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______________________________________________________________________________ <br /> <br />Page 1 of 2 <br /> <br /> <br /> <br /> <br /> <br />UTILITIES COMMISSION MEETING <br /> <br />TO: <br />ERMU Commission <br />FROM: <br />Melissa Karpinski – Finance Manager <br />MEETING DATE: <br />December 18, 2025 <br />AGENDA ITEM NUMBER: <br />3.2 <br />SUBJECT: <br />2026 Annual Business Plan (Budget, Schedule of Rates & Fees) <br />ACTION REQUESTED: <br />• Adopt Resolution No. 25-10 for the 2026 Budget and Schedule of Rates and Fees <br /> <br />BACKGROUND: <br />In previous months, the preliminary 2026 Annual Business Plan was presented to the <br />Commission. There have been some changes due to finalizing of projects and expenses. The <br />final highlights are discussed below. <br /> <br />DISCUSSION: <br />Electric Budget and Rates <br />As discussed in December, we are proposing a 2% total revenue increase to our rates for 2026 <br />as presented in the Cost of Service/Rate Study report. <br /> <br />Notable items in the electric budget for 2026 are: <br />• 3.34% wage adjustment. <br />• 2% Utilities Performance Metric Incentive Compensation. <br />• Conservative estimate for usage and growth. <br />• Filling of vacant engineer position and adding an IT/OT position. <br />• 3% rate increase for wholesale power. <br />• Electric service territory acquisition loss of revenue for Areas 3&4, 5&6, and 7&8 from <br />reserves. <br />• East substation construction from reserves. <br />• Streets/Security light service rate will have no rate increase as proposed in rate study. <br /> <br />Water Budget and Rates <br />As discussed in December, we are proposing a 4% rate increase for 2026. <br /> <br />Notable items in the water budget for 2026 are: <br />• 3.34% wage adjustment. <br />• 2% Utilities Performance Metric Incentive Compensation. <br />• Conservative estimate for usage and growth. <br />• Adding an IT/OT position.