4.5 ERMUSR 12-13-2022 - Laserfiche WebLink

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��i Elk River Municipal Utilities UTILITIES COMMISSION MEETING TO: FROM: ERMU Commission Theresa Slominski - General Manager MEETING DATE: AGENDA ITEM NUMBER: December 13, 2022 4.5 SUBJECT: Competitive Rates Policy ACTION REQUESTED: Approve proposed ERMU Commission Policy G.5b - Competitive Rates. BACKGROUND: In 2017, with the increase to a five -member Commission from a three -member Commission, it was determined to be beneficial to develop and update core governance policy to serve as a guide for the expanded Commission. Previously the policy manual was a combination of management and governance policies, as well as procedures, forms, and specifications. One of the goals of this project was to update the policy documents the Commission is ultimately responsible for and separate out the procedures, forms, and specifications that should fall under the responsibility of management. A consultant, Collaboration Unlimited, was utilized for phase one of this project, to develop the core governance policies. In February 2017, the core governance policies were developed and approved as G.1— G.3 items. In 2017-2019, additional work was done to identify and delegate the appropriate items to management as policy, as G.4 items. G.5 items remained to be completed. DISCUSSION: Section 5 of the Commission Policies is Goals and Results, G.5, and had two intended policies to be developed. Those two policies are G.5a Margins and G.5b Competitive Rates. The purpose of these two policies is to provide the Commission and staff parameters for determining appropriate margins and rates that are reasonable and justifiable to our customers, allowing for the emotion to be removed from decision making, and provide consistency year to year. The first of these policies, G.5a Margins, was presented in October. The second policy, G.5b Competitive Rates is presented this month. The intent of this policy is to provide information, ideally prior to budget preparation, for analysis of how our customers may perceive our rates compared to our surrounding communities. Information will be obtained from state and federal agencies and so will lag a year but can still provide good context for upcoming current year budget decisions. Ideally, there will be ten years of data to compare, and the policy is written to accomplish that. Electric information was available to present a ten-year history to start, however, water information was only available to present a five-year history. We will have to increase to a ten-year water history over the next five years. The tiered data for water will not Page 1 of 2 57