6.2. ERMUSR 05-13-2003 - Laserfiche WebLink

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5) Great River Energy may possibly be changing their transmission voltage from 69 kv to 115 kv in the 2010 to 2012 time frame when Elk River's electric load exceed 70 MW±. This change will effect our substation transformers. Line 42 reflects $1,000,000 in expenditures in 2010 and 2012 for substation modifications. Conclusion for Electric Department. Our goal is to maintain approximately $2,000,000 in cash balance (line 63). This study shows we can still maintain our desired level of cash reserves while not passing on all of GRE wholesale rate increases. This is good, for it will allow us to get our demand rate more competitive. Our residential and non demand rates are competitive, the demand rate is approximately 10% higher than our competition. This updated study indicates the same trends as previous versions. Water Department 1) Water sales increase at 5% to 6% (line 8). This may be conservative depending upon the weather. 2) The connection fees (line 10 WAC fees) reflect a slight slowdown for 2003, 2004, and 2005 but increase thereafter. 3) Revenue from sales (line 13) include an approximate 3%±rate increase annually. 4) The second page reflects capital outlays (line 4-11), bond issuance (line 13-19), and maintenance and repair operational (line 47-56). The major cost items are highlighted for your convenience. Conclusion for Water Department. Our goal is to maintain approximately $2,000,000 in cash balance (line 51) but will be difficult to achieve. Our debt payments (line 45 of second page) remain very high and exceed $824,000 in 2007. This study reflects by 2009, we can start paying for some of our capital outlay without or possibly only partial bonding, instead of bonding for the entire project. We will be operating close to the "wire" for the next couple of years. This updated study indicates about the same trends as previous versions except the cash reserve balance continues to deteriorate . We may need to consider raising water rates faster than 3% or delay some of the projected capital projects. It is difficult to predict with any accuracy 10 years in the future particularly with growth and weather being critical factors. The trends these studies provide are more important and are a great tool for guiding future decisions.