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<br />Elk River: <br />Municipal U <br />13069 Orono Parkway • P.O. Box 430 <br />Elk River, MN 55330-0430 <br />UTILITIES COMMISSION MEETING <br />pONERER BI <br />~~~V~~ <br />F C •,,• c a c D T O S E R V E <br />Phone: 763.441.2020 <br />Fax: 763.441.8099 <br />TO: FROM: <br />Elk River Municipal Utilities Commission Troy Adams, P.E. -Utilities Director <br />John Dietz -Chair <br />Daryl Thompson -Vice Chair <br />Al Nadeau -Trustee <br />MEETING DATE: AGENDA ITEM NUMBER: <br />November 15, 2011 5.1 <br /> <br />SUBJECT: <br />Review 2012 Bud et <br />BACKGROUND: <br />In preparation for budget approval in December, staff continues to work through the 2012 budget <br />process. <br />DISCUSSION: <br />Electric Department Expense Budget <br />Yeaz to date, wholesale power costs makes up approximately 74% of operating revenue. <br />Ultimately, the wholesale rates set by Great River Energy (GRE) have an enormous impact on <br />ERMU's rates. The 2012 wholesale power rates have been finalized by the GRE board. As <br />the budget stands, their will need to be an increase of 9.12% in revenue recover the increases <br />associated with the whole sale power costs as applied to the forecasted power sales. <br />The forecast power sales for ERMU weather normalized result in a slight reduction in sales <br />for all classes with the exception of data centers. Through the budgeting process the 9.12% <br />required increase has been reduced to an approximate overall blended revenue increase of <br />8.33%. Tlvs increase in revenue would result in a net mazgin of less than 2% and a negligible <br />amount scheduled to net to reserves. <br />After the audit was received in 2011, there was unrestricted money designated as operating <br />cash for 2011. This balance could be designated to offset wholesale power cost adjustments <br />in 2012. This is a topic for discuss by the Commission. <br />