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compliance with the new Environmental Protection Agency(EPA)regulations.Mike shared <br /> that we haven't had a chance to sit down with Minnesota Municipal Power Agency(MMPA)to <br /> determine what their interest is in having our assets on the Midcontinent Independent System <br /> Operator(MISO)market,but based on the current rate we have contracted with GRE,and the <br /> $300,000 investment associated with the emission upgrades,staff is leaning towards using the <br /> engines for emergency use only. There was further discussion.Staff will bring back a <br /> recommendation at December commission meeting. <br /> Daryl Thompson mentioned that in the news we've been hearing a lot about the power grids, <br /> and what the effects would be if those grids were to go down.He inquired as to whether we <br /> have some type of backup plan if the central grid were to be hit. Staff responded on how our <br /> diesel generation facility could be used for an emergency situation such as that. <br /> 5.0 NEW BUSINESS <br /> 5.1 2016 Budget: Rates and Review <br /> Troy Adams presented the 2016 electric and water rates. The 2016 wholesale power rates <br /> have been approved by the GRE board which results in a projected 2%impact to ERMU. <br /> The increase in wholesale power costs are passed through in ERMU's retail rates. As a <br /> result,the proposed ERMU budget reflects a projected 1.25%rate increase in retail electric <br /> rates. There was further discussion.Notable items in the electric budget included: An <br /> estimate of 1.0%growth in usage, higher growth for data centers;NISC software and <br /> implementation costs; and electric service territory acquisition costs. There was further <br /> discussion on the NISC software and implementation costs. Staff gave some example of the <br /> problems we've had with using a third party cloud server. ERMU staff has enlisted the help <br /> of Bob Pearson from the IT Department to help research all of our options with switching <br /> over to an in-house server. Daryl Thompson asked if we could partner with the city on the <br /> in-house server that would be required. Staff responded. <br /> Now that the water rates have been adjusted to meet the long term water capital project <br /> projections, ERMU is in a positon to pass through smaller but more regular rate increases. <br /> The blended result for a typical residential customer is a 2.0%rate increase for 2016. <br /> Notable items for the water budget included: maintenance of facilities;NISC software and <br /> implementation costs; and the construction of a new filter to be located at the Well#7 Filter <br /> Plant.John Dietz wanted to know if we have many customers that fall in the 2"d and 3rd tier <br /> rates. Staff responded. There was further discussion on water conservation and the <br /> Department of Natural Resources (DNR)mandates. <br /> After presenting the proposed 2016 budgets and the highlighted changes, staff reached out <br /> to the Commission to see if they had any questions. For the electric revenue and expense <br /> budget,John Dietz asked for further clarification on disconnect&reconnect charges and <br /> the consulting fees. Staff responded. The Commission had a few questions and there was <br /> Page 3 <br /> Special meeting of the Elk River Municipal Utilities Commission <br /> November 17,2015 <br />