6.4. ERMUSR 10-14-2008~/ ~~
Elk River -~
Municipal Utilities
13069 Orono Parkway • P.O. Box 430
Elk River, MN 55330-0430
October 7, 2008
To: Elk River Municipal Utilities Commission
Jerry Takle
John Dietz
Jerry Gumphrey
From: Bryan Adams
Subj: Three Phase Line Extension
Phone: 763.441.2020
Fax: 763.441.8099
A church in Otsego is proposing to build a new facility on County Road #39 at the west end of
our electric system. The location of this facility is currently served with singe phase power while
the new church requires three phase power. To provide three phase power to this facility will
necessitate burying approximately 2,500 feet of conductor at an estimated cost of:
Line extension $45,000
3Q) J-boxes for future customers $13,000
Church service $16,000
TOTAL $74,000
The question at hand is what to we charge this customer to extend three phase power. Our
current policy states:
"COST OF EXTENSION DEFINED: The construction cost shall include all the costs of
materials and labor and all other expenses incurred in the installation of poles, wire, cross arms,
insulators, line hardware, switching and protective devices, meters, appurtenances, right-of--way
permits and all other items of labor and materials incident to the construction of the extension.
TERMS AND CONDITIONS OF ELECTRIC SERVICES: The Elk River Municipal Utilities
Board of Commissioners shall make the determination as the feasibility of all electrical distribu-
tion line extension petitions."
For a commercial developer, per our policy, we typically charge 50% to extend service from
source of power to the building.
There is little probability that additional three phase customers will build in this area. The
marginal revenue for this customer is in the 3¢ range depending on load factor or $270 per
month.
The two obvious options are as follows:
1. 50% of the cost from source of power or 50% ($74,000) _ $37,000
2. 100% of the line extension $45,000
0% 3f~ J-boxes for future use $ -0-
50% Church services $ 8,000
TOTAL
$53,000
To date we have indicated to the owner the cost to provide three phase power is $53,000. We
can lower this amount if this Commission desires otherwise. The cost to provide single phase
power is in the $8000 range.