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Separate from the wholesale power expense,the electric department expenses increased by <br /> approximately 3%. But with growth and the lower than expected wholesale power cost <br /> component, the preliminary revenue increase projection need for ERMU electric results in a <br /> revenue increase under 1%. We have further considerations to be finalized in December with <br /> the MMPA analysis, and COLA decisions. Also, the ERMU rate classes will be included with <br /> the budget in December for Commission adoption. <br /> The initial ERMU 2018 retail electric rates outlook is very favorable for our customers. <br /> Attached is a worksheet illustrating a proposed rate impact study for ERMU's different retail <br /> rate classes with hypothetical customers' usage. All examples indicate an impact of <br /> approximately 1%or less.A typical residential customer would only see an approximate <br /> increase of$14 annual for 2018 compared to 2017. The 2018 retail rates will be proposed for <br /> approval with the 2018 budget in December. <br /> Water Department Budget <br /> The water department expense increases at approximately 4% are slightly higher than the <br /> electric department. In order to maintain the financial health and to plan for the short and long <br /> term water capital project projections the 2018 water budget reflects an overall 1.3% increase <br /> in revenue through water sales. <br /> The allocation of the increase will be collected through an increase in customer charge and 1St <br /> tier water use rates. Attached is a worksheet illustrating a proposed rate impact study for <br /> ERMU's residential water rate. The result for the proposed rate increase for a typical <br /> residential water customer would be 1.85%. This would result in an approximate increase of <br /> $5 annual for 2018 compared to 2017. The 2018 retail rates will be proposed for approval <br /> with the 2018 budget in December. <br /> ATTACHMENTS: <br /> • Proposed Summary of 2018 Budgets <br /> • Proposed 2018 Electric and Water Revenue and Expense Budget <br /> • Proposed 2018 Electric Capital Budget <br /> • Proposed 2018 Water Capital Budget <br /> • Proposed 2018 Administration and Technical Services Capital Budgets <br /> • Proposed 2018 Training and Travel Budget <br /> • Proposed 2018 Conservation Improvement Program Budget <br /> • Proposed 2018 Retail Rate Customer Impact Study <br /> Page 2 of 2 <br /> 64 <br />