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City of Elk River <br />Notes to Basic Financial Statements <br />NOTE 13 — POST EMPLOYMENT HEALTH CARE PLAN (CONTINUED) <br />G. OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources <br />Related to OPEB (Continued) <br />Year Ending <br />December 31, <br />2023 <br />2024 <br />2025 <br />2026 <br />2027 <br />Thereafter <br />Total <br />NOTE 14 — COMMITMENTS AND CONTINGENCIES <br />Total <br />(22,060) <br />(22,060) <br />(22,052) <br />(5,586) <br />(12,517) <br />$ (84,275) <br />A. Commitments <br />The Utilities entered into an agreement in 2007 with Central Minnesota Municipal Power Agency <br />(CMMPA) to acquire an interest in the CAPX Initiative Brookings Project, a power transmission line in <br />Minnesota. The project is a 250-mile, 345 kV AC transmission line with a rating of 2,300 MW, between <br />Brookings, South Dakota, and the Southeast Twin Cities. In 2011, there was increased opportunity for <br />investment, and subsequent agreements provide the Utilities with an ownership share of $5.6 million or <br />18.89%. Revenues have been less than originally projected due to the decrease in Rate of Return (ROE) <br />issued by FERC. The original ROE 12.38% has been reduced to 10.52% on this investment through <br />CMMPA is designed to provide approximately $80K annually over the 40-year project life. With <br />majority of the distribution once the bonds are paid off, the projected over recovery in 2022 is estimated <br />to be $25K. The bond obligations are satisfied first, distribution to participants is directly affected by <br />under recovery. The over recovery is rolled forward under the true up. However, the over recovery in <br />2022 (approximately $25K) would be included in the revenue requirements in 2024. The transmission <br />payments for 2022 were $78,165, all of which was a receivable at December 31, 2022. <br />B. Contingent Liabilities <br />Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor <br />agencies, principally the federal government. Any disallowed claims, including amounts already <br />collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures that may <br />be disallowed by the grantor cannot be determined at this time, although the government expects such <br />amounts, if any, to be immaterial. <br />