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��i <br />Elk River <br />Municipal Utilities UTILITIES COMMISSION MEETING <br />TO: <br />FROM: <br />ERMU Commission <br />Theresa Slominski —General Manager <br />MEETING DATE: <br />AGENDA ITEM NUMBER: <br />December 13, 2022 <br />4.2 <br />SUBJECT: <br />2023 Performance Metrics and Incentive Compensation Policy <br />ACTION REQUESTED: <br />Approve the Performance Metrics and Incentive Compensation Policy Score Card for 2023. <br />BACKGROUND: <br />The Commission adopted the Utilities Performance Metrics and Incentive Compensation <br />(UPMIC) Policy in December 2012 along with revisions in 2016, 2019, and 2021. This is a <br />company performance -based program designed to incentivize employee commitment towards <br />the company's success <br />DISCUSSION: <br />Per policy, the metrics for measurement of the designated year need to be determined before <br />the start of the designated year. This allows for changes to be made and timely communication <br />before performance measurement begins. Staff is not recommending any changes but has two <br />points of discussion (below) worth noting. The policy is attached for reference. <br />In 2019, the Commission had consensus to replace the customer satisfaction survey component <br />with a Clean Energy Choice participation component, with a weight of 5 percent, and a goal of <br />15 new customers for the 2020 measurement period. At that time, it was determined that the <br />most optimal way to measure the results was by an increase in the number of new participants <br />versus a percentage. 29 new participants were added in 2020, 21 new participants were added <br />in 2021, and 34 have been added to date in 2022. Staff discussed whether to recommend <br />increasing the goal of 15 net new participants or remain the same for the 2023 measurement <br />period. With the 2023 rate increases, staff believes that a modest increase to 20 new <br />participants may be challenging. We would like one more year of history before proposing any <br />changes. <br />Staff has been auditing the water loss component to ensure that any unmetered water is being <br />accounted for in the usage component of the calculation, as this could incorrectly represent <br />water loss. Some of the things we've identified are temporary water services for construction <br />and hydrant rentals, however, staff is not proposing any changes to the water loss component <br />at this time. <br />The proposed UPMIC score card is attached for approval for the 2023 measurement year. <br />Page 1 of 2 <br />