2.2 ERMUSR 07-12-2022 - Laserfiche WebLink

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Chair Dietz asked how much of the $1.3 million variance in Purchased Power is due to the EAC. Ms. Karpinski explained the EAC accounted for $1.2 million of the variance. She added that ERMU will absorb $500,000 while the rest will be recovered through PCAs. Ms. Karpinski informed the Commission that in May of this year ERMU had completed billing for the accrued PCA from 2021, meaning all PCAs billed going forward will apply to 2022 EAC. She added that ERMU began billing PCAs at 6 mills at the start of the year, moved to 8 mills in May, and will go to 10 mills in July and hopefully hold there through the summer. She added that with power providers estimating continued high costs it could be necessary to move up to 16 mills for the fourth quarter. Ms. Karpinski explained that even at the 16-mill level ERMU will likely have a PCA accrual of $1.5 million at the end of yea r. Ms. Slominski informed the Commission that ERMU's power provider, Minnesota Municipal Power Agency (MMPA) has purchased a hedge for the months of June- September to try and cap the costs of power. Chair Dietz asked if staff is getting a lot of questions about the PCA on their bill. Ms. Slominski responded that they hadn't yet. There was discussion. Commissioner Stewart asked if it would be possible to do a mid-year rate adjustment if needed. Ms. Slominski shared her opinion that it would be better to offset some of the increased costs through the PCA but put the question to the Commission. There was discussion. Chair Dietz asked if Interest Expenses were higher due to bonds. Ms. Karpinski confirmed that was correct. Chair Dietz asked why Water Production Expenses were down 73%. Ms. Karpinski explained that this was the result of providing the City with $90,000 as part of the transfer in ownership of the Jackson Street Water Tower. Moved by Commissioner Stewart and seconded by Commissioner Westgaard to receive the April 2022 Financial Report. Motion carried 5-0. 5.2 Field Services Facilitv Expansion Proiect Update Mr. Kerzman informed the Commission that the garage door company does not have materials to install the doors and will need to reschedule installation. Mr. Kerzman added that RJM Construction is investigating the delay and that notices are ready to be sent out that week to inform the company that this significantly impacts the schedule. Mr. Kerzman stated the concrete contractor will be mobilizing next week to complete all outstanding work. Elk River Municipal Utilities Commission Meeting Minutes June 14, 2022 Page 3 34