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5.5. ERMUSR 10-15-2003 i Elk River Municipal Utilities 322 King Avenue phone: 763.441.2020 Elk River,MN 55330 Fax:763.441.8099 September 24, 2003 To: Elk River Municipal Utilities Commission John Dietz Jerry Takle James Tralle From: Bryan C. Adams Subject: Revised Electric Capital Budget At the September 9, 2003, Elk River Municipal Utilities Commission meeting, the electric capital budget was presented. This proposed capital budget details projects staff is proposing for year 2004, along with other projects that need to be done but were delayed due to budget constraints. Our system established a new electric peak on August 14, 2003. Staff, since that time, has analyzed how the electrical system needs additional capacity to support further growth. Attached is the following information for your review. a) Revised 2004 Electric Distribution Capital Projects. b) Electric Distribution Capital Projects Time Schedule for future projects. c) Revised 10 Year Capital Project Projections. The revised 2004 Electric Distribution Capital Projects reflects the addition of a $450,000 feeder 85 from West Bank#2, to Station 14, and a deletion of a$120,000 underground feeder along Co. Rd. 1 South of 2215`Ave. The electric distribution capital projects time table reflects when the delayed projects should be completed. Standard operating procedure for electric utilities is to not operate electric feeders above 50% of capacity. The reason for this is when electric feeders on substations are taken out of service for maintenance/emergencies, the load is transferred to other feeder/substations so our customers are not interrupted. Due to our electric load growth, four of our feeders are loaded to 65%to 70% of capacity. We are finding it very difficult to have enough capacity on these feeders to transfer load. Staff is recommending we construct another feeder "85" from West Bank #2 (by City garage), to Station 14 (on Hwy. 169 behind Great River Energy), at a cost of approximately $450,000. To ease the financial strain, we delayed a$120,000 project until next year. The time schedule spreadsheet reflects five new feeders to be constructed between 2004 and 2007 and extend a feeder. The reasons are as follows: Item#1 —Relieve load on existing feeders. Item#2 & #10—Relieve load on existing feeders and increase capacity for west business park. Item#4 & #5 —Extend feeder and construct new feeder to accommodate existing and future territory acquisition. Item#7 & #8 —Loop feed Otsego due to load growth and prepare for Co. Rd. 39 and Hwy. 169 overpass. Load growth is great for our community and the projects outlined above need to be done. The bad news is our existing cash flow will not sustain this level of construction. Initial calculations from our cash flow model, indicates electric cash reserves will drop to around$1,100,000 for a number of years. Our desire is to maintain approximately $2,000,000 in cash reserves. Our alternative is to bond for some of the feeder construction. Bond proceeds should be in$750,000 to $850,000 area. Elk River Municipal Utilities 2004 Electric Distribution Capital Projects Equipment Needs Delay to Next year $118,000 Replace Digger Derrick/Bucket Truck Unit#9 $40,000 Fork Truck for Unloading Delivery Trucks $25,000 Replace Hand Tools,Hot Line Tools, and Hydraulic Tools $3,000 Replace Tires $3,000 Ropes, Slings, and Chains $6,000 2—Hand held Radios $6,000 2 —Battery Operated Tools (Crimpier) $15,000 Bathroom in Lower Garage&Replace Floor in Break Room $201,000 Normal Distribution Construction $450,000 Construct Feeder 85 from West Bank 2 to Station 14 Construct new Feeder from Power Plant to West Industrial Park $225,000 $55,000 Construct New Feeder from Station 14 to Lowell &Main $205,000 Start Converting Feeder 23 to 7200 v(Meadowvale Area) $65,000 Start Construction of New Feeder from West Substation $50,000 $100,000 Replace Underground Cable At 5`s and Dodge Underground Feeder along Co Rd#1 South of Co Rd#33 $414,000 Underground Feeder along Co Rd#1 South of 221 th Ave $120,000 $80,000 Unknown Projects at this Time Rebuild 15`,2st,Gates, &Evans—South of Main St $150,000 $125,500 Replace OH Line at HW 169&Co Rd 33 $550,000 New Feeder Co Rd 21 &Co Rd 13 (approx 25,000') $400,000 Territory Acquisition $1,760,500 Total $1,229,000 New Developments Trot Brook Business Park West Clever Lake Fields East Woods of Hillside Elk Meadows Twin Lakes Crossings West Oaks Down Town District Otsego Development Unknown at this Time $320,000 Total O 0 I 0 r i O 0 Ci N O 0 0 0 a O) 0 0 N m 1 0 0 N 1 1 1 C 0I III I ill O O I I O 0 0 o of O O N O a w S O 0 0 0 O O 0 0 0 O 0 0 0 O O 0 0 0 N N a O (NIp Nf O O M N N in f9 S in r I- to N S oft r IO 0 0 ! 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