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Mr. Ninow emphasized the significant impact of service connections on water revenue, <br />while Ms. Karpinski noted that major projects, such as AMI implementation and future <br />well developments, also impact the budget. <br />There was discussion about depreciation as it relates to recent large projects. <br />Commissioner Stewart asked what the depreciation life is for the new AMI meters. Ms. <br />Karpinski replied that it is 15 years. <br />Moved by Commissioner Westgaard and seconded by Commissioner Stewart to receive <br />the October 2024 Financial Report. Motion carried 5-0. <br />5.2 2025 Annual Business Plan Budget and Schedule of Rates & Fees <br />Ms. Karpinski presented the 2025 Annual Business Plan, emphasizing a second <br />consecutive year with no increase to electric rates, a 2% rise in the monthly water base <br />rate, and a 1-3% stratified tier rate increase as outlined in the memo. <br />Discussions addressed factors driving water customers into tier two or three usage levels. <br />Ms. Youngs highlighted the benefits of AMI, noting that "Continuous Flow Notification" <br />letters alert customers to unusual water consumption. <br />Mr. Hanson mentioned that a 2025 rate study could impact water tier structures. <br />Ms. Karpinski shared that residential tier two contributes 12% of revenue, and tier three <br />contributes 14%. <br />Chair Dietz inquired about the continuation of power cost adjustments (PCA) in 2025. Ms. <br />Karpinski confirmed their likely continuation, explaining that PCA directly reflects the <br />energy adjustment clause (EAC) charges passed on to ERMU by its power provider. <br />Moved by Commissioner Stewart and seconded by Commissioner Westgaard to adopt the <br />2025 Annual Business Plan. Motion carried 5-0 <br />5.3 Energy City Committee <br />Mr. Hanson presented his memo on the proposed Energy City Committee (ECC), clarifying <br />that this would be a pilot program subject to review after one year to assess its value. He <br />emphasized that staff remains neutral and will implement the Commission's decisions. <br />Mr. Hanson informed the Commission that staff met with the current ECC members. He <br />noted that members were aware the City of Elk River would most likely dismantle the ECC <br />at the December 16, 2024, City Council meeting. Mr. Hanson stated that while members <br />Elk River Municipal Utilities Commission Meeting Minutes <br />December 10, 2024 <br />Page 7 <br />34 <br />