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Elk Riv <br />Municipal Utilities <br />2009 YEAR IN REVIEW <br />The last year has been one of change for Elk River Municipal Utilities (ERMU). This change <br />occurred in all aspects of our operation affecting the company, the customers, and the provided <br />commodity. Through all these changes, ERMU has continued to grow while providing safe and <br />reliable utilities to our customers. <br />To improve organizational efficiency and to culture an environment needed to successfully <br />realize our company mission, ERMU implemented an organizational restructuring with changes <br />in leadership, policy, and procedure. The slowed economy and downturn in the construction <br />industry reflect the change to our customer base which has resulted in revenue erosion. With this <br />comes the challenge of cost control through being conservative and financially responsible. 'The <br />cost of providing service and the trend in wholesale power continue to climb. Elk River <br />Municipal Utilities continues to research wholesale power supply options to meet our needs in <br />the next decade and beyond. This last year, this research into power supply even brought ERMU <br />to consider, and eventually dismiss, the idea of participation a proposed power plant project. <br />These challenges have become opportunities and are really a reflection of ERMU's ability to <br />adapt and evolve in an effort to better serve our customers. Elk River Municipal Utilities serves <br />a geographically concentrated customer base and is locally governed. This put ERMU in a <br />unique position to ``provide safe, reliable, cost effective and quality long term electric and water <br />utility service" by being able to quickly adapt to our customer's needs while providing benefit to <br />the City of Elk River and our customers. <br />- ~. <br />1 <br />Troy Adams, P.E. <br />Director of Operations <br />