6.1 ERMUSR 02-10-2004 Elk River ^-
Municipal Utilities
322 King Avenue phone: 763.441.2020
Elk River,MN 55330 Fae:763.441.8099
January 22, 2004
To: Elk River Municipal Utilities Commission
John Dietz
Jerry Takie
James Tralle
From: Bryan Adams
Subject: Annual Report to City Council
Attached for your review and comment is the proposed Elk River Municipal Utilities
2003 annual report to the city council. We solicit your comments with any additions or
deletions.
Last years report contained a section of electric rate comparisons utilizing MMUA's 2002
rate study. MMUA's 2003 rate study is not yet available and therefore not included in
this years report.
The particular importance of this document is highlighting 2003 major accomplishments
and goals for year 2004. The 2003 major accomplishments continue to reflect the
tremendous amount of high quality work your staff of 30 employees does. These
accomplishments have only occurred due to this commissions continued leadership and
staff support. Your staff thanks you.
Our large facility expansion projects were completed by 2002. These projects were the
LFG facility, Substation North, plant garage and office, and Well #7 facility with water
tower. The new administration building was started in 2003 but will be completed in
2004. This year can be classified as "taking care of business." Nothing significant took
place except staying ahead of our tremendous growth. For a projected slow economic
year, our customer growth and sales growth were significant.
Elk R
Municip al Utilities
Annual Report
2003
Utilities Mission Statement
To provide our customers with safe, reliable, cost effective and quality
long term electric and water utility service. To
y . communicate and educate
our customers in the use of utility services, programs, policies, and future
plans. These products and services will be provided in an
environmentally and financially responsible manner.
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One Leg Cut Off Tower Falling
Tower On Ground Tower On Ground
Department Staff
Elk River Municipal Utilities Organizational Chart
Electric&Water Customers
Elk River Utility Commission
John Dietz-President
Jerry Takle-Vice Chairperson
.lames Tralle-Trustee
General Manager
Bryan Adams
Elec Technologies/Water Superintendent Electric Superintendent Office Manager
David Berg Glenn Sundeen Patricia Hemza
Utility Worker Line Foreman Lead-Lineman Assist Office Manager
- Scott Nielsen Wade Lovelette Mark Fuchs Vivian Schmidt
•
Utility Worker Lead Lineman
- Richard Cline Lloyd Lorenzen Judy r r
Elec Tech/Security Lead-Lineman Lead-Lineman A/P-Payroll
Michael Price Scott Thoreson Trevor
Utility Worker/Security Apprentice ' '
Adam Freiberg Michael Thiry Thomas Geiser Betty Belanger
Gregory Apprentice Lineman Apprentice Lineman Clerk/Receptionist
Jeffrey Henning Troy Seter Ryan Westre
Apprentice Lineman Apprentice Lineman Clerk/Receptionist
Chris Sumstad Corey Wolff Dolores Andreasen
Utility Worker/Locator Utility Worker Clerk/Receptionist
Richard Wagner Steve Ziemer
Contractors and Special Vendors:
Marketing Consultant-Vance Zehringer Laborer —
Safety Program-MMUA Christine Holman
Dispatching-GRE
Electric Metering&Relays
Meter Reading-McBrady Meter Reading
Computer Support-Saratoga Co.
Substation Maintenance
Underground Contractors
Year in Review
2003 Major Accomplishments
Bryan Adams, General Manager
Administration—Patricia Hemza/Financial Director
1) Continued administrating the Connexus/Great River Energy power purchase agreement costing
approximately $7,600.000.
2) Remained active in MMUA in industry restructuring issues.
3) Remained active in Energy City activities.
4) Completed first year operation of LFG electric generation facility at the Elk River Landfill in
partnership with Sherburne County and Waste Management at 102.2% capacity factor which far
exceeded expectations.
5) Start preparation for 2004 move to City Hall facility.
6) Continued to successfully handle the increase in customers and resulting monthly bills and
collections. Customer monthly billings include approximately 7500 electric, 3300 water, 3300
sewer, and 5000 garbage. Monthly utility billing consistently exceeded $1,000,000/month.
7) Contributions to the City of Elk River totaled approximately $560,000.
8) Administer first year's CIP Programs for Elk River which entail, Compact Fluorescent Lamps,
Appliance Rebates, Cycled Air Conditioning, Commercial Rebates, and Air Conditioning Tune-
up.
I
Water Department—David Berg/Water Superintendent
Water & Electric Technologies
I
1) Start construction of Well#8, raw water line, and modification to Filter Plant #7.
2) Finish construction and place into operation 1.5 million gallon water tower in east Elk River.
Iy 3) Demolish 100,000 gallon water tower at Well#3 behind Elk River Concrete. Finalize contract
and place antenna on Jackson Street Water Tower, thereby paying for future maintenance cost
to preserve this structure.
4) Expanded water mains to West Oak, Hillside Estates #9, and Trott Brook South.
5) Connected 314 new water services to the water system.
6) Installed 50 Security Systems for a total of 276. This year we had 20 cancel due to customers
moving.
7) Up size water main and replace non-copper service lines on 4th and 5th Street between Morton
Avenue and Rush Avenue.
8) Produce over 706 million gallons of water with a peak day of 4.47 million gallons.
Statistics
Table of Contents and Comments
Page Title and Comments
2002 Budget Summary. Year-end financials will be available
when audit is complete.
2 Elk River Municipal Utilities' 10 Year Capital Project Projection.
This spread sheet reflects where our capital project dollar priorities
will be for the next 10 years.
3 Elk River Municipal Utilities' Electrical Statistics Graphs.
4 Elk River Municipal Utilities' Power Costs & Security Systems.
5 Elk River Municipal Utilities' Water Statistics.
6 Wind Turbine/LFG output comparisons for May 2003.
7 Wind Turbine/LFG output comparisons for Year 2003.
8 Electric Service Territory Map of Elk River Municipal Utilities.
The dashed block line indicates the existing service territory
boundary. Elk River Municipal Utilities currently provides electric
service for parts of Elk River, Otsego, Dayton and Big Lake
Township. The red dashed line indicates future services territory
limits. Contract agreements between Connexus Energy and Elk
River Municipal Utilities allows for continued service territory
acquisition. The hatched area indicates areas and time frame.
Electric Department—Glenn Sundeen/Line Superintendent
Electric Department
1) Continued territory acquisition from Connexus Energy (see attached map).
2) Expanded electrical distribution system into West Oak, Hillside Estates #9, and Trott
Brook South.
3) Rebuilt electrical system in 4th and 5th Street between Morton Ave. & Rush Ave.
4) Added 530 electric meters to electric system
5) Completed construction and energized Station 14 feeder expansion.
6) Constructed UG line on Co. Rd. 13 to prepare for future territory acquisition.
7) Purchased over 170 million KWH of energy with a peak day of 39.7 MW for an
7.93% increase.
ELK RIVER MUNICIPAL UTILITIES
SUMMARY OF YEAR 2003
BUDGETS
ELECTRIC BUDGET SUMMARY 2003
ELECTRIC REVENUE $ 13.040.851
ELECTRIC EXPENDITURES 11,759,772
ELECTRIC NET FOR CAPITAL 1,281,079
CAPITAL EQUIPMENT/CONSTRUCTION 2,624,000
NET (1,342,921)
WATER BUDGET SUMMARY
WATER REVENUE 1,072,160
WATER EXPENDITURES 1,136,906
WATER NET FOR CAPITAL (64,746)
WATER FEES GENERATED (FOR EXISTING& 300,000
FUTURE BOND PMTS)
DEBT RETIREMENT 280,000
GROSS (44,746)
CAPITAL PROJECTS FROM CASH 807,000
NET (851,746)
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Sheet
Elk River Municipal Utilities Electric Statistics
Elk River Municipal Utilities Electric Demand Projections
100000
90000
80000 AAUtlrnun
Additional 9ubWawis
70000
60000
klubstellon tape*
CC 50000
PrkbebIs
sly 40000 -
30000 *Timm
20000
10000 •yj _
0
1985 1990 1995 2000 2005 2010 2015
Year
This graph reflects the peak day electrical demand for Elk River.System growth of the peak day demand determines the size of the
generation and substation facilities to carry the load.System growth Isa function of Elk River's growth and the weather.
Elk River Is a summer peaking electric utility due to the air condkloining in the summer months.
Elk River currently ranges from 24000 KW in the winter months to 40000 KW in the summer months.
40000 KW Is approximately equal to 40000 horsepower.
Elk River Municipal Utilities Annual Energy Purchases
600 ...-.__-----. _--------- -- -.__._-__ --- ---------------------
500
Madman
O 400 II
P1obsAle
E
• 300
a
0
z
r2
a 2w / III
e'
a`
M4darum
100- -
1985 1990 1995 2000 2005 2010 2015
Year
This graph reflects Elk Rivers annual comsumption of KW H. 170.1 million KW H of electricity utilized in 2003 Is a 7.93%increase from the previous year.
from the previous year. 157.5 million KW H is equivalent to approximately 85000 tons of coal.
Page 1
Sheet4
Elk River Municipal Utilities Water Statistics
Elk River Municipal Utilities Peak Day Water Pumpage
14000
12000
Mniman
II 10000
$ a W db
o4090—_,
°' II
E Probable
a 6400
os
w4000
a.
2000 ._
a
1985 1990 1995 2000 2005 2010 2015
Year
This graph reflects the peak day system usage the water production facilities must satisfy.Growth of the peak day demand dictates
when additional water wells,filter plants,and water towers must be added to the system.
The purnpage projections reflected in the above graph is a function of both Elk Rivers growth and weather.
Daily water requirements vary from 1 million to 5.3 million gallons/day.
Elk River Municipal Utilities Annual Water Pumpage
2000
1800
1600
c
O 1400
To
0
S 1200
Cuu*DOS ort*adVResouwslearuS Umi
ffi 1000 brEYtRtwrba78,gQpAgggM
a.
O 800
2 600 . t mAaamt
G I
400
200
0
1985 1990 1995 2000 2005 2010 2015
Year
This graph reflects the annual water use In Elk River. Water usage of 706 million gallons in the year 2003
is a 12.15%decrease from the previous year.
632 million gallons Is equivalent to a 152 acre lake 13 feet deep which Is similar to Lake Mitchell in Big Lake,MN.
Page 1
Shasta
Elk River Municipal Utilities Power Costs and Security Systems
Elk River Municipal Utilities Projected Wholesale
Power Costs
$0.055
_ $0.050
$0.045
c
So $0.040
0
U $0.035
$0.030
1990 1995 2000 2005 2010 2015
Year
The above graph reflects the unit cost of our wholesale power from Connexus Energy through Great River Energy. Our power is purchased
through a 10 year rolling all requirements contract. In 2003,our total power costs were$7,664,442 including the fuel cost adjustments.
Fuel cost adjustments at the wholesale level will become very commonplace.Distribution companies like ERMU will pass these costs on
to the end user.
Elk River Municipal Utilities Security Systems
300 —
E 250
d
n' 200
co
c 150
a 100
E
Z• 50
0
1990 1992 1994 1996 1998 2000 2002 2004
Years
The above graph reflects the number of security system customers we serve.Although the numbers are not as large
as we would like to see them,this program is breaking even and does provide another service to our customers
while exposing our employees to other technologies that can be utilized in the municipal utility area.
Page 1
Sheet%
Elk River Municipal Utilities Power Costs and Security Systems
Elk River Municipal Utilities Projected Wholesale
Power Costs
$0.055
$0.050
$0.045
c ,
$0.040
V $0.035
$0.030
1990 1995 2000 2005 2010 2015
Year
_ I
The above graph reflects the unit cost of our wholesale power from Connexus Energy through Great River Energy. Our power is purchased
through a 10 year rolling all requirements contract. In 2003,our total power costs were$7,664,442 including the fuel cost adjustments.
Fuel cost adjustments at the wholesale level will become very commonplace.Distribution companies like ERMU will pass these costs on
to the end user.
Elk River Municipal Utilities Security Systems
300
0 250
d I
to 200
6 150
2 100
50
0
1990 1992 1994 1996 1998 2000 2002 2004
Years
The above graph reflects the number of security system customers we serve.Although the numbers are not as large
as we would like to see them,this program is breaking even and does provide another service to our customers
while exposing our employees to other technologies that can be utilized in the municipal utility area.
Page 1
ElkRiver Municipal Utilities May 2003 Wind Turbine Output
GOO
5� ICI
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Y 200 MM M1 1 Ii Ii111
1� T&i! J9IrNFJttTl'JiIl 1�J1111 _-
0
Time in Month of May 2003
Elk River Municipal Utili ties May 2003 LFG Generation Output
3000 —
2500 ------- ---'--- - '
Str
2000
0
0
O1500
1 000 ----"_--- -- ----
500
0 --- — �
Time in Month of May 2003
Wind pen Landfill raw data
Elk River Municipal Utilities -Facility Supply @ Billing Peak
goo
x
S
soo : Prorated el WO KW Fay
Landfin On Fatality. Output
503 V
300
I 200
to
Wbid Turbine Output- 6 1 KW Fac*y
LL '00 nolk
0 __.
Dec Jan Feb Mar April May June July Aug Sept Oct Nov
2003 Months
Elk River Municipal Utilities - Facility Monthly Energy Output
600000
= 500 000 _
a talent: raday. Otdput
Prorated to 660 KW Faclly
300 030
C
O
z 200 000
ndTurbine Output -0 60KWFaddy
700000 '
Dec Jan Feb Mar April May June July Aug Sept Oct Nov
2003 Months
Wind gen Landfill raw data