2.2 ERMUSR 11-13-2018 - Laserfiche WebLink

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5.2 2019 Business Plan/Budget— Water and Electric Expenses, and Conservation Improvement Program Ms. Slominski presented the first cut of the 2019 Water and Electric Expense Budget. She noted that items are subject to change as the complete 2019 budget is assembled and the finalized wholesale power costs and revenues are reflected. Revenue and rates for 2019 will be presented in November. Electric Department Expense Budget — The 2019 forecast for electric expenses reflected a 2.77% increase over the current year budget. The wholesale power costs, which make up between 70-75% of the operating budget, were estimated using MMPA's rate structure. Ms. Slominski noted that it is a decrease in spite of an increase in kwh growth of 6% over the prior year. Commissioner Stewart inquired if staff had factored in an amount for PCA costs. Staff responded that they had done so and had used a projected average. Ms. Slominski pointed out that Depreciation and Amortization are increased largely due to the amortization of MMPA's intangible asset. Currently, staff is estimating a 0% rate increase. The Commission had a few questions on the electric department expense budget. Staff responded. Water Department Expense Budget - The 2019 forecast for water expenses reflected a less than 1% increase over the current year budget. Most notable increases were on the administrative side for increases in health insurance and benefits. Currently, staff is estimating a 2% increase to the monthly charge and tier 1 rate. Conservation Improvement Program Budget — Mr. Sagstetter presented the Conservation Improvement Program (CIP) Budget which included detailed information about the cost of the specific programs as well as the historic participation numbers; also included was a CIP summary sheet for reference. Mr. Sagstetter noted that the 2019 forecast for CIP includes approximately $242,000 for rebates. He explained that in the past these cost have been partially funded by Great River Energy (GRE), however MMPA doesn't have a similar funding mechanism, and so these costs will need to be funded by ERMU. There was discussion on state legislative developments and possible changes to the existing CIP. Commissioner Westgaard asked for further clarification on whether the proposed budget reflected the rebates ERMU would be funding. Staff responded that it did. 5.3 2019 Utilities Fee Schedule Annually ERMU staff reviews its fees for the upcoming year to make sure they are fair, reasonable, and proportionate to the actual cost of the service for which the fee is imposed. The addition of any new fees is also considered at this time. Staff is considering the addition of two new fees; an opt -out fee, and a residential application fee. Mr. Volk shared that ERMU had recently been approached by a customer that would like to opt -out of the automated meter reading (AMI) process we currently offer. As ERMU does not presently offer an opt -out program, there are a few different options we can consider. Mr. Volk Page 3 Regular Meeting of the Elk River Municipal Utilities Commission October 9, 2018