5.2 ERMUSR 10-13-2020UTILITIES COMMISSION MEETING
TO:FROM:
ERMU Commission Melissa Karpinski –Finance Manager
MEETING DATE: AGENDA ITEM NUMBER:
October 13, 20205.2
SUBJECT:
2021 Annual Business Plan: Electric and Water Expenses and Conservation Improvement
Program
ACTION REQUESTED:
None.
DISCUSSION:
In preparation for budget submittal in November, staff continues to work through the 2021
budget process. The first draft of the expense portion of the 2021 budget has been completed
for commission review. Items are subject to change as the complete 2021 budget is assembled
and the finalized wholesale power costs and revenues are reflected. Revenues and rates, and
wholesale power costs for 2021 will be presented in November.
Attached is the following information for your review. Additional budget detail is available upon
request.
1.Electric Department Expense Budget – The 2021 budget for electric expenses are a 0.3%
decrease compared to the current year budget. It is noteworthy that the 2020 forecast
for expenses is a 3.7% decrease compared to budget. Wholesale power costs make up
around 70% of the operating budget and will be provided in next month’s budget with
the revenue projections. Most notable increases are for administrativeexpensedue to
the addition of an HR staff memberand expenses related to bonding for the new field
services building. These preliminary expense numbers will likely be adjusted during the
next phase of budgeting when the 2021 rates are designed.
The 2020 budgeted purchased power cost amount was $25,507,849. The projected
wholesale power cost increase is 1% but may vary slightly when the rate formula is
applied to ERMU’s load profile and anticipated growth. Preliminarily applying the 1%
projected wholesale power cost increase on the 2020 forecasted amount resulted in a
preliminary amount of $24,742,487. When factoring the preliminary wholesale power
cost forecast and the preliminary electric department expense budget, the overall
preliminary electric department expense budget decrease is 2.1% compared to 2020
budget.
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Page 1 of 2
57
The budgeted Payment in Lieu of Taxes (PILOT) amount for 2021 is $1.589 million. The
PILOT is comprised of $1.359 million based off4% ofthe city ofElk River sales
calculation, and $230,000 in donated utilities and labor.This preliminary projection will
change when revenue is budgeted for next month.
2.Water Department Expense Budget – The 2021budgetfor water expenses are a 3.4%
decrease compared to the current year budget. It is noteworthy that the 2020 forecast
for expenses is an 8.2% decreasecompared to budget. Most notable increases are for
administrative expense due to wellhead protection plan amendment, the addition of an
HR person, and expenses related to bonding for the new field services building.
3.Conservation Improvement Program Budget – The 2021 budget for CIP includes
$307,250 for rebates, an increase from 2020 of $16,425, as required to meet our energy
savings goal mandate.
ATTACHMENTS:
Preliminary 2021 Electric Expense Budget
Preliminary 2021 Water Expense Budget
2021 Conservation Improvement Program Budget Summary
2021 Conservation Improvement Program Budget Detail
______________________________________________________________________________
Page 2 of 2
58
ELKRIVERMUNICIPALUTILITIES
ELKRIVER,MINNESOTA
2021ELECTRICEXPENSEBUDGET
2020Annual2019Annual
2021Annual
ElectricBudgetBudgetActual
Expenses
Operating&MtceExpense
540.5461OPERATINGSUPERVISION121,000109,513103,807
540.5471DIESELOILFUEL15,00017,00014,455
540.5472NATURALGAS27,00027,00024,994
540.5483ELECTRIC&WATERCONSUMPTIONPLANT33,00033,00031,289
540.5484PLANTSUPPLIES&OTHEREXPENSE10,0007,0008,368
540.5491MISCPOWERGENERATIONEXPENSE7,0007,0005,841
540.5521MAINTENANCEOFSTRUCTUREPLANT19,00019,00030,631
540.5531MTCEOFPLANTENGINES/GENERATORS20,00032,00019,825
540.5541MTCEOFPLANT/LANDIMPROVEMENT30,00030,00044,209
TotalforOperating&MtceExpense:282,000281,513283,419
LandfillGas
550.505LANDFILLGASPLANTPURCHASEDGAS182,000180,000172,286Percontract
550.5051LANDFILLGASPLANTOPERATIONS&MTCE518,725511,277529,311
550.5052LANDFILLGASPLANTADMINISTATION47,00035,00017,450Ctybonus,utilitiesandattyfee
s
550.5053LANDFILLGASPLANTINSURANCE20,00025,00017,160
550.5054LANDFILLGASPLANTMTCE5,0001,172Roofrepair
TotalforLandfillGas:772,725751,277737,379
TransmissionExpense
39,00039,331
560.562TRANSMISSIONMTCEANDEXPENSE45,205
TotalforTransmissionExpense:45,20539,00039,331
DistributionExpense
580.5801REMOVEEXISTINGSERVICE&METERS2,0001,6002,080
580.5821SCADAEXPENSE42,80042,03239,704
580.5831TRANSFORMEREXPENSEOH&URD16,00020,00010,794
580.5851MTCEOFSIGNALSYSTEMS2,0002,000310
580.5861METEREXPENSEREMOVE&RESET1,0001,2006,388
580.5871TEMPSERVICEINSTALL&REMOVE2,0001,200894
580.5881MISCDISTRIBUTIONEXPENSE275,000312,968241,739
580.589INTERCONNECTIONCARRYINGCHARGE2,4162,4164,832
TotalforDistributionExpense:343,216383,416306,741
MaintenanceExpense
590.5911MTCEOFSTRUCTURES27,50021,5005,036
590.5921MTCEOFSUBSTATIONS28,00028,00025,431
590.5922MTCEOFSUBSTATIONEQUIPMENT27,00030,00026,181
590.5931MTCEOFOHLINES/TREETRIM150,000171,000106,712
590.5932MTCEOFOHLINES/STANDBY32,00031,00029,072
590.5933MTCEOFOHPRIMARY140,000140,000125,153
590.5941MTCEOFURDPRIMARY135,000130,000132,921
590.5943LOCATEELECTRICLINES97,00095,00090,191
590.5944LOCATEFIBERLINES1,0001,000373
590.5951MTCEOFLINETRANSFORMERS45,00051,00042,184
590.5961MTCEOFSTREETLIGHTING45,00045,00041,748
590.5962MTCEOFSECURITYLIGHTING10,00012,0008,431
590.5971MTCEOFMETERS85,000107,00076,866
590.5972VOLTAGECOMPLAINTS10,00010,0009,087
590.5981SALARIESTRANSMISSION&DISTRIBUTION43,00045,61739,247
590.5985ELECTRICMAPPING100,000115,00091,744
590.5991MTCEOFOHSECONDARY20,00020,00016,540
590.5992MTCEOFURDSECONDARY41,00041,00033,347
225,000219,760
590.5995TRANSPORTATIONEXPENSE225,000
TotalforMaintenanceExpense:1,261,5001,319,1171,120,024
Depreciation&Amortization
595.8031DEPRECIATION2,332,0752,362,5432,188,122
595.8032AMORTIZATION668,135668,135668,135
TotalforDepreciation&Amortization:3,000,2103,030,6782,856,257
InterestExpense
596.8071INTERESTEXPENSEBONDS622,859657,782694,630
596.8075INTERESTEXPENSEDEFEASEDBONDS(3,317)(3,317)(3,316)
597.8281AMORTIZATIONOFDEBTDISCOUNT(48,152)(48,152)(48,151)
TotalforInterestExpense:571,390606,313643,163
OtherOperatingExpense
597.8165EVCHARGINGEXPENSE4,6504,8774,528
597.8213LOSSONDISPOSITIONOFPROP(CAPITAL)12,50012,63017,049
597.8263OTHERDONATIONS3,0004,1042,856
597.8265MUTUALAID29,577
597.8302PENSIONEXPENSE82,00060,000150,775Usedaverage
597.8303OPEBEXPENSE45,0003,00092,537Usedaverage
59
ELKRIVERMUNICIPALUTILITIES
ELKRIVER,MINNESOTA
2021ELECTRICEXPENSEBUDGET
2020Annual2019Annual
2021Annual
ElectricBudgetBudgetActual
597.8341INTERESTEXPENSEMETERDEPOSITS13,00023,82822,754
597.84RENTALPROPERTYEXPENSE
9,00010,179
TotalforOtherOperatingExpense:160,150117,439330,255
CustomerAccountsExpense
900.9021METERREADINGEXPENSE34,00029,29927,298
900.903DISCONNECT/RECONNECTEXPENSE15,00015,22614,521
900.9051MISCCUSTOMERACCOUNTSEXPENSEUTILITY275,000279,000264,303
900.9061BADDEBTEXPENSE&RECOVERY20,00015,00011,828
TotalforCustomerAccountsExpense:344,000338,525317,950
AdministrativeExpense
920.9201SALARIESOFFICE&COMMISSION762,000755,000697,446HRposition
920.9202SALARIESCOVID19
920.9205TEMPORARYSTAFFING4,0004,000
920.9211OFFICESUPPLIES165,000197,57086,045
920.9212ELECTRIC&WATERCONSUMPTIONOFFICE31,00030,58728,799
920.9213BANKFEES2,6403,0002,251
920.9221LEGALFEES32,00027,50026,786
920.9231AUDITINGFEES18,00017,36016,720
920.9241INSURANCE175,000175,000162,843
920.926UTILITYSHAREDEFERREDCOMP115,000103,00089,001
920.9261UTILITYSHAREMEDICAL/DENTAL/DISABIL780,000780,000714,622
920.9262UTILITYSHAREPERA262,440255,000241,529
920.9263UTILITYSHAREFICA245,000241,500227,281
920.9264EMPLOYEESICKPAY127,000120,983131,695
920.9265EMPLOYEEHOLIDAYPAY138,500131,643131,797
920.9266EMPLOYEEVACATION&PTOPAY230,000224,957222,218
920.9267UPMICDISTRIBUTION60,00065,00051,685
920.9291CONSULTINGFEES50,20030,00019,655Bonding
920.9301TELEPHONE31,00023,50022,519
920.9302ADVERTISING15,00015,00016,686
920.9303DUES&SUBSCRIPTIONSFEES220,480162,80097,465Bonding
920.9305SCHOOLS&MEETINGS202,509270,360154,238MMUASafetyLabor&EverydayLeadershipTraining
920.9321MTCEOFGENERALPLANT&OFFICEHEATING9,0005,8417,155
TotalforAdministrativeExpense:3,675,7693,639,6013,148,436
GeneralExpense
920.9269CIPREBATESRESIDENTIAL70,05075,62535,640
920.927CIPREBATESCOMMERCIAL222,200210,200112,422
920.9271CIPADMINISTRATION2,5007206,606
920.9272CIPMARKETING46,50043,40017,229
920.9273CIPLABOR113,083135,338150,344
920.9274CIPREBATESLOWINCOME15,0005,0008,405
920.9275CIPLOWINCOMELABOR15,5004,5009,661
920.9281ENVIRONMENTALCOMPLIANCE32,20030,56429,188
920.9306MISCGENERALEXPENSE2,5004,800708
TotalforGeneralExpense:519,533510,147370,203
TotalExpenses(beforeOperatingTransfers)
11,017,02610,153,158
10,975,698
OperatingTransfer
OperatingTransfer/OtherFunds
597.8262TRANSFERTOCITYELKRIVERREVENUE1,359,0001,365,0001,157,444Willchangewhenrevenueisbudgeted
TotalforOperatingTransfer/OtherFunds:1,359,0001,365,0001,157,444
Utilities&LaborDonated
220,000210,790
597.8261UTILITIES&LABORDONATEDTOCITY230,000
TotalforUtilities&LaborDonated:230,000220,000210,790
TotalOperatingTransfer
TotalforTotalOperatingTransfer:1,589,0001,585,0001,368,234
12,564,69812,602,02611,521,392
BudgetChangeYearoverYear0.30%
60
ELKRIVERMUNICIPALUTILITIES
ELKRIVER,MINNESOTA
2021WATEREXPENSEBUDGET
2021Annual2020Annual2019Annual
BudgetBudgetActual
Water
Expenses
ProductionExpense
700.7021MTCEOFSTRUCTURES61,20060,00057,354Securityupgrade
TotalforProductionExpense:61,20060,00057,354
PumpingExpense
710.7101SUPERVISION63,00055,00049,455
710.7181ELECTRIC&GASUTILITIES240,000230,000229,100
710.7182SAMPLING15,00018,00013,681
710.7183CHEMICALFEED28,00028,00018,435
710.722MTCEOFWELLS175,000186,124144,649
710.723SCADAPUMPING10,00010,0003,767
TotalforPumpingExpense:531,000527,124459,087
DistributionExpense
730.7301MTCEOFWATERMAINS85,00087,22069,733
730.7309LOCATEWATERLINES16,00016,00015,704
730.7312WATERMETERSERVICE45,00045,14341,578
730.731
6BACKFLOWDEVICEINSPECTION15,00011,782338devicesandsoftwareexpense
730.7321MTCEOFCUSTOMERSSERVICE25,00027,80522,143
730.7325WATERMAPPING12,00016,00012,404
730.7331MTCEOFWATERHYDRANTSPUBLIC20,00025,00018,159
730.7332MTCEOFWATERHYDRANTSPRIVATE7,0009,0002,897
730.7341WATERCLOTHING/PPE10,0009,0007,823
730.7391WAGESWATER7,5007,0006,121
730.7395TRANSPORTATIONEXPENSE15,00015,00011,073
730.7399WATERPERMIT15,00015,00013,733
TotalforDistributionExpense:272,500283,951221,368
Depreciation&Amortization
595.8031DEPRECIATION1,093,5671,215,8391,147,148
TotalforDepreciation&Amortization:1,093,5671,215,8391,147,148
InterestExpense
596.8071INTERESTEXPENSEBONDS14,28824,34533,767
596.8075INTERESTEXPENSEDEFEASEDBONDS(829)(829)(829)
TotalforInterestExpense:13,45923,51632,938
OtherOperatingExpense
597.8213LOSSONDISPOSITIONOFPROP(CAPITAL)
597.8264DAMMAINTENANCEEXPENSE1,0008931,442
597.8302PENSIONEXPENSE20,5005,000(17,722)Usedaverage
597.8303OPEBEXPENSE20,0003,00024,663Usedaverage
597.8341INTERESTEXPENSEMETERDEPOSITS500758730
597.8
4RENTALPROPERTYEXPENSE2,1252,544
TotalforOtherOperatinExpense:42,00011,77611,657
CustomerAccountsExpense
900.9021METERREADINGEXPENSE2,5001,7611,334
900.9051MISCCUSTOMERACCOUNTSEXPENSEUTILITY65,00065,10060,465
900.9061BADDEBTEXPENSE&RECOVERY1,0001,000
TotalforCustomerAccountsExpense:68,50067,86161,799
AdministrativeExpense
920.9201SALARIESOFFICE&COMMISSION211,000212,000197,084HRposition
920.9202SALARIESCOVID19
920.9205TEMPORARYSTAFFING1,0001,000
920.9211OFFICESUPPLIES41,25054,16218,533
920.9212ELECTRIC&WATERCONSUMPTIONOFFICE8,0007,3537,199
920.9213BANKFEES700800542
920.9221LEGALFEES8,0005,5266,264
920.9231AUDITINGFEES4,5004,3404,180
920.9241INSURANCE26,00024,00023,391
920.926UTILITYSHAREDEFERREDCOMP20,00022,00014,612
920.9261UTILITYSHAREMEDICAL/DENTAL/DISABIL208,500208,455174,917
920.9262UTILITYSHAREPERA46,00048,95341,109
920.9263UTILITYSHAREFICA45,00043,99038,523
920.9264EMPLOYEESICKPAY30,00030,00026,370
920.9265EMPLOYEEHOLIDAYPAY28,00028,27522,245
920.9266EMPLOYEEVACATION&PTOPAY40,00037,00035,614
920.9267UPMICDISTRIBUTION10,50011,0007,421
920.9268WELLHEADPROTECTION20,000Wellheadprotectionplanamendment
61
ELKRIVERMUNICIPALUTILITIES
ELKRIVER,MINNESOTA
2021WATEREXPENSEBUDGET
2021Annual2020Annual2019Annual
BudgetBudgetActual
Water
920.9291CONSULTINGFEES12,50034,0004,662Bonding
920.9301TELEPHONE6,0005,5005,487
920.9302ADVERTISING7,0007,0006,575
920.9303DUES&SUBSCRIPTIONSFEES80,12852,00043,975Bonding
920.9305SCHOOLS&MEETINGS39,61557,87119,352MMUASafetyLabor&EverydayLeadershipTraining
920.9321MTCEOFGENERALPLANT&OFFICEHEATING2,7001,8891,788
TotalforAdministrativeExpense:896,393897,114699,843
GeneralExpense
920.9269CIPREBATESRESIDENTIAL4,5004,6054,005
920.927CIPREBATESCOMMERCIAL500
920.9272CIPMARKETING500477210
920.9273CIPLABOR4,7004,4894,226
920.9281ENVIRONMENTALCOMPLIANCE2,2001,003934
920.9306MISCGENERALEXPENSE1,2501,1501,216
TotalforGeneralExpense:13,65011,72410,591
TotalExpenses(beforeOperatingTransfers)
2,992,2693,098,9062,701,785
OperatingTransfer
Utilities&LaborDonated
597.8261WATER&LABORDONATEDTOCITY1,5001,6301,583
TotalOperatingTransfer
TotalforTotalOperatingTransfer:1,5001,6301,583
2,993,7693,100,5362,703,368
BudgetChangeYearoverYear3.4%
62
2021 CIP Operating Budget
Required Spending and Savings Goals
Total Spending Requirement 1.5% of GOR547,350.00$
Low Income .2% of Residential GOR26,134.00$
Minimum Conservation Spending Requirement273,675.00$
Maximum Load Management Spending Requirement273,675.00$
Energy Savings Goal (kWh) Line Loss 7.6% Subtracted5,005,684
Total CIP Budget 2021
Direct Labor70,158$
General & Administration45,425$
Advertising46,500$
Equipment12,000$
Contract (Includes $32,000 MN PUC Assessment)81,668$
Total255,751$
ERMU Rebates292,250$
Total all Expenses and Rebates548,001$
Total Estimated kWh Savings5,006,099
Total Operating CIP Budget No Rebates Only Direct Costs
Direct Labor70,158$
Advertising46,500$
Equipment12,000$
Contract (Includes $32,000 MN PUC Assessment)81,668$
Total ERMU Operating Expenses210,326$
Total Rebate Budget
ERMU Self Funded292,250$
Total Requested Budget
Direct Labor70,158$
Advertising46,500$
Equipment12,000$
Contract (Includes $25,000 MN PUC Assessment)81,668$
ERMU Self Funded Rebates292,250$
Total Requested 2021 Budget*502,576$
*No General and Administrative Included
63
$ 7 5.00 Dual Fuel & ETS Equipment Costs$ 200.00 EV Equipment Costs
$ 5 6.25 ERMU Dual Fuel & ETS Field Labor Costs
2021 CIP Budget (Rebate and Operating)$ - Contract Labor & Equipment for Transition of LM Participants
20212021202120212021202120212021
Historical Participation
ERMU
Operating Total ERMU
Residential Programs
Direct LaborOnlyERMU RebateSpending
2021 Budget2020 Budget2019 ActualG & AAdvrt.Equip.ContractkWh Saved
Off-Peak (ETS) Space Heating (Systems)4104$225$200$0$2,000$0$2,425$0$2,425
Dual Fuel Heating (Systems)2752$113$150$0$5,000$0$5,263$0$5,263
Electric Vehicle Charging in Home10206$563$2,000$6,000$4,000$3,000$15,563$10,000$25,563
Off-Peak (ETS) Storage Water Heat4$225$800$0$0$0$1,025$2,000$3,025
Load Control Audits0020$0$0$0$0$0$0$0$0
CAC Installation606053$1,350$1,500$1,000$0$0$3,850$9,000$12,85030,000
ASHP Installation5102$113$1,500$1,000$0$0$2,613$2,900$5,51331,145
ECM Furnace Motor859081$1,913$1,500$1,000$0$0$4,413$8,500$12,91362,220
CAC Tune-Up150170147$3,375$1,500$1,000$0$0$5,875$9,000$14,87515,000
Programmable Thermostat (New 2021)1500$3,375$3,500$6,000$500$0$13,375$3,750$17,12593,000
Ground Source Heat Pump (tons)5103$1,000$1,000$1,000$0$0$3,000$2,000$5,00022,400
Ductless ASHP151512$338$500$1,000$0$0$1,838$6,000$7,838176,130
Residential Cooling230255252275
Clothes Washer409017$750$500$1,000$0$0$2,250$1,000$3,2507,320
Dishwasher202523$375$500$1,000$0$0$1,875$500$2,3751,200
Refrigerator New ONLY000$1,000$0$0$1,000$0$1,000
Refrigerator New w/Recycle607051$1,125$500$1,000$0$0$2,625$4,500$7,12562,820
Refrigerator Harvest10100$188$500$1,000$0$0$1,688$750$2,4389,150
Pool Pump5102$188$500$1,000$0$0$1,688$1,000$2,68810,500
Heat Pump Water Heaters1052$375$500$1,000$0$0$1,875$3,500$5,37521,280
Freezer 550$94$0$0$0$0$94$375$469
Dehumidifier152511$281$500$1,000$0$0$1,781$375$2,1566,525
LED Rebates9004000736$1,500$1,000$1,000$0$0$3,500$1,800$5,30040,500
Fluorescent Lamp Recycling25000$500$500$500$0$0$1,500$100$1,600
Income Eligible (CAP Agency)558350012000500012000$ 28,000$ 3,000$ 10,00031,000
Residential Audits3$3,375$500$0$500$2,000$6,375$0$6,375
Energy City00$8,320$0$0$0$0$8,320$0$8,320
MN Division of Energy Resources Assessment$32,000$32,000$32,000
Clean Energy Choice$2,000$2,000$2,000
Distributed Renewable Generation (Field Services)$27,368$27,368$27,368
Energy City Solar Table and Shelter$0$0
MMUA CIP Director Contribution and Education$4,000$575$0$0$1,300$5,875$5,875
Field Services Labor for Program Delivery$0
Residential and Misc. Total$37,158$32,225$30,000$12,000$77,668$189,051$70,050$259,101851,465.00
Commercial Programs
Direct LaborG & AAdvert.EquipContractERMU OPERMU RebateTotal ERMU
Custom55$5,000$2,000$1,000$0$2,000$10,000$20,000$30,000300,000
Vending Machine Control/ Door Miser$0$0$0$0$0$0$0$0-
Consultations - Commissioning200$2,000$800$0$0$0$2,800$0$2,10017,500
Chiller, Cooling Towers, VAV,22$3,000$1,200$1,500$0$0$5,700$30,000$35,700595,000
Design Assistance/Audits/Energy Star/Green Globe44$0$0$500$0$2,000$2,500$0$2,50031,250
Energy Star Certification$0$0$500$0$0$500$0$5005,000
Ground Source Heat Pump10$0$0$1,500$0$0$1,500$10,000$11,500153,333
LED Lighting65$5,000$2,000$2,500$0$0$9,500$95,000$104,5001,412,162
New Construction Lighting55$4,000$1,600$2,500$0$0$8,100$30,000$38,100624,590
Retrofit Lighting2522$6,000$2,400$2,500$0$0$10,900$20,000$30,900498,387
Premium Efficient Motors/VSD03$0$0$0$0$0$0$0$0-
Variable Frequency Drives502$5,000$2,000$1,500$0$0$8,500$10,000$18,500336,364
Roof Top Units, Split Condenser, Economizer1010$1,500$600$1,500$0$0$3,600$6,000$9,600152,381
Small Commercial AC Tune-Up2020$1,500$600$1,000$0$0$3,100$1,200$4,30028,667
Commercial Total$33,000$13,200$16,500$0$4,000$66,700$222,200$288,9004,154,634
Grand Total$70,158$45,425$46,500$12,000$81,668$255,751$292,250$548,0015,006,099
Summary
Energy Savings Goal5,005,684 $255,751ERMU Operating Budget
Total Spending 547,350$ $292,250ERMU Rebates
Low-Income26,134.00$ $548,001ERMU Budget
Disdributed Renewable Generation27,368$ $547,350Total Required Spending 2021
64