5.2 ERMU 12-12-2023Elk River
Municipal Utilities UTILITIES COMMISSION MEETING
TO:
FROM:
ERMU Commission
Melissa Karpinski — Finance Manager
MEETING DATE:
AGENDA ITEM NUMBER:
December 12, 2023
5.2
SUBJECT:
2024 Annual Business Plan (Budget, Schedule of Rates & Fees)
ACTION REQUESTED:
Adopt the 2024 Annual Business Plan
BACKGROUND:
In November, the preliminary 2024 Annual Business Plan was presented to the Commission.
There have been some changes due to finalizing of projects and expenses. The final highlights
are discussed below.
DISCUSSION:
Electric Budget and Rates
As discussed in November, we are proposing a 0% rate increase for 2024.
Notable items in the electric budget for 2024 are:
• 4.00% wage adjustment for all pay plan groups.
• Conservative estimate for usage and growth.
• 0% rate increase for wholesale power.
• Contracting for tree trimming of $145k.
• Increased pension expense due to 2022 actual.
• Increased loss on disposition of capital due to Advanced Metering Infrastructure (AMI)
implementation.
• Administrative expenses for Utilities Performance Metric Incentive Compensation
(UPMIC) Distribution for change in percentage and additional consulting fees for a rate
study, compensation study, and NISC business consult.
• Replacement of Digger Truck #9.
• Replacement of Truck #13.
• Electric Service Territory acquisition loss of revenue for Areas 1&2, 3&4, 5&6, and 7&8
from reserves.
• County Road 12 interconnection agreement with Connexus from reserves.
• East substation design and construction from reserves
• Otsego transformer replacement from reserves.
• Feeder construction from reserves.
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***AMI project from inter -fund borrowing.
Water Budget and Rates
As discussed in November, we are proposing a 2% rate increase for 2024.
Notable items in the water budget for 2024 are:
• 4.00% wage adjustment for all pay plan groups.
• Conservative estimate for usage and growth.
• Increased pension expense due to 2022 actual.
• Increased loss on disposition of capital due to AMI implementation.
• Administrative expenses for UPMIC Distribution for change in percentage and additional
consulting fees for a rate study, compensation study, and NISC business consult.
• AMI project from reserves.
• Water main construction from reserves.
Summary
Submitted for approval is the 2024 Annual Business Plan which includes the 2024 Budget and
the 2024 Schedule of Rates & Fees. The 2024 fees were approved by the commission in
November and are being presented here unchanged. The adoption of the 2024 Schedule of
Rates & Fees through the adoption of the Annual Business Plan shall supersede and replace all
previously adopted tariffs, rates, and fees.
FINANCIAL IMPACT:
Notable items discussed above. As previously discussed, we are proposing a rate increase of 0%
for electric and 2% for water.
ATTACHMENTS:
• Proposed 2024 Annual Business Plan
o 2024 Budget
o 2024 Schedule of Rates & Fees
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