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.^~/ <br />ilk River <br />Municip al Utilitie s <br />13069 Orono Parkway <br />Elk River, MN 55330 <br />v 1 <br />October 3, 2006 <br />To: Ellc River Municipal Utilities Commission <br />Jerry Takle <br />John Dietz <br />Jim Tralle <br />From: Bryan Adams <br />Subject: Proposed 2007 CIP & Expense Budget <br />phone: 763.441.2020 <br />Fax: 763.441.8099 <br />Our Conservation Improvement Program is required to spend 1.5% of gross electric revenues <br />or $232,500 for 2007. Attached is our proposed 2007 CIP budget. The total expenditure is <br />$451,760 of with GRE is contributing $351,750 and we are contributing $100,010. Due to the <br />large industrial/commercial development, GRE is contributing for high efficiency motors, <br />HVAC and lighting for these projects. We would not be required to contribute this year, but <br />are doing so to keep the other programs viable when the industrial/commercial rebates subside. <br />Also attached are the proposed 2007 electric and water expense budgets. The important <br />assumptions for each budget are as follows: <br />Water <br />Water sales growth...... <br />WAC Fees assumed at... <br />Unit WAC fee remains unchanged at... <br />Water Rate Increase... <br />Fixed Monthly Change Increase.... <br />1 S` Step raised from.. . <br />2"d Step unchanged at.... <br />5% <br />$475,000 to $500,000 <br />$2000/unit <br />4.4% <br />$5.50 to $6.50 <br />$1.3 5/unit to $1.40 <br />$3.00/unit <br />Expense budget increase from last year... 9.7% w/o depreciation <br />Electric <br />Electric Sales Increase...... <br />Connect fees assumed at.... <br />Connect unit fees..... <br />Electric Rate Increase per rate study.... <br />Power Cost Increase.... <br />Expense budget increase w/o purchase <br />power costs, depreciation or LFG Expense.. <br />7.58% <br />$500,000 <br />raised $100/year <br />6% <br />6.89% <br />10.5% <br />