5.2. ERMUSR 10-13-2009 - Laserfiche WebLink

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Elk River Municipal Utilities Summary of 2010 Electric Budget Design Criteria The wholesale power costs makes up over 73% of operating revenue. Great River Energy is still in the process of finalizing their 2010 wholesale power rates. Through discussions, the pre- liminary numbers have consistently reflected a wholesale power cost increase of 2.3%. This is significantly down from 2010 projections of 10% given last year. There has been focus at GRE to reduce costs and it appears that this will be realized in this years wholesale power costs. The budget has been designed based on these preliminary rates from GRE. Last year, budget reflected 0% growth for residential, small commercial, and industrial (excluding data centers). Looking at the recent trends in energy usage, the 2010 budget reflects a reduction in consumption for these groups. Connections are also declining and this has been reflected in the budget. The overall approach was to control costs and pass on as little as possible through rate increases. There are known increases in expenses including wholesale power costs, fees (CMMPA, CapX, MMTG, etc...), and CIP. These are some costs that are going up and can not be cut. Excluding these known exceptions, the electric expense budget is down from last year by 0.5%. Including these exceptions, the expense budget is up by 4%. Here are some of the assumptions used to develop the 2010 electric expense budget: Electric sales increase overall -1.26% (Residential -1.25%, Commercial -4%, Industrial -4%, Data Centers +7.5%) Connect fees $50,000 Connect unit fee -unchanged at $1320/residential lot Electric Wholesale Rate Increase 2.3% Electric Retail Rate Increase (Residential +4.25%, Commercial +3.75%, Industrial/Data Centers +3.25%)