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Elk River <br /> Municipal Utilities <br /> 322 King Avenue phone: 763.441.2020 <br /> Elk River.MN 55330 Fax_'63.+41.8099 <br /> June 25, 2003 <br /> To: Elk River Municipal Utilities Commission <br /> John Dietz <br /> Jerry Takle <br /> James Tralle <br /> From: Bryan C. Adams <br /> Subject: Wholesale Electric Rate <br /> Late last year, we had a brief discussion about Great River Energy's future rate structure. <br /> As an incentive for Great River Energy member co-op to extend their all requirement <br /> power and energy contracts with Great River Energy, Great River Energy is offering a <br /> two tier rate. All of Great River Energy's members have extended their contracts and the <br /> two tier rate has been adopted in principal. The details of this two tier rate structure has <br /> been worked out except for the actual rate. <br /> The highest demand and energy per month for years 2001, 2002, and 2003. will establish <br /> the quantity base for the base year. Because of Elk River's fast growth, the highest of <br /> these three years will be our demand and energy for 2003. These values will be corrected <br /> for our demand customers who are interruptible (Cub Foods and Aggregate Industries). <br /> This base quantity will be fixed at a demand and energy rate. Any growth above the base <br /> quantities will be at a different demand and energy rate. The attached spread sheet and <br /> graph, hopefully shows more clearly the future rate structure. The proposed rates are just <br /> that..."proposed" and will not be adopted until later in the year. These proposed rates <br /> will undoubtedly change. <br /> The 5% Option, which is the more favorable rate will expire in 2006. Great River Energy <br /> is estimating a 5.1% rate increase for 2004 and a 1.8% increase per year thereafter. <br />