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Elk River <br /> Municipal Utilities UTILITIES COMMISSION MEETING <br /> TO: FROM: <br /> Elk River Municipal Utilities Commission Theresa Slominski—Finance and Office <br /> John Dietz, Chair Manager <br /> Allan Nadeau, Vice-Chair <br /> Daryl Thompson, Trustee <br /> MEETING DATE: AGENDA ITEM NUMBER: <br /> March 13, 2017 4.2 <br /> SUBJECT: <br /> PCA Credits <br /> BACKGROUND: <br /> At the February 14, 2017 Commission Meeting, it was proposed that we reconsider the direction <br /> given at the November 15, 2016 Commission Meeting for giving the PCA credit on the first bill <br /> reflecting the rate increase, which would have been the February bill. It was decided to bring it <br /> back as an agenda item for discussion this month. <br /> DISCUSSION: <br /> We have approximately$486,000 in accumulated PCA credits from 2015 and 2016 (the credit <br /> brought forward from 2015 and the credits in 2016 are presented in the attachment.) Historically <br /> we have passed through the PCAs to the customers as either a charge or a credit, and not <br /> "managed" a PCA of our own. We had communicated to our customers that a PCA would be <br /> given on the February bill, however, given that we have two known future bondings for the true- <br /> up of the MMPA buy-in and the field services facility, it is reason for pause. Bonding costs are <br /> approximately 10%of the bond. If we retain and use all the accumulated PCAs to lessen the <br /> future bonding amounts,we effectively save our customers $48,000 (10% of the $486,000). If <br /> we use only a portion of the accumulated PCAs,we effectively save 10%of that amount. A pro <br /> would be the money saved to our customers. A con would be that the bonding is for a future use, <br /> and the accumulated PCAs are for past/current use. <br /> ACTION REQUESTED: <br /> Staff is requesting direction for distributing or retaining PCA funds as follows: <br /> 1) Distribute the entire amount of accumulated PCAs to customers, or <br /> 2) Retain the entire amount of accumulated PCAs for future use, or <br /> 3) Distribute a portion and retain a portion of accumulated PCAs <br /> POWERED 81 <br /> NATURE <br /> Reliable Public P O W E RED T o S E 0.V E <br /> Power Provider <br /> 83 <br />