5.2. ERMUSR 07-15-2014 - Laserfiche WebLink

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on the draft to help develop a handbook for consideration by the Commission. Staff looks to bring the draft of the handbook to the Commission in the future. Financial Oversight and Budgeting: The complexities to public utilities' finances are increasing with the changing world we live in. The shift to a global economy,the changes in power generation and transmission markets, the increase in Federal and State regulations and unfunded mandates, the responsibilities to our local government, the perception of our community, these are all important issues for a utility to address to have long term financial strength. Public power has the added complexity of balancing between operating like a business and being overseen like government. If any of these components are weighted too heavily, a utility can suffer over the long term. There is public pressure to minimize rates yet maintain a fiscally healthy utility while providing safe and reliable utility services. At ERMU we have done a great job setting multiple key annual financial targets including debt coverage ratio, cash reserves policies, and target operating income and margins. Much of this is done through the development of the annual budget and the review of the financial audit. In attending this conference as well as others, it is apparent that compared to many public power providers ERMU's financial policies and practices are strategic,progressive, and often already well established. We have set the bar high for others. Employee Recruitment, Retention, and Development: Workforce development is one of the four categories used in the APPA RP3 evaluation. Although ERMU has been recognized nationally as one of the very few with the RP3 designation, we scored lower in the workforce development section. In the short term, ERMU is still able to meet the operational goals. But in the long term, ERMU has been in a compromised position not being able to develop and retain employees. All positions are important,but the discussions at the conference really focused on the exposure that public utilities have with losing upper management and critical skill positions. To help position ERMU to be market competitive, the Commission recently established the Wage &Benefits Committee as a vehicle for compensation review. The Commission also has recently adopted a multi-group pay plan to create improved flexibility for the Commission to follow multiple labor markets. These changes have put ERMU ahead of other public power providers by providing the Commission the ability to analysis sensitive data and appropriately adapt to changing markets. Other key topics discussed were: The path to electric municipalization for Boulder, Colorado; Small modular nuclear reactor developments; Electric service territory acquisition developments; Analysis and selection of a wholesale power provider; National Information Systems Cooperative(NISC); Municipal transmission ownership and regulation; Communicating the public power message to the customers; The value of the integrated grid and using utility-scale and distributed energy resources; and legislative and regulatory issues. Overall,this conference provided a fire-hose of information and was well worth the time for Commission Vice Chair Al Nadeau and me to attend. Next year the APPA National Conference will be held June 5th- 10th in Minneapolis,MN. I P O I E H E D 8 1 Page 4 of 4 NATURE Reliable Public Power Provider P O W E R E D T o S E R V E 75