Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58 Page 59 Page 60 Page 61 Page 62 Page 63 Page 64 Page 65 Page 66 Page 67 Page 68 Page 69 Page 70 Page 71 Page 72 Page 73 Page 74 Page 75 Page 76 Page 77 Page 78 Page 79 Page 80 Page 81 Page 82 Page 83 Page 84 Page 85 Page 86 Page 87 Page 88 Page 89 Page 90Seattle City Light 2015 Annual Report THE CITY OF SEATTLE—CITY LIGHT DEPARTMENT NOTES TO FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014 - 62 - Energy received and expenses incurred under these and other long-term purchased power agreements at December 31, 2015 and 2014 were as follows: ($ in millions) 2015 2014 2015 2014 Bonneville Block 78.7 $ 78.1 $ 269.8 266.5 Bonneville Slice 77.8 77.5 297.8 322.0 Long-term purchase power—Bonneville 156.5 155.6 567.6 588.5 Lucky Peak, including royalties 6.3 6.3 31.7 35.2 British Columbia - High Ross Agreement 13.4 13.4 35.4 35.1 Grant County Public Utility District 3.2 3.2 2.7 2.5 Columbia Basin Hydropower 6.6 6.1 29.5 31.1 Bonneville South Fork Tolt billing credit (3.3) (3.3) - - Renewable energy - State Line Wind 20.8 23.7 34.2 40.8 Renewable energy - other 8.7 7.1 15.5 12.5 Exchanges and loss returns energy at fair value 6.1 8.9 71.2 14.5 Long-term purchased power booked out (4.7) (6.7) (24.0) (25.3) Long-term purchased power—other 57.1 58.7 196.2 146.4 Total 213.6 $ 214.3 $ 763.8 734.9 Expense Average Megawatts Renewable Energy Purchase and/or Exchanges—The Energy Independence Act, Chapter 19.285 Revised Code of Washington, requires all qualifying utilities in Washington State to meet certain annual targets of eligible new renewable resources and/or equivalent renewable energy credits as a percentage of total energy delivered to retail customers. The annual targets are: at least 3% by 2012, at least 9% by 2016, and at least 15% by 2020. The Department’s 2015 and 2014 resource portfolio met the 3% target. Energy Exchange—Northern California Power Agency (NCPA) and the Department executed a long- term Capacity and Energy Exchange Agreement in March 1993. The Department delivers energy to NCPA from June through October 15. NCPA returns energy under conditions specified in the contract at a 1.2:1 ratio of exchange power, from November through April. The agreement includes financial settlement and termination options. In a letter NCPA dated May 17, 2011, NCPA gave seven year’s advance written notice to the Department terminating the agreement effective no later than May 31, 2018. Fair Value of Exchange Energy—Exchange energy receivable and the related regulatory gains at December 31, 2015 and 2014, were valued using Kiodex Forward Curves, and Dow Jones U.S. Daily Electricity Price Indices for settled deliveries. An income valuation technique that uses interest rate forecasts from HIS Global Insight is used to discount for present value based on the interest rate for U.S. Government Treasury constant maturities, bond-equivalent yields by the future month of the transactions (see Note 15 Deferred Inflows of Resources). 62