5.2 EMRUSR 12-10-2024��i
Elk River
Municipal Utilities UTILITIES COMMISSION MEETING
TO:
FROM:
ERMU Commission
Melissa Karpinski — Finance Manager
MEETING DATE:
AGENDA ITEM NUMBER:
December 10, 2024
5.2
SUBJECT:
2025 Annual Business Plan (Budget, Schedule of Rates & Fees)
ACTION REQUESTED:
Adopt the 2025 Annual Business Plan
BACKGROUND:
In November, the preliminary 2025 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 2025.
Notable items in the electric budget for 2025 are:
• 4.00% wage adjustment.
• 2% UPMIC.
• Decreased power plant expenses due to decommissioning.
• Conservative estimate for usage and growth.
• Filling of vacant administrative specialist and engineer position.
• 0% rate increase for wholesale power.
• Contracting for tree trimming of $200k.
• Loss on disposition of capital due to Advanced Metering Infrastructure (AMI)
implementation.
• Administrative expenses for consulting fees for a rate study, Arc Flash study, future of
power plant, and NISC business consult.
• Replacement of Digger Truck #9.
• Replacement of Bucket Truck #5.
• Electric Service Territory acquisition loss of revenue for Areas 1&2, 3&4, 5&6, and 7&8
from reserves.
• East substation construction from reserves
• Feeder construction from reserves.
***AMI project from inter -fund borrowing.
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Water Budget and Rates
As discussed in November, we are proposing a 1-3% rate increase for 2024.
• Tier 1— 1% increase
• Tier 2 - 2% increase
• Tier 3 - 3% increase
• Monthly base rate — 2%
Notable items in the water budget for 2024 are:
• 4.00% wage adjustment.
• 2% UPMIC.
• Conservative estimate for usage and growth.
• Additional lead water operator and filling vacant administrative specialist positions.
• Loss on disposition of capital due to AMI implementation.
• Administrative expenses for consulting fees for a rate study, urban services expansion
study, future of power plant, AES2, and NISC business consult.
• New well projects from reserves.
• AMI project from reserves.
• Meadowvale booster station from reserves.
Summary
Submitted for approval is the 2025 Annual Business Plan which includes the 2025 Budget and
the 2025 Schedule of Rates & Fees. The 2025 fees were approved by the Commission in
November and are being presented here with one change. The adoption of the 2025 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 1%-3% for water.
ATTACHMENTS:
• Proposed 2025 Annual Business Plan
o 2025 Budget
o 2025 Schedule of Rates & Fees
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