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5.5. ERMUSR 04-12-2016 Elk River Municipal Utilities \2015. .A n n u a I , e .,._.,__,___....... ,, 7 r t ai ... ; mi. mi - '., , ...- 914 i I. . :-. ...... ,... t - .. _.: . . ' w . , ' ( ( 1. [ . . . .,. 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I 111 - - • Alt ..... _ ,_ ( ,• i ....----------- I RI- . . .— ,. ___..- -:., — 4.14. I, . • ... -N--- I ' -- ---. '-i • 0 0 0 0 0 4111' intA, , ,__.• --* t ti if.•:'7 =.7-14-'' I t'" A ._ ,f:: •.e • ; ''''7.•,, ""-- - "...--;,-4%, .,,..,,,, • - • T .1.1,: N • 1 . ..,",-,'fr • r•,1: / ( ' — ,,,," p,„ . V ---, , .0. 4. : . 1 1 # # 0 / 00 # SIP I i \ II*/ III , I SI . id i , 1./.• IVS 0 $ 1 I i 0 S litS°0 _ , •\k., , st44 $ $ $ stil I t414111 ° 0 , 00 , .4 , t 0 t si0104441 4 0 4 , ,; gil, , 4 , 0 , , ‘ • t i a . 40 .. , 'o I 4 I $ 0 t•$ f,', I . . ) , Is , ii . . 11 I ' ti If ' / /", „ Uvlission To provide our customers with safe, reliable, cost effective, 'To communicate and educate our customers in the use Page 1 'These products and services will"be provided in an __. _ --r-----__________ _ 0 2 To Our Customers _ _ _ .... - -----__ :- Thank you to all who attended our 100th anniversary 17 x. celebration in August, 2015. The support from our community ht-, - is truly incredible. I speak for all Elk River Municipal Utilities -- -. 1employees that it is an honor to serve our community. In addition to being ERMU's 100th anniversary, 2015 proved to be a significant milestone for our community-owned utility. An agreement was signed with Connexus Energy ,, which established terms for the transfer of electric service � 1 :Prv A territory by the cooperative to ERMU over five years. To date, this is the largest agreement of this nature where both . . utilities continued to service customers in Minnesota after the transfer. The first transfer under these terms transpired in Late 2015. The outages to facilitate this transfer took just minutes. Connexus Energy and ERMU employees worked _, at together seamlessly both operationally and administratively to make this transfer a success. The positive nature in which , 4tb4 this agreement was negotiated and how the first transfer was executed speaks volumes about the leadership values of c 4 both utilities. We are public power and water; we are owned by those we serve; we are governed by members of our community. And a we are proud to be a part of this growing community. x A century of service. A future of growth. i '-1,k ti A.-,_ - Troy Adams, P.E., General Manager Statement: and quality long term electric and water utility service. of utility services, programs, policies, and future plans. Page 2 environmentally andfinancially responsible manner. Pictures taken at the August 27, 2015 anniversary celebration . \ C• t f _ 3-- '.m ) � k, r , , IP SAFETY • DEMONSTRATION 4� 4 1 1 V t. . t �G A, y` "�; _ r RIS lltll 4.` ' jI' t\ �l will �U I « o ' _--- 1 p P' I i Y � r art_ � � - .;,• Ill 7. i e a a'o I) n��.��a a Quo, 1 . _ 'O r Val • ECkgiver[Municipal ttilities would like Page 3 serving the ECk liver community and 100 Year Anniversary Celebration Our community has been dedicated to Local ownership of their electric utility for 100 years. To honor the milestone, Elk River Municipal Utilities hosted a celebration at the Sherburne County Fairgrounds which was attended by nearly 1,300 people. The community participation at the event illustrated Local commitment to public power and community owned and operated utilities. The centennial celebration that included live music, food, kids activities, electric department demonstrations, and tours of the historic power plant, was a great way for the utilities and community to come together to celebrate a century of service and a future of growth. , .1 , • •• a� ' '0 1- ""- LAI ,. , , i ., N. d 1 p , 0 r , ■ Elikz r-- res 1 . 4 ' ' - 1 ,-, i 1 4,. .z.,iv ..., r C to thankour customers for the privilege of surrounding areas for the past 100 years. Page 4 Electric Service Territory Growth After three years of negotiations, ELk River Municipal Utilities and Connexus Energy executed an agreement that established terms for the transfer of electric service territory serviced by the cooperative within the ELk River city limits to ERMU. These terms provide the framework for an orderly transfer of this service territory over a five year period. This is truly a historic event for our community and may prove to be one of the most important accomplishments in the history of ERMU as it is expected to increase our customer base by 20%. And in late 2015, ERMU welcomed 950 new customers with the first transfer under these terms. The transfer of this initial area will allow the City of ELk River and ERMU to work together in creating economic development opportunities that enhance the comprehensive growth for the City and ERMU. By mutually growing together, the City and ERMU are able to provide greater value to all customers. The transferred areas will allow ERMU to recognize substantial economies of scale spreading fixed costs over a Larger customer base. This translates into more competitive electric rates. In 2016, ERMU was able to keep the electric retail rates at the 2015 Levels. This was in large part due to the economies of scale recognized with the first electric service transfer. This was also accomplished despite a 2% increase in power costs from our wholesale power provider. ELk River is a thriving community and the addition of the transferred territory will only add to our "Future of Growth". 2015 Electric Department Statistics: • Peak = 55 MW • Annual Energy Sales = 282,265,268 kWh Page 5 • Number of Customers = 10,500 • Miles of Electric Lines = 450 miles R_,, . .11mem al �Ie e p p ■sa 1 — _ , 71--1I F 1111111.111C_— Ai' Mil $ . i _,--.7. L - ., . d�p�al': i AWO l 0 �b - r. . , 1 .„,...„,, -�v, _o1lc0d Li ep' Ir 1' An. -N.. 'A ' ` M='1L 'L� �lU :'-.'I;I; F- ; / �F �oV aL 0 ''1 �B- ,/o v�eA LE---4141 0�0 � � 1 13' ' � oov� .-: I oa 001n o mo -i o ' J o A°9a poaa�ao a ! �-1� 1i fidt I o09;,i ." Pn g- OPV-moo --ii F . Ili a ae a � o ��tt��s,s` ° 6 ` d a� tea, C eirmi a emu o4 A�0 s---a=-- ,E _ O3 11r iQ o> n l _ •�,� ® ir m ]pm , me a1,,,j,.! v9 �. /At NI it irZk WII - Rao �.Ys• it I�.'r II'. "II' 0 10—E?�, 7. r '�0li'''id;- �' �n Krupp M N IA "'"''SII■ , . 0,.11ll1 .r.�• Y % - _ LLQ 1' IY Yli III.�..:�i ••i IIlt' , it a•' 171;1.,• r �a Y , �� ��a :42.5:171i @� k".s ■�-� ac4a `B1�. it�9a comm e®Do IIV: i c.^ �� 41;7' ybfirae®��e� .dt1�0��1 Cbd A�`.90a10:, d�. s � Yy�f®u='TOea'9u -9 %Jao i v9e �v ,V•�I�i'1- 1A d'aD 04�0.pYil�0'180198 Q]]]y I, /'1 li 91 ..a fib 0 �4199iD 00a�✓e V� 9 „91 O 4 a°o 99m9 a°al0 0e0 �� d .1 Elide . Sea. e a AAA31111; 0 1=a, • oay.a noir– '�.,10E1111 2015 ERMU Nr Electric Service Territory " , ��° Connexus Acquisition Zones q. ,. Existing ERMU 1A 3 6 N Milk ,A : ooh imill 1 B 4 7 'y;. h 2 5 8 S ``I_■SII! o —�ILA h Page 6 Energy Efficiency Pays Out 3ig in 2015 Elk River Municipal Utilities residential and commercial customers were able to capitalize on over $178,000 in electric utility rebates in 2015. Residential customers participated by buying Energy Star® qualified appliances, heat pumps, central air conditioners, and energy efficient Lighting products. The commercial customers took advantage of rebates for lights, motors, chillers, variable frequency drives, and many other energy efficient products. In addition to the rebate dollars customers received, they will also enjoy lower energy consumption that results in dollars saved every month for years to come. The residential and commercial customers that participated in the rebate programs collectively saved over 2,900,000 kWh as well as an estimated $300,000 off their electric bills. This is a CO2 reduction equivalent of one decade of CO2 consumption from planting 50,000 tree seedlings. Our community makes a real difference to our environment through energy conservation. Page 7 '411* Financials The financial performance of Elk River Municipal Utilities continues to be solid and 1101.1°.1°.. we are proud of our physical growth related to the electric service territory transfer, as well as new businesses and residences. This growth provides an increased revenue stream that currently outpaces our operation and administrative expenses, resulting in better rates for everyone. In conjunction with the Mission of ERMU, "To provide safe, reliable, cost effective and quality Long term electric and water utility services.....in an environmentally and financially responsible manner," we strive to keep our costs down, so we can keep your costs down, and still provide the best service possible. Arm In 2015 we implemented a temporary demand rate adjustment to help with rate transitions for the new Large commercial customers acquired. We were able to hold our electric rates for 2016 to a 0% increase, water rates to a 2.5% increase, and we are hoping to have minimal rate increases over 3r+rthh:,;;; : mail the next several years. ,ter Page 8 Below: Well #2 pressure filter Opposite: Electrical technician installing a meter Water Department In 2015 Elk River Municipal Utilities went through an extensive rehabilitation project for WeLL #2. The well was entirely rebuilt, the filter and pipes were sandblasted and painted, and the chemical feed system was rebuilt. This project will extend the life of the well and filter far into the future. In 2015 ERMU also began the WeLL #7 Water Treatment Plant Expansion design process. The addition of the filter is the final phase of a multi-year project to increase water production to cover growth and development in Natures Edge Business Park. } iliP i Mi N _ E K V NISAllimio t 2015 Water Department Statistics: • Peak = 4,400,000 gallons per day • Annual Water Sales = 676,842,000 gallons Page 9 • Number of Customers = 4,800 • Miles of Watermain = 110 miles Metering and Mapping Elk River Municipal Utilities currently - utilizes an Automated Meter Reading { (AMR) system that allows ERMU to read all of its meters using an Encoder Receiver . Transmitter (ERT). This technology is used to transmit data directly from utility meters over a short range so a meter reading vehicle can collect meter data without a meter technician physically inspecting each meter. As part of the 2015 transfer of electric service territory, ERMU's Technical `", Services Department was responsible for changing out and replacing the existing ,, .. meters in use. In all, there were 950 meters that were changed out during the transfer; a monumental task completed in Vis' just a few days. In addition to the meterl `- 3 ' change out, area mapping needed to be updated as well. ERMU is currently in the ' , W ` ` -T' process of updating their territory maps �. ` using Geographic Information System .` ,ii (GIS) software. The electronic mapping ' will allow for more accurate information, ,; : ° , , } easier modifications, and Global Positioning _ ;: System (GPS) capabilities. Page 10 Opposite: Engines at the historical power plant A History of Elk iver Municipal Utilities Elk River Municipal Utilities has seen tremendous change and growth throughout the past century. It all started with a businessman determined to bring power to the Village of Elk River. In June of 1915, Fred Waterman, businessman and real estate developer, incorporated the Elk River Power and Light Company, now known as Elk River Municipal Utilities. Construction began on the hydroelectric power plant, which included a 200 horsepower turbine engine housed by a 30 by 30 foot structure located next to the dam on Orono Lake. Elk River residents were anxious to enter the world of modern conveniences that electric appliances could provide. Incandescent lamps, flat irons, electric fans, vacuum cleaners; the possibilities seemed endless. That was just the beginning of our robust relationship with our beloved city of Elk River and surrounding areas. a. . � ` ' One hundred years later, ERMU serves more than 10,500 electric customers in the Elk River area, has 450 miles of electric lines, and had energy sales of 282,265,268 kWh in 2015. ERMU's water system now supplies water to approximately 4,800 customers with more than 110 miles of water mains. ERMU has played a Large part in shaping the community of Elk River and surrounding areas and it continues to grow. To read more about the history of the utilities, you can view "A History of Elk River Municipal Utilities" on our website. The history report, which highlights the past 100 years, was published in 2015. We are public power and-water; We are owned.by those Page 11 Historic Power Plant If a natural disaster occurred here in our city, and/or separated us from the regional transmission grid, Elk River Municipal Utilities is prepared to keep the power on for critical Loads. ERMU has four Large engines that have the capability to generate over eight Megawatts of power in the event of an emergency. The engines are Located at the historic Power Plant on Main Street and are, in a sense, a "living museum." The engines, which can be started with compressed air, are able to generate enough power to meet our critical needs. Two of the engines have been here since 1948, another was acquired in 1962, and the fourth in 1972. The engines are very well maintained and are exercised every month to keep them in tip top shape so they are ready to go if needed. The plant and these engines are an important part of our City's history and public power, and continue to be an important asset playing a critical role in our emergency preparedness. rr r (" k j ir tkililliR-,',OA a - '"Arr. ��/ r. � � r: Airid 4 � .�1 � e . 1 aims' A0 if Mt: (1111.: _ wii: --,-- _, ._,.-_ _,_ „ we serve; We are governed by members of our community. Page 12 ���� :141) _ __ ,-r - 130,3 -NM _ -- a . i ' — • 'r -'--1=' 8 _ 1 ' -`'3 '^fir"„ 3`; .;I" !u u iA � t � . ' �) II- Fi i 1 s Y 1 '..-t-,t*:".‘..".,, ,, I ,N ! �: . Elk 1 yy 1 P,, T —� • I -.. I golf i r R - I fiir '�' . '. r116 I 11 111Minisi _1 i ,, •;411111141\ \` A it , , ,1i,' Aftec ,. '1 �t „..., • i do --. poi .� .. �, ........ - .... ..., s.:_., V iia _ _ , .-_ �, P 1 roi �' / .: ,44100. ' _ _ — iligi- 1. 1. Captain Public Power makes an appearance at ERMU for 2015 Public Power Week 2. Aerial Shot from the Historic Jackson Street Water Tower 3. Opening ceremony at the 2015 APPA Lineworkers Rodeo held in Sacramento, California Page 13 Back Cover: The Elk River Dam served as the first generation facility for our community 2 44( „,,...- -.....,- • -±.___.tz,:, . -------- -,,-4.... -- — . _ .---._- ..r - - -- ,-- • - ..-1 - I, ,-' . ,- -1-7...-- - :-..,--• ---:- f. \--- ... ------ - 777---(,-,-.i:',1147W--" ,,,l- --.-?Iriii'l77 7:-t"_•-. •:. - ---,. , ..„ . ... . ; ..• ,L _ .,5_44, i.---_.__ INEwi,=,_-.,._. 3,. , - .. . .;-,-t _ ....b._ - N,.... 11 ,...-.-0....,,,..ki„ iii(... . , ,., ,-. 4• ,...,'V , . • • fr;II:,,• . 0' i , •-,, •-' . ..4 ' ' , , • '' ''''''''',- '• I\S% -' ",-Y'•-.''''''''' 4' ” ._---,,,, .., - -.5" - . — , . , , .• , A -,- • \ -•;•• 1-.* -----•t, -....,-''-''' `11 Iv , —-_,..-• ,, 1 s ., .....„........,1=------ , --.*--\. ., __ . , , - k. , - , ,, _____,- ;3i., • i Ist‘ ________ ,• :,..0- , -..' / ----1/..„,--- ,, . \ , / . - . , I RI' Il I ' . : 1 AIJIIII/11 illib. ' LI, ,. ... ..,., ,.i -:,... pt . ,1 , .,..„:- ,e-e.,..., - ,I.,, _ . . i . . . ,-- ..,-, _,. i i ._ , - ..:;i!. ... .: ki ! . . . _c„ ., a 4 ,L._ I• 44.. -ft/44 - 4 1.1•f.- •94 _ _ ' ' ..4::?""'" / / 4 q4 * ..-• -.4 I ' - • iv 44.0'• 4 ;-.! 7 I -.. -.. ( ' ._..• - , .. i.. • .- \\1 6 7... . ... . ___-___„_-__,., ' .,....•-, - = __. i .. . . , ..,.... . . , . 4. ERMU employees and family manning the bucket truck float at the Sherburne County Parade 5. Technical Services Superintendent Wade Lovelette retires after 33 years of dedicated service 6. Lineworker repelling in a safety training 7. ERMU's Water Department conducting annual Dam inspection Page 14 .1 p,- :. -. 4- a3 ',' .., y C . • • i.., .1 I I) a e v - f - P _ w .. . ' v., ' 1 Y '1 r ":'-i:i."'- iii, , : lilt, j1 4 'elk ay C - ..'', i r ..,..R.�if• w iw '�. =„,, t. . 13069 Orono Parkway • P.O. Box 430 Elk River, MN 55330 • wwwelkriverutilities.com 763.441 .2020 • C3 0 © ERMJMN