5.1. ERMUSR 10-12-2010 - Laserfiche WebLink

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Total forecasted electric sales (kWh) = 5.3 L% (Residential = 0%, Commercial = 0%, Industrial = -1%, Data Centers = 26.69%) Connect fees = $50,000 Connect unit fee = $1400/residential lot Preliminary Electric Wholesale Rate Increase = 4% Preliminary Electric Retail Rate Increases Residential =+4.6% (blended increase for a typical customer) Commercial = +2.5% (blended increase in for a typical customer) Industrial/Data Centers = 0% change in demand charge and an energy cost increase from $0.0545 to $0.0575 ($/kWh) Attached is the electric department expense budget for Commission review. Water Department Expense Budget The water expense budget has fewer urilmowns at this point that the electric. The water rate analysis conducted in spring of 2010 established a cash flow plan that results in the rates remain unchanged for 201 1. Also determined during the analysis was that the water connection charge will increase from $2500 to $3000. The 2011 forecast for water sales is slightly down and the connections are slightly up. There is also the addition of the revenue from the water tower antenna space leases. Again in 2011 the water department has budgeted for summer help. In addition, the water department has budgeted for the addition of 1 full time employee to replace the 1 full time employee that left during 2009. Attached is the water department expense budget for Commission review. Conservation Improvement Program (CIP) Budget The state had mandated a change in CIP effective 2010 that now requires there to be 1.5% energy reduction instead of spending 1.5% of revenue on energy reduction. This requirement of 1.5% energy reduction is not capped at a specific cost and it complicates the process because energy reduction now needs to be quantified. The state has still not given the mandate any "teeth" to enforce or penalize. However, as Energy City, we need to make the best effort to meet the target. We have received disappointing news from Great River Energy that the Conservation Improvement Program rebates that ERMU passes on to our customer may be eliminated. The 2011 expense budget reflects the worst case scenario of GRE's program being completely eliminated and ERMU realizing the full cost of $310,000. Project Conserve continues to be very important to this program and a large part of ERMU meeting the State's required energy reduction. Attached is the proposed 2010 CIP budget for commission review. ACTION REQUESTED: No action required at this time.