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W A T E R I E N L R 6 't I I r r <br />1!V 19& RIVERSIDE PUBLIC UTILITIES <br />PUBLIC UTILITI F -S Board Memorandum <br />BOARD OF PUBLIC UTILITIES DATE: AUGUST 13, 2018 <br />ITEM NO: 8 <br />SUBJECT: APPROVAL OF THE ONLINE SUBSCRIPTION SERVICE WITH S&P GLOBAL MARKET <br />INTELLIGENCE LLC IN THE AMOUNT OF $48,620 <br />ISSUE: <br />Approval of payment to S&P Global Market Intelligence LLC for the annual RatingsDirect online <br />subscription service. <br />RECOMMENDATION: <br />That the Board of Public Utilities approve the expenditure to S&P Global Market Intelligence LLC in the <br />amount of $48,620 for the Master Subscription Agreement for the 2018-19 annual RatingsDirect online <br />subscription service. <br />BACKGROUND: <br />Riverside Public Utilities (RPU) electric power supply activities are directed toward the goal of providing <br />electricity to its retail customers at the best available price consistent with sound business practices while <br />maintaining the reliability of the electric system. Effective wholesale counterparty management and credit <br />analysis is essential to mitigate the counterparty credit risk associated with physical or financial <br />transactions in electricity markets. <br />The original Power Resources Counterparty Risk Policy was approved by City Council on February 15, <br />2002, and the revised Power Resources Risk Management Policies were approved by City Council in <br />2013. Therein, one of the objectives in the Wholesale Counterparty Risk Management Policy is to preserve <br />RPU's capital, liquidity, and supply reliability by limiting wholesale counterparty credit risk to acceptable <br />levels. <br />On June 24, 2003, City Council authorized the City Manager, or his designee, to execute the Master <br />Subscription Agreement with Standard & Poor's for "RatingsDirect — Global Issuers" research services and <br />Moody's KMV Subscription Agreement with Moody's KMV Company for "CreditEdge" services. Unless a <br />notice of termination is provided, this agreement automatically renews annually. <br />DISCUSSION: <br />Credit limits for Power Resources counterparties shall be established for credit worthy counterparties. <br />Analytical procedures for granting open lines of credit and managing counterparty exposures are required. <br />All counterparties will be reviewed for public debt ratings as published by Nationally Recognized Statistical <br />Rating Organizations (NRSRO) such as Standard & Poor's Rating Group, Moody's Investor Services, and <br />Page 76 <br />