5.3. ERMUSR 05-10-2011 - Laserfiche WebLink

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Elk River ^-~ Municipal Utilities 13069 Orono Parkway • P.O. Box 430 Elk River, MN 55330-0430 UTILITIES COMMISSION MEETING Phone: 763.441.2020 Fax: 763.44 L8099 TO: FROM: Elk River Municipal Utilities Commission Troy Adams, P.E. - Director of Operations John Dietz, Chair Daryl Thompson, Vice Chair Al Nadeau, Trustee MEETING DATE: AGENDA ITEM NUMBER: Ma 10, 2011 5.3 SUBJECT: Review and Consider Revision to Off Peak Demand Electric Service Tariff BACKGROUND: With the December 2010 Commission approval of the 2011 budget and by the January 2011 Commission action to receive, the electric tariffs were made effective January 1, 2010. Included with these tariffs is an Off Peak Demand Electric Service tariff. This tariff is attached for reference. DISCUSSION: The Off Peak Demand Electric Service tariff has a higher energy rate than the Demand Electric Service tariff, but offers a substantially lower demand rate for a specified off peak time period. The intent of this rate is to encourage commercial customers to shift load to an off peak time through lower overall electric costs. By shifting the customers load to this off peak time, ERMU lowers our wholesale power costs, improves system load factor, and utilizes the distribution system more effectively. In the past, this tariff has not been utilized by our commercial customers. However, this tariff does have the potential to be used as apro-business tool to help local commercial customers lower their electric cost in a way that is mutually beneficial to ERMU. Over the past year, ERMU explored options to increase use of this tariff by our commercial customers. In has been identified that this tariff would be better received by potential uses if the off peak time period were to be revised. Changing the start of the On- Peak period from lpm to 2pm would allow greater opportunity to utilize this rate on our commercial customers without increasing the wholesale power cost risk exposure. ERMU is currently working with one commercial customer who has switched to this tariff but is interested in this proposed change in On- Peak start time. ACTION REQUESTED: Staff recommends the Commission approve the revision of the Off-Peak Demand Electric Service tariff changing the On-Peak time period start time from 1 pm to 2pm.