INFORMATION 11-25-2002Elk River
Municipal Utilities
322 King Avenue
Elk River, MN 55330
phone: 763.441.2020
Fax: 763.441.8099
November 20, 2002
To:
From:
Elk River City Council
Bryan C. Adams
Elk River Municipal Utilities
Subject:
Explanation of Electric & Water Rate Changes
Councilman John Dietz asked for a summary of the recently revised electric & water
rates. As part of the Elk River Municipal Utilities annual budgeting process, electric rates, water
rates, and connection fees are reviewed. Rate comparisons are made with neighboring utilities.
Also income, expense, and cash reserve projections are made for a ten year period to help ensure
we have adequate financial resources necessary to adequately serve our customers with no large
unexpected rate changes, while keeping rates as low as possible.
For the electric department, our initial intentions were to pass on the entire rate increase
from GRE. This year the whole rate increase is projected to be $236,661 or approximately
$0.0015. We elected to pass on only $197,000. This is an increase of 1.76%. In summary the
electric rates are as follows:
Current 2003
Residential
· Account Maintenance Fee $7.00/month 7.00/month
· Winter $0.0638/KWH $0.0653/KWH
· Summer $0.081/KWH $0.0825/KWH
Non-Demand (Commercial) · Account Maintenance Fee
· Winter
· Summer
$15/month
$0.0541/KWH
$0.078/KWH
$15/month
$0.0556/KWH
$0.0795/KWH
Demand (Large Commercial) · Account Maintenance
· Energy
· Winter Demand
· Summer Demand
$35/month
$0.037/KWH
$8.50/KW
$11.25/KW
$35/month
$0.038/KWH
$8.50/KW
$11.25/KW
The off-peak and energy management rates were also adjusted. The electric connection fees
were unchanged.
The rates for the water department are driven by the high debt load and requirements to
curb lawn sprinkling. Our lawn sprinkling policy of even/odd with no sprinkling between 10am -
6pm has had limited success. Instead of using winter/summer rate structure we will be utilizing
an increasing block rate to help curb sprinkling. This is also highly encouraged by the MN DNR.
In summary the water rates are as follows:
· Winter Period - Nov. 1st thru March 30th
· Summer Period- April 1st thru Oct. BOth
Existing Residential & Commercial Water Rates
· Account Maintenance Fee $5.00 to $85.00/month, depending upon water meter size
· Winter Rate $1.15/1000 gallons
· SummerRate $1.20/1000 gallons
2003 Residential & Commercial Water Rates
· Account Maintenance Fee No Charge
o Residential Rate
· 0-8000 gal/month
· Above 8000 gal/month
Commercial Rate
$1.20/ 1000 gallons
$1.50/1000 gallons
0-1.1 x previous years average winter period monthly consumption
$1.20/1000 gallons
Above 1. lx previous years average winter period monthly consumption
$1.50/1000 gallons
The average winter period monthly consumption for residences is approximately
5000 gallons/month. This allows the average residential water customer 3000 gallons/month of
sprinkling before the higher rate is charged. Because the commercial water customer usage
varies so much depending upon the type of business, a fixed level for the second or higher step
would not be equal. The new rate structure allows 10% above the average winter period monthly
consumption before the higher rate is charged. As you may recall the sewer consumption is
based upon the water consumption. For summer sewer consumption, the quantity billed is the
monthly average of November thru March. The WAC fee was raised from $1350/unit to
$1500/unit.
If the city council desires to see the actual rate tariff sheets with all of the details, please
advise.