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Elk River <br />Municipal Utilities UTILITIES COMMISSION MEETING <br />TO: <br />FROM: <br />ERMU Commission <br />Melissa Karpinski — Finance Manager <br />MEETING DATE: <br />AGENDA ITEM NUMBER: <br />December 12, 2023 <br />5.2 <br />SUBJECT: <br />2024 Annual Business Plan (Budget, Schedule of Rates & Fees) <br />ACTION REQUESTED: <br />Adopt the 2024 Annual Business Plan <br />BACKGROUND: <br />In November, the preliminary 2024 Annual Business Plan was presented to the Commission. <br />There have been some changes due to finalizing of projects and expenses. The final highlights <br />are discussed below. <br />DISCUSSION: <br />Electric Budget and Rates <br />As discussed in November, we are proposing a 0% rate increase for 2024. <br />Notable items in the electric budget for 2024 are: <br />• 4.00% wage adjustment for all pay plan groups. <br />• Conservative estimate for usage and growth. <br />• 0% rate increase for wholesale power. <br />• Contracting for tree trimming of $145k. <br />• Increased pension expense due to 2022 actual. <br />• Increased loss on disposition of capital due to Advanced Metering Infrastructure (AMI) <br />implementation. <br />• Administrative expenses for Utilities Performance Metric Incentive Compensation <br />(UPMIC) Distribution for change in percentage and additional consulting fees for a rate <br />study, compensation study, and NISC business consult. <br />• Replacement of Digger Truck #9. <br />• Replacement of Truck #13. <br />• Electric Service Territory acquisition loss of revenue for Areas 1&2, 3&4, 5&6, and 7&8 <br />from reserves. <br />• County Road 12 interconnection agreement with Connexus from reserves. <br />• East substation design and construction from reserves <br />• Otsego transformer replacement from reserves. <br />• Feeder construction from reserves. <br />Page Iof2 <br />0 <br />