4.1. ERMUSR 12-15-2009 - Laserfiche WebLink

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Ji Elk River ---1 Municipal Utilities 13069 Orono Parkway • P.O. Box 430 Elk River, MN 55330-0430 December 9, 2009 To: Elk River Municipal Utilities Commission John Dietz Jerry Gumphrey Daryl Thompson From: Troy Adams Subject: Review and Consider 2010 Budget, Rate, and Fee Changes Phone: 763.441.2020 Fax: 763.441.8099 Enclosed for commission review and consideration is the proposed 2010 Budget. The Great River Energy rate increase has been finalized with no changes from the preliminary numbers used by staff during the electric rate design process. The proposed budget reflects the new 80/20 Electric/Water split for the applicable accounts as well as some minor changes to the capital budget and expense budget. The change from a 75/25 split to the 80/20 split resulted in an approximate $79,000 shift in cost from Water to Electric. Other analysis identified additional areas where expenses needed to be allocated differently between Water and Electric. This included some costs associated with meter reading and fuel. These changes do impact the Water and Electric budgets. The Water budget profit margin increase by approximately $90,000 to be -$322,980. The Water net to reserves increased by approximately $82,000 to be -$56,530. The Electric budget needed to revise the rate increase to compensate for the increases in expenses. This was done through a minor increase in the winter energy (kWh) charge for residential and non-demand small commercial as well as a minor increase in energy (kWh) charge for demand commercial. The Electric budget profit margin increase by approximately $10,000 to be.$388,020. This is still an approximate 1.5% profit margin. The Electric budget net to reserves decreased by $16,449 to be $339,597. This is the result of an increase in capital projects to reflect current and more accurate costs. Also included is the proposed 2010 Fee Schedule reflecting the proposed rate changes.