Seattle City Light 2016 ANNUAL REPORT | Audited Financial Statements 71 THE CITY OF SEATTLE—CITY LIGHT DEPARTMENT NOTES TO FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 - 71 - Minimum payments under the operating leases are: Year Ending Minimum December 31 Payments ($ in millions) 2017 1.5 $ 2018 1.1 2019 1.0 Total 3.6 $ 2017 Capital Program—The budget for the Department’s 2017 program for capital improvement, conservation, and deferred operations and maintenance including required expenditures on assets owned by others is $541.8 million. At December 31, 2016, the Department had approximately $191.0 million in commitments relating thereto. Department overhead costs and other allocations associated with the capital program are not included in the budget amount. 2017 Operations and Maintenance Budget—The Department’s 2017 Operating and Maintenance budget is $1,041.4 million for labor and related benefits, purchased power, outside services, supplies, taxes, injuries and damages, interest, debt-related costs, maintenance of Department assets, and other non-capital expenditures incurred in the normal course of operations. Federal Energy Regulatory Commission Fees—Estimated Federal land use and administrative fees related to hydroelectric licenses total $203.5 million through 2055; these estimates are subject to change. The estimated portion of fees attributed to the Skagit and Tolt licenses are excluded after 2025, at which time their current FERC licenses expire. The estimated portion of Boundary fees is included through 2055, the year in which the current license issued by FERC expires. The current Boundary FERC license and related issues are discussed below. New Boundary License—The Department’s FERC license for the Boundary Project expired on September 30, 2011 and a new license was issued on March 20, 2013 with a 42-year life and a total cost of $48.6 million. The terms and conditions of the new license have been evaluated and the Department is in the license implementation process, which imposes mitigation of endangered species including water quality standards and conservation management. As part of the application process, the Department negotiated a settlement with external parties such as owners of other hydroelectric projects, Indian tribes, conservation groups and other government agencies. The settlement sought to preserve the Department’s operational flexibility at Boundary Dam while providing for natural resource protection, mitigation and enhancement measures. The cost projections for such mitigation over the expected 42-year life of the license, included in the Department’s license application, were estimated to be $371.0 million adjusted to 2016 dollars, of which $42.9 million were expended through 2016. Projected mitigation cost estimates are subject to revision as more information becomes available. Skagit and South Fork Tolt Licensing Mitigation and Compliance—In 1995, the FERC issued a license for operation of the Skagit hydroelectric facilities through April 30, 2025. On July 20, 1989, the FERC license for operation of the South Fork Tolt hydroelectric facilities through July 19, 2029, became