2.2. ERMUSR 12-13-2016 - Laserfiche WebLink

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all customers equally, s specific rate design recommendations were included for each retail p g rate class. David noted that the proposed rates would increase estimated revenues for the residential and commercial non-demand customers by approximately 1.8%, and increase the demand and large demand by approximately 3.7%. There was discussion. Both staff and the Commission commented that it was reassuring to know that ERMU's existing class revenues are very close to the allocated cost to serve them. David explained the Existing and Proposed Rate Options provided in Exhibit 4-A. There was discussion on establishing a different rate for large commercial/industrial demand customers. There was also discussion on considering a reduction in the demand billing threshold from 50 kW to 25 kW. David also touched on other rate considerations including Net Metering and Economic Development Rates. Troy Adams pointed out that the cost-of- service study can be used to fulfill the requirements of the State statute governing net metering. Per Troy Adams' request, David Berg provided the history behind economic development rates and the pros and cons of offering them. David explained that in today's cost environment, most utilities' offering an economic development rate are offering a subsidized rate that is supported by the utility's existing customers. He shared that if the costs to serve new customers is similar to the costs to serve existing customers,there is not a cost-of-service justification for an economic development rate. There was discussion. Al Nadeau made a motion to receive the Final Electric Cost of Service and Rate Design Study prepared by Dave Berg Consulting, LLC. Daryl Thompson seconded the motion. Motion carried 3-0. 4.2 RFP Auditing Firm At the October 11, 2016 Commission meeting, staff presented the results of the Auditing Firm RFP and their recommendation for moving forward with the current firm of Abdo, Eick, and Meyers LLP (AEM). Keeping the current auditors would be a cost neutral move for 2016, and an approximate $3,500 increase of each of the remaining four years. The Commission directed staff to bring back some proposed cost savings of approximately $3,500 in order to substantiate that recommendation. Theresa Slominski shared that in reviewing forecasted expenses for potential savings,there is a notable decrease in expenses for our MMTG fees resulting in an annual savings of $6,100. In addition, we will be receiving an increase in revenue received through the MISO reporting which is projected to be approximately $150,000 per year. Both of these items would be sufficient in offsetting the RFP increase. John Dietz stated that he didn't feel comfortable voting in favor of this as there is still money being left on the table. John said that what staff had identified was an increase in revenue and a cost savings in fees that would have occurred anyway, versus making a budget cut to offset the $3,500. Daryl Thompson inquired as to how much of a disruption it would cause to switch auditors. Theresa responded that there would be a learning curve. She also explained that we have a lot of irons in the fire which our current auditors have Page 3 Special Meeting of the Elk River Municipal Utilities Commission November 15,2016 22