in the Unit 3 step-up transformer;

• SCPPA Termination Easement and License (TEL), whereby, among other things, the TEL terminates SCPPAs rights on the exit date, December 31,2017, as an owner to the entirety of the SJGS plant site; and

• Template Decommissioning Trust Funds Agreement, whereby all SJGS owners agree that they will use this template to establish decommissioning trust funds to prepay their decommissioning liabilities per the Restructuring Agreement.

The SJGS Divestiture Agreements facilitated the Authoritys divestiture of its ownership interest in the SJGS and did not commit the Authority to a project with potentially significant impact on the environment.

SJGS Unit 3 has permanently ceased operations in December 2017. However, the Authority retains certain liabilities for a share of the environmental (mine reclamation) and plant decommissioning costs of SJGS Unit 3.

Magnolia Power Project - MPP consists of a combined cycle natural gas-fired generating plant with a nominally rated net base capacity of 242 MW and was built on a site in Burbank, California. The plant is the first that is wholly owned by the Authority and entitlements to 100% of the capacity and energy of the Project have been sold to six of its members.

Southern California Public Power Authority Notes to Combined Financial Statements Note 1 - Organization and Purpose (continued)

The City of Burbank, a Project participant, managed its construction and also serves as the operating agent for the Project. Commercial operations began on September 22,2005.

• Gas Supply and Services Agreement - SCPPA entered into an agreement with Occidental Energy Marketing, Inc. (OEMI) beginning January 2005. This agreement is renewed each year unless notification is given by either party prior to December 31, of each year. OEMI provides 100% of the natural gas plant requirements on a daily basis, and also includes an option for the participants to bring in their own gas supply. In addition, OEMI provides gas balancing services.

• Natural Gas Transportation - SCPPA has an agreement with Southern California Gas Company (SoCalGas) for intrastate transmission services. The agreement took effect in January 2005 and will renew every year unless a cancellation notice is provided by the Authority. SoCalGas provides

transportation, storage, and balancing services of natural gas from the Southern California Border to the Magnolia Plant.

Parts and Special Services Agreement - SCPPA entered into an 18-year agreement with General Electric International (GEI) in September 2005. Initially, the agreement covered only the gas turbine, but the agreement was amended in August 2007, to include coverage for the gas generator, the steam turbine, and the steam generator. In 2015, a second amendment was executed and adjusted the overall term from 96,000 fired factored hours (FFH) to 112,000 FFH due to the installation of longer interval rated components. Due to this, the major maintenance intervals were extended from every three years to every four years which made the existing agreement estimated to conclude in early 2021. On May 17, 2019, a third amendment was executed adding 96,000 FFH of operation beyond the prior agreement. It is now estimated to conclude in 2033 at a total of 208,000 FFH. GEI provides planned and unplanned maintenance, including replacement parts, based on factored fired hours.

Canyon Power Project - The Canyon Power Project (the Project) consists of a simple cycle natural gas-fired power generating plant, comprised of four combustion turbines with a combined nominally rated net base capacity of 200 MW, and auxiliary facilities, located in an industrial area of the City of Anaheim, California (Anaheim). The Project is owned by the Authority and constructed, operated, and maintained by Anaheim. The Project achieved full commercial operation in September 2011.

Apex Power Project - On March 26, 2014, the Authority acquired the Apex Power Project (the Project) pursuant to an Asset Purchase Agreement, dated as of October 17, 2013. The Project consists of a natural gas-fired, combined cycle generating facility (the Facility), nominally-rated at 531 MW, located in Clark County, Nevada, generator interconnection facilities, related assets and property, and interconnection and transmission contractual rights. The Facility is interconnected through a 3.13 mile 500 kV radial generation tie line owned by Nevada Power Company that connects the Facility to the Nevada Power Companys transmission system at its Harry Allen 500 kV Substation. The Los Angeles Department of Water & Power (LADWP) serves as project manager and operating agent of the Project.

48

Southern California Public Power Authority Notes to Combined Financial Statements Note 1 - Organization and Purpose (continued)

• Operation and Maintenance (O&M) Agreement - The Facility is operated by EthosEnergy Power Operations (West), LLC (EthosEnergy), formerly Wood Group Power Operations (West), Inc.,

pursuant to an Operations and Maintenance Agreement dated February 12, 2007. Under the O&M Agreement, EthosEnergy provides all operations, routine maintenance, budget controi, purchasing, billing, and reporting for the operation of the Facility, other than the maintenance provided by General Electric International (GEI), under a long-term service agreement. EthosEnergy currently employs 22 people at the Facility for operation and maintenance purposes. The O&M Agreement initially between the Seller and EthosEnergy was assumed and amended by the Authority. The O&M Agreement expires on February 2023.

• Large Generator Interconnection Agreement (LGIA) - The LGIA between Nevada Power Company and the Seller, dated July 1,2001, provides for the interconnection of the Facility, and firm transmission service for the Facility output through a Firm Point-to-Point Transmission Service Agreement by and between Nevada Power Company and LADWP as Agent for the Authority, dated in November 2015 with a point of delivery at the McCullough 500 kV Substation. The term of the Transmission Service Agreement extends to July 30, 2023. The Authority expects to renegotiate these agreements prior to their expiration date (with a term extension if it is economic) or to provide for alternative transmission service from the facility to the McCullough 500 kV Substation.

• Long-Term Service Agreement - Major maintenance, including parts supply, parts repair and labor for the Facility's combustion turbine generators and the steam turbine are provided pursuant to a Long-Term Service Agreement between the Seller and GEI, dated June 16, 2004. The Authority anticipates the contract to expire on 2022.

• Operational Balancing Authority Agreement and Letter Agreement - The natural gas to fuel the Facility will be provided by LADWP and delivered by facilities owned by the Kern River Gas Transmission Company through an Operational Balancing Authority Agreement and Letter Agreement.

• Water Agreement - Water for the facility will be provided by Las Vegas Valley Water District pursuant to an agreement, dated June 5, 2001 and assigned to the Authority upon acquisition of the Facility. The Facilitys acquisition date was on March 26, 2014. Unless extended, the Water Agreement expires on June 5, 2038.

• Transmission Service Agreements (TSAs) - Under the TSAs, Nevada Power Company currently provides transmission services to deliver the output of the Facility to the McCullough 500 kV Substation. The rates, terms and conditions for such services are regulated by the Federal Energy Regulatory Commission pursuant to Nevada Power Companys open access transmission tariff.

Changes to the rates are not accurately predictable and subject to numerous factors unrelated to the Apex Project.

Southern California Public Power Authority Notes to Combined Financial Statements Note 1 - Organization and Purpose (continued)

LADWP, as the operating agent, will administer, supervise, monitor and enforce all the preceding agreements in accordance with the Agency Agreement.

GREEN POWER Hoover Uprating Project - As of March 1, 1986, the Authority and six participants entered into an agreement pursuant to which each participant assigned its entitlement to Hoover Uprating capacity and associated firm energy to the Authority in return for the Authoritys agreement to provide for the advancement of funds for the uprating to the United States Bureau of Reclamation (USER) on behalf of such participants. The agreement expired on September 30, 2017.

On December 20, 2011, the Hoover Power Allocation Act, which extends the availability of Hoover Power to the existing contractors for an additional fifty years and creates a pool for new entrants, was signed into law. The participants entered into new agreements with the federal government for the capacity and energy, effective from October 1,2017 through September 30, 2067. SCPPA did not enter into a new agreement with the federal government regarding the Project.

Certain SCPPA members have requested the Authority to continue attending project meetings and monitoring activities at Hoover on their behalf. Participating members agreed to reimburse the Authority for ail costs and expenses associated with the services. In 2018, the remaining funds of $2.97 million from the Project were distributed to the participants.

Tieton Hydropower Project - On November 30, 2009, the Authority acquired the Tieton Hydropower Plant pursuant to an Asset Purchase Agreement, dated as of October 19, 2009. The Tieton Hydropower Project (the Project) consists of a 13.6 MW nameplate capacity run-of-the-reservoir hydroelectric generation facility, comprised of a powerhouse located in Yakima County, Washington, a 21-mile 115 kV transmission line and other related assets, property, and contractual rights.

Contractor Service Agreement - SCPPA entered into an agreement with Energy Northwest on July 1,2014 to direct the operations of the Tieton Hydropower facility and to provide certain technical services with respect to the operation and maintenance of the facility. On July 2018, the contract was amended for one additional year from July 1,2018 to June 30, 2019 with an option to renew on an annual basis for up to four additional years.

Facilities Maintenance Agreement - SCPPA entered into an agreement with PacifiCorp to provide supervision, labor, materials, and equipment necessary to perform routine non-emergency maintenance of the facilities and routine vegetation management. The agreement started on April 28, 2010 and will continue for as long as the Interconnection Agreement is in effect, unless terminated by mutual agreement.

Southern California Public Power Authority Notes to Combined Financial Statements Note 1 - Organization and Purpose (continued)

• Small Generator Interconnection Agreement - SCPPA entered into an agreement with PacifiCorp to perform certain interconnection requests submitted under the Small Generator Interconnection Procedures. This agreement governs the terms and conditions under which SCPPAs Small Generating Facility will interconnect with PacifiCorps Transmission System. The agreement became effective on November 30, 2009 and will remain in effect for a period of 10 years after which it will automatically renew for successive one-year periods, unless terminated by a 20-day written notice in accordance with this agreement.

Milford I Wind Project - On February 9, 2010, the Authority financed the prepayment of a specified supply of electricity from a wind farm located in Milford, Utah (the Facility). The Facility is a 203.5 MW nameplate capacity wind farm comprised of 97 wind turbines located near Milford, Utah, together with a 90-mile transmission line, and other related facilities. Under the related power purchase agreements by and between SCPPA and Milford Wind Corridor Phase I, LLC (the Seller), SCPPA will receive 6.7 million MW hours over a 20-year delivery term. SCPPA has also agreed to make monthly payments to the Seller for any energy delivered in each year that exceeds the guaranteed annual quantity of 338,215 MW hours.

Commercial operation began on November 16, 2009.

Milford II Wind Energy Project - On August 25, 2011, the Authority financed the prepayment of a specified supply of energy from the Milford Wind Corridor Phase II Project (the Milford II Project), for a delivery term of 20 years (unless terminated earlier) pursuant to a Power Purchase Agreement dated March 1,2010. The Authority also entered into power sales agreements with LADWP and the City of Glendale (Glendale) to sell 100% of its entitlement to capacity and energy in the Facility on a take-or-pay basis. Through a separate layoff agreement, the City of Glendale has sold 100% of its entitlement to capacity and energy to LADWP, but remains responsible for all payments associated with its participation in the power sales agreement if LADWP fails to buy the energy pursuant to the layoff agreement. The Facility is a 102 MW nameplate capacity wind powered electric generating facility comprised of 68 1.5 MW wind turbines and related facilities located near Milford, Utah. The Milford II Project achieved commercial operation on May 2, 2011.

i Southern California Public Power Authority Notes to Combined Financial Statements Note 1 - Organization and Purpose (continued)

Linden Wind Energy Project - On September 15, 2010, the Authority acquired the Linden Wind Energy Project (the Project) pursuant to the terms of the Asset Purchase Agreement, dated as of June 23, 2009.

The Project is a 50 MW nameplate capacity wind farm comprised of 25 wind turbines and related facilities, located in Klickitat County, Washington, developed and constructed by Northwest Wind Partners, LLC. The Authority has also entered into power sales agreements with LADWP and Glendale to sell 100% of its entitlement to capacity and energy in the Project on a take-or-pay basis. Through a separate layoff agreement, the City of Glendale has sold 100% of its entitlement to capacity and energy to LADWP, but remains responsible for all payments associated with its participation in the power sales agreement if LADWP fails to buy the energy pursuant to the layoff agreement.

• Operation and Maintenance Service Agreement - SCPPA entered into a three-year agreement with Senvion Wind Energy Solutions (Senvion) (formerly, REpower Systems AG) in February 2012.

This agreement automatically renews for an additional two years unless either party provides written notice to the other party to cancel the contract. Senvion performs fixed fee services such as scheduled maintenance, periodic operational checks and tests, and regular preventive maintenance required on the wind turbine generators (WEC) in accordance with the maintenance manual.

Senvion also performs remote monitoring services, repair services, and services related to the availability of the WEC. The agreement with Senvion remains in effect until February 26, 2022.

• Energy Exchange Agreement - SCPPA entered into a two-year agreement with Shell Energy North America, L.P. (Shell) on January 1,2018 for delivery of energy to Shell for shaping and moving services. The delivery term may be renewed for up to five additional one-year terms commencing on January 1 of each successive calendar year, if the parties have confirmed in writing their agreement to extend this contract not less than ninety days prior to the commencement of each renewal term.

The agreement with Shell remains in effect until December 31,2020.

Balance of Plant Agreement - Cannon Power Services Company, LLC assumed responsibility for operations of the Linden Wind Energy Project from EDF Renewable Energy (formerly EnXco Service Corporation) through an agreement with SCPPA that was executed on July 9, 2013 and was effective September 3, 2013. This agreement to operate, maintain, and repair the Wind Plant will continue for a period of three years and will automatically be extended for successive one-year periods unless either party provides written notice to terminate the contract. The agreement with Cannon Power Services Company, LLC remains in effect until December 31,2020.

Windy Point/Windy Flats Project - On September 9, 2010, the Authority financed the purchase of a supply of energy from the Windy PointA/Vindy Flats Project (the Project) for an initial delivery term of 20 years, pursuant to the terms of a power purchase agreement, dated June 24, 2009. The Authority also entered into power sales agreements with LADWP and the City of Glendale to sell 100% of its entitlement to capacity and energy in the Project on a take-or-pay basis.

Southern California Public Power Authority Notes to Combined Financial Statements Note 1 - Organization and Purpose (continued)

Through a separate layoff agreement, the City of Glendale sold 100% of its entitlement to capacity and energy to LADWP, but remains responsible for all payments associated with its participation in the power saies agreement if LADWP faiis to buy the energy pursuant to the layoff agreement.

The Project is a facility with a 262.2 MW nameplate capacity wind farm comprised of 114 wind turbines located in the Columbia Hiiis area of Klickitat County, Washington near the city of Goidendaie. The Project is owned by Windy Flats Partners, LLC, a limited liability company organized and existing under the laws of the State of Delaware. The initial delivery term began on the commercial operation date of the first of two phases of the facility. The first phase commenced operations on January 25, 2010 and the second phase on March 1,2010.

TRANSMISSION PROJECTS Southern Transmission System Project - On May 1,1983, the Authority entered into an agreement with the Intermountain Power Agency (IPA), to defray ali the costs of acquisition and construction of the Southern Transmission System Project (STS). IPA provides for the transmission of energy between the Southern California and the Rocky Mountain regional markets, including long-term renewable resources such as Milford I Wind and Milford II Wind, from the Intermountain Generating Station located in Utah to Southern California. STS commenced commerciai operations in July 1986. Construction to upgrade two AC/DC converter stations and increase their combined rating from 1,920 MW to 2,400 MW was compieted in May 2011. The LADWP, a member of the Authority, serves as project manager and operating agent of the Intermountain Power Project (IPP).

Mead-Phoenix and Mead-Adelanto Projects - Authority Interest (Members) - As of August 4, 1992, the Authority entered into an agreement to acquire an interest in the Mead-Phoenix Project (Mead-Phoenix), a transmission iine extending between the Westwing substation in Arizona and the Marketplace substation in Nevada. The agreement provides the Authority with an 18.31% interest in the Westwing-Mead project component, a 17.76% interest in the Mead Substation project component, and a 22.41%

interest in the Mead-Marketplace project component.

As of August 4,1992, the Authority also entered into an agreement to acquire a 67.92% interest in the Mead-Adeianto Project (Mead-Adeianto), a transmission line extending between the Adelanto substation in Southern California and the Marketpiace substation in Nevada. Funding for these projects was provided by a transfer of funds from the Multiple Project Fund and commercial operations commenced in April 1996. LADWP serves as project manager and operating agent of Mead-Adeianto.

Mead-Phoenix and Mead-Adeianto Projects - Authority Interest (LADWP) - On May 25, 2016 the Authority acquired all of M-S-R Public Power Agencys (MSR PPA) ownership interests and associated participation share and related rights and interests in the Mead-Adeianto (MA) and the Mead-Phoenix (MP) Projects on behaif of LADWP.

AinTjF laiti'Tie l^

Southern California Public Power Authority Notes to Combined Financial Statements Note 1 - Organization and Purpose (continued)

The Authority Interest (LADWP) in Mead-Adelanto and in Mead-Phoenix, collectively the Authority Interests (LADWP), is separate and distinct from the Authority Interest (Members) and the Authority Interest (Western) in the existing MA and MP Projects. The acquisition represents an additional 17.5%

ownership share in the MA Project and an additional 11.54% ownership share in the Westwing-Mead Component and an additional 8.10% ownership share in the Mead-Marketpiace Component of the MP Project, pursuant to a Purchase and Sale Agreement dated August 31,2015 between MSR PPA and the Authority. Pursuant to separate Transmission Service Contracts (LADWP), each dated as of March 17, 2016, LADWP is entitled to transmission services using 100% of the available capability of the Authority Interests (LADWP) in the MA and MP Projects.

NATURAL GAS PROJECTS Pinedale Project - On July 1,2005, the Authority, together with LADWP and Turlock Irrigation District (TID), acquired 42.5% of an undivided working interest in three natural gas leases located in the Pinedale Anticline region of the State of Wyoming. The Authoritys individual share in these interests equals 14.9%.

The purchase includes 38 operating oil and gas wells and associated lateral pipelines, equipment, permits, rights of way, and easements used in production. The natural gas field production is expected to increase for several more years as additional capital is invested on drilling new wells and then decline over a life expectancy greater than 30 years.

• Joint Operating Agreement (JOA) - In July 2005, SCPPAs purchase of the natural gas reserve interests at Pinedale, Wyoming (Pinedale) included an underlying long-term JOA with the operator.

Ultra Resources, Inc. (Ultra). SCPPA pays the operator for SCPPAs share of both operating and drilling/capital expenses on a monthly basis.

Ultra filed for Chapter 11 on April 29, 2016 after failing to reach a debt-restructuring agreement with its lenders and bondholders. Ultra continues as the Project Operator and has made no significant changes to the operation of the project. Currently, there is no effect on the participants of the Pinedale Project.

• Gathering and processing agreements - SCPPAs purchase of Pinedale included underlying agreements with Jonah Gas Gathering Company, Tesoro Logistics, formerly Questar Gas Management Company, and Western Gas Resources, Inc. forgathering and processing of the natural gas.

• V "t - .

Southern California Public Power Authority Notes to Combined Financial Statements Note 1 - Organization and Purpose (continued)

Barnett Project - Natural gas resources in the Barnett shale geological formation in Texas were acquired from Coilins and Young Hoiding, LLP (C&Y) for a total of $84 million. The acquisition settled on October 26, 2006 and was completed on December 7, 2006 when the participants, together with TID, exercised their option to purchase additional resources from C&Y.

• Joint Operating Agreement (JOA) - In October 2006, SCPPAs purchase of the natural gas reserve interests in Barnett, TX (Barnett) included an underlying long-term JOA with the operator, Devon Energy Production Company, LP. SCPPA pays the operator for SCPPAs share of both operating and drilling/capital expenses on a monthly basis.

Prepaid Natural Gas Project - On October 11, 2007, the Authority made a one-time prepayment of

$481 million to acquire the right to receive approximately 135 billion cubic feet of natural gas from J. Aron

& Company (J. ArOn) to be delivered over a 30-year term, beginning July 1, 2008. On October 3, 2007, prior to the acquisition of the prepaid gas supply, the Authority entered into five separate Prepaid Natural Gas Sales Agreements (the Gas Sales Agreements) with J. Aron and simultaneously, five Prepaid Natural Gas Supply Agreements (the Gas Supply Contracts) in which the Authority sold its interest in the natural gas, on a take-and-pay basis, to the cities of Anaheim, Burbank, Colton, Glendale, and Pasadena (the Project Participants). Through the Gas Supply Contracts, SCPPA has provided for the sale to the Project Participants, on a pay-as-you-go basis, of all of the natural gas to be delivered to SCPPA pursuant to the Gas Sales Agreements.

• On October 22, 2009, the Prepaid Natural Gas Sales Agreements and certain other agreements were restructured to reduce risk, provide an acceleration of a portion of the long-term savings, reduce the remaining volumes of gas to be delivered from 135 billion to 90 billion cubic feet, and shorten the term of the agreements from 30 years to 27 years. As a result of the restructuring, the Natural Gas contracts will now expire in 2035 and $165.5 million principal of the 2007 Natural Gas Project Bonds were terminated (see Note 7).

Southern California Public Power Authority Notes to Combined Financial Statements Note 1 - Organization and Purpose (continued)

Under the Gas Supply Contracts, the approximate average Daily Quantity of gas to be purchased by each Project Participant is as follows:

Average Daily Quantity (1)

Revised Original Participant Project Participant Volumes Volumes Percentage (%)

City of Anaheim 1,467 2,000 16.5%

City of Burbank 2,924 4,000 33.0%

City of Colton 1,007 1,375 11.0%

City of Glendale 2,015 2,750 23.0%

City of Pasadena 1,464 2,000 16.5%

Total 8,877 12,125 100.0%

(1) The Average Daily Quantity is in one million British Thermal Units (MMBtu) and is calculated over the term of the applicable Gas Supply Contracts. The contracts were restructured and volumes revised in October 2009.

Participant ownership interests - The Authority's participants may elect to participate in the projects.

As of June 30, 2019, the members have the following participation percentages in the Authoritys operating projects:

GENERATION TRANSMISSION Southern Mead- Mead- Mead- Mead-Pak) Magnolia Canyon Apex Transmission Phoenix Adelanto Phoenix Adelanto Participants Verde Power Power Power System (1992) (1992) (2016) (2016)

San Juan 67.0% 100.0% 59.5% 24.8% 35.7% 100.0% 100.0%

city of Los Angeles 38.0% 100% 17.6% 24.2% 13.5%

City of Anaheim 5.4%- - 10.2% 4.0% 13.5%

City of Riverside 6.5% -

51.0% -

Imperial Irrigation District 4.9% - - - -

City of Vernon 1.0% -

14.7% - - 1.0%- -

2.2%

City of Azusa 1.0% 9.8% - . 1.0% 1.3%

City of Banning 1.0% 14.7% 4.2% - - 1.0% 2.6%

City of Colton 4.4% 31.0% -

4.5% 15.4% 11.5%

City of Burbank 4.4% -

9.8% 16.5% 2.3% 14.8% 11.1%

City of Glendale 4.2%

City of Cenitos 4.4%- - 6.1% -

5.9% 13.8%- .

8.6%

City of Pasadena - -

100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Southern California Public Power Authority Notes to Combined Financial Statements Note 1 - Organization and Purpose (continued)

GREEN POWER NATURAL GAS Tieton Linden Prepaid Hydro Milford I Milford II Wind Windy Natural Participants power Wind Wind Energy Point Pinedale Barnett Gas city of Los Angeles 92.5% 95.1% 90.0% 92.4%

City of Anaheim 35.7% 45.4% 16.5%

City of Riverside Imperial Irrigation District City of Vernon City of Azusa City of Banning City of Colton 7.1% 9.1% 11.0%

50.0%- 5.0% 14.3% 27.3% 33.0%

City of Burbank City of Glendale 50.0% 4.9% 10.0% -

7.6% 28.6% 23.0%

City of Cerritos

- 2.5% . - _ 14.3%_ 18.2% 16.5%

City of Pasadena - - -

100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

The Authority has entered into power sales, natural gas sales, and transmission service agreements with the above project participants. Under the terms of the contracts, the participants are entitled to power output, natural gas, or transmission service, as applicable. The participants are obligated to make payments on a take-or-pay basis for their proportionate share of operating and maintenance expenses and debt service. The contracts cannot be terminated or amended in any manner that will impair or adversely affect the rights of the bondholders as long as any bonds issued by the specific project remain outstanding.

The contracts expire as follows:

Palo Verde Project various*

San Juan Project 2018**

Magnolia Power Project 2036 Canyon Power Project 2040 Apex Power Project 2038 Tieton Hydropower Project 2040 Milford I Wind Project 2030 Milford II Wind Project 2031 Linden Wind Energy Project 2035 Windy Point Project 2030 Southern Transmission System Project 2027 Mead-Phoenix Project 2030 Mead-Adelanto Project 2030 Natural Gas Pinedale Project 2032 Natural Gas Barnett Project 2032 Prepaid Natural Gas Project 2038

• 2045, 2046 and 2047 for Units 1, 2 and 3, respectively.

• • Decommissioning and Reclamation commenced on January 2018.

Southern California Public Power Authority Notes to Combined Financial Statements Note 1 - Organization and Purpose (continued)

The Authoritys interests or entitlements in natural gas, generation, and transmission projects are Jointly owned with other utilities, except for the Magnolia Power Project, Canyon Power Project, Apex Power Project, Tieton Hydropower Project, and the Linden Wind Energy Project, which are wholly owned by the Authority. Under these arrangements, a participating member has an undivided interest in a utility plant and is responsible for its proportionate share of the costs of construction and operation and is entitled to its proportionate share of the energy, available transmission capacity, or natural gas produced. Each joint plant participant, including the Authority, is responsible for financing its share of construction and operating costs. The financial statements reflect the Authority's interest in each jointly owned project as well as the projects that it owns. Additionally, the Authoritys share of expenses for each project is included in the statements of revenues, expenses, and changes in net position as part of operations and maintenance expenses.

POWER PURCHASE AGREEMENTS Ormat Geothermal Energy Project - The Authority entered into long-term power purchase agreements in December 2005 with divisions of Ormat Technologies, Inc. for up to 20 MW of electric generation. The Project started delivery of approximately 5 MW in January 2006 from geothermal energy facilities located in Heber, California, and the agreements were amended to allow for excess capacity in May 2008. The City of Anaheim acts as the scheduling coordinator on behalf of the project participants. The term of the contract is 25 years.

MWD Small Hydro Project - Consists of a power purchase agreement for the output from four small hydroelectric plants on the Metropolitan Water District system in Southern California, having a total nameplate capacity of 17.04 MW, and a historical output of 40,130 MWH per year. Transmission is accomplished through the California Independent System Operator, with the City of Anaheim acting as scheduler. The term of the contract is 15 years and 2 months, expiring December 31,2023. Operations began on November 1, 2008.

Pebble Springs Wind Project - In December 2007, the Authority entered into a power purchase agreement for the facility output of a wind project with 98.7 MW, located in Gilliam County, Oregon.

SCPPA along with LADWP, Burbank, and Glendale are now scheduling the energy through transmission agreements which bring this renewable energy from the project substation to the project participants. The term of the Project is 18 years with a right of first offer to potentially purchase the entire project after the 10th contract year. Operations formally began on January 31, 2009.

Ameresco Chiquita Energy Project - In March 2004, SCPPA entered into a power purchase agreement with Ameresco Chiquita Energy LLC, subsequently amended in September 2006, for 100% of the electric generation from a landfill gas to energy facility located at the landfill site in Valencia, California (Ameresco Landfill Gas to Energy Project). The SCPPA participants in the project include the cities of Burbank and Pasadena. This project will initially be for 10 MW with the right of first refusal on any increase in output.

Operations began in November 2010. The term of the contract is 20 years from the commercial operation date.

Southern California Public Power Authority Notes to Combined Financial Statements Note 1 - Organization and Purpose (continued)

Don A. CampbeilANild Rose Geothenmai Energy Project - On December 31, 2012, the Authority entered into a power purchase agreement with Ormat Nevada, Inc. to purchase renewable geothermal energy from the Don A. CampbellWild Rose Facility (the Facility) beginning December 31, 2013, for a 20-year term. The Facility is a geothermal power generating facility with a 16.2 MW nameplate capacity and a 95 percent capacity factor located in Mineral County, Nevada. The commercial operating date was December 31,2013 but early delivery of energy began in November 2013. The two participants are LADWP and the City of Burbank. LADWP acts as project manager and has balancing authority at the point of delivery of energy at the Mead 230kV Substation in Southern Nevada. Electricity from the Project will be transmitted through Nevada Energy's transmission system that includes the new 500 kV One Nevada Transmission Line.

Copper Mountain Solar 3 Project - On August 31,2012, SCPPA entered into a power purchase agreement with Sempra U.S. Gas and Power (Sempra) to purchase certain renewable energy and associated environmental attributes from the Copper Mountain Solar 3 Facility. The Facility is a fixed tilt photovoltaic system with a capacity of 250 MW located near Boulder City, Nevada. Full commercial operation was achieved on December 31, 2015. On December 13, 2018, Consolidated Edison purchased the facility from Sempra. The term of the contract is 20 years. LADWP is the scheduling coordinator on behalf of the participants.

Columbia 2 Solar Project - On September 19, 2013, SCPPA entered into a power purchase agreement with RE Columbia Two, LLC to purchase all of the output of the Columbia 2 Solar Project, and to acquire other rights and resources, including but not limited to the purchase option and the rights under other ancillary agreements associated with the project. The project is a photovoltaic solar power generating facility located in Kern County, California with an expected nameplate capacity of 15 MW. Commercial operation began on December 20, 2014. The term of the contract is 20 years. The City of Riverside is the scheduling coordinator on behalf of the participants.

Don A. Campbell 2 Geothermal Energy Project - On December 18, 2014, the Authority entered into a power purchase agreement with ORNI 37 LLC to purchase renewable geothermal energy from the Don A. Campbell 2 Facility (DAC2) beginning December 31,2016, for a 20-year term. The Facility is a geothermal power generating facility with a 16.2 MW nameplate capacity and a 95% capacity factor located in Mineral County, Nevada. The commercial operating date was September 17, 2015, but early delivery of energy began in August 2015. The LADWP acts as project manager and has balancing authority at the point of delivery of energy at the Mead 230 kV Substation in Southern Nevada. Electricity from the Project will be transmitted through Nevada Energy's Transmission System that includes the new 500 kV One Nevada Transmission Line. Consequently, the Don A. Campbell/Wild Rose Facility is now called Don A. Campbell 1 to distinguish from the expansion, DAC2.

- 4 Southern California Public Power Authority Notes to Combined Financial Statements Note 1 - Organization and Purpose (continued)

Heber-1 Geothermal Energy Project - On May 31,2013, the Authority entered into a power purchase agreement with Heber Geothermal Company for 45 MW of generating capacity. The facility is a geothermal power generating facility with a 62.5 MW gross nameplate capacity located in Imperial County, California. The project began deliveries of energy under the power purchase agreement on February 2, 2016. The term of the contract is 10 years. Global is the third party scheduling coordinator on behalf of the participants.

Kingbird Solar B Project - On September 19, 2013, the Authority entered into a power purchase agreement with Kingbird Solar B, LLC for 20 MW of generating capacity. The project is a solar photovoltaic power generating facility located near Rosamond, California. The commercial operation date for the project was declared on April 30, 2016. The term of the contract is 20 years. The City of Riverside is the scheduling coordinator on behalf of the participants.

Springbok 1 Solar Farm Project - On August 21,2014, SCPPA on behalf of LADWP, entered into a power purchase agreement with 62 SK 8me, LLC for 100 MW of solar energy with all associated environmental attributes, and photovoltaic generating capacity from the Springbok 1 Solar Farm located in western Kern County, California. The commercial operation began on July 2016, starting a term of 25 years. SCPPA has an Early Buy Out option at the end of the 15th, 20th, and 25th Contract Years. The project is expected to have a measured initial generation capacity factor up to 34% with a 0.7% annual degradation. LADWP serves as the project manager on behalf of SCPPA.

Astoria 2 Solar Project - On July 23, 2014, SCPPA on behalf of Azusa, Banning, Colton and Vernon, entered into a power purchase agreement with Recurrent Energy for solar energy from the Astoria 2 Solar Project. SCPPA is entitled to 35 MW of photovoltaic generating capacity from commercial operation to December 31,2021 and 45 MW of generating capacity from January 1,2022 until the expected expiration date of December 31,2036. The commercial operation date was December 2016. Power and Water Resources Pooling Authority, Lodi, Corona, Moreno Valiey, and Rancho Cucamonga, are each buying the output of a separate portion of the facility, which is located in Kern County, California. SCPPA has purchase options in the 10th, 15th, and 20th Contract Years.

The project is forecasted to start at a capacity factor of 31% with a 0.5% annual degradation. ACES Power Marketing is the scheduling coordinator for the project.

Summer Solar Project - On November 15, 2012, SCPPA on behalf of Azusa, Pasadena and Riverside, entered into a power purchase agreement with Sustainable Power Group (sPower) for 20 MW of solar photovoltaic generating capacity from the Summer Solar Facility for a term of 25 years from January 1, 2017. The facility is located in Lancaster, California, and was commercial in July 2016. The project is forecasted to start at a capacity factor of 28% with a 0.5% annual degradation. SCPPA does not have purchase options on this project. Riverside serves as the scheduling coordinator for the project.

Southern California Public Power Authority Notes to Combined Financial Statements Note 1 - Organization and Purpose (continued)

Springbok 2 Solar Farm Project - On August 28, 2015, SCPPA on behalf of LADWP, entered into a power purchase agreement with 63SU 8me, LLC for 150 MW of solar photovoltaic generating capacity from the Springbok 2 Solar Farm located 70 miles north of Los Angeles in Kern County, California. The commercial operation began on September 2016, starting a term of 27 years, with an option for a three-year extension. SCPPA has an Early Buy Out option at the end of the 15th, 20th, 27th, and 30th Contract Years. The project is expected to start at a capacity factor of 33% with a 0.7% annual degradation.

LADWP serves as the project manager on behalf of SCPPA.

Antelope Big Sky Ranch Solar Project - On November 15, 2012, SCPPA on behalf of Azusa, Pasadena and Riverside, entered into a power purchase agreement with sPower for 20 MW of solar photovoltaic generating capacity from the Antelope Big Sky Ranch Facility. The facility is located near Lancaster, California, and commercial operation occurred in late August 2016 for a term of 25 years from January 1,2017. The project is expected to start at a capacity factor of 28% with a 0.5% annual degradation. SCPPA has purchase options in the 10th, 15th, and 20th Contract Years. Pasadena is the scheduling coordinator for the project.

Antelope DSR 1 Solar Project - On July 16, 2015, the Authority, on behalf of Riverside and Vernon, entered into a power purchase agreement with Antelope DSR 1, LLC for 50 MW solar photovoltaic generating capacity from the Antelope DSR 1 Solar Facility. The facility is located near Lancaster, California, and commercial operation occurred on December 16, 2016 for a term of 20 years. The City of Riverside is the scheduling coordinator on behalf of the participants.

Antelope DSR 2 Solar Project - On July 16, 2015, the Authority, on behalf of Azusa and Colton, entered into a power purchase agreement with Antelope DSR 2, LLC for 5 MW solar photovoltaic generating capacity from the Antelope DSR 2 Solar Facility. The facility is located near Lancaster, California, and commercial operation occurred on December 6, 2016 for a term of 20 years. The City of Riverside is the scheduling coordinator on behalf of the participants.

Puente Hills Landfill Gas-to-Energy Project - On June 25, 2014, the Authority entered into a power purchase agreement with County Sanitation District No. 2 of Los Angeles County for 46 MW of the electric generation from a landfill gas to energy facility, located at Whittier, California. The project began deliveries to the Authority on January 1, 2017 for a term of 10 years.

Ormat Northern Nevada Geothermal Project - On October 20, 2016, the Authority entered into a power purchase agreement with ONGP, LLC, a subsidiary company of Ormat Technologies, Inc., based in Reno, Nevada. The Ormat Northern Nevada Geothermal Portfolio Project is a renewable geothermal power generating with nine separate facilities, and with a total of 150 MW nameplate capacity located in the different counties of Nevada.

Southern California Public Power Authority Notes to Combined Financial Statements Note 1 - Organization and Purpose (continued)

Each facility has its own schedule of commercial operation date and expiration date. The first facility provided 24 MW on December 31,2017, and subsequent development wili bring the remainder in commercial operation by December 31,2022. l_ADWP maintains 100% entitiement of the entire 150 MW, and wiil provide project management services on behalf of SCPPA. The term of the contract is 25 years.

Ormesa Geothermal Complex Energy Project - On March 1, 2016, the Authority entered into a power purchase agreement with Ormesa, LLC, to purchase renewabie geothermal energy. The project has a generating facility of 30 MW namepiate capacity located in Imperial Valley, California. The official delivery commencement date was on November 30, 2017 for a term of 25 years.

ARP-Loyalton Biomass Project - On April 2, 2018, the Authority entered into a power purchase agreement with ARP-Loyalton Cogen LLC, seller and developer of the existing biomass power generation facility in California. The project has a total energy output of 18 MW located in Loyalton, California. The commercial operation date occurred on April 20, 2018 for a term of 5 years. The City of Riverside is the scheduling coordinator on behalf of the participants.

The Authority has entered into power purchase agreements with project participants as follows. These agreements are substantially take-and-pay contracts where there may be other obligations not associated with the delivery of energy.

f' i:

I*

Southern California Pubiic Power Authority Notes to Combined Financial Statements r- Note 1 - Organization and Purpose (continued)

Participants ownership interests are as foilows; Parttdpanls City of Los City of City of City of City of City of City of City of CKy of City of City of Angeles Anaheim Impertal Vernon Riverside Azusa Banning Colton Burbank Glendale Power Purchase Agreements Pasader^ Total Ormat Geothermal Energy 60.0% 10.0% 15.0% 15.0% 100.0%

69.6% . _ . 10.1% 20.3%

Pebble Springs Wind

- - - 100.0%

MWD Small Hydro 56.4% 21.8% - 21.8%- - 100.0%

16.7% - .

Ameresco Chiquita Landfill Gas

- - 63.3% 100.0%

84.6% - - - 15.4%

Don A CampbellAIVIId Rose Geothermal

- - - 100.0%

Copper Mountain Solar 3 84.0% - 16.0% 100.0%

74.3%- 8.6%- - - 17.1%

Columbia 2 Solar

- 100.0%

Don A. Campbell 2 Geothermal 100.0% - - 100.0%

66.7% 33.3% - - - - -

Heber-1 Geothermal

• 100.0%

Kingbird Solar 70.0% 15.0%- - 15.0%- 100.0%

- 50.0% 17.6%

• Summer Solar - 32.6% 100.0%

Springbok 1 100.0% - - 100,0%

100.0% - - - - -

Springbok 2

- - - 100,0%

Astoria 2 Solar 67.1% 22.9%

• 20.0%- 100,0%

50.0%* 17.5% - 32.5%

Antelope Big Sky Ranch Solar

- 100.0%

Antelope DSR 1 Solar 50.0% 50.0% . - 100.0%

Antelope DSR 2 Solar 100.0% - r. -V . - 100.0%

23.3%- - 23.2% - 23.3%-

Puente Hills Landfill Gas 30.2% 100,0%

Ormat Northern Nevada Geothermal 100.0% - - 100.0%

85.7% 14.3% - - - - -

Omnesa Geothermal Complex

• -

• 100.0%

ARP-Loyalton Biomass Project 74.1% 6.7% 12.5% B.7% - - 100.0%

(1) In accordance to the project's respective Xontract for Sale and Purchase" agreement between the City of Glendale, LADWP, and SCPPA, LADWP agrees to pay from and after the Commencement Data, the Contract Monthly Costa and other obligations of Glendale associated with the Contract Output EnlltlomenI Shares of the project until Glendale exercises its option to repurchase Its Entitlement Share by providing LADWP with a 60 day prior written notice of Ita Intent.

(2) In accordance with Board Resolution No. 2017-097, the City of Azusa assigned Its Interest of energy and capacity to the City of Banning and tenriinatad the Power Sales Agreement with the Authority in the Puente Hills Landfill Gas Project effective January 1, 2018.

(3) In accordance with Board Resolution No. 2017-105, the City of Azusa and the City of Colton have mutually negotiated and agreed to transfer their respective rights and obligations among themselves In the Antelope DSR 2 Solar and Astoria 2 Solar projects. The resolution authorized the transfer of rights and obligation In the Antelope DSR 2 Solar Project from the City of Colton to the City of Azusa and the transfer of rights and obllgaUon in the Astoria 2 Solar Project from the City of Azusa to the City of Colton.

Southern California Public Power Authority Notes to Combined Financial Statements Note 1 - Organization and Purpose (continued)

As of June 30, 2019, the Authoritys power purchase agreements are summarized as follows:

Agreement Commercial Project Contract Project Name Location Capacity Date Operations Date Manager Expiration Ormat Geothermal Energy Project Heber, California 17.0 MW December 2005 January 2006 SCPPA 2031 Pebble Springs Wind Project Gilliam County, Oregon 98.7 MW December 2007 January 2009 LADWP 2025 MWD Small Hydro Project Southern California 17.04 MW November 2008 November 2008 SCPPA 2023 Ameresco Chiquita Landfill Gas Project Valencia, California 10.0 MW March 2006 November 2010 SCPPA 2030 Don A. Campbell 1 Project Mineral County, Nevada 16.2 MW December 2012 December 2013 LADWP 2033 Copper Mountain Solar 3 Project Clark County, Nevada 250.0 MW August 2012 December 2012 LADWP 2040 Columbia 2 Solar Project Kem County, California 15.0 MW September 2013 December 2014 SCPPA 2033 Don A. Campbell 2 Project Mineral County, Nevada 16.2 MW December 2014 September 2015 LADWP 2035 Heber-1 Geothermal Project Imperial Valley, California 46.0 MW May 2013 February 2016 LADWP 2025 Kingbird Solar Project Kem County near Rosamund, California 20.0 MW July 2013 Febmary 2016 SCPPA 2036 Summer Solar Project Los Angeles County 20.0 MW November 2012 July 2016 SCPPA 2042 Springbok 1 Solar Project Kem County, California 100.0 MW April 2015 July 2016 LADWP 2040 Springbok 2 Solar Project Kem County, California 150.0 MW April 2015 October 2016 LADWP 2045 Astoria 2 Solar Project Kem County, California 45.0 MW July 2014 December 2016 SCPPA 2036 Antelope Big Sky Ranch Solar Project Los Angeles County 20.0 MW November 2012 August 2016 SCPPA 2036 Antelope DSR 1 Solar Project Los Angeles County 50.0 MW September 2015 December 2016 SCPPA 2036 Antelope DSR 2 Solar Project Los Angeles County 5.0 MW September 2015 August 2016 SCPPA 2036 Puente Hills Landfill Gas-to-Energy Project Whittier, California 46.0 MW June 2014 January 2017 SCPPA 2030 Ormat Northern Nevada Geothermal Nevada Counties 150.0 MW October 2016 October 2017 LADWP 2042 Ormesa Geothermal Complex Imperial County, California 125.6 MW March 2016 November 2017 LADWP 2042 ARP-Loyalton Biomass Project Loyalton, California 18.0 MW October 2017 April 2018 SCPPA 2023

Southern California Public Power Authority Notes to Combined Financial Statements Note 1 - Organization and Purpose (continued)

MISCELLANEOUS FUNDS Project Development Fund - Holds funds related to projects in the development phase.

Projects Stabilization Fund - In fiscal year 1997, the Authority authorized the creation of a Projects Stabilization Fund. Deposits may be made into the fund from budget under-runs, after authorization of individual participants, and by direct contributions from the participants. Participants have discretion over the use of their deposits within SCPPA project purposes. This fund is not a project-related fund; therefore, it is not governed by any project Indenture of Trust. The members participate in the Projects Stabilization Fund by making deposits to the fund at their discretion.

SCPPA Fund - In January 2016, the SCPPA Board of Directors approved Resolution No. 2016-003 authorizing the purchase and renovation of the building adjacent to the office building that SCPPA currently owns.

The building was negotiated and put into escrow on January 16, 2016 at a price of $1.54 million. The acquisition will be allocated to each member based on the methodology that was used to fund the purchase of the original SCPPA Office Building which was acquired in June 2011. On January 2, 2018, the Authority had commenced the close of the escrow for the new building (see Note 3).

Reclassification - Certain accounts in the 2018 financial statements have been reclassified to conform to the presentation in the 2019 combined financial statements. Such reclassifications have no effect on net position or the changes in net position.

Note 2 - Summary of Significant Accounting Policies Basis of accounting and presentation - The combined and individual financial statements of the Authority are prepared under the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America issued by the GASB applicable to governmental entities that use proprietary fund accounting. Revenues are recognized when earned and expenses are recognized when incurred. The format of the Statement of Net Position follows the inverted approach which is consistent with the Federal Energy Regulatory Commission (FERC).

Southern California Public Power Authority Notes to Combined Financial Statements Note 2 - Summary of Significant Accounting Policies (continued)

In November 2016, the GASB issued Statement No. 83, Certain Asset Retirement Obligations, effective for financial statements for periods beginning after June 15, 2018. This statement addresses accounting and financial reporting for certain asset retirement obligations (AROs). An ARO is a legally enforceable liability associated with the retirement of a tangible capital asset. A government that has legal obligations to perform future asset retirement activities related to its tangible capital assets should recognize a liability and deferred outflows based on the guidance of this statement. Changes adopted to conform to the provisions of GASB 83 were applied retroactively by restating the financial statements for all prior periods presented (see Note 13).

In March 2016, the GASB issued Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, effective for financial statements for periods beginning after June 15, 2017. Statement 75 replaces the requirements of GASS Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. Among other things. Statement 75 requires governments to report a liability on the face of the financial statements for the OPEB that they provide and requires governments in all types of OPEB plans to present more extensive note disclosures and required supplementary information about their OPEB liabilities (see Note 11).

Net position - The Authoritys net position is classified as follows:

• Net investment in capital assets - This component of net position consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any bonds, other borrowings, and advances from participants that are attributable to the acquisition, construction, or improvement of those assets. If there are significant unspent related debt proceeds at year-end, the portion of the debt attributable to the unspent proceeds is not included in the calculation of net investment in capital assets. Rather, that portion of the debt is included in the same net position component as the unspent proceeds.

• Restricted - This component consists of net position on which constraints are placed as to their use.

Constraints include those imposed by creditors (such as through debt covenants), contributors, or laws or regulation of other governments or constraints imposed by law through constitutional provisions or through enabling legislation.

• Unrestricted - This component of net position consists of net position that does not meet the definition of restricted or net investment in capital assets.

Southern California Public Power Authority Notes to Combined Financial Statements Note 2 - Summary of Significant Accounting Poiicies (continued)

Use of estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the combined financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Utility piant - The Authoritys share of construction and betterment costs, natural gas reserves, intangibles, and nuclear fuel associated with PVNGS, STS, Mead-Phoenix, Mead-Adelanto, SJGS, Magnolia Power Project, the Natural Gas Pinedale Project and the Natural Gas Barnett Project (together the Natural Gas Projects), Canyon Power, Tieton Hydropower, Linden Wind Energy, and the Apex Power Projects are included as utility plant and recorded at cost. Utility plant also includes the SCPPA Building.

Costs include labor, materials, capitalized interest costs on funds used in construction, and allocated indirect charges such as engineering, supervision, transportation and construction equipment, retirement plan contributions, health care costs, and certain administrative and general expenses. The costs of routine maintenance, repairs, and minor replacements incurred to maintain the plant in operating condition are charged to the appropriate operations and maintenance expense accounts in the period incurred. The original cost of property retired, net of removal and salvage costs, is charged to accumulated depreciation.

Depreciation expense is computed using the straight-line method based on the estimated service lives, principally 35 years for PVNGS, STS, Mead-Phoenix and Mead-Adelanto; 30 years for Magnolia and Canyon Power Project; 50 years for the Tieton Hydropower Project; 25 years for Linden Wind Energy Project; 24 Years for the Apex Power Project; and 35 years for the SCPPA Building Fund. In June 2018 due to the Authoritys divestiture from the SJ Project, the Authority decided to write down the utility plant (see Notes 1 and 2).

Natural gas reserve depletion - Depletion expense for the Natural Gas Projects is computed using the unit of production method based on the future production of the proven producing wells, estimated at 50 years for the Natural Gas Pinedale Project and 50 years for the Natural Gas Barnett Project. The estimate is based on site specific studies prepared by independent consultants as of December 2016 for both projects. The depletion rate for the Natural Gas Pinedale Project was $5.27/MMBtu and $5.17/MMBtu for fiscal years 2019 and 2018, respectively; and the estimated total net revenue volume was 6,354,798 MMBtu and 6,977,121 MMBtu for fiscal years 2019 and 2018, respectively. The depletion rate for the Natural Gas Barnett Project was $6.08/MMBtu and $2.78/MMBtu for fiscal years 2019 and 2018, respectively; and the estimated total net revenue volume was 14,887,980 MMBtu and 15,660,008 MMBtu for fiscal years ended June 30, 2019 and 2018, respectively.

Nuclear fuel - Nuclear fuel is amortized and charged to expense on the basis of actual thermal energy produced relative to total thermal energy expected to be produced over the life of the fuel. Under the provisions of the Nuclear Waste Policy Act of 1982, the federal government assesses each entity with nuclear operations, including the participants in PVNGS, $1 per MW hour of nuclear generation. The Authority records this charge as a current year expense. See Note 12 for information about spent nuclear fuel disposal.

Southern California Public Power Authority Notes to Combined Financial Statements Note 2 - Summary of Significant Accounting Policies (continued)

Asset Retirement Obligations - SCPPA records asset retirement obligations where there is a legaily enforceable liability associated with the retirement of the tangible capital assets. An ARO is measured based on the best estimate of the current value of outlays expected to be incurred. The current value is adjusted annuaily for the effects of general inflation or deflation. All relevant factors are evaluated at least annually to determine whether there is a significant change in the estimate outlays and whether to remeasure ARO. The deferred outflows of resources should be reduced and recognized as outflows or resources in a systematic and rational manner over the estimated useful life of the tangible capital assets.

Implementation of GASB 83, Certain Asset Retirement Obligation - The Authority adopted the requirements of GASB 83 as of June 30, 2019. This statement requires that recognition of a liability occur when external laws, regulations, contracts, or court judgments, together with the occurrence of an internal event that obligates an entity to perform asset retirement activities.

The impact for the Authority is as follows; Asset Retirement Obligation Liability - An asset retirement obligation is measured based on the best estimate of the current value of outlays expected to be incurred, including probability weighting of potential outcomes. This statement requires the current value of an entitys AROs to be adjusted for the effects of general inflation or deflation at least annually and it requires entities to evaluate all relevant factors at least annually to determine whether the effects of one or more of the factors are expected to significantly change the estimated asset retirement outlays. An entity should remeasure an ARO only when the result of the evaluation indicates there is a significant change in the estimate outlays. Under GASB 83, the current value of the obligation was recorded and the effect of inflation was recognized in the opening balance of the statements of net position.

Deferred outflows of resources - asset retirement obligation - GASB 83 requires recognition of deferred outflows of resources associated with an ARO based on the useful life of the asset and estimated liability at the time of recognition. The deferred outflows of resources reported after a tangible capital assets estimated life should be reduced and recognized as outflows or resources in a systematic and rational manner over the remaining estimated useful life of the tangible capital asset.

GASB 83 requires the effects of accounting change to be applied retroactively by restating the financial statements for all prior periods presented.

68

Southern California Public Power Authority Notes to Combined Financial Statements Note 2 - Summary of Significant Accounting Policies (continued)

The Authority has adopted GASB 83 as of June 30, 2019 and, accordingly, has restated amounts of the effected balances with the financial statements for the fiscal year ending June 30, 2018 as follows; (In Thousands)

As Originally Reported As Restated Effect of Change Statement of Net Position Deferred outflows of resources Asset retirement obligation $ - $ 44,561 $ 44,561 Total defened outflows of resources $ - 44,561 44,561 Noncurrent liabilities Reclamation and decommission obligation $ 332,811 $ 211,270 $ (121,541)

Total noncurrent liabilities $ 332,811 $ 211,270 $ (121,541)

Total net position $ (83,611) $ 82,491 $ 166,102 Statement of Revenues, Expenses and Changes in Net Position Operating expenses Decommissioning costs $ 17,500 $ 1,720 $ (15,780)

Nonoperating expenses Inflation of ARO Liability $ - $ 5,086 $ 5,086 Investments - Investments include United States government and governmental agency securities, guaranteed investment contracts, medium term notes, and money market accounts. These investments are reported at fair value and changes in unrealized gains and losses are recorded in the statement of revenues, expenses, and changes in net position with the exception of the guaranteed investment contracts which are recorded at amortized cost. Gains and losses realized on the sale of investments are generally determined using the specific identification method.

The Bond Indentures for the Projects require the use of trust funds to account for the Authoritys receipts and disbursements. Cash and investments held in these funds are restricted to specific purposes as stipulated in the Bond Indentures.

Accounts receivable - Accounts receivable consists primarily of participant receivables. As such no allowance is deemed necessary.

Prepaid and other assets - SCPPA entered into a prepaid gas contract with a supplier for a 30-year gas supply at a fixed discount and simultaneously entered into a contract with each of the project participants for the delivery of natural gas. The prepaid contracts were subsequently restructured and the term of the agreements were shortened to 27 years. SCPPA has also entered into 20-year term prepaid contracts for all of the energy generated by the Milford I Wind, Milford II Wind, and the Windy PointA/Vindy Flats Facilities, with corresponding power sales contracts with each project participant (see Note 1).

Southern California Public Power Authority Notes to Combined Financial Statements Note 2 - Summary of Significant Accounting Policies (continued)

Advance to IPA - Advance to IPA consists of cash transferred to IPA for reserve, contingency, and self-insurance funding and reiates to the STS Project.

Unamortized premiums and discounts - Unamortized premiums and discounts are recorded as part of long-term debt and amortized over the life of the related debt issue.

Cash and cash equivalents - Cash and cash equivalents include cash and investments with originai maturities of 90 days or less.

Restricted cash and investments - Restricted cash and investments are set aside to meet externally imposed legal and contractual obligations. Restricted cash and investments are used in accordance with their requirements and include certain proceeds of the Authoritys revenue bonds, as well as resources set aside for their repayment, and participant advances restricted for costs of certain capital projects.

Deferred outflow and inflow of resources - Losses on refunding related to bonds redeemed by refunding bonds are reported as deferred outflows of resources and are amortized over the shorter life of the refunding bonds, or the remaining term of bonds in accordance with GASB Statement No. 23, Accounting and Financial Reporting for Refundings of Debt Reported by Proprietary Activities.

In addition, the accumulated decrease in the fair value of effective hedging derivative instruments are reported as deferred outflow of resources. Under hedge accounting, the changes in the fair value of an effective hedging derivative instrument, in asset or liability positions, are reported as a deferred inflow of resources or deferred outflow of resources, respectively, on the statements of net position.

See Note 11 for a description of the deferred outflows of resources and the deferred inflows of resources related to the pension and OPEB.

Deferred outflows of resources related to asset retirement obligation are recognized and amortized in a systematic and rational manner over the remaining estimated useful life of the tangible capital asset.

Materials and supplies - Materials and supplies consist primarily of items for construction and maintenance of plant assets and are stated at the lower of cost or market.

Arbitrage rebate and yield restrictions - The unused proceeds from the issuance of tax-exempt debt have been invested in taxable financial instruments. The excess of earnings on investments, if any, over the amount that would have been earned if the investments had a yield equal to the bond yield or yield restricted rate, is payable to the IRS within five years of the date of the bond offering and each consecutive five years thereafter until final maturity of the related bonds.

Southern California Public Power Authority Notes to Combined Financial Statements Note 2 - Summary of Significant Accounting Policies (continued)

Pensions - For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of SCPPAs California Public Employees Retirement System (CalPERS), Miscellaneous plans (Plans), and additions to/deductions from the Plans fiduciary net position have been determined on the same basis as they are reported to CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

Postemployment benefits other than pensions - For purposes of measuring the net OPEB liability and deferred outflows/inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the OPEBs plan and additions to/deductions from the OPEB plans fiduciary net position have been determined on the same basis as they are reported by the plan. For this purpose, the OPEB plan recognizes benefit payments when due and payable in accordance with the benefit terms.

Revenues - Revenues consist of billings to participants for the sales of electric energy, natural gas, and transmission service in accordance with the participation agreements. Generally, revenues are fixed at a level to recover all operating and any debt service costs over the commercial life of the property.

Transportation costs - As a result of the sales and purchases agreements for natural gas entered into by SCPPA, the participants receive less volume than processed incurring embedded transportation costs.

These costs are recorded as participants revenue and expense to the Natural Gas Pinedale Project. At June 30, 2019 and 2018, transportation costs were approximately $231,600 and $119,100, respectively, for the Natural Gas Pinedale Project.

Non-exchange contribution - Each participant of the Magnolia Power Plant is responsible for its own share of natural gas. They may elect to bring fuel to the plant or purchase fuel from Occidental Energy Marketing, Inc. (OEMI). OEMI computes the daily imbalances of fuel volume per participant using the daily consumption data that the operating manager provides. Monthly, actual fuel burnt is reported together with the daily imbalances, participants in kind contribution, and fuel purchases from OEMI.

Non-exchange contributions are valued at fair market value and recorded as participant revenue and fuel expense to the Magnolia Power Project. SCPPA values the participants fuel contribution using monthly average pricing from the Projects OEMI fuel purchases. During the fiscal years ended June 30, 2019 and 2018, the participants contribution in kind was approximately 10.7 MMBtu and 9.9 MMBtu and was valued at approximately $62.4 million and $34.7 million, respectively.

Build America Bonds (BABs) - These are taxable municipal bonds that were created under the American Recovery and Reinvestment Act of 2009, and carry special tax credits and federal subsidies for either the bond issuer or the bondholder. BABs provide for a subsidy payment from the Department of the Treasury to be paid directly to the issuer (Direct Payment) or the bondholder (Tax Credit BABs) in an amount equal to 35% of the bonds interest. On September 28, 2010, SCPPA issued $41.5 million of the Linden Wind 2010 Series B, Direct Payment BABs.

Southern California Public Power Authority Notes to Combined Financial Statements Note 2 - Summary of Significant Accounting Policies (continued)

The budget sequestration or automatic spending cuts of the United States Government that went into effect in 2013 resulted in a 7.2% decrease of the BABs subsidies received by the Authority for the related bonds. During the fiscal year ended June 30, 2019, BABs subsidy received for the debt service payments made on July 1,2018 was reduced by 6.9% and by 6.2% for the payments made on January 1, 2019.

Note 3-Utility Plant At June 30, 2019, Net utility plant consisted of the following (amounts in thousands):

June 30.2019 GENERATION GREEN POWER Magnolia Canyon Tieton Linden Wind Power Power Hydro-powar Energy

'i Pak) Verde San Juan Apex Power Utility plant Production S s 256,964 5 345,826 123,083

$ 755,779 $ 289,348 $ 35,601 $

Transmission 18,575 15,247 31,853 13,371 23,431 General 4.508 - 16,752 595 493- 11 Natural gas reserves - - - - - - -

778,862 321,347 289,412 346,319 48,983 146,514 584,960 . 153,185 74,468 68,937 13,949 51.112 Less accumulated depreciation -

193,902 168,162 214,944 277,382 35,034 95,402 40,889 . 557 1,380 Construction work in progress 46,382 - . -

Nudear fuel, at amortized cost - - - .

Nat utility plant $ 281,173 $ $ 168.719 $ 214,944 s 278.762 t 95,402 S 35,034 TRANSMISSION OTHERS NATURAL GAS Southern Transmission Mead- Mead- SCPPA System Phoenix Adelanto Pinedale Barnett Fund Total Utility plant Production $ $ $ $ 1,806,601 Transmission 770.498 82,071 206,521 - $ $ $

1,161,567 General 44,399 3,159 509 4.092- 7266- 81,784 73.202 65,182 158,384 Natural gas reserves - - - -

814,897 85,230 207,030 77294 85,182 7266 3208,336 666,900 38,504 110,344 46,336 46,456 868 1.856,019 Less accumulated depredation 147,997 46,726 96,666 30.958 38,726 6,398 1,352,317 82 39 95 43.042 Construction work in progress - - - 46,382 Nudear fuel, at amortized cost - - - - -

$ 147,997 $ 30,997 $ 38,821 $ 1,441,741 Net utility plant $ 46,808 $ 96,686 $ 6.398

Southern California Public Power Authority Notes to Combined Financial Statements Note 3 - Utility Plant (continued)

At June 30, 2018, Net utility plant consisted of the following (amounts in thousands):

June 30, 2018 GENERATION GREEN POWER Magnolia Canyon Hoover Tieton Linden Wind Power Power Uprating Hydro-power Energy Palo Verde San Juan Apex Power utility plant Production 3,917 Transmission

$ 748,300 18,615

$ S 289,348 $ 253,020

$ 310,272

$ s 35,247 S 123,082 15,247 31,853 13,371 23,431 General 4,329 - 16,233 550 323- - 11 Natural gas reserves - - . - - _

771,244 3,917 320,628 285,423 310,595 48,629 146,513 Less accumulated depredation 564,841 3,917 142,197 64,837 53,781 12,396 45,298 206,403 178.631 220,566 256,814 36,233 101,215 Construction work in progress 36,535 . 654 28 19,527 .

Nuclear fuel, at amortized cost 45,578 - .

Net utility plant $ 288,516 $ t 179,285 $ 220,614 S 276,341

• i 36,233 $ 101^15 TRANSMISSION OTHERS NATURAL GAS Southern Transmission Mead- Mead- SCPPA System Phoenix Adelanto Pinedals Barnett Fund Total Utility plant Production Transmission

$ 770,498

$ 62,070

$ 206,404

$ - $ - $ $ 1,763,186 1,161,489 General 44,400 3,159 509 4,092 . - 7,226 . 80,832 73,196 85,104- 158,300 Natural gas reserves - - - -

814,898 85.229 206,913 77.288 85,104 7,226 3,163,807 644,147 35,719 104.107 43,180 43,519 692 1,758,631 Less accumulated depreciation 170,751 49,510 102,806 34,108 41,585 6,534 1,405,176 28 5 78 56,855 Construction work in progress Nuclear fuel, at amortized cost 45,578 49,538 S 34.113 41,663 1,507,609 Net utility plant $ 170,751 $ $ 102,806 s S 6,534 s

<< TT-i-f-n-nrTT'*-rn

a Southern California Public Power Authority Notes to Combined Financial Statements Note 3 - Utility Plant (continued)

A summary of changes in Utility Plant follows (amounts in thousands):

Balance Balance July 1,2018 Additions Disposals Transfers June 30, 2019 Nondepreciable utility plant Land $ 56.102 $ $ $ $ 56,102 Construction work in progress 56,784 15,714 (29,576) 42,922 Construction work in progress - gas 74 134 (83) 125 Nuciear fuel* 45,578 13,664 (12,858) 46,384 Total nondepreciable utility plant 158,538 29,512 (12,858) (29,659) 145,533 Depreciable utility plant Production Nuclear generation (Palo Verde Project) 747,387 (234) (2,698) 10,410 754,865 Coal-fired plant (San Juan Unit 3 Project) 6,490 6,490 Gas-fired plant 841,528 20,909- -

(55) 18,646- 881,028 Green power 160,834 354 161,188 1,112,771 229 -

(153) - 1,112,847 Transmission General 77,582 440 (3,923) 520- 74,619 Natural gas reserves 161,135 83 161,218 Total depreciable utility plant 3,107,727 21,698 (6,829) 29,659 3,152,255 Less accumulated depreciation (1,758,656) (103,878) 6,487 (1,856,047)

Total utility plant net $ 1,507,609 $ (52,668) S (13,200) $ S 1,441,741

• Nuclear fuel disposals represent amortization.

Note 4 - Investments The Authoritys investment function operates within a legal framework established by Sections 6509.5 and 53600 et. seq. of the California Government Code, Indentures of Trust, and instruments governing financial arrangements entered into by the Authority to finance and operate Projects and the Authoritys Investment Policy.

Guaranteed investment contracts (GICs) are contracts that guarantee the owner principal repayment and a specified interest rate for a predetermined period of time. GICs are typically issued by insurance companies and marketed to institutions that qualify for favorable tax status under federal laws. These types of securities provide institutions with guaranteed returns. GICs are negotiated on a case-by-case basis.

Based on SCPPA's Investment Policy, certain vehicles such as GICs, flexible repurchase agreements or forward debt service agreements, may be entered into only upon approval of the SCPPA Board. In addition, eligible securities and general limitations are derived from each Projects Indenture of Trust, the Government Code and SCPPAs evolving investment practices.

Southern California Public Power Authority Notes to Combined Financial Statements Note 4 - Investments (continued)

The operative Indentures of Trust in which securities are authorized for investment purposes relate to the Southern Transmission System Project Bonds, the Mead-Phoenix Project Bonds, the Mead-Adelanto Project Bonds, the Magnolia Power Project Bonds, the Pinedale Project Bonds, the Barnett Project Bonds, Prepaid Natural Gas Project Bonds, the Canyon Power Project Bonds, the Milford Wind Phase I Project Bonds, the Milford Wind Phase II Project Bonds, the Linden Wind Project Bonds, the Tieton Hydropower Project Bonds, the Windy PointAVindy Flats Bonds, and the Apex Power Project Bonds.

Authorized investments for the Projects Stabilization Fund are set forth in a resolution approved by the Board in 1996 and amended and approved in 2016.

Eligible securities include; United States Treasury Securities, which are bonds or other obligations secured by the full faith and credit of the United States of America; - 3 Federal Agency Obligations, which have the full financial backing of the U.S. Government:

Government Sponsored Enterprise Obligations, which are created by acts of Congress to provide liquidity for selected lending programs targeted by Congress; Repurchase Agreements, which are collateralized loan contracts where the seller includes a written agreement to repurchase the securities at a later date for a specified amount; Negotiable Certificates of Deposit, which are deposit liabilities issued by a nationally or state-chartered bank, a savings or a federal association or by a state-licensed branch of a foreign bank, which has short-term ratings of at least A-1 by S&P and at least P-1 by Moodys; Bankers Acceptances, a short-term draft or bill of exchange guaranteed for payment at face value to the holder of the instrument on its maturity date, which has a short-term rating of at least A-l" by S&P and at least P-1 by Moodys; Commercial Paper, a short-term unsecured promissory note issued by non-financial or financial firms with a rating of at least A-1 by S&P and at least P-1 by Moodys; Medium Term Notes rated A or better and only those issued by corporations organized and operating within the United States, or by depository institutions licensed by the United States or any state and operating within the United States; Mortgage-Backed and Asset-Backed Obligations, which are secured by a mortgage or collection of mortgages, credit card receivables, student and auto loans, which are rated AA or its equivalent or better by NRSRO and whose issuer have a rating of A or higher for the issuers debt as provided by NRSRO; State of California Obligations such as warrants, treasury notes, or bonds, including bonds payable solely out of the revenues from a revenue producing property owned, controlled, or operated by the State of California or by a department, board, agency, or authority of the State of California with a rating of A or better; California Local Agency Obligations such as notes, warrants, or bonds including bonds payable solely out of the revenues from a revenue producing property owned, controlled, or operated by the local agency or by a department, board, agency, or authority of the local agency with a rating of A or better:

Southern California Public Power Authority Notes to Combined Financial Statements Note 4 - Investments (continued)

• State (Other than California) Obligations such as notes or bonds of any of the other 49 states in addition to California was a rating of A or better;

• Supranationals, which are United States dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by the International Bank of Reconstruction and Development, International Finance Corporation, or Inter-American Development Bank with the rating of AA or better;

• Placement Service Deposits placed through a deposit placement service that meet the requirements of Code Section 53601.8, with a maximum term of one year or less; and

• Equity-Linked Notes, which are categorized as medium-term corporate notes and are subject to the constraints set forth in the Government Code and the Authoritys Investment Policy.

As of June 30, 2019, the Authority held the following as cash and cash equivalents and investments:

Fair Value Weighted Average Investment Type (In thousands) Maturity (Years) Percent of Portfolio U.S. Agency Securities $ 367,792 0.32 39.1%

Guaranteed Investment Contracts 20,467 12.30 2.2%

Money Market Funds 86,250 0.08 9.1%

Supranational Securities 29,546 0.30 3.1%

Commercial Paper 13,269 0.10 1.4%

U.S. Treasury Securities 41,143 0.44 4.4%

Medium Term Corporate Notes 15,631 0.97 1.7%

Negotiable CDs 6,800 2.00 0.7%

Municipal Bonds 4,125 1.37 0.4%

U.S. Agency Discount Notes 356,286 0.07 37.9%

Total $ 941,309 0.49 100.0%

The weighted average maturity in years calculation assumes that all investments are held until maturity.

Southern California Public Power Authority Notes to Combined Financial Statements Note 4 - Investments (continued)

Investments at June 30, 2019 are as follows (amounts in thousands):

GENERATION GREEN POWER Magnolia Canyon Tieton Windy Milford 1 Milford II Linden Wind Power Power Hydro-power Wind Wind Point Energy Palo Verde San Juan Apex Power 191.141 28,363 U S, agencies $ $ 22,263

$ 4,519

$ 6,460

$ 1,763

$ 13,200

$ 3,207

$ 7,744 Agency discount notes 13,150 690 36,476 15,040 10,270 2.020 20,508 13,291 30,349 10,627 8,606 1.800 2,515 3,400 Supranational securities - - - - _

Negotiable CDs - - 1,980- - 1,800- - - _ 3,500 Commercial paper GICs - - . . _

1,196- - 6,974- . 2,974. 1,591. . 2,482 U.S. Treasury securities 4,132 - 9,867 1,632 _

Medium term corporate notes Municipal bonds 4,125 . . .

7,632- 1,038 8.237 -

2,550 2.658. 1,219- 510 526_ 961 1,375.

Money market funds I

i Total 9 225,857 30,100 89,944

$  % 22,100

$ 37,171

$ 8,225

$ 36,733

% 17,026

• 48,436

$ 12,002 t 196,363 29,883 64,362 Restricted investments $ $  % 7,250

$ 21,834

$ 5,666

$ 27,023

% 8,907

$ 32,176 S 4,387 15,225 12,745 1,700 Unrestricted investments 14,269 217 12,837 14,650- 15,337- 2,539 . . 16,260 5,015 Cash and cash equivalents 9 710 8 119 225,857 30,100 t 80,944 i

Total $ $ t 22,109 i 37,171

$ 8,225

$ 36,733

$ 17,026

$ 48,436

% 12,002

Southern California Public Power Authority Notes to Combined Financial Statements Note 4 - Investments (continued)

Investments at June 30, 2019 are as follows (amounts in thousands):

POWER Southern TRANSMISSION NATURAL OAS PURCHASE AGREEMENTS Project MISCELLANEOUS Projects' 3

Transmission Mead- Prepaid Development Stabilization SCPPA System Phoenix Pinedale Barnett Combined Fund Fund Fund Total Mead- Adelanto Natural Gas 5,259 U.S. agencies $ $ . $ . % . $

22,858

$ . $ $ $ 58,995

$ 367,792 46,250 6.450 28,692 3,350 12.137 2,196 46,202 2,098 46,470 356,286 Agency discount notes 6,100 7,125 - 29,546 Supranational securities 6,800 - - - . - 6,800 Negotiable CDs 5,989 - - - - - - 13,269 Commercial paper GICs 7,789 - 12,678 - . - . 20,467 2,991- 11,987- . 10,948- - 41,143 U.S. Treasury securities - - - . 15,631 Medium term corporete notes - * - - . - _ 4.125 2,647- 1.138-Municipal bonds 903 5,485 5,651- 2,870- 25,638 - 3,573- 11,228 . 1- 86,250 Money market funds 81,034 Total $  % 9,353

$ 29,830 i 8,836

$ 43,637

$ 17,752

$ 82,827

$ 5,671

$ 134,766

% 1

$ 941,309 45,051 17,400 Restricted investments $ $ 3,700

$ $ $ 32,116

$ 12,679

$ $ 111,061

% $ 619,889 9,486 34,409 73,565 Unrestricted investments 26,497 5,653- 12,430- -

8,835 11,519- 5,073- 48,418 5,671- - 1.

Cash and cash equivalents 23 705 247 855 61,034 i

Total is $ 9,353

$ 29,830

$ 8,835

$ 43,637

$ 17,752

$ 82,827 i 5,671

$ 134,766

% 1

$ 941,309

Southern California Public Power Authority Notes to Combined Financial Statements Note 4 - Investments (continued)

Investments at June 30, 2018 are as follows (amounts in thousands):

GENERATION GREEN POWER Magnolia Canyon Hoover TIeton Milford I Milford II Linden Wind Palo Verde San Juan Power Power Apex Power Uprating Hydro-power Wind Wind Energy Windy Point 187,807 24,577 6.430 U S. agencies $ $ $ 32,478 $ $ 11,041

$ - $ 4,922

$ 21.187 $ 3,116

$ 10,090

$ 2,317 17,723 10,595 38,156 12,800 15,800 1,550 11,350 12,078 31,004 7,200 Agency discount notes 6,756 3,394 3,000 - 3,100 2.100 6,100 1,300 Supranational securities 3,999 3,999* - . .

Negotiable CDs

- 1,599 - . . _

Commercial paper GICs - - _ . . _

- - 1,984- . . . 1,904.

3,075-U.S. Treasury securities Medium term corporate notes

- 2,110- - _ _

Municipal bonds 5,638 1.622- 10,363 4,387- 2.652 . 1.B26. 3,820. 1,698_ 779 645 Money market funds Total 221,199 45,786 t

$ $ 89,099 $ 23,617

$ 32,493

$ - $ 8,298

$ 41,451 $ 18,994

$ 47,973

$ 1t^

192,198 29,237 i Restricted investments $ $ 57.474 $ 13,630

$ 17,642

$ ' $ 5,722 32,931 $ 7.418

$ 28,011

$ 6,317 16,383 2,976 3,680 2,486 Unrestricted investments 12,618 18,549 28,649 9,987- 14,851- - 2.576 8,520 17,476 5,345 Cash and cash equivalents

- 7 896 221,199

- Total s $ 45,786

$ 69,099 $ 23,617

$ 32,493 s - >> 8,298

$ 41,451 $ 18,994 j__ 47,973

$ 11,682

Southern California Public Power Authority Notes to Combined Financial Statements Note 4 - Investments (continued)

Investments at June 30, 2018 are as follows (amounts in thousands):

POWER PURCHASE TRANSMISSION NATURAL GAS AGREEMENTS MISCELLANEOUS Southern Project Projects' Transmission Mead- Prepaid SCPPA Deveiopment Stabilization System Phoenbt Pinedale Barnett Combined Fund Fund Fund Total Mead- Adelanto Natural Gas 8,645 U.S. agencies $ $ . $

1,987 17,320

$ $ $ $ 79,888

$ $ 411,807 62,599 4,000 20,374 3,995 8,527 1,995 45,012 19,380 324,138 Agency discount notes Supranational securities 1,100 1,100 1,600

• 2,499 _ 32,049 Negotiable CDs 7,000 1,000 - .

1,450 _ . 2,600 _ 20,048

- - . _ 1,599 _ 3,198 Commercial paper GICs 7,789- - - - 12,183_ _ 19,972 2,040 1,860- - 7,747- . - 6,448 _ 22,073 U.S. Treasury securities

- - . << _ 3,075 Medium term corporate notes

- - - - - . . _ 2,119 Municipal bonds Money market funds 4,323- 2,157 3,364- 7,678- 7,459- 2,904 18,910_ .

470 37 87,982 6 850 Total 91,456 9.297

$ $ $ 30,185

$ 11,673

$ 42,503

$ 17,082

$ 63,922

$ 470

$ 119,264

$ 37

$ 926,461 61,635 4,940 Restricted investments $ $ $ 21,021

$ $ 28,947

$ 12,183

$ * $ 88.836

$ $ 608,142 Unrestricted investments 15,149 40,674 Cash and cash equivalents 29,821- 4,357- 9,164- 11,673- 13,556- 4,899 48,773 .

470 . _

37 277,645 30 428 91,456 9,297 J Total $ $ $ 30,185

$ 11,673

$ 42.503

$ 17,082 63,922

$ 470

$ 119,264

$ 37

$ 926,461 80

Southern California Public Power Authority Notes to Combined Financial Statements Note 4 - Investments (continued)

Interest rate risk - The Authoritys investment policy limits the maturity of its investments to a maximum of five years for investments in the United States Treasury, Federal Agency, and Government Sponsored Enterprise securities, excluding: investments held in Project Debt Service Reserve; long-term commitments or agreements approved by the Authoritys Board; five years for medium term corporate notes; 270 days for commercial paper; 180 days for bankers' acceptances; and one year for negotiable certificates of deposits.

Credit risk - Under its investment policy and the State of California Government Code, the Authority is subject to the prudent investor standard of care in managing all aspects of its portfolios. As an investment standard, each investment shall be made \<<ith judgment and care under circumstances then prevailing, which a person of prudence, discretion and intelligence would exercise in the management of his/her affairs, not in regard for speculation, but in regard to the permanent disposition of funds, considering the probable income as well as the probable safety of the capital to be invested. The Authority's investment policy does not preclude active management of the portfolio to address market opportunities. All transactions shall be undertaken in the best interest of the Authority and its participants.

The Authoritys investment policy specifies that all project funds may be invested in shares of beneficial interest for temporary periods, pending disbursement or reinvestment as allowed under the state of California Government Code (Code). The Code requires that the fund must have either 1) attained the highest ranking or highest letter and numerical rating provided by not less than two nationally recognized statistical rating organizations (NRSRO) or 2) retained an investment advisor registered or exempt from registration with the Securities and Exchange Commission with not less than five years experience managing money market mutual funds with assets under management in excess of $500 million. As of June 30, 2019, money market funds in the portfolios with Bank of New York Mellon have attained the following ratings: AAAm by Standard and Poors, and AAA-mf by Moodys Investors Service; while money market funds in the portfolios with US Bank have attained ratings of/VAAm by Standard and Poors, AAAmf by Moodys Investors Service, and /\AAmmf by Fitch Ratings.

The U.S. government agency securities in the portfolio consist of securities issued by government-sponsored enterprises, which are not explicitly guaranteed by the U.S. government. As of June 30, 2019 and 2018, the U.S. government agency securities in the portfolio carried the highest possible credit ratings by the NRSRO that rated them.

The Guaranteed Investment Contracts in the portfolio with American International Group (AIG) consist of securities issued by corporations and carry a rating of Baal by Moodys Investors Service, BBB+ by Standard and Poors, and BBB+ by Fitch Rating.

The Investment Agreement Contract with American General Life consists of securities issued by corporations and carries a rating of A+ by Standard and Poors, A2 by Moodys and A+ by Fitch Ratings.

Southern California Public Power Authority Notes to Combined Financial Statements Note 4 - Investments (continued)

The Investment Agreement Contract in the portfolio with Assured Guaranty (formerly Financial Security Assurance) consists of securities issued by corporations and carries a rating of A by Standard and Poors, and Baa2 by Moodys Investors Service.

Concentration of credit risk - The Authoritys investment policy specifies a 100% percentage limitation on the amount that can be invested in U.S. government agency securities, except in certain issues of other Authority projects, such as the STS project, specificaily relating to the 1992 Subordinate Refunding Bond.

Of the Authoritys total investments as of June 30, 2019, $384.6 million (40.9%) was invested in securities issued by the Federal Home Loan Bank; $39.5 million (4.2%) was invested with Farm Credit Bank; $62.5 million (6.6%) was invested in securities issued by the Federal National Mortgage Association; $237.4 million (25.2%) was invested with Federal Home Loan Mortgage; $41.1 million (4.4%) was invested in US Treasuries; $6.8 million (0.7%) was invested in Certificates of Deposit; $13.3 million (1.4%) was invested in Commercial Paper; $20.5 million (2.2%) was invested in GICs; $29.5 million (3.1%) was invested in Supranational Securities; $15.6 million (1.7%) was invested in Medium Term Corporate Notes; and $4.1 million (0.4%) was invested in Municipal Bonds.

Of the Authoritys total investments as of June 30, 2018, $340.6 million (36.8%) was invested in securities issued by the Federal Home Loan Bank; $44.5 million (4.8%) was invested with Farm Credit Bank; $97.2 million (10.5%) was invested in securities issued by the Federal National Mortgage Association; $253.7 million (27.4%) was invested with Federal Home Loan Mortgage; $22.1 million (2.4%) was invested in US Treasuries; $20.0 million (2.2%) was invested in Certificates of Deposit; $3.2 million (0.3%) was invested in Commercial Paper; $20.0 million (2.2%) was invested in GICs; $32.0 million (3.5%) was invested in Supranational Securities; $3.1 million (0.3%) was invested in Medium Term Corporate Notes; and $2.1 million (0.2%) was invested in Municipal Bonds.

Note 5 - Derivative Instruments Objective of the swaps - SCPPA uses derivative instruments to hedge its exposure to changing interest rates through the use of interest rate swaps and also to manage its exposure to fluctuating natural gas prices through the use of natural gas hedge contracts. An interest rate swap is the exchange of payments between SCPPA and a counterparty in order to potentially obtain a lower cost of funding than traditional fixed rate bonds, or to hedge interest rate exposure on SCPPAs assets or liabilities. The Authority has entered into separate pay-fixed, receive-variable interest rate swaps and three basis swaps to produce savings or to result in lower costs over the life of each transaction than what the Authority would have paid using fixed-rate debt.

Southern California Public Power Authority Notes to Combined Financial Statements Note 5 - Derivative Instruments (continued)

The Authority has adopted GASB Statement No. 53, Accounting and Financial Reporting for Derivative Instruments. This Statement addresses the recognition, measurement, and disclosure of information regarding derivative instruments. In accordance with GASB 53, SCPPA recognizes the changes in fair values of effective hedging derivative instruments as either deferred inflows or outflows of resources on the Authoritys Statements of Net Position and includes changes in the fair value of an ineffective derivative instrument in earnings.

For fiscal year ended June 30, 2019, the balance for the swaps deemed to qualify for effective hedge accounting under GASB 53 was a net liability and corresponding deferred outflows of resources of $28.7 million. It is an increase of $11.5 million from the liability balance of $17.2 million at June 30, 2018.

For the swaps that were deemed ineffective derivative instruments under GASB 53, the changes were reported in the statements of revenues, expenses and changes in net position. The net liability balance for the ineffective derivative instruments at June 30, 2019 was $9.0 million, an increase of $3.5 million from the liability balance of $5.5 million at June 30, 2018.

For fiscal year ended June 30, 2018, the balance for the swaps deemed to qualify for effective hedge accounting under GASB 53 was a net liability and corresponding deferred outflows of resources of $17.2 million. It is a decrease of $7.5 million from the liability balance of $24.7 million at June 30, 2017.

For the swaps that were deemed ineffective derivative instruments under GASB 53, the changes were reported in the statements of revenues, expenses and changes in net position. The net liability balance for the ineffective derivative instruments at June 30, 2018 was $5.5 million, a decrease of $8.6 million from the liability balance of $14.1 million at June 30, 2017.

Terms, fair values, and credit risk - The terms, including the fair values and credit ratings of the counterparties under the outstanding swaps as of June 30, 2019, are included in following table. In most cases, and with the exclusion of basis swaps, the notional amount of any swap matches the principal amount of the associated debt. Except as discussed under the rollover risk, and when associated with basis swaps, the Authoritys swap agreements contain scheduled reductions to outstanding notional amounts that are expected to approximately follow scheduled or anticipated reductions in the associated bonds payable category.

Nobonai Swap Amount Effactiva Tennination Counterparty Fair Values Date Date (in thousands) Fixad Rate P^ Variable Rata Received (in thousands) Credit Rating-100,000 7/1/2023 SIFMA S MAG 2010-1 Swap (Bwdays) $ ao.4% of 3-month LIBOR 395 7/1/2036 A/A2/A'*-

loaooo 7/1/2023 SIFMA 482 7/1/2036 AA-/Aa2/AA MAO 2010-2 Swap (RBC) 81% of 3-month UBOR 108,686 5/1/2012 3.125% SIFMA (18,152) 7/1/2036 AA-/Aa2/AA MAG 2009-1 Swap (BNYMdkxi) 9/22/2017 3.139% SIFMA (10,968) 7/1/2036 A-^/Aa2/AA MAG 2009-2 Swap (JPMorgan) 100,000 6/1/2018 1,094 9/15/2030 A-^/Aa2/AA MA 2007 Swap (JPMorgan) 1-month LIBOR 100% of 10-yr LIBOR CMS rate less .414%

36,000 5/1/2009 5.0475% (10.500) 11/1/2035 BBB+/A3/A PNG 2007 Swap (J. Aron) 67% of 3-Month LIBOR plus 1.47%

(37,649)

• S&P/Moodys/Fitch ratings

Southern California Public Power Authority Notes to Combined Financial Statements Note 5 - Derivative Instruments (continued)

• MAG 2017-1 Swap (amended/restated) - This swap transaction amends and restates the MAG 2009-2 Swap which amended the MAG 2007-1 Swap. The original transaction was novated from Bear Steams to JP Morgan on November 6, 2008 and was amended and restated on April 21,2009.

Under the MAG 2009-2 Swap, the Authority was paying its counterparty a fixed rate of 3.139% in exchange for receiving 100% of the SIFMA Index on a notional amount of $109.9 million. In order to provide more favorable terms to the participants, SCPPA made a payment of $15.7 million to the counterparty which has been deferred and is being amortized as an interest yield adjustment over the life of the swap. The amendment allowed the parties to re-coupon the swaps, change the collateral posting requirements, and to move to uninsured swaps. In August 2012, the swap documents were amended to raise the collateral threshold.

On September 22, 2017 the MAG 2017-1 Swap restructured the MAG 2009-2 Swap. Under the MAG 2017-1 Swap, SCPPA makes scheduled monthly payments to the counterparty commencing on October 1, 2017 through July 1, 2020. Commencing July 1,2020, SCPPA will recommence making fixed rate payments at 3.139% and receive floating rate payments at 100% of the SIFMA Index on an initial notional amount of $63,840,000. Additionally, a portion of the MAG 2009-2 swap was terminated and SCPPA paid the counterparty a restructure payment of $7.3 million.

MAG 2010-1 Swap (amended/restated) - In May 2010, SCPPA executed $100 million Securities Industry and Financial Markets Association Swap Index (SIFMA)/LIBOR floating-to-floating basis swap related to Magnolia Power Project A Refunding Bonds 2009-1. SCPPA pays the 6-month average of the weekly reset SIFMA Municipal Swap Index semi-annually on an Actual/Actual basis in exchange for receiving 80.4% of average 3-Month LIBOR, reset quarterly and paid semi-annually on an Actual/360-day basis. The swap expires on July 1,2036.

On November 16, 2018, the SCPPA suspended the swap for a period of five years. SCPPA received

$1.2 million from Barclays Bank PLC, the swap counterparty, as full consideration of the suspension.

No cash flows shall occur from January 1, 2019 to July 1, 2023. Payment on the MAG 2010-1 Swap will recommence on January 1, 2024.

MAG 2010-2 Swap (amended/restated) - In May 2010, SCPPA executed $100 million SIFMA/LIBOR floating-to-floating basis swap related to Magnolia Power Project A Refunding Bonds 2009-2. SCPPA pays the 6-month average of the weekly reset SIFMA Municipal Swap Index semi annually on an Actual/Actual basis in exchange for receiving 81.0% of average 3-Month LIBOR, reset quarterly and paid semi-annually on an Actual/360-day basis. The swap expires on July 1, 2036.

On November 13, 2018, the SCPPA suspended the swap for a period of five years. SCPPA received

$1.4 million from the Royal Bank of Canada, the swap counterparty, as full consideration of the suspension. No cash flows shall occur from January 1, 2019 to July 1,2023. Payment on the MAG 2010-2 Swap will recommence on January 1,2024.

84

Southern California Public Power Authority Notes to Combined Financial Statements Note 5 - Derivative Instruments (continued)

• MAG 2009*1 Swap (restated/novated) - This swap transaction amends the MAG 2007-1 Swap, which had an original trade date of April 30, 2007. The transaction was amended and restated as of April 21,2009. The Authority pays its counterparty a fixed rate of 3.125% in exchange for receiving 100% of the SIFMA on a notional amount of $109.0 million. In order to provide more favorable terms to the participants, SCPPA made a payment of $15.7 million to the counterparty which has been deferred and is being amortized as an interest yield adjustment over the life of the swap. The amendment allowed the parties to re-coupon the swaps, change the collateral posting requirements, and to move to uninsured swaps. In May 2012, the swap was novated to a new counterparty and the swap documents were amended to raise the collateral threshold.

• MA 2007 Swap (amended) - In January 2007, the Authority entered into a Constant Maturity Swap (CMS) in connection with its outstanding Mead-Adelanto Project bonds. The transaction consisted of a $100 million basis swap and does not relate to any single series of the Mead-Adelanto bonds. The amended swap terms became effective on February 1, 2008 and the Authority pays the swap counterparty 100% of the one month LIBOR in exchange for receiving 100% of the 10-year LIBOR minus 41.4 basis points. The swap expires on September 15, 2030.

On November 5, 2008, the MA 2007 Swap was novated from Bear Stearns to JP Morgan. In addition, the swap was suspended until November 1,2011. As part of the novation, the credit terms of the existing swap agreements were maintained and SCPPA received $4.1 million from JP Morgan as compensation for the suspension of the cash flows of the MA 2007 CMS. The $4.1 million was deferred to be amortized over the suspension term.

In June 2010, the MA 2007 CMS Agreement was amended to extend the suspension period from November 1,2011 to June 1,2018. SCPPA received $5 million as compensation for the suspension of the cash flows of the swap, which was deferred and is being amortized over the suspension term.

The credit terms of the existing swap agreements remain unchanged. Payment on the MA 2007 CMS Agreement recommenced on July 1,2018.

• PNG 2007 Swap - In October 2007, SCPPA entered into an interest rate swap agreement in connection with the issuance of the Prepaid Natural Gas Project No. 1 Series 2007B Bonds. The swap hedges the interest-rate risk on the LIBOR Floating-rate bonds, where SCPPA pays a fixed rate of 5.0475% in exchange for receiving 67% of three-month LIBOR plus 1.47%. The floating index on the swap exactly matches the coupon on the Bonds and therefore provides a hedge with no tax or basis risk. The swap expires on November 1,2035.

• PNG 2007 Commodity Swap - At the same time, SCPPA also entered into five commodity price swap agreements, on behalf of each of the Prepaid Natural Gas Project No. 1 Participants, in order to hedge against reductions to its gas sale revenues resulting from changes in monthly market index prices. SCPPA pays a floating natural gas price over a 30-year period and receives specified fixed natural gas prices at an agreed pricing point as determined in the Prepaid Natural Gas No. 1 Agreements. The swaps became effective on July 1,2008 and will all expire on September 30, 2035.

Southern California Pubiic Power Authority Notes to Combined Financial Statements Note 5 - Derivative Instruments (continued)

Fair value - The Authority reports its derivative instruments in accordance with GASB 53 and records its fair values in accordance with GASB 72 (see Note 6).

While some of SCPPAs current mark to market values are negative, this valuation would be realized only if the swaps were terminated at the valuation date, and only SCPPA retains the right to optionally terminate most of the transactions.

Interest rate risk - Interest rate risk is the risk that changes in interest rates will adversely affect the fair values of SCPPAs financial instruments or cash flows. SCPPA is exposed to interest-rate risk on its pay-fixed, receive variable interest rate swaps. As the LIBOR or the SIFMA swap index decreases, SCPPAs net payment on swaps increases. In addition, SCPPA is exposed to interest rate risk if the counterparty to the swap defaults or if the swap is terminated.

Market access risk - Market access risk is the risk that SCPPA will not be able to enter credit markets or that credit will become more costly. SCPPA's financial rating is tied to the credit strength of the major participants of the specific project for which each financial instrument is issued. SCPPA is also exposed to market access risks caused by disruptions in the municipal bond market.

Credit risk - As of June 30, 2019, the net fair values of the Authoritys applicable swaps for which payments were made were negative for each counterparty except for the MAG 2010-1, MAG 2010-2 and Mead-Adelanto 2007 swap. However, should interest rates change and the fair values of the swaps become positive, the Authority may be exposed to credit risk in the amount of the derivatives fair value.

The swap agreements contain varying collateral agreements with the counterparties. The swaps require full collateralization of the fair value of the swap should the counterpartys (or if applicable, the guarantors of the counterpartys) credit rating fall below AA- as issued by Standard & Poors or Aa3 as issued by Moodys Investors Service for the MA 2007 Swaps; A/A2 for the PNG 2007 Commodity Swap; and A-/A3 for the MAG 2010-1, MAG 2010-2, and MAG 2009-1. Collateral on all swaps is to be in the form of U.S.

government securities held by a third-party custodian.

The swap agreements provide that when the Authority has more than one derivative transaction with a given counterparty involving the same Authority project (and having the same swap/bond insurer), should one party become insolvent or otherwise default on its obligations, close-out netting provisions permit the non-defaulting party to accelerate and terminate all such related transactions and net the transactions fair values so that a single sum will be owed by, or owed to, the non-defaulting party.

Basis risk - Basis risk is the risk that the interest rate paid by the Authority on underlying variable rate bonds to bondholders exceeds the variable swap rate received from the counterparty, and the risk that both legs of a basis swap are not exactly equal. With the exception of the PNG 2007 Swap, the Authority bears basis risk on each of its swaps. The PNG 2007 Swap is perfectly hedged since the counterparty pays the Authority its actual variable bond rate on the related bonds.

86

Southern California Public Power Authority Notes to Combined Financial Statements Note 5 - Derivative Instruments (continued)

All the other swaps have a basis risk since under each of those swaps the Authority received a percentage of LIBOR or a percentage of, or spread to, SIFMA to offset the actual variable bond rate or variable swap rate the Authority pays on any related bonds or on any basis swap. The Authority is exposed to basis risk should the floating rate that it receives on a swap be less than the actual variable rate the Authority pays on any related bonds; or in the case of the floating-to-floating fixed-spread basis swap, less than the variable rate paid to the swap counterparty.

Depending on the magnitude and duration of any basis risk shortfall, the expected cost savings from a swap may not be fully realized.

The following is a summary of interest rates paid to and received from the counterparties as of June 30, 2019:

MAG 2009-1 MAG 2010-1 MAG 2010-2 PNG 2007 Swap Swap Swap Swap Payments to counterparty 3.125% 1.489% 1.488% 5.048%

Less, variable payments from counterparty 1.659% 1.926% 1.940% 2.579%

Net interest-rate swap payments 1.466% -0.437% -0.452% 2.469%

Add, variable-rate bond coupon payments 1.500% N/A N/A 2.579%

Synthetic interest rate on bonds 2.966% -0.437% -0.452% 5.048%

Termination risk - The Authority or the counterparty may terminate any of the swaps if the other party fails to perform under the terms of the contract. If any of the swaps were terminated, any associated variable rate bonds would no longer be hedged to a fixed rate. If at the time of termination the swap has a negative fair vaiue, the Authority would be liable to the counterparty for a payment equal to the swaps fair value.

Rollover risk - Rollover risk is the risk that the swap contract is not co-terminus with the related bonds.

In the event that this type of swap terminates, the Authority would be exposed to variable interest rates on the underlying bonds.

Southern California Public Power Authority Notes to Combined Financial Statements Note 5 - Derivative Instruments (continued)

Swap payments and associated debt - Using rates as of June 30, 2019, debt service requirements of the Authority's outstanding variable rate debt and net swap payments are as follows. As rates vary, variable rate bond interest payments and net swap payments will vary.

(amounts in thousands)

Variable-Rate Bonds Interest-Rate Fiscal Year Ending June 30, Principal Interest Swaps, Net Total 2020 $ 485 $ 2,132 $ 2,513 $ 4,645 2021 900 3,902 2,882 6,784 2022 940 3,887 2,758 6,645 2023 5,665 3,794 2,674 6,468 2024 11,550 3,612 2,504 6,116 2025-2029 114,920 15,076 10,395 25,471 2030-2034 178,825 9,333 7,020 16,353 2035-2039 172,860 2,083 1,772 3,855

$ 486,145 $ 43,819 $ 32,518 $ 76,337 The following table shows the changes in fair value of derivative instruments (amounts in thousands):

Change in Description June 30, 2018 Fair Value June 30, 2019 Assets Mead Adelanto - Derivative instruments $ $ 1,094 $ 1,094

$ __ $ 1,094 $ 1,094 Defemed outflows of resources Magnolia - Deferred outflows $ 12,248 $ 6,780 $ 19,028 Prepaid Natural Gas - Deferred outflows 7,425 3,075 10,500

$ 19,673 $ 9,855 $ 29,528 Liabilities Magnolia - Derivative instruments $ 16,542 $ 14,797 $ 29,120 Mead Adelanto - Derivative instruments 1,218 (1,218)

Prepaid Natural Gas - Derivative instruments 7,425 3,075 10,500

$ 25,185 $ 16,654 $ 39,620 1

88 i

Southern California Public Power Authority Notes to Combined Financial Statements Note 6 - Fair Value Measurement In February 2015, the GASB issued Statement No. 72, Fair Value Measurement and Application, effective for financial statements for years beginning after June 15, 2015. This statement clarifies the definition of fair value, establishes general principles for measuring fair value, provides additional fair value application guidance, and enhances disclosures about fair value measurements. This statement establishes a three-level hierarchy to the valuation techniques used to measure fair value. Disclosure is required to be made about fair value measurements, the level of fair value hierarchy, and valuation techniques.

In accordance with GASB 72, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). Fair Value is a market-based measurement for a particular asset or liability based on assumptions that market participants would use in pricing the asset or liability. Such assumptions include observable and unobservable inputs of market data, as well as assumptions about risk and the risk inherent in the inputs to the valuation technique. ^

Valuation inputs are assumptions that market participants use in pricing an asset or liability. The hierarchy of inputs used to generate the valuation is classified into three different Levels;

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the government can access at the measurement date.

• Level 2 inputs include quoted prices for similar assets or liabilities in markets that are active; quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs other than quoted prices that are observable for an asset, either directly or indirectly.

• Level 3 inputs are unobservable inputs from the asset or liability where there is very little market activity and they should be used only when relevant Level 1 and Level 2 inputs are unavailable.

The Authoritys fair value measurements are performed on a recurring basis. Because investing is not a core part of the Authoritys mission, the Authority determines that the disclosures related to these investments only need to be disaggregated by major type. The Authority categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles.

The fair value of SCPPAs swaps reflect the nonperformance risk of their client counterparty relating to that liability, and the nonperformance risk of the bank counterparty relating to that asset. The tables on pages 90 and 91 present fair value balances and their levels within the fair value hierarchy as of June 30, 2019 and 2018. The investment balances presented exclude amounts related to Government Money Market Funds and Guaranteed Investment Contracts.

Fair value of SCPPAs investments under GASB 72 - Debt and other securities classified in Level 1 of the fair value hierarchy are valued through the evaluation of information obtained from live data sources, including active market makers and inter-dealer brokers and the use of prices quoted in active markets for those securities. Level 2 Securities are valued using a multi-dimensional relationship model or matrix pricing model utilizing market data including, but not limited to, benchmark yields, reported trades, and broker/dealer quotes.

89

Southern California Public Power Authority Notes to Combined Financial Statements Note 6 - Fair Value Measurement (continued)

Fair value of SCPPAs swaps under GASB 72 - Fair values take into consideration the prevailing interest rate environment and the specific terms and conditions of a given transaction. The expected swap cash flows are calculated using the zero-coupon discounting method which takes into consideration the prevailing interest rate environment, the specific terms and conditions of a given transaction, and assumes that the current fonward rates implied by the yield curve are the markets best estimate of future spot interest rates. The income approach is then used to obtain the fair value of the swaps, where future amounts (the expected swap cash flows) are converted to a single current (discounted) amount, using a rate of return that takes into account the relative risk of nonperformance associated with the cash flows, and time value of money. Where applicable under the income approach, the option pricing model technique, such as the Black-Derman-Toy model, or other appropriate option pricing model is used. The observability of inputs used to perform the measurement results in the swap fair values being categorized as Level 2.

The Authority has the following fair value measurements at June 30, 2019:

Fair Value Using Quoted Prices Significant in Active Other Significant Markets for Observable Unobservable June 30, Identical Assets Inputs Inputs 2019 (Level 1) (Level 2) (Level 3)

Investments by fair value level Debt securities U.S. government securities $ 41,143 $ 41,143 $ $

U.S. agencies 724,078 724,078 29,546 Supranational securities 29,546 Municipal bonds 4,125 4,125 Total debt securities 798,892 41,143 757,749 Other Commercial paper 13,269 13,269 Certificate of deposit 6,800 6,800 Medium term corporate notes 15,631 15,631 Total other 35,700 35,700 Total investments by fair value level 834,592 $ 41,143 $ 793,449 $

Derivative instruments by fair value level Investment derivative $ (8,997) $ $ (8,998) $

Effective hedge (28,652) (28,652)

Total derivative instruments by fair value level $ (37,649) $ (37,650) $

Southern California Public Power Authority Notes to Combined Financial Statements Note 6 - Fair Value Measurement (continued)

The Authority has the following fair value measurements at June 30, 2018:

Fair Value Using Quoted Prices Significant in Active Other Significant Markets for Observable Unobservable June 30, Identical Assets Inputs Inputs 2018 (Level 1) (Level 2) (Level 3)

Investments by fair value level Debt securities U.S. government securities $ 22,073 $ 22,073 $ - $ -

U.S. agencies 735,945 735,945 Supranationai securities 32,049 32,049 Municipal bonds 2,119 2,119 Total debt securities 792,186 22,073 770,113 Other Commercial paper 3,198 3,198 Certificate of deposit 20,048 20,048 Medium term corporate notes 3,075 3,075 Total other 26,321 26,321 Total investments by fair value level $ 818,507 22,073 $ 796,434 $ -

Derivative instruments by fair value level Investment derivative $ (5,512) $ $ (5,512) $

Effective hedge (17,194) (17.194)

Total derivative Instruments by fair value level $ (22,706) $ - $ (22,706) $ -

Southern California Public Power Authority Notes to Combined Financial Statements Note 7 - Long-Term Debt Long-term debt outstanding at June 30, 2019, consisted of new money bonds, refunding bonds, and subordinate refunding bonds due in varying annual amounts through July 1,2040. The new money bonds were issued to finance the purchase and construction or acquisition of the Authoritys interest in each of the Projects. The refunding and subordinate refunding bonds were issued to refund specified new money bonds.

In accordance with the bond indentures, the new money bonds and refunding bonds are special, limited obligations of the Authority. With the exception of the Magnolia Power Project B, Lease Revenue Bonds (City of Cerritos, California) 2003-1 (Project B Bonds), the bonds issued by each project are payable solely from and secured solely by interests in that project as follows:

• Proceeds from the sale of bonds;

• All revenues, incomes, rents, and receipts attributable to that project and interest earned on securities held under the bond indenture or indentures; and

• All funds established by the indenture or indentures.

The Authority has agreed to certain covenants with respect to bonded indebtedness, including the requirement to enforce the natural gas, power, and transmission sales agreements with the participants.

At the option of the Authority, all outstanding new money bonds and refunding bonds are subject to redemption prior to maturity, except as follows:

Southern Transmission System - 2011 Series A, 2013 Series A, 2015 Series A and B, portions of the 2015 Series C Subordinate Refunding bonds, 2017 Series A Subordinate Refunding bonds, and 2018 Series A Subordinate Refunding bonds; Mead-Phoenix and Mead-Adelanto-2012 Series A and portions of 2016 Series A Revenue bonds; Prepaid Natural Gas - 2007 Series A and B Revenue bonds; Canyon Power - portions of 2016 Series A Refunding Revenue bonds; Milford II Wind - portions of the 2011-1 Revenue bonds; Linden Wind - portions of the 2010 Series A Revenue bonds; and Windy Point/Windy Flats - portions of the 2010-1 Revenue bonds.

Variable rate debt includes debt with rates based on daily, weekly, and long-term rates as determined by a remarketing or calculation agent.

Southern California Public Power Authority Notes to Combined Financial Statements l^ote 7 - Long-Term Debt (continued)

A summary of changes in long-term debt follows (amounts in thousands):

GENERATION GREEN POWER Canyon TIeton Milford I MiHord II Power Hvdro-Dower Wind Wind Magnolia Power Linden Wind Total long-term debt at June 30, 2018 $ 291,139 $ 326,042 $ 293,004 $ 47,008 $ 172,747 I 126.427 $ 113,442 7,210 7.540 9,545 950 385,446 9 Total debt due within one year at June 30, 2010 298,349 333.582 302,549 47,958 182.832 132,797 407.466 117,612 Total debt at June 30.2018 (7.210) (7.540) (9.545) (960) (10,086) (6.370) (22,020) (4.170)

Principal payments Revenue bonds issued Refunding bonds issued phange in unamortized premiums and discounts (1.282) -

(2,025) .

(747) .

(65) _

(841) .

(1.292) (3.815) (628) 280,657 324,017 292,257 46.943 171,906 125.135 381.631 112,814 Total debt at June 30.2019 i

total debt due within one year at June 30.2010 (7,560) (7.835) (9.710) (1,000) (10,570) (6.665) (23,040) (4.335) jrotal long-term debt at June 30,2010 262,297 $ 161,338 358,591 108,479 316,182 $ 282,547 $ 45,943 $ 118.470 $

TRANSMISSION NATURAL GAS Southern Trarwmiseton Mead- Mead- Prepaid System Phoenix Adeianto Barnett Natural Gas Total long-term debt at June 30,2018 $ 470,191 $ 34.583 $ 65,877 $ 16,490 $ 38,780  % 2,674,562

___________56,100 7,185 293.386 $

Total debt due within one year at June 30, 2010 20.705 1,770 4,150 5,385 163,165 Total debt at June 30, 2018 626,291 41,768 86,582 18.260 42,930 298,771 2,837,747 Principal payments (56,100) (7.186) (20,705) (1.770) (4.150) (5,385) (163,185)

Revenue bonds Issued Bonds refunded/defeased (52,795) . . (52.795)

Refunding bonds issued 46,535 . _ . 48.535 Change in unamortized premiums and discounts (5.578) (757) -

(1.719) 1. .

(1) .

(999) (18.978) 460,353 33,826 64,158 16,491 38,779 293,157 2,651.324 Total debt at June 30, 2019 (48,730) (7.365) (21,565) (1.627) (3,818) (6.445) (160,265)

Total debt due within one year at June 30, 2018 Total long-term debt at June 30, 2019 $ 411,623  % 26.461 $ 42,593 $ 14,864 $ 286,712 2,491,059 34,961 $

..L ' - r r

Southern California Public Power Authority Notes to Combined Financial Statements Note 7 - Long-Term Debt (continued)

Magnolia Power Project - Debt consists of revenue and refunding series bonds with variable and fixed interest rates between 2.00% and 5.00% with final maturities occurring in 2036.

Of the outstanding Magnolia Power Project Revenue Bonds, $10,685 million of Project B Bonds are secured by lease rental payments to be made by the City of Cerritos (the City) in connection with the lease of certain facilities and premises owned by the City to the Authority and the leaseback of such facilities and premises to the City. The Base Rental Payments will be equal to the principal and interest on the Project B Bonds. In accordance with the Assignment Agreement between the Authority and the Trustee, the Authority will assign certain of its rights under the lease, including its right to receive the Base Rental Payments, to the Trustee for the benefit of the owners of the Project B Bonds.

The City has covenanted to budget and appropriate sufficient funds to make all payments required to be made under the lease. The lease has a term of 55 years.

Canyon Power Project - Debt consists of revenue bonds with variable and fixed interest rates ranging from 0.94% to 5.00% and final maturity occurring in 2040.

Canyon Power Project Refunding Revenue Bonds - On May 15, 2018, SCPPA issued $114.31 million of Canyon Power Project 2018 Series A Refunding Revenue Bonds (the 2018A Bonds") with a premium of

$298,349 and $114,605,000 of Canyon Power Project 2018 Series B Refunding Revenue Bonds (the 2018B Bonds). The 2018A and 2018B Bonds are being issued to refund all of the outstanding Canyon Power Project, Refunding Revenue Bonds 2017 Series A, and pay the costs of issuance relating to the 2018A & 2018B Bonds. The Series 2018A Bonds were issued as Fixed Rate Tender Bonds, bearing a fixed yield of 2.14% through the initial mandatory tender date of May 1,2021, at which point the bonds will be remarketed for another fixed rate period or converted into another permissible mode. The Series 2018B Bonds were issued as Index Tender Bonds, bearing a variable rate at a fixed spread of 0.25% to the SIFMA Index through the initial mandatory tender date of May 1,2021, at which point the bonds will be remarketed for another index rate period or converted into another permissible mode. Based on the assumed rate, the Refunding has a present value savings of $1.68 million.

Apex Power Project - Debt consists of revenue bonds with fixed interest rates between 1.728% and 5.00% and final maturity occurring in 2038.

Tieton Hydropower Project - Debt consists of revenue bonds with fixed interest rates between 5.00%

and 5.79% and final maturity occurring in 2040.

Milford I Wind Project - Debt consists of revenue bonds with fixed interest rates ranging from 4.00% to 5.00% and final maturity occurring in 2030.

Milford II Wind Project - Debt consists of revenue bonds with fixed interest rates ranging from 4.00% to 5.25% and final maturity occurring in 2031.

Southern California Public Power Authority Notes to Combined Financial Statements Note 7 - Long-Term Debt (continued)

Linden Wind Energy Project - Debt consists of revenue bonds with fixed interest rates between 4.00%

and 5.92% and final maturity occurring in 2035.

Southern Transmission System Project - Debt consists of refunding and subordinate refunding series bonds with fixed interest rates ranging from 1.829% to 5.00% and final maturities occurring in 2027.

STS Project Refunding Bonds - On October 10, 2018, SCPPA issued $48,535,000 of Southern Transmission System Project 2018 Series A Refunding Revenue Bonds (the 2018A Bonds) with a premium of $4,675,655.90. The 2018A Bonds are being issued to refund all of the outstanding

$43,860,000 of STS Project, Refunding Revenue Bonds 2008 Series A, and $37,000,000 of STS Project, Refunding Revenue Bonds 2009 Series A, and to pay the costs of issuance relating to the 2018A Bonds.

The Refunding has a net present value savings of $4.65 million.

Windy Point/Windy Flats Project - Debt consists of revenue bonds with fixed interest rates between 3.00% and 5.00% and final maturity occurring in 2030.

Mead Phoenix/Mead Adelanto Projects - Debt consists of revenue and refunding series bonds with fixed interest rates between 2.81% and 5.00% with final maturities occurring in 2030.

Natural Gas Projects - Debt consists of revenue bonds with fixed interest rates ranging from 5.51% to 6.03% and final maturities occurring in 2032.

Prepaid Natural Gas Project - Debt consists of revenue bonds with variable and fixed interest rates ranging from 5.00% to 5.25% and final maturity occurring in 2035.

Southern California Public Power Authority Notes to Combined Financial Statements Note 7 - Long-Term Debt (continued)

Premiums/Discounts - Unamortized premiums and discounts, net, which are included in the statements of net position as a component of long-term debt, are as follows (amounts in thousands):

June 30, 2019 Unamortized (Premium) Discount, Net (Premium) Discount Magnolia Power Project $ (1.627)

Canyon Power Project (8,186)

Apex Power Project (11,087)

Tieton Hydropower Project (843)

Milford I Wind Project (4,406)

Milford II Wind Project (6,000)

Windy Point Project (17,456)

Linden Wind Energy Project ' (2,944)

Southern Transmission System Project (34,307)

Mead-Phoenix Project (3,071)

Mead-Adelanto Project (4,159)

Prepaid Natural Gas Project No. 1 (1,882)

$ (95,968)

June 30, 2018 Unamortized (Premium) Discount, Net (Premium) Discount Magnolia Power Project $ (2,909)

Canyon Power Project (10,211)

Apex Power Project (11,834)

Tieton Hydropower Project (908)

Milford 1 Wind Project (5,247)

Milford II Wind Project (7,292)

Windy Point Project (21,271)

Linden Wind Energy Project (3,572)

Southern Transmission System Project (39,885)

Mead-Phoenix Project (3,828)

Mead-Adelanto Project (5,878)

Prepaid Natural Gas Project No. 1 (2,111)

$ (114,946) 96

Southern California Public Power Authority Notes to Combined Financial Statements Note 7 - Long-Term Debt (continued)

Advance refundings - The Authority has established irrevocable escrow trusts with the proceeds from issuance of subordinate refunding bonds. These investments will be used to pay specified revenue bonds called at scheduled redemption dates.

Defeasance of debt - The Authority has defeased specified revenue bonds by placing the proceeds from the issuance of subordinate refunding bonds in irrevocable trusts to provide for all future debt service payments on the refunded bonds. The trust investments and related liability for bonds that are considered legally defeased are not included in the Authoritys financial statements. At June 30, 2019 and 2018,

$81.7 million and $206.7 million, respectively, of revenue bonds outstanding are considered legally defeased.

The refunded bonds constitute a contingent liability of the Authority only to the extent that cash and investments presently in the control of the refunding trustees are not sufficient to meet debt service requirements and are therefore excluded from the combined financial statements because the likelihood of additional funding requirements is considered remote.

Debt service - The scheduled debt service payments for future years ending June 30 are included in the table on the following page. The variable rate used for the MAG 2009-1 was 1.50%. The variable rate used for the CPP 2018B Bonds was 1.90%. All of the preceding variable rates were the rates at June 30, 2019. The variable rates are set by the bond-remarketing agent on a weekly basis based on economic conditions and bond ratings.

Southern California Public Power Authority Notes to Combined Financial Statements Note 7 - Long-Term Debt (continued)

Future principal and interest payments are as follows (amounts in thousands):

GENERATION GREEN POWER Magnolia Canyon Tieton Milford I Milford II Linden Wind FISCAL YEAR Palo Verde San Juan Power Power Apex Power Hydropower Wind Wind Windy Point Energy 2020 Principal 7,560 $ 7,835 9,710 1,000 10,570 6,665 23,040 4.335 2020 Interest 8,298 8,833 12,128 2,336 8,040 6,030 17,462 5,711 2021 Principal 115,450 8,185 9,920 1,050 11,090 7,000 24,125 4,555 2021 Interest 6,847 8,453 11,892 2,284 7,508 5,691 16,362 5,511 2022 Principal 8,320 8,595 10,185 1,105 11,635 7,345 25,240 4,735 2022 Interest 5,377 8,033 11,609 2,226 6,955 5,335 15,186 5,308 2023 Principal 7,085 9,025 10,490 1,165 12,200 7,710 26,475 4,960 2023 Interest 5,014 7,593 11,286 2.164 6,369 4,949 13,907 5,071 2024 - 2028 Principal 36,000 52,375 58,210 8,665 70,610 45,070 153,520 28,780 2024 - 2028 Interest 21,454 30,546 50,413 9,490 21,995 18,061 47,871 21,277 2029 - 2033 Principal 44,060 78,825 71,245 9,280 51,395 45,345 111,775 36,640 2029 - 2033 Interest 14,990 19,840 36,825 7.164 3,937 4,913 8,564 12,986 2034 - 2038 Principal 69,755 91,775 90,505 11,845 25,865 2034 - 2038 Interest 5,920 10,865 16,981 4,536 2.336 2039 - 2043 Principal 59,216 20,905 11,990 2039 - 2043 Interest 1,840 523 1,082 iPrincipal - $ 288,230 $ 315,831 $ 281,170 $ 46,100 $ 167,500 $ 119,135 $ 364,175 $ 109,870 Interest 67,900 $ 96,003 $ 151,657 $ 31,282 $ 54,804 $ 44,979 $ 119,352 $ 58,200 98

Southern California Public Power Authority Notes to Combined Financial Statements Note 7 - Long-Term Debt (continued)

TRANSMISSION NATURAL GAS Southern Transmission Mead- Mead- Prepaid FISCAL YEAR System Phoenix Adelanto Pinedale Barnett Total Natural Gas 2020 Principal $ 48,730 $ 7,365 $ 21,565 $ 1,627 $ 6,445 160,265 3,818 $

2020 Interest 18,665 1,214 2,347 907 2,134 108,780

, 14,675 2021 Principal 59,900 5,990 17,110 1,522 3,573 7,725 277,195 2021 Interest 16,430 949 1,441 819 1,926 14,303 100,416 2022 Principal 78,640 1,415 1,695 1,427 3,353 8,940 172,630 2022 Interest 13,534 798 1,024 736 1,732 13,865 91,718 2023 Principal 59,415 1,475 1,780 1,345 3,160 9,705 155,990 2023 Interest 10,276 740 937 658 1,550 13,376 83,890 2024 - 2028 Principal 179,361 8,405 10,328 5,767 13,558 72,309 742,958 2024 - 2028 Interest 18,892 2,608 3,221 2,243 5,295 56,945 310,311 2029 - 2033 Principal 6,105 7,520 4,803 11,317 119,690 598,000 2029 - 2033 Interest 468 576 698 1,647 32,695 145,303 2034 - 2038 Principal 66,460 356,205 2034 - 2038 Interest 4,394 45,032 2039 - 2043 Principal 92,111 2039 - 2043 Interest 3,445 Principal $ 426,046 $ 30,755 $ 59,998 $ 16,491 $ 291,274 2,555,354 38,779 $ $

Interest $ 77,797 $ 6,777 $ 9,546 $ 6,061 $ 14,284 $ 150,253 $ 888,895

Southern California Public Power Authority Notes to Combined Financial Statements Note 8 - Notes Payable and Other Liabilities Notes payable and other liabilities consist mainly of an allowance for future major maintenance expenses and swap-related transaction fees for MPP, the Authoritys net pension liability, and OPEB liability.

Notes payable and other liabilities rollforward (amounts in thousands):

June 30, 2019 Amortization June 30, Payments/ of Surplus June 30, Description 2018 Additions Amortization Fund 2019 MPP major maintenance $ 20,142 $ 8,485 $ (7,500) $ $ 21,127 MPP 2010-1 and 2010-2 swap suspension 2,492 (273) 2,219 Net pension and OPEB liabilities 2,301 26 2,327

$ 22,443 $ 11,003 $ (7,773) $ $ 25,673 June 30,2018 Amortization June 30, Payments/ of Surplus June 30, Description 2017 Additions Amortization Fund 2018 MPP major maintenance $ 14,157 $ 6,263 $ (278) $ $ 20,142 Mead-Adelanto 2007 Swap suspension 592 (592)

Net pension and OPEB liabilities 1,264 1,037 2,301

$ 16,013 $ 7,300 $ (278) $ (592) $ 22,443 Note 9 - Advances from Participants Advances from participants under current liabilities in the statements of net position consist mainly of billings to participants related to acquisition, inventory and working capital reserves wherein the matching operating expenses will be recognized at a future date. Advances from participants under noncurrent liabilities in the statements of net position are advances held by the Wyoming and Barnett Natural Gas Projects mainly from LADWP and TID for their share of operating costs and capital expenditures pursuant to their respective Agency Agreements.

100

Southern California Public Power Authority Notes to Combined Financial Statements Note 9 - Advances from Participants (continued)

Advances from participants rollforward (amounts in thousands):

Description June 30, 2018 Activity June 30,2019 Noncurrent; Pinedale Project $ 13,682 S (1,224) $ 12,458 Barnett Project 7,274 (705) 6,569 Total noncurrent advances from participants $ 20,956 $ (1,929) $ 19,027 Current:

San Juan Project $ 19,954 $ (19,954) $ -

Magnolia Power Project 17,204 40 17,244 Canyon Power Project 9,421 9,421 Apex Power Project <<

3,451 1,138 4,589 Tieton Hydropower Project 202 202 Milford 1 Wind Project 250 250 Milford II Wind Project 250 250 Windy Point Project 1,000 1,000 Linden Wind Energy Project 2,004 2,004 Mead-Adelanto Project 1,100 (1,100)

Pinedale Project 6,136 (2,587) 3,549 Barnett Project 1,743 208 1,951 Ormat Geothermal Project 857 857 MWD Small Hydro Project 500 500 Ameresco Chiquita Landfill Gas Project 400 400 Project Development Fund 470 1,500 1,970 SCPPA Building 37 (36) 1 Don A. Campbell/ Wild Rose Geothermal Project 960 960 Columbia 2 Solar Project 405 405 Don A. Campbell 2 Geothermal Project 960 960 Kingbird Solar Project 171 171 Heber-1 Geothermal Project 400 400 Springbok 1 Solar Project 2,000 2,000 Springbok 2 Solar Project 2,000 2,000 Summer Solar Project 600 600 Astoria 2 Solar Project 800 800 Antelope Big Sky Ranch Solar Project 300 300 Antelope DSR 1 Solar Project 900 900 Antelope DSR 2 Solar Project 90 90 Puente Hills Landfill Gas Project 420 420 Ormat Northern Nevada Geothermal Project 1,800 (1,400) 400 Total current advances from participants $ 67,364 $ (12,770) $ 54,594 101

• i Southern California Public Power Authority Notes to Combined Financial Statements Note 10 - Net Position The Authoritys billing amounts to the participants are determined by its Board of Directors and are subject to review and approval by the participants. Billings to participants are designed to recover costs as defined by the power sales, natural gas sales, and transmission service agreements. The billings are structured to systematically provide for debt service requirements, operating funds, and reserves in accordance with these agreements. The accumulated difference between billings and the Authoritys expenses calculated in accordance with accounting principles generally accepted in the United States of America are presented as Net Position. It is intended that this difference will be recovered in the future through billings for repayment of principal on the related bonds.

Net position is comprised of the following (in thousands);

Rscal Year Fiscal Year 2019 June 30, 2017 2018 Activity June 30, 2018 ^ Activity June 30, 2019 GAAP Items not included In billings to participants Depreciation of plant S (1,942,154) $ (104,827) $ (2,046,981) S (103,874) $ (2,150,855)

Nuclear fuel amortization (5,860) (5,860) (5,860)

(125,085) -

(1,720) (126,805) -

(1.720) (128,525)

Decommissioning expense Inflation gain (loss) (3,469) (5,086) (8,555) (3,004) (11,559)

Amortization of bond discount debt issue costs.

and loss on refundings (801,735) 3,554 (798,181) 1,427 (796,754)

Interest expense (54,900) (54,900) (54,900)

(87,509) - (87,509) - (87,509)

Loss on defeasance of bonds Derivatives and related charges (13,817) 8,632- (5,185) -

(3,486) (8,671)

Pension expense (1,058) (1,119) (2,177) (140) (2,317)

Bond requirements included in billings to participants Operations and maintenance, net of investment income (62,114) (32,960) (95,074) (31,133) (126,207)

Costs of acquisition of capacity 264 (431) (167) (167)

Billings to antortlze costs recoverable 382,050 382,050 - 382,050 Reduction in debt service billings due to transfer of excess funds (94,543) (94,543) (94,543)

Principal repayments 2,504,456 163,459- 2,667,915 160,186- 2,828,101 Withdrawal of funds (24,821) (2,971) (27,792) (27,792)

Other 268,564 (1,862) 266,702 10,862- 277,564 (61,731) 24,669 (37,062) 29,118 (7,944)

Projects Stabilization Fund net position 133,941 (14,388) 119,553 15,549 135,102

$ 72,210 S 10,281 $ 82,491 S 44,667 $ 127,158 Note 11 - Pension and Other Postemployment Retirement Plans Pension Plan Plan descriptions - All qualified permanent and probationary employees are eligible to participate in SCPPAs Miscellaneous Employee Pension Plans, cost-sharing multiple employer defined benefit pension plans administered by the California Public Employees Retirement System (CalPERS). Benefit provisions under the Plans are established by State statute and SCPPA resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.

102

Southern California Public Power Authority Notes to Combined Financial Statements Note 11 - Pension and Other Postemployment Retirement Plans (continued)

Benefits provided- CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries.

Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service.

The death benefit is one of the following: The Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees Retirement Law.

The Plans provisions and benefits in effect at June 30, 2019 and 2018, are summarized as follows:

Prior to On or after January 1, January 1, 2013 2013 Hire date Benefit formula 2.7% @ 55 2% @ 62 Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life Retirement age 50-55 52-67 Monthly benefits, as a % of eligible compensation 2.0% to 2.7% 1.0% to 2.5%

Required employee contribution rates 8% 6.5%

Required employer contribution rates 19.6% 6.7%

Contributions - Section 20814(c) of the California Public Employees Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for both Plans are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to fmance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. SCPPA is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.

For the year ended June 30, 2019 and 2018, the contributions recognized as part of pension expense for the Plans were $263,137 and $269,866, respectively.

Pension liabilities, pension expenses and deferred oufflows / inflows of resources related to pensions -

As of June 30, 2019 and 2018, SCPPA reported a net pension liability of $1.4 million and $1.5 million, respectively, for its proportionate share of the net pension liability. SCPPAs net pension liability for each Plan is measured as the proportionate share of the net pension liability. The net pension liability of each of the Plans is measured as of June 30, 2018, and the total pension liability for each Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2017 rolled forward to June 30, 2018 using standard update procedures. SCPPA's proportion of the net pension liability was based on a projection of SCPPAs long-term share of contributions to the pension plans 103

Southern California Public Power Authority Notes to Combined Financial Statements Note 11 - Pension and Other Postemployment Retirement Plans (continued) relative to the projected contributions of all participating employers, actuarially determined. SCPPAs proportionate share of the net pension liability for the Plans were 0.0398% and 0.0388% as of the June 30, 2018 and 2017 measurement dates, respectively.

For the year ended June 30, 2019 and 2018, SCPPA recognized pension expense of $232,549 and

$279,262 respectively. SCPPA reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

June 30, Deferred Outflows of Resources 2019 2018 Pension contributions subsequent to measurement date $ 263,137 $ 269,886 Change in employer's proportion and differences between the employer's contributions and the employer's proportionate share of contributions 59,895 70,523 Differences between actual and expected experience 57,493 2,090 Changes in assumptions 170,827 259,314 Net differences between projected and actual earnings on plan Investments 7,408 58,646 Total $ 558,760 $ 660,459 June 30, 2019 2018 Deferred Inflows of Resources Pension contributions subsequent to measurement date $ - $ -

Change in employers proportion and differences between the employer's contributions and the employer's proportionate share of contributions - -

Differences between actual and expected experience - -

Changes in assumptions (41,866) (19,773)

Net differences between projected and actual earnings on plan investments (19,564) (29,942)

Total $ (61,430) $ (49,715)

$263,137 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2020. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

For the Period Ended June 30, 2019 $ 147,232 2020 115,222 2021 (32,130) 2022 (2,883)

Thereafter 6,751

$_ _ 234,192 104

Southern California Public Power Authority Notes to Combined Financial Statements Note 11 - Pension and Other Postemployment Retirement Plans (continued)

Actuarial assumptions - The total pension liabilities in the June 30, 2019 actuarial valuations were determined using the following actuarial assumptions:

Valuation Date June 30. 2017 Measurement Date June 30, 2018 Actuarial Cost Method Entry Age Normal Actuarial Assumptions:

Discount Rate 7.15%

Inflation 2.50%

Payroll Growth 2.75%

Projected Salary Increase Varies by Entry Age and Service Investment Rate of Return 7.5% (1)

Derived using CalPERS' Mortality Membership Data (1) Net pension plan investment expenses, including inflation The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2018 valuation were based on the results of an actuarial experience study for the period 1997 to 2015. Further details of the Experience Study can be found on the CalPERS website.

Discount rate - The discount rate used to measure the total pension liability was 7.15% for the Plans. To determine whether the municipal bond rate should be used in the calculation of a discount rate for the Plans, CalPERS stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate. Based on the testing, none of the tested plans run out of assets. Therefore, the current 7.15% discount rate is adequate and the use of the municipal bond rate calculation is not necessary. The long term expected discount rate of 7.15% will be applied to all plans in the Public Employees Retirement Fund (PERF). The stress test results are presented in a detailed report that can be obtained from the CalPERS website.

According to paragraph 30 of Statement 68, the long-term discount rate should be determined without reduction for pension plan administrative expense. The 7.15% investment return assumption used in this accounting valuation is net of administrative expenses. Administrative expenses are assumed to be 15 basis points. An investment return excluding administrative expenses would have been 7.15%. Using this lower discount rate has resulted in a slightly higher total pension liability and net pension liability.

CalPERS checked the materiality threshold for the difference in calculation and did not find it to be a material difference.

CalPERS reviewed all actuarial assumptions as part of its regular Asset Liability Management (ALM) review cycle that is scheduled in February 2018. There was no change in the discount rate used for GASB 67 and 68 calculations. Any changes to the discount rate will require Board action and proper stakeholder outreach. CalPERS will continue to check the materiality of the difference in calculation until such time as CalPERS has changed its methodology.

105

Southern California Public Power Authority Notes to Combined Financial Statements Note 11 - Pension and Other Postemployment Retirement Plans (continued)

The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.

In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds asset classes, expected compound returns were calculated over the short-term (first 10 years) and the long-term (11-60 years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund.

The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-tenn and long-term ^

returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and rounded down to the nearest one quarter of one percent.

The table below reflects the long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. These rates of return are net of administrative expenses.

New Strategic Real Return Real Return Asset Class Allocation Years 1 -10(a) Years 11+ (b)

Global Equity 50.0% 4.80% 5.98%

Global Debt Securities 28.0% 1.00% 2.62%

Inflation Assets - 0.77% 1.81%

Private Equity 8.0% 6.30% 7.23%

Real Estate 13.0% 3.75% 4.93%

Infrastructure and Forestland 0.0% 0.00% 0.00%

Liquidity 1.0% -0.92%

Total 100.0%

(a) An expected inflation of 2.00% used for this period (b) An expected inflation of 2.92% used for this period 106

Southern California Public Power Authority Notes to Combined Financial Statements Note 11 - Pension and Other Postemployment Retirement Plans (continued)

Sensitivity of the proportionate share of the net pension liability to changes in the discount rate - The following presents SCPPAs proportionate share of the net pension liability for the Plans, calculated using the discount rate for each Plan, as well as what SCPPAs proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:

June 30, 2019 2018 1 % Decrease 6.15% 6.15%

Net Pension Liability 2,409,911 $ 2,384,289 Current Discount Rate 7.15% 7.15%

Net Pension Liability 1,418,393 1,472,764 1% Increase 8.15% 8.15%

Net Pension Liability $ 748,513 $ 821,575 Pension plan fiduciary net position - Detailed information about each pension plans fiduciary net position is available in the separately issued CalPERS financial reports.

Payable to the pension plan - At June 30, 2019, SCPPA did not have an outstanding amount of contributions payable to the pension plan.

Postemployment benefits other than pension - On July 1,2017 SCPPA implemented GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, which replaces the requirements of GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions as amended, and GASB No.

57, OPES Measurement by Agent Employers and Agent Multiple-employer Plans. Specifically, Statement No. 75 recognizes the long-term obligation for health and life insurance benefits offered to retirees.

SCPPAs defined benefit OPEB plan provides health care and life insurance benefits for eligible employees. SCPPAs plan is a single employer defined benefit OPEB plan administered by the SCPPA Board. The authority to establish and amend the benefit terms and financing is accomplished through the SCPPA Board of Directors.

107

Southern California Public Power Authority Notes to Combined Financial Statements Note 11 - Pension and Other Postemployment Retirement Plans (continued)

SCPPAs plan provides healthcare and life insurance benefits for retirees. The benefit terms vary depending on the employees date of hire. Below is a brief summary of employee eligibility and benefits provided.

Elioibilityfor OPEB

1) Employee must retire with 120 days from date of separation

2) The retiree must be receiving benefits from CalPERS (California Public Employees' Retirement System)

3) Employee was either hired before December 18, 2014 or has at least 10 years of service is eligible for a supplemental contribution upon retirement Net OPEB Liability - At June 30, 2018 and 2017, the following employees were covered by the benefit terms:

Active employees electing coverage 10 Active employees waiving coverage 4 Retirees electing coverage 4 Total SCPPA's net OPEB liability of $908,596 and $827,411 was measured on June 30, 2018 and 2017, respectively and was determined by an actuarial valuation as of that date.

The total OPEB liability in the June 30, 2018 actuarial valuation was determined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified:

Inflation 2.75%

Salary Increases Varied on years of experience Discount Rate 3.62%

Healthcare cost trend rates:

Not Medicare Eligible Medicare Eligible 6.3% in 2019, trending 5.4% in 2019, trending down to 4.4% in 2074 down to 4.4% in 2074 thereafter thereafter Retirees are required to pay the applicable retiree premiums, less any direct subsidies provided by SCPPA. Retiree premiums can vary from $357 to $878 for the retiree and $713 to $1,756 for the retiree plus spouse depending on the care the provider selected.

108

'* "S

Southern California Public Power Authority Notes to Combined Financial Statements Note 11 - Pension and Other Postemployment Retirement Plans (continued)

The discount rate was based on the index rate for 20-year, tax exempt municipal bonds.

Mortality rates were based on assumptions for the Public Agency Misceilaneous members used in the June 30, 2017 and 2016 CalPERS actuarial valuation.

June 30, 2018 2017 Beginning balance $ 827,411 $ 818,744 Changes for the year Service cost 80,882 86,517 Interest 31,913 26,114 Changes of assumptions (7,876) (82,085)

Benefit payments (23,734) (21,879)

Net changes 81,185 8,667 Ending balance $ 908,596 $ 827,411 Changes in the Net OPEB Liability-There were no changes to benefit terms during the year. Changes of assumptions and other inputs reflect a change in the discount rate from 3.56% percent as of June 30, 2017 to 3.62% as of June 30, 2018. In addition, changes of assumptions were made to update healthcare costs and trends, and a change was made to the spousal coverage assumptions.

Benefit payments in the measurement period included $14,574 in direct subsidy payments to retirees and

$9,160 estimated implicit subsidy costs incurred during measurement period ended June 30, 2018.

The following presents the net OPEB liability of SCPPA, as well as what SCPPAs net OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower or 1-percentage point higher than the current discount rate:

June 30, 2018 2017 Discount rate 1 % Decrease 2.62% 2.56%

Net OPEB Liability $ 1,054,739 961,145 Current Discount Rate 3.62% 3.56%

Net OPEB Liability $ 908,596 827,411 1% Increase 4.62% 4.56%

Net OPEB Liability $ 791,389 720,071 109

Southern California Public Power Authority Notes to Combined Financial Statements Note 11 - Pension and Other Postemployment Retirement Plans (continued)

The following presents the net OPEB liability of SCPPA, as well as what SCPPAs net OPEB liability would be if it were calculated using a healthcare cost trend rates that is 1-percentage-point lower or 1-percentage point higher than the current healthcare cost trend rates:

June 30, 2018 2017 Healthcare cost trend rates 1 % Decrease - 4.4% decreasing to 3.4%

Net Health Plan Liability $ 772,942 $ 711,640 5.4% decreasing to 4.4%

Net Health Plan Liability $ 908,596 $ 827,411 1% Increase - 6.4% decreasing to 5.4%

Net Health Plan Liability $ 1,083,443 $ 975,356 There were no deferred inflows or outflows in the current year.

Note 12 - Commitments and Contingencies Public benefits - The members continue to collect the public benefit charge through existing rate structures and have instituted programs to benefit their customers including conservation and energy efficiency programs, public educational programs, research and development, and low income rate subsidies, totaling a combined $2.0 billion since their inception in 1997. The decisions on how these funds are allocated are made by the local governing authority, in most cases this is the city council.

Executive action and state legislation - A number of bills affecting the electric industry have been introduced or enacted by the California Legislature. In general, these bills regulate greenhouse gas emissions and provide for greater investment in energy efficiency and environmentally friendly generation and storage alternatives through more stringent renewable resource portfolio standard requirements. The following is a brief summary of bills that have been enacted:

Greenhouse gas emissions - Executive Orders -Executive Order B-55-18, signed in September 2018, set a new statewide goal to achieve carbon neutrality as soon as possible, and no later than 2045, and to achieve and maintain net negative emissions thereafter.

Greenhouse gas emissions - Global Warming Solutions Act - The Global Warming Solutions Act of 2006 (the GWSA) prescribed a statewide cap on global warming pollution with a goal of reaching 1990 greenhouse gas emission levels by 2020.

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Southern California Public Power Authority Notes to Combined Financial Statements Note 12 - Commitments and Contingencies (continued)

Greenhouse gas emissions - cap-and-trade program - The cap-and-trade program introduced a hard emissions cap that covered emissions transportation fuels, natural gas, propane, and other fossil fuels. In July 2017, the California Legislature passed AB 398, extending the cap-and-trade program until 2030 and the distribution of free carbon allowances is continued for certain industrial sectors.

Greenhouse gas emissions - emissions performance standard - Senate Bill 1368 (SB 1368) signed on January 1,2007, provides for an emission performance standard, restricting new investments in baseload fossil fuel electric generating resources that exceed the rate of greenhouse gas emissions for existing combined-cycie natural gas baseload generation.

Energy procurement and efficiency reporting - Senate Bill 1037 requires that each publicly owned utilities (POUs), including the Project Participants, prior to procuring new energy generation resources, first acquire all available energy efficiency, demand reduction, and renewable resources that are cost effective, reliable and feasible, then report annually to its customers and to the CEC its investment in energy efficiency and demand reduction programs. Each Project Participant has complied with such reporting requirements.

Renewable Portfolio Standard (RPS) - Senate Bill XI 2 (SBX1-2), the California Renewable Energy Resources Act," was signed into law on April 12, 2011. SBX1-2 codifies the RPS target for retail electricity sellers to serve 33% of their loads with eligible renewable energy resources by 2020 as provided in Executive Order S-14-08.

Clean Energy and Pollution Reduction Act of 2015 - Senate Bill 100 (SB 100), the 100 Percent Clean Energy Act of 2018, was signed into law in September 2018. SB 100 accelerates the States RPS target as established by SB 350 from 50% by 2030 to 60% by 2030 and sets a goal of 100% clean energy by the year 2045. SB 100 requires retail electric sellers and local publicly-owned electric utilities to procure a minimum quantity of electric products from eligible renewable energy resources so that the total kWhs of those products sold to retail end-use customers achieve 44% of retail sales by December 31,2024, 52%

of retail sales by December 31, 2027 and 60% of retail sales by December 31,2030. SB 100 further establishes a State policy that eligible renewable energy resources and zero-carbon resources supply 100% of retail sales of electricity to California end-use customers by December 31,2045.

Biomass Legislation - Senate Bill 859, signed in September 2016, requires investor-owned utilities (iOUs) and POUs that serve more than 100,000 customers, including certain of the Project Participants, to procure, through financial commitments of five years, their proportionate shares (based on the ratio of the utilitys peak demand to the total statewide peak demand), of 125 MW of cumuiative rated capacity from existing bioenergy projects that generate energy from wood harvested from high-fire-hazard zones.

Legislation Relating to Wildfires - SB 901, signed into in September 2018, amends certain provisions of SB 1028 requiring POUs and electric cooperatives to prepare wildfire mitigation measures if the utilities overhead electrical lines and equipment are located in an area that has a significant risk of wildfire resulting from those electrical lines and equipment. Under SB 901, each POU or electric cooperative is required to prepare before January 1,2020 and annually thereafter, a wildfire mitigation

Southern California Public Power Authority Notes to Combined Financial Statements Note 12 - Commitments and Contingencies (continued) plan. SB 901 requires specified information and elements to be considered as necessary, at minimum, in the wildfire mitigation plan. The POL) or electric cooperative is required to present each wildfire mitigation plan in an appropriately noticed public meeting, and to accept comments on its wildfire mitigation plan from the public, other local and state agencies, and interested parties. In addition, SB 901 requires the POU or electric cooperative to contract with a qualified independent evaluator with experience in assessing the safe operation of electrical infrastructure to review and assess the comprehensiveness of its wildfire mitigation plan. The report of the independent evaluator is to be made available to the public and to be presented at a public meeting of the POU's governing board.

Assembly Bill 1054 (AB 1054) was signed into law on July 12, 2019. AB 1054 was enacted as an urgency statute to take effect immediately. SB 1054 establishes a Wildfire Fund of approximately $21 billion to provide liquidity for lOUs (only) to facilitate payment of eligible, uninsured third-party damage claims resulting from future catastrophic wildfires. AB 1054 revises the cost recovery review of wildfire costs and expenses for lOUs before the California Public Utilities Commission (CPUC), and estabiishes safety certification protocols that lOUs must meet in order to participate in the Wildfire Fund. AB 1054 provides for a cap on an lOU's obligations to reimburse the Wildfire Fund and a presumption of reasonableness if a utility develops and maintains a valid safety certification from the Wildfire Safety Division, which is established in the CPUC pursuant to companion legislation. Assembly Bill 111, also signed into law on July 12, 2019. To receive the safety certification from the CPUC, the lOU must develop and implement an approved wildfire mitigation plan, implement the findings of its safety culture assessments, establish a safety committee of its board of directors, establish board level reporting to the CPUC on safety issues, and adopt a compensation structure tied to safety performance, among other requirements.

AB 1054 expands on the existing requirements established under SB 901 for POUs to make and implement wildfire mitigation plans. AB 1054 also establishes the California Wildfire Safety Advisory Board (the Wildfire Advisory Board), a seven member board to be appointed by the Governor (five members), the Speaker of the State Assembly (one member) and the State Senate Committee on Rules (one member). The Wildfire Advisory Board will provide advice and recommendations related to wildfire safety, including on the content and sufficiency of wildfire mitigation plans. AB 1054 requires that after January 1,2020, each POU or electrical cooperative submit, by July 1 of each year, its plan to the Wildfire Advisory Board for review and comment. Under AB 1054, the Wildfire Advisory Board is required to provide comments and an advisory opinion to each POU regarding the content and sufficiency of its plan and to make recommendations on how to mitigate wildfire risks. AB 1054 requires each POU to comprehensively revise its plan at least once every three years. The Authority and the Project Participants expect to prepare and submit wildfire mitigation plans in accordance with the requirements of SB 901 and AB 1054 as required.

A number of wildfires occurred in California in 2017 and 2018. Under the doctrine of inverse condemnation (a legal concept that entitles property owners to just compensation if their property is damaged by a public use), California courts have imposed liability on utilities in legal actions brought by property holders for damages caused by the utilitys infrastructure. Thus, if the facilities of a utility, such as its electric distribution and transmission lines, are determined to be the substantial cause of a fire, and the doctrine of inverse condemnation applies, the utility could be liable for damages without having been

Southern California Public Power Authority Notes to Combined Financial Statements Note 12 - Commitments and Contingencies (continued) found negligent. SB 1028, SB 901 or AB 1054 do not address the existing legal doctrine relating to utilities liability for wildfires. How any future legislation addresses Californias inverse condemnation and strict liability issues for utilities in the context of wildfires in particular could be significant for the electric utility industry.

Solar power - Senate Bill 1 (also known as the California Solar Initiative), which was signed into law on August 21,2006, requires POUs, including the Project Participants, to establish a program supporting the stated goal of the legislation to install 3,000 MW of photovoltaic energy in California. POUs are also required to establish eligibility criteria in collaboration with the CEC for the funding of solar energy systems receiving ratepayer-funded incentives. Certain reporting requirements also have to be met by the POUs. Each of the Project Participants has established programs in accordance with the requirements of the California Solar Initiative.

Future regulation - The electric industry is subject to continuing legislative and administrative reforms.

States routinely consider changes to the way they regulate the electric industry. Historically, both further deregulation and forms of additional regulation have been proposed for the industry, which has been highly regulated throughout its history. While there is no current proposal to further the industry, there still are additional regulations or legislative mandates being proposed or considered for the industry such as higher reliance on renewable energy and tighter regulations for greenhouse gas emission reductions. The Authority and the Project Participants are unable to predict at this time the impact any such proposals will have on the operations and finances of the Project Participants electric utility or the electric utility industry generally.

Impact of developments on the Project Participants - The effect of these developments in the California energy markets on the Project Participants cannot be fully ascertained at this time. Also, volatility in energy price in California may return due to a variety of factors which affect both the supply and demand for electric energy in the western United States.

This price volatility may contribute to greater volatility in the revenues of their respective electric systems from the sale (and purchase) of electric energy and. therefore, could materially affect each Project Participants financial condition. Each Project Participant undertakes resource planning, risk management activities, and manages its resource portfolio to mitigate such price volatility and spot market rate exposure.

Federal policy on cybersecurity -In September 2018, National Cyber Strategy was signed which sought to update the nations cyber strategy for the first time in 15 years - and identified energy and power as one of the seven key areas for protection. The FERC has also sought to expand reporting rules for incidents involving attempts to compromise operation of the electric grid (not just when an incident to compromise or disrupt one or more reliability tasks actually occurs).

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Southern California Public Power Authority Notes to Combined Financial Statements Note 12 - Commitments and Contingencies (continued)

Federal energy legislation Energy Policy Act of 2005 - Under the Federal Energy Policy Act of 2005 (EPAct 2005), FERC was given refund authority over municipal utilities if they sell into short-term markets, like the International Organization for Standardization or ISO markets, and sell eight million MWhs or more of electric energy on an annual basis.

NERC reliability standards - On February 3, 2006, FERC issued Order 672, which certified the NERC as the Electric Reliability Organization or ERO. Many reliability standards have since been approved by FERC. Such standards pertain not only to the planning, operations, and maintenance of Bulk-Power System facilities, but also to the cyber and physical security of certain critical facilities.

Federal regulation of transmission access - EPAct 2005 authorizes FERC to compel open access to the transmission systems of certain utilities that are not generally regulated by FERC, including municipal utilities if the utility sells more than four million MWhs of electricity per year. Under open access, a transmission provider must allow all customers to use the system under standardized rates, terms and conditions of service.

Other legislation - Congress has considered and is considering numerous bills addressing domestic energy policies and various environmental matters, including bills relating to energy supplies and development (such as a federal energy efficiency standard and expedited permitting for natural gas drilling projects), global warming, and water quality. Many of these bills, if enacted into law, could have a material impact on the Authority, the Project Participants, and the electric utility industry as a whole. The Authority and the Project Participants are unable to predict the outcome or potential impacts of any possible legislation at this time.

Environmental issues - Electric utilities are subject to continuing environmental regulation. Federal, state and local standards and procedures which regulate the environmental impact of electric utilities are subject to change. There is no assurance that any Authority or Project Participant facility or project will remain subject to the laws and regulations currently in effect, will always be in compliance with future laws and regulations, or will always be able to obtain all required operating permits. In addition, the election of new administrations, including the President of the United States, could impact substantially the current environmental standards and regulations and other matters described herein. An inability to comply with environmental standards could result in, for example, additional capital expenditures, reduced operating levels or the shutdown of individual units not in compliance. In addition, increased environmental laws and regulations may create certain barriers to new facility development, may require modification of existing facilities and may result in additional costs for affected resources.

Greenhouse gas regulations under the Clean Air Act - On July 8, 2019, the EPA issued the final rule.

The final Affordable Clean Energy rule: (i) replaces the Clean Power Plan with revised emissions guidelines that inform the development, submittal, and implementation of state plans to reduce greenhouse gas emissions from fossil fuel steam electric generating units, primarily coal-fired plants; and (ii) implements new regulations that provide direction to both the EPA and the states on the

Southern California Public Power Authority Notes to Combined Financial Statements Note 12 - Commitments and Contingencies (continued) implementation of emission guidelines. The final rule identifies heat rate improvements as the best system of emission reduction from coal-fired power plants, to be made at the individual facilities. The final rule becomes effective on September 6, 2019 National Ambient Air Quality Standards - The Clean Air Act requires that the ERA establish National Ambient Air Quality Standards (NAAQS) for certain air pollutants. Once NAAQS have been established, each state must identify areas that do not meet the ERA standard (non-attainment areas) and develop regulatory measures in its state implementation plan to reduce or control the emissions of that air pollutant in order to meet the applicable standard and become an attainment area. ERA noticed a final rule on December 6, 2018 implementing ozone NAAQS for non-attainment areas and addressing state implementation plan requirements.

That rule became effective on February 4, 2019. In August 2019, the D.C. appellate court upheld thresholds for ground-level ozone (70 ppb), directing ERA to revisit secondary public welfare standards.

Mercury and Air Toxic Standards (MATS) - On December 16, 2011, the ERA signed a rule establishing new standards to reduce air pollution from coal- and oil-fired power plants under sections 111 (new source performance standards) and 112 (toxics program) of the Clean Air Act. While many plants meet some or all of these new standards, some plants will be required to install new equipment to meet the standards. In April 2019, California joined a multi-state comment letter opposing ERA'S proposal that they believe would undermine emissions standards for power plants as it would unlawfully remove justification for Clean Air Act regulation of mercury and air toxics emissions from coal- and oil-fired power plants.

Other proposals - On August 14, 2019, ERA formally noticed a proposed rule to make targeted revisions to Coal Combustion Residuals (CCR) rules from electric utilities - intended to enhance public access to information, reconsider beneficial use criteria, make revisions to the annual groundwater monitoring and corrective action report requirements, amongst others; stakeholder comments are due October 15, 2019.

Other factors - The electric utility industry in general has been, or in the future may be, affected by a number of other factors which could impact the financial condition and competitiveness of many electric utilities and the level of utilization of generating and transmission facilities. Such factors, including those discussed above, could have an adverse effect on the financial condition of any given electric utility and likely will affect individual utilities in different ways.

The Authority is unable to predict what impact such factors will have on the business operations and financial condition of its members but the impact could be significant. Extensive information on the electric utility industry is available from the legislative and regulatory bodies and other sources in the public domain.

Southern California Public Power Authority Notes to Combined Financial Statements Note 12 - Commitments and Contingencies (continued)

Nuclear spent fuel and waste disposal - Under the Nuclear Waste Policy Act, the Department of Energy (DOE) was to develop the facilities necessary for the storage and disposal of spent fuel and to have the first such facility in operation by 1998. DOE collected a fee of 0.1 cents/kwh of electric generation from the nuclear plant operators to fund the development and operation of the disposal facility.

In 2009, the federal government, under the new administration, decided to cut off all the appropriated funds for the development of the repository at the Yucca Mountain, at the urging of the Congress, except a small budget allocation for the closing of the project.

The Palo Verde operating agent, on behalf of the co-owners, has litigated the DOE to recover the costs of storing spent fuel at Palo Verde because the DOE failed to honor the contract to remove and dispose of spent fuel as scheduled. Palo Verde has submitted four claims pursuant to the terms of the 2014 Settlement Agreement, for four separate time periods during July 1,2011 through June 30, 2018. The DOE has approved and paid $74.2 million for these claims (Authoritys share is $4.4 million).

Palo Verde submitted its most recent claim on October 2018 in the amount of $10.2 million of which the Authoritys share was $0.6 million. On June 2019, the Authority received this payment.

The spent fuel storage in the wet pool at Palo Verde exhausted its capacity in 2003. A Dry Cask Storage Facility (the Facility) was built and completed in 2003. The Facility has the capacity to store all the spent fuel generated by the Palo Verde plant until 2027. To date, over 152 casks, each containing 24 spent fuel assemblies were placed in the Facility. Beginning in 2019, PVNGS is expected to use the newly designed Magnastor casks that contain 36 spent fuel assemblies allowing the dry cask storage facility to accept more spent fuel. The new cask design is currently in fabrication. Storing spent fuel at Palo Verde is now considered indefinite with undetermined costs until spent fuel is removed from the plant site.

The Department of Energy indicated to nuclear operators that it intends to restart collection of the spent fuel disposal fee in the year 2020. The plant still intends to continue petitioning for reimbursement for the indefinite future.

Nuclear insurance - The Price-Anderson Act (the Act) requires that all utilities with nuclear generating facilities share in the payment for liability claims resulting from a nuclear incident. The Act limits liability from third-party claims to approximately $13.9 billion per incident. Participants in the Palo Verde Nuclear Generating Station (PVNGS) currently insure potential claims and liability through commercial insurance with a $450 million limit; the remainder of the potential liability is covered by the industry-wide retrospective assessment program provided under the Act. This program limits assessments to $137.6 million per operating reactor for each licensee (there are about 98 operating reactors in the U.S.) for each nuclear incident occurring at any nuclear reactor in the United States; payments under the program are limited to $28.4 million per reactor, per incident, per year to be indexed for inflation every five years.

Based on the Authoritys 5.91% interest in Palo Verde, the Authority would be responsible for a maximum assessment of $24.4 million per incident for all three units, limited to payments of $4.9 million per incident, per year.

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In addition to the above, the Authority may be subject to retroactive insurance assessments for its participation in the Neil Property Insurance Program in the amount of $2.75 million.

Other legal matters - The Authority is also involved in various other legal actions. In the opinion of management, the outcome of such litigation or claims will not have a material effect on the financial position or the results of operations of the Authority or the respective separate Projects.

Note 13 - Certain Asset Retirement Obligations The Authority has asset retirement obligations in the following projects:

GENERATION PROJECTS Palo Verde Project - PVNGS is located approximately 50 miles west of Phoenix, Arizona. PVNGS consists of three nuclear electric generating units (numbered 1, 2 and 3). PVNGS's combined design capacity is 4,003 MWs and its combined dependable capacity is 3,937 MWs. Each PVNGS generating unit has been operating under 40-year Full-Power Operating Licenses granted by the Nuclear Regulatory Commission (NRC) expiring in 2025, 2026, and 2027, respectively. In 2011, NRC extended the operation for an additional 20 years until 2045, 2046 and 2047, respectively.

Nuclear Regulatory Commission - The NRC has broad authority under federal law to impose licensing and safety-related requirements for the operation of nuclear generation facilities. In 1988, NRC issued the General Requirements for Decommissioning Nuclear Facilities. The regulation addressed decommissioning planning needs, timing, funding methods, and environmental review requirements. The intent of the rule was to ensure that decommissioning would be accomplished in a safe and timely manner and that adequate funds would be available for this purpose.

Decommissioning Study - In April 2017, APS, the operating agent for PVNGS has availed of the services of an independent consultant to prepare the 2016 Decommissioning Cost Study.

This study is conducted every three years and the next study is scheduled in April 2020. The objective of this study is to prepare an estimate of the cost, schedule and waste volume generated to decommission Palo Verde, including all common and supporting facilities. The study considered the integration of the three-unit dismantling, and the dismantling of the Water Facilities and Reservoirs, Evaporation Ponds, Independent Spent Fuel Storage Installation, Steam Generators, Reactor and Storage Facilities. However, the sites Transmission and Distribution System will remain in place and is not considered part of the decommissioning estimate.

The methodology used to develop the estimates are based on numerous fundamental assumptions such as the estimating basis, labor costs, design conditions, including regulatory requirements, project contingencies, low level radioactive waste disposal practices, high-level

Southern California Public Power Authority Notes to Combined Financial Statements Note 13 - Certain Asset Retirement Obiigations (continued) radioactive waste management options, and site restoration requirements. The decommissioning scenarios assume continued operation of the plants spent fuel pool for a minimum of six years following the cessation of operations for continued cooling of the assemblies. The primary cost contributors are either labor-related or associated with the management and disposition of the radioactive waste. Program management is the largest single contributor to the overall cost.

Removal costs reflect the labor-intensive nature of the decommissioning process, as well as the management controls required to ensure a safe and successful program. Decontamination and packaging costs also have a large labor component that is based upon prevailing union wages.

License termination survey costs are associated with the labor intensive and complex activity of verifying that contamination has been removed from the site to the levels specified by the regulating agency.

The cost projected to promptly decommission Palo Vqrde is estimated to be $2.74 billion (2016 dollars),

of which the Authoritys interest which is at 5.91% is estimated to be $161.9 million (2016 dollars). The Authority is providing for its share of the estimated future decommissioning costs over the remaining life of the nuclear power plant through annual charges to expense, which amounted to $1.3 million at June 30, 2019 and 2018. The estimated remaining useful life for Unit 1, Unit 2 and Unit are 26 years, 27 years and 28 years, respectively. The effects of general inflation amounted to $0,003 million and $0,005 million as of June 30, 2019 and 2018, respectively. The decommissioning liability reported under noncurrent liabilities in the statements of net position was $172.0 million and $169.3 million at June 30, 2019 and 2018, respectively.

The owners of PVNGS have created external trusts in accordance with the PVNGS participation agreement and NRC requirements to fund the costs of decommissioning PVNGS. As of June 30, 2019, the Authoritys decommissioning funds totaled approximately $181.4 million, including approximately $0.9 million of interest receivable.

San Juan Project - On July 1, 1993, the Authority purchased a 41.80% interest in Unit 3 and related common facilities of the SJGS from Century Power Corporation. Unit 3, a 497-MW unit, is one unit of a four-unit coal-fired power generating station in New Mexico.

Environmental Protection Agency - SJGS was subject to the statutory obligations of the Federal Clean Air Act to reduce visibility impacts. On October 9, 2014, the United States Environmental Protection Agency (EPA) issued a final rule approving a plan to provide a Best Available Retrofit Technology path to comply with federal visibility rules at SJGS, which among other things resulted in the shutdown of Units 2 and 3 on December 2017. The EPA rule became effective on November 10, 2014.

To meet the 2017 closure deadline, the Authority and other owners who participated in Unit 3 entered into various negotiations and agreements that ultimately entitled the Authority and the other owners to exit the Project at the end of 2017. Unit 3 closed on December 18,2017 and the Authority exited the SGJS Project on December 31, 2017.

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Southern California Public Power Authority Notes to Combined Financial Statements Note 13 - Certain Asset Retirement Obligations (continued)

Decommissioning Study - In 2013, the operating agent of SJGS availed the services of an independent engineering firm to conduct a decommissioning study for the Project. The study inciuded three retirement, decommissioning and demolition scenarios and the impact of the different assumptions on these scenarios. The cost estimates were based on direct and indirect cost assumptions and materiai estimations using a contracting approach by the operating agent and other SJGS owners. Direct cost assumptions include, among others, wage rates based on the prevalent rates in the labor sector, costs associated with equipment rental, demolition and all contractor services, and contingency costs are included as an allowance for site unknowns. Indirect costs assumptions include utilities used during demolition, liability insurance and performance bond.

Material quantity estimation was based on major demolition activities including complete dismantling of all four units and restoring the site to the original condition.

The reclamation and decommissioning of SJGS Unit 3 has commenced on January 2018 and July 2018, respectively. The decommissioning liability reported under noncurrent liabilities in the statements of net position was $3.6 million and $3.7 million at June 30, 2019 and 2018, respectively. For the fiscal year ended June 30, 2019, actual decommissioning expenses totaled $0.19 million.

As of June 30, 2019 and 2018, the Authority recognized $26.0 million and $25.4 million reclamation liability and reported it under noncurrent liabilities in the statements of net position, respectively. For the fiscal year ended June 30, 2019 and 2018, actual decommissioning and reclamation expenses totaled

$0.69 million and $0.52 million, respectively.

The Decommissioning and Reclamation Trust Funds were fully funded based on the requirements set forth by the Trust Fund Agreements in December 2017. As of June 30, 2019, decommissioning and reclamation trust funds totaled $3.6 million and $25.2 million, respectively.

Apex Power Project - On March 26, 2014, the Authority acquired the Apex Power Project pursuant to an Asset Purchase Agreement, dated as of October 17, 2013. The Apex Generating Station, located in North Las Vegas, Nevada, is owned by SCPPA with all power generated sold to LADWP. The station is natural gas combined cycle consisting of combustion turbine generators and a steam turbine generator.

The facility is interconnected through a 3.13 mile 500kv radial generation tie line owned by Nevada Power Company that connects the Facility to the Nevada Power Companys transmission system at its Harry Allen 500 kV Substation. LADWP serves as project manager and operating agent of the Project.

Contractual Obligation - In accordance with the Asset Purchase Agreement, Schedule 2.07, the Authority assumed liabilities arising after the Closing of the facility. The liabilities include among others, those related to environmental conditions on the real property and remediation obligations.

Decommissioning Study - In 2019, the Authority and LADWP contracted an independent consultant to perform a study of decommissioning costs and so to begin allocating the funds necessary for station decommissioning. The study presented demolition of all equipment and structures as well as removal of all paved roads and foundations to a depth of two feet below 119

Southern California Public Power Authority Notes to Combined Financial Statements Note 13 - Certain Asset Retirement Obiigations (continued) grade. It may ultimately be required by local or state authorities in the future or for the propertys future use and was used by the Authority to recognize the asset retirement obligation. The study developed a labor-hour estimate for disassembling the station using standard techniques for wholesale demolition and associated unit cost factors applicable for installed equipment and structures. Costs were calculated for removal and demolition of existing station structures, equipment and associated site restoration costs, scrap value of valuable metals, indirect, contingency, escalation and owners costs.

Total decommissioning cost recognized amounted to $9.9 million (2019 dollars). The estimated remaining useful life for the tangible capital assets from the date of purchase is approximately 24 years. The deferred outflows recognized at the beginning of the Project amounted to $9.2 million and is amortized over the remaining useful life of the plant for $0.37 million as of June 30, 2019 and 2018. The effects of general inflation amounted to $0.16 million and $0.27 million as of June 30, 2019 and 2018, respectively.

The decommissioning liability reported under noncurrent liabilities in the statements of net position was

$9.9 million and $9.8 million at June 30, 2019 and 2018, respectively.

GREEN POWER Tieton Hydropower Project - The Tieton Hydropower Project is a run of the reservoir hydroelectric facility, comprised of a powerhouse constructed at the base of the USBR Tieton Dam on the Tieton River, and a 21-mile 115 kV transmission line from the power plant substation to the point of interconnection with the electrical grid. The powerhouse comprised of two Francis turbines and accompanying generators, has a nameplate capacity of 13.6 MW, with a maximum capacity of approximately 20 MW.

Federal Energy Regulatory Commission -In accordance with Article 30 of the FERC, if the Authority shall abandon or discontinue the operation of the Project, it may require the Authority to remove any or all structures, equipment and power lines within the boundary and to take any such other action necessary to restore the waters, lands and facilities remaining within the boundary to a condition satisfactory to the United States agency having jurisdiction over its lands or the FERCs authorized representative as appropriate or to provide for the continued operation and maintenance of non-power facilities and fulfill such other obligations under the license as the FERC may prescribe.

Asset Retirement Obligation - The operating manager for the Project availed the services of an independent consultant to perform the estimate for the decommissioning and restoration estimate. The preliminary estimate presented a list of the work that will be performed on the site such as concrete and foundation work, mechanical and electrical work with corresponding cost estimates. The estimate assumed that the powerhouse will be removed up to the top of the caisson. It also assumed that the concrete trust block and the two inlet pipes will remain along with the existing valve house. Cost estimates include both labor and materials.

Total cost recognized amounted to $0.85 million (2019 dollars). The estimated remaining useful life for the tangible capital assets from the date of purchase is 31 years. The deferred outflows recognized at the beginning of the Project amounted to $0.72 million and is amortized over the remaining useful life of the 120

Southern California Public Power Authority Notes to Combined Financial Statements Note 13 - Certain Asset Retirement Obligations (continued) plant for $0.02 million as of June 30, 2019 and 2018. The effects of general inflation amounted to $0.01 million and $0.02 million as of June 30, 2019 and 2018, respectively. The decommissioning liability reported under noncurrent liabilities in the statements of net position was $0.85 million and $0.83 million at June 30, 2019 and 2018, respectively.

Linden Wind Energy Project - Linden Wind is a wind farm facility that is located near the town of Goldendale in Klickitat County, Washington. It has an approximately 50 MW nameplate capacity comprised of; (i) 25 Repower MM 92, 60 HZ, three-bladed, 92.5 meter rotor diameter wind energy converters (WECs); (ii) one 50 meter tall meteorological tower; (iii) a 34.5-kV power underground collection system linking the WECs to the collector substation; (iv) 25 pad-mount 2.25 MVA transformers; (v) a substation and transmission line intertie; (vi) fiber optic underground communication cables from the WECs to the substation control building; (vii)a supervisory control and data acquisition system; (viii) operation, maintenance and storage buildings, structures and facilities; and (ix) all equipment and other personal property related to the operation and support of the facility. The facility achieved commercial operation on June 30, 2010, and on September 15, 2010, the Authority completed its acquisition pursuant to the terms of the Asset Purchase Agreement. LADWP is the operating manager of this Project.

Environmental Matters -The lead agency for environmental review and land use permitting is Klickitat County. The facility is located within the Klickitat Country Energy Overlay Zone (EOZ) for wind energy development and EOZ requires compliance with numerous other laws and regulations, including the Clean Air Act, the Clean Water Act, the Endangered Species Act, hazardous materials and waste management requirements, fire and building codes, health and safety regulations. Federal Aviation Administration limitations, and historical, cultural and archeological requirements. The EOZ Permit authority will continue so long as the facility remains in compliance with all permit requirements, including habitat mitigation and financial assurance requirements for final decommissioning of facility structures. The decommissioning of turbines on federal lands is regulated by the Bureau of Land Management.

Wind Turbine Decommissioning Costs - The Authority has used a market survey from an independent consultant considering key cost components on decommissioning, restoration of project site and salvage value. The survey used a case-by-case approach to analyze and estimate costs given numerous variables relating to equipment, geography, commodity market, etc. An internal assessment was made to identify the wind farm that is closest to the Linden Wind Energy Project and used the cost to recognize for ARO purposes.

Total cost recognized amounted to $0.70 million (2019 dollars). The useful life for the tangible capital assets from the date of purchase is 26 years. The deferred outflows recognized at the beginning of the Project amounted to $0.60 million and is amortized over the remaining useful life of the plant for $0.02 million as of June 30, 2019 and 2018. The effects of general inflation amounted to $0.01 million and

$0.19 million as of June 30, 2019 and 2018, respectively. The decommissioning liability reported under noncurrent liabilities in the statements of net position was $0.70 million and $0.69 million at June 30, 2019 and 2018, respectively.

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Southern California Public Power Authority Notes to Combined Financial Statements Note 13 - Certain Asset Retirement Obligations (continued)

NATURAL GAS Natural Gas Project - The Natural Gas Project includes the Authoritys leasehold interests in (i) certain natural gas resources, reserves, fields, wells and related facilities located near Pinedale, Wyoming and (ii) certain natural gas resources, reserves, fields, wells and related facilities in (or near) the Barnett Shale geological formation in Texas. There are currently 130 proved, developed, and producing wells on the Pinedale Leases. In addition to the producing wells, the Pinedale Leases include 19 proved Undeveloped well locations with well spacing down to the 10-acre level. The Barnett Leases has currently 151 proved, developed and producing wells, including condensing equipment to remove water and oil from the gas. In addition to the producing wells, there are 3 proved undeveloped well locations and 3 Probable undeveloped well locations, with well spacing down to 1,000 feet between 2,500-foot lateral wells.

Wyoming Oil and Gas Conservation Commission (Supervisor) - Pinedale Field is controlled by the Supervisor which administers the Wyoming Conservation Act. The Supervisor sets the manner for supervising the field in conjunction with the federal government which also issued leases for federal land within the outline of the field.

Abandonment Work - The Authority has availed of the services of an independent engineering firm to estimate the costs of abandonment on idle wells. Abandonment costs include detailed statement of proposed work such as kind, location, length of plugs, plans for mudding, cementing, shooting, testing and removing casing, as well as any other pertinent information. The final abandonment consists of restoring the land to its natural state. The operator will contour the land to fit its natural environment and the area will be seeded to restore the native vegetation.

Abandonment costs used in the study are the operators estimates of the costs to abandon the wells and production facilities, net of any salvage value. The costs are held constant, and then escalated 1 percent on January 1 of each year to the date of expenditure.

For Wyoming, Pinedale, total cost recognized amounted to $1.38 million (2018 dollars). The useful life for the tangible capital assets from the date of acquisition is 28 years. The deferred outflows recognized at the beginning of the Project amounted to $1.07 million and is amortized over the remaining useful life of the plant for $0.04 million as of June 30, 2019 and 2018. The effects of general inflation amounted to

$0.02 million and $0.04 million as of June 30, 2019 and 2018, respectively. The decommissioning liability reported under noncurrent liabilities in the statements of net position was $1.40 million and $1.38 million at June 30, 2019 and 2018, respectively.

For Barnett, Texas, total cost recognized amounted to $0.29 million (2018 dollars). The useful life for the tangible capital assets from the date of acquisition is 28 years. The deferred outflows recognized at the beginning of the Project amounted to $0.23 million and is amortized over the remaining useful life of the plant for $0,008 million as of June 30, 2019 and 2018. The effects of general inflation amounted to $0,004 million and $0,008 million as of June 30, 2019 and 2018, respectively. The decommissioning liability reported under noncurrent liabilities in the statements of net position was $0.30 million at June 30, 2019 and 2018.

122 IT !' IT>

Southern California Public Power Authority Notes to Combined Financial Statements Note 13 - Certain Asset Retirement Obligations (continued)

TRANSMISSION PROJECTS Southern Transmission System, Mead-Phoenix, and Mead-Adelanto Projects - These projects are generally located upon land that is leased from Federal and certain state governments. Upon termination of the leases, the structures, improvements and equipment are to be removed and the land is to be restored. Because these leases are expected to be renewed indefinitely and because the inherent value of the transmission corridors, the leases have no foreseeable termination date, and therefore, ARO related to the transmission facilities cannot be reasonably estimated.

A summary of ARO information are as follows (amounts in thousands):

Remaining Deferred Outflow Decommissioning and Project Name Asset Types Useful Life (yrs) of Resources Reclamation Obligation Palo Verde Nuclear power plant 26/27/28 $ 34,139 $ 172,040 San Juan* Coal power plant 29,624 Apex Power Natural Gas turbine generators 24 7,239 9,933 Tieton Hydropower Hydro Powerhouse 21 479 853 Linden Wind Energy Wind turbines 16 372 699 Natural Gas - Wyoming Oil Wells 13 497 1,404 Natural Gas - Barnett Oil Wells 13 116 297 42,842 $ 214,850 Docommissioning and reclamation commenced on January 2018.

Note 14 - Subsequent Events Springbok 3 Solar Farm Project - On December 17, 2015, SCPPA on behalf of LADWP, entered into a power purchase agreement with 64KT 8ME, LLC for 90 MW of solar photovoltaic generating capacity from the Springbok 3 Solar Farm Project located approximately 4.5 miles north-northwest of California City and to the south-southwest of the unincorporated town of Cantil, California. Springbok 3 is adjacent to both Springbok 1 and 2. The commercial operation began on July 19, 2019, starting for a term of 27 years, unless a one-time three-year extension is exercised. LADWP serves as the project manager on behalf of SCPPA.

Milford I Wind Project Bonds - On September 19, 2019, the Board approved the bond resolutions and related bond documents necessary for the sale and issuance of refunding bonds. The Milford Wind Corridor Phase 1 Project, Revenue Bonds, 2010-1 bonds are fixed rate bonds issued on February 9, 2010 in the amount of $237,235,000. Presently, $156,930,000 of the 2010-1 bonds remain outstanding and are subject to optional redemption on January 1, 2020. The refunding is expected to generate a significant amount of debt savings through 2030. The net present value savings net of issuance costs is estimated at $32.33 million, 20.6% savings of refunded bonds, based on market conditions at the time of bond pricing on October 3, 2019.

123

Required Supplementary Information V 'I-

- ^5;

)

1

' -1

Southern California Public Power Authority Schedule of Proportionate Share of the Net Pension Liability As of June 30, 2019

_______________ Last Ten Years*

2019 2018 2017 2016 2015 Proportion of the net pension liability 0.03976% 0.03880% 0.03779% 0.03604% 0.01404%

Proportionate share of the net pension liability $ 1,418,393 $ 1,472,764 $ 1,263,624 $ 1,010,974 $ 873,857 Covered - employee payroll $ 2,270,923 $ 2,455,761 $ 2,373,992 $ 2,258,941 $ 1,091,557 Proportionate Share of the net pension liability as percentage of covered-empioyee payroli 62.46% 59.97% 53.23% 44.75% 80.06%

Plan's fiduciary net position $ 29,308,590 $ 27,244,095 $ 24,705,532 $ 24,907,306 $ 24,940,528 Plan fiduciary net position as a percentage of the totai pension iiability 75.26% 73.31% 74.06% 78.32% 81.00%

Notes to Schedule Changes in assumptions - In 2016, GASB 68 was modified to state that the long-term expected rate of return should be determined net of pension plan investment expense but without reduction for pension plan administrative expense. The discount rate was changed from 7.65 percent (net of administrative expense in 2014) to 7.15 percent as of June 30, 2016 measurement date to correct the adjustment which previously reduced the discount rate for administrative expense.

Fiscal year 2015 was the 1st year of implementation, therefore only five years are shown.

Southern California Public Power Authority Schedule of Contributions As of June 30, 2019 Last Ten Years*

2019 2018 2017 2016 2015 Contractually required contribution (actuarially determined) $ 198,739 $ 177,260 $ 251,133 $ 265,844 $ 699,279 Contributions in relation to the actuarially determined contribution (263,137) (269,886) (229,160) (278,896) (699,279)

Contribution deficiency (excess) $ (64,397) $ (92,626) $ 21,973 $ (13,052) $ _

Covered-employee payroll $ 2,270,923 $ 2,455,761 $ 2,373,992 $ 2,258,941 $ 1,091,557 Contributions as a percentage of covered-employee payroll 8.75% 7.22% 10.58% 11.77% 64.06%

Notes to Schedule Valuation date: 6/30/2017 6/30/2016 6/30/2015 6/30/2014 6/30/2013 Methods and assumptions used to determine contribution rates:

Actuariai cost method Entry age Amortization method Level percentage of payroll Remaining amortization period Differ by employer Asset vaiuation method Market Value Inflation 2.50%

Salary increases Varies by entry age and service Investment rate of return 7.15%

Retirement age 57yrs.

Mortality Derived using CalPERs membership data for all funds Fiscal year 2015 was the 1st year of implementation, therefore oniy five years are shown.

125

Southern California Public Power Authority Schedule of Changes in OPEB Liability As of June 30, 2019 Last Ten Years*

2019 2018 Total OPEB Liability Service cost $ 80,882 $ 86,517 Interest cost 31,913 26,114 Change in assumptions (7,876) (82,085)

Benefit payments (23,734) (21,879)

Net change in total OPEB liability $ 81,185 $ 8,667 Total pension liability, beginning $ 827,411 $ 818,744 Total pension liability, ending $ 908,596 $ 827,411 Plan fiduciary net position "i Contributions Employer contributions $ 23,734 $ 21,879 Benfit payments (23,734) (21,879)

Net change in plan fiduciary net position $ - $ -

Plan fiduciary net position, beginning $ * $

Plan fiduciary net position, ending $ - $ -

Net pension liability, ending $ 908,596 $ 827,411 Plan fiduciary net position as a percent of the total pension liability 0.00% 0.00%

Covered-employee payroll $ 2,491,466 $2,217,802 Net pension liability as a parent of covered payroll 36.50% 37.30%

Fiscal year 2018 was the 1 st year of implementation, therefore only two years are shown.

126

Supplementary Information 1

Southern California Public Power Authority Power Purchase Agreements Combining Statements of Net Position June 30, 2019 (Amounts in Thousands)__________

POWER PURCHASE AGREEMENTS Don A.

Ormat Pebble Ameresco Campbell/ Copper Don A. Springbok 1 Geothemial MWD Small Springs Chiquita Wild Rose Mountain Columbia 2 Heber-1 Kingbird Campbell 2 Solar Energy Hydro Wind Landfill Gas Geothermal Solar 3 Solar Geothermal Solar Geothermal Proiect ASSETS Noncurrent assets Investments - restricted $ * $ - $ $ $ $ $ - $ $ $ $

Investments - unrestricted 3,993 1,996 2,976 - - 1,997 2,283 Total noncurrent assets 3,993 1,996 2.978 1,997 2,283 Current assets Cash and cash equivalents - restricted Cash and cash equivalents - unrestricted 2,245- 1,268- 2,007- 880- 1,616. 4,477. 1.014- 2,273_ 944 2,402. 3.122 Interest receivable 20 11 9 5 17 4

- - - 34.

Accounts receivable 410 43_

Prepaid and other assets 5- 2- 6- 1- 3. 12 2 12 4 2 3 Total current assets 2,250 1,270 2,033 881 1,830 4,498 2,700 991 2,421 3.129 1 050

$ 2,250 $ 1,270 $ 6,026 $ 881 $ 3,826 $ 7,476 $ 1,050 2,700 Total assets $ $ 991 $ 4,418 $ 5,412 LIABILITIES Current liabilities Advances from participants due within

$ 857 S 500 t $ 400 $ 960 $ 405

$ $ 400 $ 171 $ 960 S 2,000 6.012-one year Accounts payable and accruals 1,393 770 481 2,857 7,454- 645 2,295 820 3,400 3 442 Total current liabilities 2,250 1,270 6,012 881 3.817 7,454 991 4,402 5,400 1 050 2 695 Total liabilities 2,250 1,270 6,012 881 3.817 7,454 991 4,402 5,400 1 050 2 695 NET POSITION Unrestricted 14 g 22 5 16 12 Total net position 14 9 22 5 16 12

$ 2,250 $ 1,270 $ 6,026 $ 881 $ 3,826 $ 7,476 $ 1,050 $ 2,700 991 Total liabilities and net position $ $ 4,418 $ 5,412

Southern California Public Power Authority Power Purchase Agreements Combining Statements of Net Position June 30, 2019 (Amounts in Thousands)

POWER PURCHASE AGREEMENTS Springbok 2 Summer Astoria 2 Antelope Big Antelope Antelope ORMAT ORMESA Puente Hills ARP Loyalton Solar Solar Solar Sky Ranch DSR1 DSR2 Northern Geothermal Biomass Landfill Gas Project Project Project Solar Project Project Nevada Project Project Totals Solar Project Solar Project ASSETS Noncurrent assets Investments - restricted $ $ $ $ $ $ $ $ $ s $

Investments - unrestricted 2,481- - - - _ _ . 4,971. 8,448 5,262 34,409 Total noncunent assets 2,481 5,262 34,409

_ _ . 4 971 8 448 Current assets Cash and cash equivalents - restricted 34 34 Cash and cash equivalents - unrestricted 3,352- 1,417- 1,876- 1,647. 2,575_ 331 6,264_ 1,892. 3,760_ 2,822 48,384 Interest receivable 6 6 5 4 87 Accounts receivable 25- - 44- 91. . 414_ 25 1,086 Prepaid and other assets 4- 4 9- 4 6 2. 22 10 8 4 125 Total current assets 3,302 1,446 1,885 1,695 2,672 333 2,889 49,716 6 700 1 908 3 773 5,843 $ 1,446 1,885 $ 1,695 Total assets J. $ 2,672 $ 333 $ 6,700 $ 6,879 $ 12,221 $ 8,151 $ 84,125 LIABILITIES Current liabilities Advances from participants due within

$ 2,000 $ 600 3 800 $ 300 $ 900 $ 90 S 420 400 one year  % $ $ $ 12,163 Accounts payable and accruals 3,830 846 1,085 1,395 1,772 243 6,280 6,453 12,182_ 8,132_ $ 71,787 Total cunent liabilities 5,830 1,446 1,885 1,695 2,672 333 6,853 12,182 8,132 83,950 6 700 Total liabilities 5,830 1,446 1,885 1,695 2,672 333 6,853 12,182 8,132 83,950 6 700 NET POSITION Unrestricted 13 26 39 19 175 Total net position 13 26 39 19 175

$ 5,843 S 1,446 $ 1,885 $ 1,695 $ 2,672 $ 333 6,700 Total liabilities and net position $ $ 6,879 $ 12,221 $ 8,151 $ 84,125 128

Southern California Public Power Authority Power Purchase Agreements Combining Statements of Net Position June 30, 2018 (Amounts in Thousands)_________________

POWER PURCHASE AGREEMENTS Don A.

ORMAT Pebble Ameresco Campbell/ Copper Geothemnal Don A. Springbok 1 MWD Small Springs Chlquita Wild Rose Mountain Heber-1 Kingbird Solar Columbia 2 Campbell 2 Enerqy Hydro Wind Landfill Gas Geothermal Solar Geothermal Solar Geothermal Project Solar 3 ASSETS Noncurrent assets Investments - restricted $ $ $ $ $ $ $ $ $ $ $

Investments - unrestricted - - - - - - - 5 486 Total noncurrent assets - 5,488 Current assets Cash and cash equivalents - restricted Cash and cash equivalents - unrestricted 1,205 1,033 4,672 819 2,190 4,873 1,108 5,156 699 2,404 3,525 Interest receivable 3 2 2 2 2 Accounts receivable 403- - 1,398 20- 114- 904_

Prepaid and other assets 5 2- 6- 2- 4- 13 3 11. 5 3 4 Total current assets 1,613 1,035 4,681 821 2.196 6,286 1.131 818 2.409 4,433 5 169 Total assets $ 1.613 S 1,035 S 4.681 S 821 $ 2.196 $ 6,286 $ 1,131 S 10,655 $ 818 $ 2,409 $ 4,433 LIABILITIES Current liabilities Advances from participants due within one year $ 857 $ 500 $ $ 400 S 960 $ $ 405 $ 400 $ 171 $ 960 $ 2,000 Accounts payable and accruals 758 535 4.678 421 1.232 6.282 726 647 1.446 2.430 10 229 Total current liabilities 1,613 1,035 4,878 821 2.192 6,282 10,829 818 2,406 4.430 1 131 Total liabilities 1,613 1,035 4,678 821 2.192 1.131 10.629 818 2.406 6 282 4 430 NET POSITION Unrestricted 3 4 4 26 3 3 Total net position 3 4 4 26 3 3 Total liabilities and net position 1,613 S 1,035 $ 4,681 $ 821 $ 2,196 $ 6,286 $ 1,131 $ 10.655 $ 818 $ 2,409 $ 4,433 129

Southern California Public Power Authority Power Purchase Agreements Combining Statements of Net Position June 30, 2018 (Amounts in Thousands)

POWER PURCHASE AGREEMENTS Springbok 2 Summer Astoria 2 Antelope Big Antelope Antelope ORMAT ORMAT Puente Hills ARP Lovalton Solar Solar Solar Sky Ranch DSR1 DSR2 Northern Geothermal Biomass Landfill Gas Project Proiect Proiect Solar Project Pmjort NnuaHa Proiect Proiect Totals Solar Project Solar Proiect ASSETS Noncurrent assets Investments - restricted $ - $ - $ $ $ . $ $ $ $ $ $

Investments - unrestricted _ 4.681 4.982

- - - - - . . _ 15 149 Total noncurrent assets 4,681 4,982 15,149 Current assets Cash and cash equivalents - restricted Cash and cash equivalents - unrestricted 6,044- 517. 901_ 496_ 2,210_ 182 4,159. 1,281. 2,353 2,946 48,773 Interest receivable 2 2 3 18 Accounts receivable

- 741- 1,126. 416. 333_ 17_ 800 70 6,342 Prepaid and other assets 5- 4 8 5 6 2 21 109 Total current assets 6,049 1,262 2,035 917 2,549 201 9A9 4 980 1 283 2 355 3 019

$ 6,049 $ 1,262 $ 2,035 $ 917 $ 2,549 201 Total assets $ $ 4,980 5,964 $ 7,337 $ 3,019 $ 70,391 LIABILITIES Current liabilities Advances from participants due within

$ 2,000 $ 600 $ 800 $ 300 $ 900 90 one year $ $ 420 $ 1,800 $ $ $ 13,563 Accounts payable and accmals 4,043 662 1,235 617 1,649 111 4 560 4,152 7,321_ 3,015 56,747 Total current liabilities 6,043 1,262 2,035 917 2,549 201 7 7fi 4 980 5 952 3 015 Total liabilities 6,043 1,262 2,035 917 2.549 201 7,321 3,015 70,310 4 980 5 952 NET POSITION Unrestricted 6 12 16 4 81 Total net position 6 12 16 4 81

$ 6,049 $ 1,262 $ 2,035 $ 917 $ 2,549 201 4,980 Total liabilities and net position $ $ $ 5,964 $ 7,337 $ 3,019 $ 70,391 130

Southern California Public Power Authority Power Purchase Agreements Statements of Revenues, Expenses, and Changes in Net Position June 30, 2019 (Amounts in Thousands)___________

i POWER PURCHASE AGREEMENTS Don A.

Pebble Ameresco Campbell/ Copper Ormat Springs Don A. Springbok 1 MWD Small Chiquita Wild Rose Mountain Columbia Heber-1 Kingbird Solar Geothermal Hydro Campbell 2 Wind Landfill Gas GeoOtermal Solar 3 Geothermal Solar Geothermal Project Solar 2 Operating revenues Sales or electric energy $ 9,772 $ 1,106 $ 19,455 $ 3,068 $ 15,175 $ 56,249 $ 4 273 $ 27,062 $ 5,944 $ 11,264 $ 19,959 Total operating revenues 9,772 1,106 19,455 3,068 15,175 56.249 27,062 5,944 11,264 19,959 4 273 Operating expenses Operations and maintenance 9,772 1,106 19,549 3,068 15,248 56,362 4,273 5,944 11,337 20,040 27 246 Total operating expenses 9,772 1,106 19,549 3,068 15,248 56,362 4,273 27,246 5,944 20,040 11 337 Operating income (loss) (94) (731 (113) (184) (73) (81)

Non operating revenues (expenses)

Investment and other Income 105 78 131 163 86 90 Net non operating revenues (expenses) 105 78 131 163 86 90 Change in net position 11 5 18 (21) 13

- - - - - 9 Net position - beginning of year 3 4 4 26 3

- - - _ 3 Net position - end of year * $ $ 14 $ $ 9 $ 22 $ J 5 $ $ 16 $ 12

Southern California Public Power Authority Power Purchase Agreements Statements of Revenues, Expenses, and Changes in Net Position June 30, 2019

_________________________________ (Amounts in Thousands)

POWER PURCHASE AGREEMENTS Springbok 2 Summer Antelope Big Antelope Antelope ORMAT ORMESA Puente Hills ARP Loyalton Solar Solar Astoria 2 Sky Ranch DSR1 DSR2 Northern Geothermal Biomass Landfill Gas Project Project Solar Project Solar Project Project Nevada Project Project Totals Solar Project Solar Project Operating revenues Sales of electric energy $ 23.803 $ 5.846 $ 9.687 $ 5.998 S 10.977 $ 646 $ 26 471 $ 41947 $ 18.409 $ 3,992 $ 321,103 Total operating revenues 23.803 5.846 9.687 5.998 10,977 646 18.409 3.992 321,103 26 471 41 947 Operating expenses Operations and maintenance 23.915 5.846 9.687 5,998 11,068 655 42.188 18.615 4,094 322,482 26 471 Total operating expenses 23.915 5.846 9.687 5,998 11,066 655 42.188 18.615 4,094 322,482 26 471 Operating income (loss) (112) (91) (9) (241) (206) (102) (1.379)

Non operating revenues (expenses)

Investment and other income 119 01 9 255 229 117 1,473 Net non operating revenues (expenses) 119 61 9 255 229 117 1,473 Change in net position 7 14 23 15 94 Net position - beginning of year 6 12 16 4 81 Net position - end of year $ 13 $ $ $ $ $ $ 26 $ 39 $ 19 $ 175 132

Southern California Pubiic Power Authority Power Purchase Agreements Statement of Revenues, Expenses, and Changes in Net Position June 30, 2018 (Amounts in Thousands)

POWER PURCHASE AGREEMENTS Don A.

Pebble Ameresco Campbell/ Copper ORMAT Don A.

MWD Small Springs Chlquita Wild Rose Mountain Columbia Heber-1 Geothermal Hydro Campbell 2 springbok 1 Wind Landfill Gas Geothermal Geothermal Geothemial Solar 3 Solar 2 Kingbird Solar Solar Project Operating revenues Sales of electric energy $ 10,728 $ 1,314 $ 20,829 J 3.155 $ 16,927 $ 59,207  % 3 852 $ 26,050 $ 5,727 $ 13,340 $ 20,539 Total operating revenues 10,728 1,314 20,829 3,155 16,927 59.207 26,050 5,727 13,340 20.539 3 852 Operating expenses Operations and maintenance 10,728 1,314 20,901 3,155 16.954 59,319 26,177 5,727 13,360 20.572 3 852 Total operating expenses 10,728 1,314 20,901 3,155 16,954 59.319 3,852 26,177 5,727 13,360 20,572 Operating Income (loss) (72) (27) (112) (127) (20)

- - _ (33)

Non operating revenues (expenses)

Investment and other Income 70 30 105 141 23 36 Net non operating revenues (expenses) 70 30 105 141 23 36 Change In net position (2) 3 (7) 14 3 3 Net position - beginning of year S 1 11 12 Net position - end of year 3 $ 4 $ 4 $ 3 $

133

Southern California Public Power Authority Power Purchase Agreements Statement of Revenues, Expenses, and Changes in Net Position June 30, 2018 (Amounts in Thousands)

POWER PURCHASE AGREEMENTS Antelope Big Antelope Antelope Puente Hills ORMAT ORMESA ARP Loyalton Springbok 2 Summer Astoria 2 Sky Ranch DSR1 DSR2 Northern Geothermal Biomass Landfill Gas Solar Project Solar Project Solar Project Solar Project Solar Project Solar Project Project Nevada Project Project Totals Operating revenues Sales of electric energy

$ 24,050 $ 5,595 $ 9,657 ( 5,614 $ 10,126 $ 1,039 $ 28 784 S 12,385 $ 13,630 $ 1,538 $ 294,086 Total operating revenues 24,050 5,595 9,657 5.614 10.126 1.039 28 784 12,385 13,630 1,538 294,086 Operating expenses Operations and maintenance 24,110 5,595 9,657 5,614 10.217 1,048 1,541 294,710 28 784 12 422 13 663 Total operating expenses 24,110 5,595 9,657 5,614 10,217 1.048 28,784 13,663 1,541 294,710 12 422 Operating Income (loss) (60) (91) (9) (37) (33) (3) (624)

Non operating revenues (expenses)

Investment and other income 66 91 9 49 49 7 676 Net non operating revenues (expenses) 66 91 9 49 49 7 676 Change In net position 6 12 16 4 52 Net position - beginning of year 29 Net position - end of year $ 6 $ $ $ $ $ $ $ 12 S 18 S 4 $ 81 134

Southern California Public Power Authority Power Purchase Agreements Statement of Cash Flows June 30, 2019 (Amounts in Thousands)___________

POWER PURCHASE AGREEMENTS Don A.

ORMAT Ameresco Copper Campbell/ Wild Don A.

Geothermal Chiquita Rose Mountain MWD Small Pebble Springs Columbia 2 Heber-1 Campbell 2 Energy Hydro Wind Geothermal spnngoOR i Undfill Gas Solar 3 Solar Geothermal Kingbird Solar Geothermal Solar Project Cash flows from operating actMUes 10,795 i 1,380 S Receipts from participants $ $ 20,312 3,146

$ 16,867

$ 59,142

$ 1,652 $ 18,752 t 2,365

$ 13,311

$ 21,928 (9,755) (1,145) (19.071) (3,085) (15.314) (56,684) (3,014) (27,280) (3,940) (11,388) (20,134)

Payments to operating managers 1 1,268 (1) 1,820 (1) other disbursements and receipts - - -

1,040 235 1,242 61 1.553 2,458 (94) (8.529) 245 1,924 1,794 Net cash flows from operating activities Cash flows from investing activities 81 72 115 148 66 67 interest received on investments - - (3,988) (1,999) (2,969) . (1.994) (4,264)

Purchases of investments - - - 2,000 Proceeds from saie/maturity of Investments - - - - - - s win Net cash provided by (used for) investing activities (3,907) f1,927) (2,854) 5,646 (2.197)

- - . (1 926)

Net increase (decrease) in cash and 1,040 235 (2,665) 61 (374) (396) (94) (2,883) 245 (2) (403) cash equivaients 1,205 1,033 4,672 819 2,190 4,673 699 2,404 Cash and cash equivaients. beginning of year 1 108 5 156 3,525 2,245 1,268 Cash and cash equivalents, end of year $  %

• 2,007

% 880

$ 1,816 $ 4,477

<< 1.014 $ 2,273

$ 944

$ 2,402

$ 3,122 Reconciliation of operating Income (loss) to net cash provided by operating activities

$ i (94) t (73)

(113)

Operating income (loss) - $ $ - $ (184)

(73)

$ (81)

Changes in assets and liabilities 403 1,398 (14) (410) 71 904 Accounts receivable 637 -

235 1,334- 61- -

1,626 1,172 (80) (7.934) 174 1,997 Accounts payable and accruals 970 Other 2 1 (1) 1 1,040 235 1,242 Net cash provided by operating activitiss $ $ $ $ 61 t 1,553

% 2,458

$ (94) $ (8.529)

% 245

$ 1,924

$ 1,794 Cash and cash equivalents as stated In the Combined Statements of Net Position Cash and cash equivalents - restricted 2,245- -

1,268 2,007- 860 -

1,616 4.477. 1,014_ . 944 . 2,402 Cash and cash equivalents - unrestricted 2 273 3.122 2,245 1,268 2,007

$ $ $ 880

>> 1,816

$ 4,477

$ 1,014 $

2,273

$ 944

$ 2,402 135

Southern California Public Power Authority Power Purchase Agreements Statement of Cash Flows June 30, 2019

_____________________ (Amounts in Thousands)

POWER PURCHASE AGREEMENTS Antelope Antelope ORMAT ORMESA Antelope Big Puente Hills ARP Loyalton Springbok 2 Summer Solar Astoria 2 Sky Ranch DSR 1 Northern Geothermal Biomass DSR 2 Landfill Gas Project Project Nevada Project Project Totals Solar Project Solar Project Solar Project Solar Project Solar Project Cash flows from operating ar^lvltles 23,690 3,053 4,333 Ret>>lpls from participants $ $ $ $ 3,329

$ 3,393

$ 822

$ 8,522

$ 41,143

% 23,482

$ 6,895

$ 288,312 (24,013) (3,926) (6,670) (3,949) (7,054) (675) (6,418) (40.502) (18.848) (4,016) (286,877)

Payments to operating managers Other disbursements and receipts 1,773 3,312 1,771 4,026 2 1 6 10 2,174 16,164 Net cash flows from operating activitieB (323) 900 975 1.151 365 146 2,105 649 5,053 17.599 4 646 Cash flows from investing activities 92 214 158 85 1,098 Interest received on Investments (4.461) - . _ . (4.952) (11.197) (8.228) (44,052)

Purchases of investments Proceeds from sale/maturlty of Investments 2,000 - - - - . 7,600 3,000 25,000

- - - - - - 4 700 Net cash provided by (used for) investing activities (2,369) (38) (3,239) (6,143) (17,954)

Net Increase (decrease) in cash and cash equivalents (2,692) 900 976 1,151 365 149 2,105 611 1,407 (90) (355)

Cash and cash equivalents, beginning of year 6,044 517 901 496 2,210 182 4,159 1,281 2,353 2,948 48,773 3,352 Cash and cash equivalents, end of year $ $ 1,417 1 1,876

$ 1,647 6 2,575

$ 331

$ 6,264

$ 1,892 3,760

$ 2,856

$ 48,418 Reconciliation of operating Income (loss) to net cash provided by operating activities (112)

Operating income (loss) $ $ - % - % - $

(91) t (9)

(241)

$ (208)

$ (102)

$ (1,379)

Changes in assets and liabilities Accounts receivable 716 1,126 372 240 17 386 45 5,254 (211) 184 (151) 779 214 141 1,720 900. 4,860. 5,115 13,743 Accounts payable and accnials Other 2 (1) (10) (8) (5) (19)

(323)

Net cash provided by operating activitiea $ $ 900

$ 975

% 1,151

$ 365 i 149

$ 2,105

$ 649 4,646

$ 5,053

$ 17,599 Cash and cash equivalents as stated In the Combined Statements of Net Position 34 34 Cash and cash equivalents - restricted 3,352- -

1,417 1,876- 1.647- 2.575- 331. . . . $

Cash and cash equivalents - unrestricted 2,822 48,384 6 264 1 692 3 760 3,352

$ $ 1,417

$ 1,876

$ 1,647 2,575

$ 331

$ 6,264

$ 1,892

$ 3,760 t 2,856 t 48,418 136

Southern California Public Power Authority Power Purchase Agreements Statement of Cash Flows June 30, 2018 (Amounts in Thousands)_________

POWER PURCHASE AGREEMENTS Don A.

ORMAT Ameresco Campbell/ Copper Mountain Don A.

Geothermal MWD Small Pebble Springe Chlquita Wild Rose Columbia 2 Heber-1 Campbell 2 Springbok 1 Enemy Geothermal Solars Hydro Wind Landfill Gas SolafGeothermal Kingbird Solar Geothermal Solar Project Cash flows from operating activities 11,822 Receipts from participants $ (10,648)

$ 1,771 (1,456)

$ 19,245 (20,844)

$ 3,318 (3,194)

$ 18,085 (16,760)

$ 58,187 $ 2,137 $ 26,195

• 2.459 $ 14,636 $ 21,930 Payments to operating managers (65,416) (2,973) (26,007) (4,215) (13,277) (20.612) 1 1 2 (1) 953 4 1,431 Other disbursements and receipts 4 1,174 316 (1,598) 126 1.325 (7,230) 117 192 (325) 1,559 1.322 Net cash flows from operating activities Cash flows from investing activities 54 26 93 104 22 35 Interest received on Investments

- - - (10,452)

Purchases of investments

- - 3,200 - - - 7.000. 9,200 .

Proceeds from sale/maturity of investments Net cash provided by (used for)

Investing activities 3,254 26 (1.148) 22 35

- - - 7 093 Net Increase (decrease) in cash and 1,174 316 1,656 126 1,353 (137) 117 (956) (325) 1,561 1,357 cash equivalents 31 717 3,016 693 837 5,010 991 6,112 1,024 823 2,168 Cash and cash equivalents, beginning of year 1,205 Cash and cash equivalents, end of year $ $ 1,033 $ 4,672 $ 819

% 2,190 $ 4,873 $ 1,108 $ 5,156

$ 699 $ 2.404 $

3,525 Reconciliation of operating income (loss) to not cash provided by operating activities Operating income (loss) s - $ $ (72) $

- $ (27) $ (112) $ $ (127) s - $ (20) $ (33)

Changes in assets and liabilities 1,619 9 997 (1,019) 69 14 875 1,391 Accounts receivable Accounts payable and accruals (444) -

316 -

(1.527) 117 355 (6,099) 48 .

316 (338) 677 (36)

Other (1) 1 1 (1) 27 1,174 Net cash provided by operating activities $ $ 316 $ (1,598) $ 128

$ 1.325 $ (7,230) $ 117 $ 192 J_ (325) $ 1,559 $ 1,322 Cash and cash equivalents as stated In the Combined Statements of Net Position 1,205 1,033 4,672 819 2,190 4,873 1,108 699 2,404 3.525 Cash and cash equivalents - unrestricted 5 156 1,205

$ $ 1,033 $ 4,672 $ 819

$ 2,190  % 4,873 $ 1,108 $ ___ 5^156

$ 699 $ 2,404 $ 3,525

Southern California Public Power Authority Power Purchase Agreements Statement of Cash Flows June 30, 2018

_____________________ (Amounts in Thousands)

POWER PURCHASE AGREEMENTS Antelope Antelope Antelope Puente Hills ORMAT ORMESA ARP Loyalton Springbok 2 Summer Astoria 2 Big Sky Ranch OSR1 DSR 2 Landfill Gas Northern Geothermal Biomass Solar Project Solar Project Solar Project Solar Project Solar Project Solar Proiect Proiect Nevada Prpject Project Totals Cash flows from operating activltieB 24,745 1,892 2,236 Receipts from participants $ (24,141)

$ (4,059)

$ (5,828)

$ 2,306 (4,182)

$ 3,566 (7,325) 8 506

$ 11,595

$ 15,766

$ 19,320 $ 3.324

• 265.243 Payments to operating managers (832) (10,818) (11.251) (12,031) (827) (266.696)

Other disbursements and receipts 5 1.312 1,552 1.379 3,070 247 20 1,400 446 11,826 609 (655) (2,040) (497) (689) (77) 797 5,915 7.289 2,943 10,373 Net cash flows from operating activities Cash flows from Investing activities 67 39 35 3 480 Interest received on Investments Purchases of Investments

- - _ _ (4.673) (4,971) (20.096)

Proceeds from sale/maturity of Investments

- - - - - _ 19,400 Net cash provided by (used for) 67 (4.936) 3 (216) investing acllvilles Net Increase (decrease) in cash and cash equivalents 676 (855) (2,040) (497) (689) (77) 797 1,281 2,353 2,046 10,157 Cash and cash equivalents, beginning of year 5.368 1,372 2,941 993 2,699 259 38,616 3 362 6,044 517 Cash and cash equivalents, end of year * $ $ 901

$ 496 t 2,210 $ 182

$ 4,159 t 1,281 i 2,353 $ 2,946

$ 48,773 Reconciliation of operating income (loss) to net cash provided by operating activities (60)

Operating Income (loss) $ $ - $ - $ - $ (91) $ (9)

(37)

$ (33) % (3) s (624)

Changes in assets and liabilMies (620) (1,120) (307) (59) 12 (789) (70) 996 Accounts receivable Accounts payable and accnials 668- (230) (906) (185) (533) (80) 1,608 5,952. 7.322. 3,016 10,020 Other (5) (8) (5) (6) (22) (19) 609 j_ (855) (2,040) (497)

Net cash provided by operating activities $ $ $ (689) $ $ 797 i 5,915

$ 7,289 $ 2,943

$ 10.373 Cash and cash equivalents as stated in the Combined Statements of Net Position Cash and cash equivalents - unrestricted 6,044 517 901 496 2,210 182 2,353 2,946 48,773 4 159 1 281 6,044 517

$ $ $ 901

$ 496

$ 2,210 $

182

$ 4,159

% 1.281

$ 2,353 $ 2,946

$ 48,773 138

Southern California Public Power Authority Power Purchase Agreements Investments June 30, 2019 (Amounts in Thousands)

POWER PURCHASE AGREEMENTS Don A.

Pebble Ameresco Campbell/ Copper ORMAT Don A, MWD Small Springs Chlquita Wild Rose Mountain Heber-1 Columbia 2 Campbell 2 Geothemnal Hydro Wind Landfill Gas Geothermal Solar Geothormal Geothermal Solar 3 Kingbird Solar Sprinobok 1 Agency discount notes $ - $ . $$

1,498

$ _ $ 1,399 $ 4,474

$ $ 1,598 S $ 1,998

$ 3,383 U.S. treasury securities 3,993 1,997 2,600 1,997 1,400 Money market funds 2,245 1,268- 509 880 416 381 1,014- 675. 944 404 622 Total $ 2,245 $ 1,268 s 6,000 880

$  % 3,812 $ 7,455 $ 1,014 $ 2,273 $ 944 $ 4,399

$ 5,405

$ $ $ 3,993 Unrestricted Investments 2.245 .

1,268 2,007

$ 880 S 1,996 $ 2,978

$ $ $ $ 1,997

$ 2,283 Cash and cash equivalents 1,816 4,477 1 014 2,273 944 2,402 3,122 Total $ 2.245 1,268 $ 6,000

--22L J__Jj812_ $ 7,455 $ 1,014

$ 2,273

$ 944 4,399 $ 5,405 139

Southern California Public Power Authority Power Purchase Agreements Investments June 30, 2019

_____________________ (Amounts in Thousands)

POWER PURCHASE AGREEMENTS Antelope Antelope Antelope ORMAT ORMESA ARP Loyalton Summer Astoria 2 Big Sky DSR1 DSR2 Northern Geothermal Biomass Puente Hills Springbok 2 Solar Solar Ranch Solar Solar Nevada Proiect Proiect Total Landfill Gas

$ 5,478 $

Agency discount notes U S. treasury securities

- $ . $ _ $ $ _ $ . $ 6,469 $ 11,645 $ 7,260 $ 45,202 11,987 Money maritet funds 355- 1.417- 1.876- 1,647- 2,575- 331- - 394- 563- 858- 25,638 6 264 Totai 5,833 $ 1,417 $ 1,876 $ 1,647 2,575

-* $ 331 $ 6,264 $ 6,863 $ 12,208 $ 8,118 $ 82,827

$ 2,481 $ $ $ $

Unrestricted investments 3,352 . . . $ $ $ 4,971 $ 8,448 $ 5,262 $ 34,409 Cash and cash equivalents 1.417 1,876 1,647 2.575 331 6,264 1,892 3,760 2,856 48,418 Total $ 5,833 $ 1,417 $ 1,876 1,647 2,575

$ $ 331 $ 6,264 $ 6,863 $ 12,208 $ 8,118 $ 82,827 140

Southern California Public Power Authority Power Purchase Agreements Investments June 30, 2018 (Amounts in Thousands)________

POWER PURCHASE AGREEMENTS Don A.

Ameresco Campbell/ Copper ORMAT Chiquita Mountain Don A.

MWD Snrall Pebble Springs Wild Rose Columbia 2 Heber-1 Geothermal Hydro Wind Geothermal Campbell 2 Landfill Gas Sdar3 Solar Geothermal r^anthnrmAl Kingbird Solar Sorinobok 1

$ $ i 3,997 $ $ 1,799 $ 4,395 $ $ 9,878 $ $ 1,999 1,033.

Agency discount notes . $ 3,195 1,205 675 819 391 478 1,108 764 699 Money market funds 405 330 Total $ yo5 $ 1,033 $ 4,672 $ 819 2,190

$ $ 4,873 $ 1,108

• 10,642 $ 699 $ 2,404 $ 3,525 Unrestricted Investments $ . $ . $ $ _ $ . $ $ $ 5,486 $ $ $

1,205 1,033 4,672 819 2,160 5,156 699 Cash and cash equivalents 4 873 1 inn 2,404 3 525 Total $ 1,205 $ 1,033 $ 4.672 $ 819 4,873

$ $ 1,108 $ 10,642 $ 699 2,404 $ 3,525

Southern California Public Power Authority Power Purchase Agreements Investments June 30, 2018 (Amounts in Thousands)

POWER PURCHASE AGREEMENTS Antelope Antelope Antelope ORMAT ORMAT ARP Loyalton DSR1 DSR2 Astoria 2 Big Sky Puente Hills Northern Geothemral Biomass Springbok 2 Summer Solar Solar Ranch Solar Solar Total Landfill Gas_____ Nevada Project Project Agency discount notes 5,592 $ 5,879 $ 6,778 $ 1,500 $ 45,012 452 901 2.210 Money market funds 83 ____ 557 1,446 18,910 Total 8,044 $ 517 S 901 $ 496 $ 2,210 $ J82^ $^^4^ira $^^5j62 $ 7,335 $ 2,946 $ 63,922 Unrestricted investments Cash and cash equivalents 6,044 901 2,210 182

$ - i 4,681 $ 4,982 1,281__________ 2,353

$ $ 15,149 2,946 48,773 Total 6,044 $ 517 $ 901 $ 496 $ 2,210 $ 182 $ 4,159 $ 5,962 $ 7,335 $ 2,946 $ 63,922

' 7 142

other Information

'.e

Southern California Public Power Authority Palo Verde Project Supplemental Schedule of Receipts and Disbursements in Funds Required by the Bond Indenture for the Year Ended June 30, 2019

____ (Amounts in Thousands)

Decommissioning Operating Reserve and Revenue Trust Fund Account Contingency Fund Total Balance at June 30, 2018 $ 178,701 $ 25,740 $ 20,748 $ - St 225,189 Additions Investment earnings 2,888 265 274 23 3,450 Discount on investment purcha - 235 127 362 Distribution of investment earni - (500) (400) 900 _

Revenue from power sales - - 66,141 66,141 Distribution of revenue - 54,406 12,658 (67,064) _

Other receipts - 693 693 Other transfers - - - - -

Total additions 2,888 55,099 12,659 70,646 Deductions Construction expenditures - - 15,115 15,115 Operating expenditures 3 40,773 8 40,784 Fuel costs - 13,980 13,980 Premium and interest on invest - - -

• purchases (1) - 3 2 Total deductions 2 54,753 15,126 69,881 Balance at June 30, 2019 $ 181,587 $ 26,086 $ 18,281 $ - 35 225,954 This schedule summarizes the receipts and disbursements in funds required under the Bond Indenture and has been prepared from the trust statements.

The balances in the funds consist of cash and investments at original cost. These balances do not include accrued interest receivable, unrealized gain (loss) on investments, or $32 and $31 held in the revolving fund at June 30, 2019 and 2018, respectively.

143

Southern California Public Power Authority San Juan Project Supplemental Schedule of Receipts and Disbursements in Funds Required by the Bond Indenture for the Year Ended June 30, 2019 (Amounts In Thousands)

Resen/e and Depository General Reserve Contingency Decommissioning Mine Reclamation Revenue Fund Operating Fund Account Account Fund Total Fund Fund Balance at June 30, 2018 6,667 $ 9,812 $ 3,721 $ 25,816 $ 46,016 Additions

- 20 11 29 76 477 613 Investment earnings -

- 60 35 89 2 37 223 Discount on investments 198 (80)

Distribution of Investment earnings - - (118) 156 . _ .

Revenue from power sales - - - 156 (354) 354 Distribution of revenues - - . _

- (500) 500 Transfer funds for decommissioning - - - . .

Other - 9,640 220 (46) (9,812) (2)

Total additions _ 9,494 220 (9,812) 76 1,014 992 Deductions Operating expenses . 187 3 190 Decommissioning and reclamation expenses - - - - - 191 635 826

- 15,974 15,974 Distribution to the participants - - - . .

Total deductions . 16,161 3 191 635 16,990 Balance at June 30,2019 $ $ $ 217 $ $ $ 3,606 $ 26,195 $ 30,018 This schedule summarizes the receipts and disbursements in funds required under the Bond Indenture and has been prepared from the trust statements.

The balances in the funds consist of cash and investments at original cost. These balances do not include accrued interest receivable, unrealized gain (loss) on investments or $25 held in the revolving fund at June 30, 2018.

144

Southern California Public Power Authority Magnolia Power Project Supplemental Schedule of Receipts and Disbursements in Funds Required by the Bond Indenture for the Year Ended June 30, 2019

_________________________________________(Amounts in Thousands)

Debt General Debt Service Operating Reserv Fuel GHG Service Reserve Reserve Reserve and Operating Revenue e Reserve Reserve Account Account Fund Contingency Fund Fund Fund Fund Fund Total Balance at June 30, 2018 $ 11,186 $ 17,587 $ 4,996 $ 34,621 $ 11,215 $ $ $ 6,842 $ 2,955 $ 89,402 Additions Investment earnings 51 234 62 402 96 13 6 81 42 987 Discount on investment purchase! 51 12 30 295 143 5 79 21 636 Distribution of investment earning! (102) (246) (92) (696) (239) 1,386 (11) _ _

Receipt from participants - - 48,238 48,238 Distribution of revenues 16,503 - 456 28,738 (51,140) 5,443 Other (2,575) (5,500) 12,077 1,503 (5,505)

Total additions 13,928 ** (5,043) 40,815 98 63 49,861 Deductions Construction expenses - ** 309 309 Operating expenses - 35,828 35,828 Payment of principal 7,210 - 7,210 Interest paid 6,301 6,301 Premium and interest on investmer - 13 (7) 3 3 12 Total deductions 13,511 13 302 35,828 3 3 49,660 Balance at June 30, 2019 $ 11,603 $ 17,574 $ 4,996 $ 29,276 $ 16,202 $ $ - $ 6,937 $ 3,015 $ 89,603 This schedule summarizes the receipts and disbursements in funds required under the Bond Indenture and has been prepared from the trust statements.

The balances in the funds consist of cash and investments at original cost. These balances do not include accrued Interest receivable, unrealized gain (loss) on investments, or $29 and $27 held in the revolving fund at June 30, 2019 and 2018, respectively.

145

Southern California Public Power Authority Canyon Power Project Supplemental Schedule of Receipts and Disbursements in Funds Required by the Bond Indenture for the Year Ended June 30, 2019 (Amounts in Thousands)

Debt Debt Service Cost of Revenue Operating Service Reserve Project General Issuance Fund Fund Fund Fund Fund Reserve Fund Total Balance at June 30, 2018 $ $ 1,500 $ 10,501 $ 8,072 $ 3,506 $ 3 $ 27 $ 23,609 Additions Investment earnings 3 26 25 99 16 20 189 Discount on investment purchases - 18 76 13 36 26 169 Distribution of investment earnings 293 (44) (91) (112) (46)

Receipt from participants 21,940 - - 21,940 Distribution of revenues (22,236) 6,347 9,222 - 6,667 Other - (4) 26 2 4 (2) (26) _

Total additions 6,343 9,258 2 56 6,665 (26) 22,298 Deductions Construction expenses - 461 - 3,560 4,021 Operating expenses - 4,119 - - 4,119 Principal payment - - 7,540 7,540 Interest paid - - 8,191 8,191 Accrued interest purchased on investn - - (18) 18 Debt issue costs - - - 1 1 Total deductions _ 4,580 15,731 (18) . 3,560 18 1 23,872 Balance at June 30, 2019 $ $ 3,263 $ 4,028 $ 8,092 $ 2 $ 6,650 $ $ 22,035 This schedule summarizes the receipts and disbursements in funds required under the Bond Indenture and has been prepared from the trust statements.

The balances in the funds consist of cash and investments at original cost. These balances do not include accrued interest receivable or unrealized gain (loss) on investments, or $8 and $10 held in the revolving fund at June 30, 2019 and 2018, respectively.

146

Southern California Public Power Authority Apex Power Project Supplemental Schedule of Receipts and Disbursements in Funds Required by the Bond Indenture for the Year Ended June 30, 2019

__ ______________________________________ (Amounts in Thousands)

Debt Debt Service Reserve and Revenue Depository Operating Service Reserve Contingency General Project Fund Fund Fund Fund Fund Fund Reserve Fund Total Balance at June 30, 2018 $ $ - $ 1,118 $ 15,798 $ 5,488 $ 3,664 $ 58 $ 6,523 $ 32,649 Additions Investment earnings 11 96 6 45 28 65 251 Discount on investment purchases 31 114 11 48 4 208 Distribution of investment earnings 380 (128) (120) (56) (76)

Receipt from participants 85,288 .

- 85,288 Distribution of revenues (85,679) 44,520 21,832 19,327 60,194 (42,782)

Other transfers 58 (13,831) (58) (3.581)

Other receipts 675 33 708 Total additions 60,194 2,412 21,890 5,529 (58) (3,512) 86,455 Deductions Construction expenses 18,639 18,639 Operating expenses 41,555 41,555 Payment of principal 9,545 9,545 Interest paid 12,316 12,316 Total deductions 60,194 21,861 82,055 Balance at June 30, 2019 $ $ - $ 3,530 $ 15,827 $ 5,488 $ 9,193 $ - $ 3,011 $ 37,049 This schedule summarizes the receipts and disbursements in funds required under the Bond Indenture and has been prepared from the trust statements.

The balances in the funds consist of cash and investments at original cost. These balances do not include accrued Interest receivable and unrealized gain (loss) on investments, or $15 and $13 held in the revolving fund at June 30, 2019 and 2018, respectively.

Southern California Public Power Authority Tieton Hydropower Project Supplemental Schedule of Receipts and Disbursements in Funds Required by the Bond Indenture for the Year Ended June 30, 2019 (Amounts in Thousands)

Reserve and Revenue Operating Debt Service Debt Service Contingency Fund Fund Fund Reserve Fund Fund Total Balance at June 30, 2018 $ $ 759 $ 2,155 $ 5,008 $ 419 $ 8,341 Additions Investment earnings 1 7 12 78 9 107 Discount on investment purchases - 10 10 20 Distribution of investment earnings 126 (7) (22) (88) (9)

Receipt from participants 6,017 6,017 Distribution of revenues (6,144) 2,783 3,361 - _ _

Other transfers - 1 1 Total additions _ 2,784 3,361 6,145 Deductions Acquisition costs - - - -

Operating expenses 2,941 2,941 Payment of principal - 950 950 Interest paid - 2,385 7 2,392 Total deductions _ 2,941 3,335 7 6,283 Balance at June 30, 2019 $ $ 602 $ 2,181 $ 5,001 $ 419 $ 8,203 This schedule summarizes the receipts and disbursements in funds required under the Bond Indenture and has been prepared from the trust statements.

The balances in the funds consist of cash and investments at original cost. These balances do not include accrued interest receivable, unrealized gain (loss) on investments, or $3 held in the revolving fund at June 30, 2019 and 2018.

148

Southern California Public Power Authority Milford I Wind Project Supplemental Schedule of Receipts and Disbursements in Funds Required by the Bond Indenture for the Year Ended June 30, 2019

_____________________ (Amounts in Thousands)

Debt Service General Operating Revenue Operating Debt Service Reserve Reserve Reserve Fund Fund Fund Fund Fund Fund Total Balance at June 30. 2018 $ $ 2,706 $ 14,479 $ 18,874 $ 2,520 $ 3,000 $ 41,579 Additions Investment earnings 6 18 4 232 35 26 321 Discount on investments - 10 104 47 10 17 188 Distribution of investment earnings 502 (28) (107) (279) (45) (43) _

Receipt from participants 28,992 28,992 Distribution of revenues (29,500) 10,630 18,870 _ . _

Other transfers - 2,548 (2,548)

Total additions 13,178 18,871 (2,548) 29,501 Deductions Operating expenses - 15,877 15,877 Payment of principal - 10,085 10,085 Interest paid - 8,545 8,545 Total deductions _ 15,877 18,630 34,507 Balance at June 30, 2019 $ $ 7 $ 14,720 $ 18,874 $ 2,520 $ 452 $ 36,573 This schedule summarizes the receipts and disbursements in funds required under the Bond Indenture and has been prepared from the trust statements.

The balances in the funds consist of cash and investments at original cost. These balances do not include accrued interest receivable, unrealized gain (loss) on investments, or $6 and $7 held in the revolving fund at June 30, 2019 and 2018, respectively.

149

, ' 1

Southern California Public Power Authority Milford II Wind Project Supplemental Schedule of Receipts and Disbursements in Funds Required by the Bond Indenture for the Year Ended June 30, 2019 (Amounts in Thousands)

Revenue Operating Debt Service Debt Service Fund Fund Fund Reserve Fund Total Balance at June 30, 2018 $ $ 6,209 $ 9,618 $ 3,216 $ 19,043 Additions Investment earnings 2 38 3 49 92 Discount on investments - 82 65 147 Distribution of investment earnings 237 (120) (68) (49)

Receipt from participants 17,409 - i 17,409 Distribution of revenues (17,648) 4,787 12,861 _ _

Other - - - - _

Total additions _ 4,787 12,861 17,648 Deductions Operating expenses - 7,017 7,017 Payment of principal - - 6,370 6,370 Interest paid - - 6,346 6,346 Total deductions 7,017 12,716 19,733 Balance at June 30, 2019 $ $ 3,979 9,763 $ $

J= 3,216 16,958 This schedule summarizes the receipts and disbursements in funds required under the Bond Indenture and has been prepared from the trust statements.

The balances in the funds consist of cash and investments at original cost. These balances do not include accrued interest receivable, unrealized gain (loss) on investments, or $4 and $5 held in the revolving fund at June 30, 2019 and 2018, respectively.

150

Southern California Public Power Authority Windy Point Project Supplemental Schedule of Receipts and Disbursements in Funds Required by the Bond Indenture for the Year Ended June 30, 2019

_________________________________________(Amounts in Thousands)

Revenue Operating Debt Service Debt Service i Fund Fund Fund Reserve Fund Total Balance at June 30, 2018 $ $ 6,182 $ 31,533 $ 10,262 $ 47,977 Additions Investment earnings 6 48 9 1 64 Discount on investments 70 241 195 506 Distribution of investment earnings 564 (118) (250) (196) -

Receipt from participants 79,760 39,286 41,044 160,090 Distribution of revenue (80,330) (80,330)

Total additions 39,286 41,044 80,330 Deductions Operating expenses 39,634 39,634 Payment of principal 22,020 22,020 Interest paid 18,515 18,515 Total deductions 39,634 40,535 80,169 Balance at June 30, 2019 $ $ 5,834 32,042 $ 10,262 $ 48,138 J=

This schedule summarizes the receipts and disbursements in funds required under the Bond Indenture and has been prepared from the trust statements.

The balances in the funds consist of cash and investments at original cost. These balances do not include accrued interest receivable, unrealized gain (loss) on investments, or $15 and $16 held in the revolving fund at June 30, 2019 and 2018, respectively.

151

Southern California Public Power Authority Linden Wind Energy Project Supplemental Schedule of Receipts and Disbursements in Funds Required by the Bond Indenture for the Year Ended June 30, 2019 (Amounts in Thousands)____________

Revenue Operating Debt Service Debt Service U.S. Treasury Fund Fund Fund Reserve Fund Direct Subsidy Total Balance at June 30, 2018 $ $ 2,139 $ 6,761 $ 2,324 $ 402 $ 11,626 Additions Investment earnings 1 18 13 9 41 Discount on investments - 13 61 46 120 Distribution of investment earnings 160 (31) (74) (55)

• Revenue from power sales 16,293 - 16,293 Distribution of revenue (16,454) 7,107 10,153 (806)

Other receipts - - 808 808 Total additions _ 7,107 10,153 2 17,262 Deductions Operating expenses - 6,867 6,867 Payment of principal - - 4,170 4,170 Interest paid - - 5,903 5,903 Total deductions 6,867 10,073 16,940 Balance at June 30, 2019 $ $ 2,379 $ 6,841 $ 2,324 $ 404 $ 11,948 This schedule summarizes the receipts and disbursements in funds required under the Bond Indenture and has been prepared from the trust statements.

The balances in the funds consist of cash and investments at original cost. These balances do not include accrued interest receivable, unrealized gain (loss) on Investments, or $3 held in the revolving fund at June 30, 2019 and 2018.

152

Southern California Pubiic Power Authority Southern Transmission System Project Supplemental Schedule of Receipts and Disbursements in Funds Required by the Bond Indenture for the Year Ended June 30, 2019 (Amounts in Thousands)

General Operating Revenue Reserve Fund Issue Fund Fund Fund Escrow Fund Total Balance at June 30, 2018 $ 3,243 $ 82,175 $ 4,487 $ $ $ 89,905 Additions Investment earnings 56 737 66 24 883 Discount on investment purchases 4 535 71 610 Distribution of investment earnings (60) (1.272) (137) 1,469 _ _

Revenue from transmission sales - 106,113 106,113 Distribution of revenue - 60,956 46,650 (107,606)

Bond proceeds 2018A 541 52,670 53,211 Other (931) 27 904 Total additions 60,566 46,677 53,574 160,817 Deductions Operating expenses - 40,505 40,505 Payment of principal 56,100 56,100 Interest paid - 20,755 20,755 Debt issuance costs 528 528 Premium and interest on investment purchases (2) (2) 2008A Bond redemption - escrow - 44,461 44,461 2009A Bond redemption - escrow 9,113 9,113 Total deductions (2) 77,383 40,505 53,574 171,460 Balance at June 30, 2019 $ 3,245 $ 65,358 10,659 $ $ $ 79,262

=L -

This schedule summarizes the receipts and disbursements in funds required under the Bond Indenture and has been prepared from the trust statements.

The balances in the funds consist of cash and investments at original cost. These balances do not include accrued interest receivable, unrealized gain (loss) on investments, or $31 and $36 held in the revolving fund at June 30, 2019 and 2018, respectively.

153

Southern California Public Power Authority Mead-Phoenix Project Supplemental Schedule of Receipts and Disbursements in Funds i Required by the Bond Indenture for the Year Ended June 30, 2019 (Amounts in Thousands)

Reserve and General Revenue Debt Service Operating Contingency Reserve Surplus Fund Account Fund Fund Fund Fund Total Balance at June 30, 2018 $ $ 7,984 $ 910 $ 254 $ 6 $ 119 $ 9,273 Additions Investment earnings 2 30 15 6 2 55 Discount on investment earnings - 49 - - 49 Distribution of investment earnings 102 (79) (15) (6) (2)

Transmission revenue 9,721 - - 9,721 Distribution of revenues (10,425) 8,720 1,681 24 Other 600 - 31 > 631 Total additions 8,720 1,712 24 10,456 Deductions Operating expenses - - 1,719 1,719 Construction expenses - - - 52 52 Principal payment - 7,185 - 7,185 Interest paid - 1,471 - 1,471 Total deductions _ 8,656 1,719 52 10,427 Balance at June 30, 2019 $ $ 8,048 $ 903 $ 226 6 119 $

A A 9,302 This schedule summarizes the receipts and disbursements in funds required under the Bond Indenture and has been prepared from the trust statements.

The balances in the funds consist of cash and investments at original cost. These balances do not include accrued interest receivable, unrealized gain (loss) on investments, or $3 held in the revolving fund at June 30, 2019 and 2018.

154

Southern California Public Power Authority Mead-Adelanto Project Supplemental Schedule of Receipts and Disbursements in Funds Required by the Bond Indenture for the Year Ended June 30, 2019

__________________________________ (Amounts in Thousands)

Revenue Debt Service Operating Reserve and General Surplus Fund Account Fund Contingency Reserve Fund Total Balance at June 30, 2018 $ $ 22,647 $ 952 $ 509 $ 13 $ 5,936 $ 30,057 Additions Investment earnings 7 29 12 9 70 127 Discount on investment earnings - 178 60 238 Distribution of investment earnings 358 (207) (12) (9) (130)

Transmission revenue 28,674 28,674 Distribution of revenues (29,214) 24,416 5,442 (365) (279)

Other receipts 200 7 207 Other transfers (25) 25 - - - - -

Total additions 24,441 5,442 (365) (272) 29,246 Deductions Construction expenses - - 117 117 Operating expenses - - 5,588 5,588 Principal payment - 20,705 20,705 Interest paid - 3,280 3,280 Accrued interest on investment purchase - - - - - - -

Total deductions . 23,985 5,588 117 29,690 Balance at June 30, 2019 $ $ 23,103 $ 806 $ 27 $ 13 $ 5,664 29,613

_L This schedule summarizes the receipts and disbursements in funds required under the Bond Indenture and has been prepared from the trust statements.

The balances in the funds consist of cash and investments at original cost. These balances do not include accrued interest receivable, unrealized gain (loss) on investments, or $11 and $10 held in the revolving fund at June 30, 2019 and 2018, respectively, 155

Southern California Public Power Authority Pinedale Project Supplemental Schedule of Receipts and Disbursements in Funds Required by the Bond Indenture for the Year Ended June 30, 2019 (Amounts in Thousands)

General Revenue Operating Debt Service Reserve Project ' Capital Fund Fund Fund Fund Fund Fund Total Balance at June 30, 2018 $ $ 6,972 $ 2,297 $ 39 $ 1,685 $ 676 $ 11,669 Additions Investment earnings 1 88 19 1 36 10 155 Discount on investment purchases - 28 - 28 Distribution of investment earnings 19 - (19) - _ _

Receipt from participants 2,877 2,054 4,931 Sales of natural gas 381 4,019 - 4,400 Distribution of revenues (3,280) 917 2,580 (217)

Other receipts 2 16 - 18 Other transfer - - - (21) 21 Total additions 7,122 2,580 1 15 (186) 9,532 Deductions Construction expenses - - 218 218 Operating expenses - 9,380 - 9,380 Payment of principal - - 1,770 1,770 Interest paid - - 1,003 1,003 Total deductions 9,380 2,773 218 12,371 Balance at June 30, 2019 $ $ 4,714 $ 2,104 $ 40 $ 1,700 $ 272 $ 8,830 This schedule summarizes the receipts and disbursements in funds required under the Bond Indenture and has been prepared from the trust statements.

The balances In the funds consist of cash and investments at original cost. These balances do not include accrued interest receivable, unrealized gain (loss) on Investments, or $2 held in the revolving fund at June 30, 2019 and 2018.

156

Southern California Public Power Authority Barnett Project Supplemental Schedule of Receipts and Disbursements in Funds Required by the Bond Indenture for the Year Ended June 30, 2019

_________________________________________ (Amounts in Thousands)

General Revenue Operating Debt Service Reserve Project Capital Fund Fund Fund Fund Fund Fund Total Balance at June 30, 2018 $ $ 2,475 $ 5,387 $ 23 $ 34,276 $ 680 $ 42,841 Additions Investment earnings 2 54 30 111 14 211 Discount on investment purchases - 4 21 590 615 Distribution of investment earnings 51 (51)

Receipt from participants 6,627 98 6,725 Sales of natural gas 2,034 579 2,613 Distribution of revenues (8,714) 2,655 6,059 (80) 80 Total additions . 3,390 6,059 621 94 10,164 Deductions Construction expenses - 97 97 Operating expenses - 2,773 39 2,812 Payment of principal - 4,150 4,150 Interest paid - 2,357 2,357 Total deductions . 2,773 6,507 39 97 9,416 Balance at June 30, 2019 $ $ 3,092 $ 4,939 $ 23 $ 34,858 $ 677 $ 43,589 This schedule summarizes the receipts and disbursements in funds required under the Bond Indenture and has been prepared from the trust statements.

The balances in the funds consist of cash and investments at original cost. These balances do not include accrued interest receivable, unrealized gain (loss) on investments, or $3 held in the revolving fund at June 30, 2019 and 2018.

Southern California Public Power Authority Prepaid Natural Gas Project No. 1 Supplemental Schedule of Receipts and Disbursements in Funds Required by the Bond Indenture for the Year Ended June 30, 2019 (Amounts in Thousands)__________________________________

Revenue Operating Debt Service Fund Fund Fund Total Balance at June 30, 2018 $ . $ 13,155 $ 3,923 $ 17,078 Additions Investment earnings 6 565 231 802 Distribution of investment earnings 489 (489) - -

Receipt from gas sales 15,874 - - 15,874 Distribution of revenues (23,310) 2,626 20,684 -

Commodity swap settlement 6,941 - 1,130 8,071 Other receipts - - - -

Total additions . 2,702 22,045 24,747 Deductions A & G expenses - 2,583 - 2,583 Payment of principal - - 5,385 5,385 Payment of interest - - 16,109 16,109 Total deductions 2,583 21,494 24,077 Balance at June 30, 2019 $ 13,274 $ 4,474 $ 17,748 J= -

This schedule summarizes the receipts and disbursements in funds required under the Bond indenture and has been prepared from the trust statements.

The balances in the funds consist of cash and investments at original cost. These balances do not include accrued interest receivable, unrealized gain (loss) on investments, or $4 and $3 held in the revolving fund at June 30,2019 and 2018, respectively.

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