4.2. ERMUSR 12-12-2012 - Laserfiche WebLink

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Elk River Municipal Utilities UTILITIES COMMISSION MEETING TO: FROM: Elk River Municipal Utilities Commission Troy Adams, P.E. —General Manager John Dietz—Chair Daryl Thompson— Vice Chair Al Nadeau—Trustee MEETING DATE: AGENDA ITEM NUMBER: December 12, 2012 4.2 SUBJECT: 2013 Budget BACKGROUND: In November, the Commission reviewed the 2013 budget. The Commission had a number of issues with the budget as presented. Direction on water rates indicated that 5% was too much of an increase in one year and stated a target of 2.5% for 2013 increase. There were questions on the customer accounts expense and what was included, there was discussion on out of state travel and proposed staff additions. The budget currently reflects a 3% Cost of Living Adjustment (COLA). No decision on COLA was made by the Commission at the November meeting. DISCUSSION: Electric Department Expense Budget As mentioned before, wholesale power costs makes up approximately 74% of the required operating revenue and the wholesale rates set by Great River Energy (GRE) have an enormous impact on ERMU's rates. The 2013 wholesale power rates have been finalized and are the same as preliminary rates presented. This results in a 4.1% increase in wholesale power cost to ERMU, and a 4.4% increase in ERMU revenue to cover the budgeted expenses. Notable items in the electric budget for 2013 are(again): • $0 Generation Credit for income with the elimination of the standby engines agreement with GRE • Continued current efficiency with the LFG plant in terms of higher production and lower maintenance • New starting 2013 - SCADA expenses, estimate $8,000; radio licensing cost($75 per radio) $3,000 included in Distribution Expense • Maintenance reduction in meters as change-outs completed, and shifted to underground services • Mapping included $20,000 to include outside help for specialized areas Jr r oERED IE Page 1 of 3 NATURE Reliable Public Power Provider POWERED To SERVE