5.2 EMRUSR 10-11-2022 - Laserfiche WebLink

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UTILITIES COMMISSION MEETING TO:FROM: ERMU Commission Melissa Karpinski –Finance Manager MEETING DATE: AGENDA ITEM NUMBER: October 11, 20225.2 SUBJECT: 2023 Annual Business Plan: Water and Electric Expenses; andConservation Improvement Program ACTION REQUESTED: None DISCUSSION: In preparation for budget submittal in November, staff continues to work through the 2023 budget process. The first draft of the expense portion of the 2023 budget has been completed for commission review. Items are subject to change as the complete 2023 budget is assembled and the finalized wholesale power costs and revenues are reflected. Revenues and rates, and wholesale power costs for 2023 will be presented in November. Attached is the following information for your review. Additional budget detail is available upon request. Please contact staff for additional information. 1. Electric Department Expense Budget – The 2023 budget for electric expenses are a .5% decrease compared to the current year budget (excluding purchased power). It is noteworthy that the 2022 forecast for expenses (excluding purchased power) is a 2.2% decrease compared to budget. Wholesale power costs make up around 70% of the operating budget andwill be provided in next month’s budget with the revenue projections. Most notable increases are for administrativeexpenses due to the addition of anew administration director and depreciation expense due to thenew fieldservices building. A noteworthy change from 2022 is the retirement of the landfill gas plant.This is a reduction of $613,131 from the 2022 budget. It is planned to bring in contractors again in 2023 for tree trimming. These preliminary expense numbers will likely be adjusted during the next phase ofbudgeting when the 2023 rates are designed. The 2022 budgeted purchased power cost amount was $27,017,920. The 2023 projected wholesale power cost increase has yet to be communicated to ERMU. Preliminarily applying last year’s rate increase of 2.5% (may vary slightly when the rate formula is applied to ERMU’s load profile and anticipated growth) power cost increase on the 2022 rates resulted in a preliminary amount of $27,676,608. When factoring the preliminary wholesale power cost forecast and the preliminary electric department ______________________________________________________________________________ Page 1 of 2 68