5.3. ERMUSR 10-13-2009 - Laserfiche WebLink

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Elk River -~ Municipal Utilities 13069 Orono Parkway • P.O. Box 430 Elk River, MN 55330-0430 October 5, 2009 To: Elk River Municipal Utilities Commission John Dietz Jerry Gumphrey Daryl Thompson From: Troy Adams Subject: Review 2010 Conservation Improvement Program (CIP) Budget Phone: 763.441.2020 Fax: 763.441.8099 The state has mandated a change in CIP effective 2010 that now requires there to be 1.5% energy reduction instead of spending 1.5% of revenue on energy reduction. This requirement of 1.5% energy reduction is not capped at a specific cost and it complicates the process because energy reduction now needs to be quantified. The state has not given the mandate any "teeth" to enforce or penalize. However, as Energy City, we need to make the best effort to meet the target. We have received good news from Great River Energy that ERMU will be included in their aggregate filing. Also, ERMU will be able to count GRE's infrastructure savings towards our 1.5% energy savings requirement. This reduces ERMU contribution to 1 % energy reduction which will need to come from the customer side of the meter. Because of the GRE pass through of CIP savings, essentially ERMU is being treated as a GRE member (as it pertains to CIP). With this benefit, ERMU will be in a great position to meet our requirement without too much additional financial burden. The CIP budget total is $144,320. This reflects approximately an 11.5% increase from last year. There are some new programs this year including an appliance recycling program and a furnace blower rebate. Project Conserve will be very important. Last years pilot program had 35 participants. We are looking to have 500 participants this year. Overall, the programs in place put ERMU in a great position to meet the targeted goal. This will become increasing difficult in years to come because we will have already "picked the low hanging fruit." Attached is the proposed 2010 CIP budget for commission review.