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Elk River <br />Municipal <br />ities <br />13069 Orono Parkway Phone: 763.441.2020 <br />Elk River, MN 55330 Fax: 763.441.8099 <br />January 27, 2005 <br />To: Elk River Municipal Utilities <br />Jerry Takle <br />Jim Tralle <br />John Dietz <br />From: Bryan Adams <br />Subject: 2005 Territory Acquisition <br />The 2005 budget contains a $570,000 item for electric service territory acquisition. The <br />attached drawing reflects our past and proposed service territory acquisition. The <br />schedule indicates area 16 will be acquired this year which contains approximately 175 <br />customers and an estimated cost of $525,000 plus an additional estimated $45,000 for <br />lost revenues from previous purchases. On the dark side of this purchase, this area will <br />need cable replacing next year. Connexus has shared with us the age, material, and fault <br />history for this area. There is a lot of 175 mil 20 to 30 year old cable with a number of <br />previous faults. This cable has reached the end of its life. The estimated cost to replace <br />is in the $200,000 range. <br />Staff recommends we acquire area 16. The attached drawing also shows we have come a <br />long way in our territory acquisition endeavor starting in 1992. Our territory acquisition <br />agreement ends in 2008. I am assuming this commission desires to extend this agreement <br />to include the remaining portions of Elk River being western Elk River and south east Elk <br />River along the Hwy 10 corridor including the Cargill property. <br />