5.3. ERMUSR 11-12-2013 - Laserfiche WebLink

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Elk River • Municipal Utilities UTILITIES COMMISSION MEETING TO: FROM: Elk River Municipal Utilities Commission Troy Adams, P.E. —General Manager John Dietz—Chair Al Nadeau—Vice Chair Daryl Thompson—Trustee MEETING DATE: AGENDA ITEM NUMBER: November 12, 2013 5.3 SUBJECT: 2014 Budget: Rates and Review BACKGROUND: In preparation for budget approval in December, staff continues to work through the 2014 budget process. Based on the preliminary rate increase notifications and projected expense increases and capital expenditures, a preliminary balanced budget has been drafted. DISCUSSION: Electric Department Expense Budget As mentioned before, wholesale power costs makes up a considerable portion of the required operating revenue, approximately 72% for 2014, and the wholesale rates set by Great River • Energy (GRE) have an enormous impact on ERMU's rates. The 2014 wholesale power rates have not yet been finalized by the GRE board but their preliminary rates are designed to provide a 0% increase in GRE revenue from wholesale power sales. (This was done by lowering all component rates except off peak energy, which was increased. This impacts our budget by .5%) As the budget with preliminary wholesale rates stand, we will need an increase of approximately 1.5% in revenue to recover the increases associated with the whole sale power costs as applied to the forecasted power sales, and remaining increased expenses. Notable items in the electric budget for 2014 are: • Continued current efficiency with the LFG plant in terms of higher production and lower maintenance • An estimate of 1%growth in usage • Funds for ERMU History Book update in anticipation of upcoming 100th year anniversary in 2015 • Mapping included $30,000 to include outside help for specialized areas • New NISC software and implementation costs • Consulting for Territory Acquisition .,-1 0 ` IRNERER IT Page I oft NATURE ) Reliable Public Power Provider PowERLo To SERVE 59