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Elk River Municipal Utilities <br />Elk River, Minnesota <br />Notes to the Financial Statements <br />December 31, 2024 <br />Note 3: Other Information (Continued) <br />C. Commitments <br />The Utilities entered into an agreement in 2007 with Central Minnesota Municipal Power Agency (CMMPA) to acquire an <br />interest in the CAPX Initiative Brookings Project, a power transmission line in Minnesota. The project is a 250-mile, 345 kV <br />AC transmission line with a rating of 2,300 MW, between Brookings, South Dakota, and the Southeast Twin Cities. In 2011 <br />there was increased opportunity for investment, and subsequent agreements provide the Utilities with an ownership share <br />of $5.6 million or 18.89 percent. Revenues have been less than originally projected due to the decrease in Rate of Return <br />(ROE) issued by FERC. The original ROE 12.38% has been reduced to 10.48%. The current return of 10.48% on this <br />investment through 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 under recovery in 2024 is estimated to be $146K. <br />The bond obligations are satisfied first, distribution to participants is directly affected by under recovery. The under <br />recovery is rolled forward under the true up. However, the under recovery in 2024 (approximately $146K) would be <br />included in the revenue requirements in 2026. The transmission payments for 2024 were $0. <br />44 <br />107 <br />