5.3 ERMUSR 07-11-2017 - Laserfiche WebLink

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The aide to construction collected from the developer upfront helps to pay for approximately 50% of the initial cost of labor and materials. The fixtures are then depreciated over 20 years. Replacement is funded through energy sales on an electric tariff or a fixed fee per fixture. The 2017 ERMU Street/Security Light Service Tariff and 2017 ERMU Fee Schedule are attached for reference. ERMU also has a unique lighting situation in downtown Elk River where there are decorative two fixture light poles. In conjunction with the US HWY 10 bridge project in Elk River,the City will be adding a trail that will lead from Lake Orono Park into downtown. ERMU is in the process of selecting a decorative light pole that can be used on this trail and transition to a matching decorative light pole to replace the existing downtown streetlights. When transferred, ERMU would look to fix and paint many of these streetlights to extend their life. As previously noted, not all of these streetlights work and many have been damaged. ERMU would need to replace selected areas initially and potentially reuse some of the removed fixtures to replace broken fixtures. Once transferred,the City of Otsego would relinquish their authority to select the streetlight fixtures style. That authority would need to be ERMU's. Based on the remaining life of these fixtures and the potential for reusable parts, ERMU staff has estimated a supplemental transfer of$70,000 would be needed in addition to asset transfer. This is a prorated aide to construction equivalent. These streetlights would then become part of the ERMU capital project projects and be scheduled with applicable priority with all system projects. The City of Otsego had expressed interest in having their Otsego Waterfront commercial development outfitted with the same decorative lighting the ERMU selects for Elk River's downtown. This would be possible, but would require an additional premium per fixture. Overhead Electric Feeder Along County Road 39 There is an additional consideration. In January 2008, the City of Otsego informed ERMU that an upgrade portion of the 2.5 mile overhead electric distribution feeder that runs from the ERMU Otsego substation on CSAH 39 west to the Mississippi Cove residential development would need to be relocated to underground electric within 10 years or before CSAH 39 is upgraded. This was a waiver granted by the City of Otsego Council to delay an ordinance which required upgraded overhead electric systems to be placed underground. This county road has not been upgraded and we are approaching the 10 year mark. The purpose of the ordinance is aesthetics. The Otsego City Council meeting minutes from January 14, 2008, are attached. This issue is discussed in agenda item 9.1. There are multiple concerns for ERMU with this requirement. First, to retire an asset before its end of life is an undue financial burden on ERMU's customers. Second, the replacement of an overhead electric feeder with an underground electric feeder is not a one-for-one change. With overhead electric, restoration from damage is quicker than with underground. Because of this, ERMU can maintain high reliability and short outage times. Underground maintenance takes significantly longer. Because of this, ERMU loops all underground facilities allowing for an alternate power source while maintenance is performed. So the underground facilities required to accomplish the same function as the overhead facilities nearly double the amount of equipment and could more than quadruples the cost. Page 2 of 3 194