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)44-h- <br /> Elk River <br /> Municipal Utilities <br /> 13069 Orono Parkway <br /> P.O. Box 430 <br /> Elk River,MN 55330 <br /> (763) 441-2020 <br /> UTILITIES COMMISSION MEETING <br /> TO: FROM: <br /> Elk River Municipal Utilities Commission Theresa Slominski— Finance and Office <br /> John Dietz—Chair Manager <br /> Daryl Thompson—Vice Chair <br /> Al Nadeau—Trustee <br /> MEETING DATE: AGENDA ITEM NUMBER: <br /> November 13, 2012 5.3 <br /> SUBJECT: <br /> Review 2013 Budget: Water and Electric Rates I <br /> BACKGROUND: <br /> In preparation for budget approval in December, staff continues to work through the 2013 budget <br /> process. Based on the preliminary rate increase notifications and projected expense increases and <br /> capital expenditures, a preliminary balanced budget has been drafted. <br /> DISCUSSION: <br /> Electric Department Expense Budget <br /> As mentioned before, wholesale power costs makes up approximately 74% of the required <br /> operating revenue and the wholesale rates set by Great River Energy(GRE)have an enormous <br /> impact on ERMU's rates. The 2013 wholesale power rates have not yet been finalized by the <br /> GRE board but their preliminary rates are designed to provide a 4% increase in GRE revenue <br /> from wholesale power sales. As the budget with preliminary wholesale rates stand, we will <br /> need an increase of approximately 4.5% in revenue to recover the increases associated with <br /> the whole sale power costs as applied to the forecasted power sales, and remaining increased <br /> expenses. <br /> Notable items in the electric budget for 2013 are: <br /> • $0 Generation Credit for income with the elimination of the standby engines <br /> agreement with GRE <br /> • Continued current efficiency with the LFG plant in terms of higher production and <br /> lower maintenance <br /> ® POWERED BY <br /> POWERED I <br /> Reliable Public <br /> Power Provider POWERED To SERVE <br />