5.4 ERMUSR 12-12-2017 - Laserfiche WebLink

Home Browse Search

Elk River Municipal Utilities UTILITIES COMMISSION MEETING TO: FROM: ERMU Commission Tom Sagstetter—Conservation and Key Accounts Manager MEETING DATE: AGENDA ITEM NUMBER: December 12, 2017 5.4 SUBJECT: 2018 Tariffs ACTION REQUESTED: Approve the proposed 2018 Rates and Tariff Sheets. BACKGROUND: At the November 14, 2017 Utility Commission meeting, the proposed 2018 Budget and applicable rates were presented. Included as part of the proposed 2018 Budget were modest rate increases for electric and water customers. DISCUSSION: Enclosed for your review and consideration are the updated tariff sheets for 2018. The proposed electric rates for 2018 will have modest increases in the monthly electric charge, energy (kWh), and demand (kW) for each customer class. The estimated rate increase for an average customer is approximately 1% based on the existing tariff rates. In 2016 and 2017, ERMU provided a demand credit to customers qualifying for the demand billed service tariff'; customers received a$2 per kW credit in 2016, and a$1 per kW credit in 2017. Beginning in 2018, there will be no credits for customers qualifying for the demand electric service tariff. Factoring in the demand credit of$1/kW qualifying customers the estimated realized rate increase from 2017 to 2018 will range from approximately 3 to 6%. It should be noted that ERMU has not passed along a demand rate increase since January 1, 2015. An additional point of interest supporting this rate increase to demand bills is based on the results of the 2016 Electric Cost of Service Study that identified these customers as being slightly below where they should be for cost recovery. The proposed rate increases for water are approximately 2% on the monthly meter charge and the first tier water use. Tier 2 & 3 water use rates will be unchanged. The average increase for a water customer is estimated to be a 1.85% increase. As part of the transition to multiple billing cycles in 2018,the proposed tariff sheets have also been updated to accommodate for the change; specifically the language regarding the timeframe for the summer and winter rates have been changed to correspond with the monthly billing periods. The summer rate will be applicable during the five monthly billing periods of June - October, and the winter rate will be applicable during the seven monthly billing periods of November—May. Page 1 of 2 117