6.2. ERMUSR 01-13-2009J,
Elk River
Municipal Utilities
13069 Orono Parkway • P.O. Box 430
Elk River, MN 55330-0430
January 7, 2009
To: Elk River Municipal Utilities Commission
Jerry Takle
Jerry Gumphrey
John Dietz
Fr: Vance Zehringer
Subj: Annual Report to City Council
Phone: 763.441.2020
Fax: 763.441.8099
Each year all departments of the City provide annual reports to the City- Council. This
year ERMU's report will be presented on March 2°d. These reports are also completed in
digital format and placed on the City's website so the general public can view same. The
City generally condenses most presentations so this may appear shortened in its final
form. It is good for the Commission to review 2008 accomplishments and review 2009
goals.
Attached is the proposed Elk River Municipal Utilities 2008 Annual Report for your
review and comment.
ELK RIVER MUNICIPAL UTILITIES
Mission Statement
To provide our customers with safe, reliable, cost effective and quality
long term electric and water utility service. To communicate and
educate our customers in the use of utility services, programs, policies,
and future plans. These products and services will be provided in an
environmentally and financially responsible manner.
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ELK RIVER MUNICIPAL UTILITIES
SUMMARY OF YEAR 2008
BUDGETS
ELECTRIC BUDGET SUMMARY 2008
ELECTRIC REVENUE $ 22,757,508
ELECTRIC EXPENDITURES 21,544,397
ELECTRIC NET FOR CAPITAL 1,213,111
DEBT RETIREMENT 320,000
PROMISSORY NOTE TO COUNTY 189,060
LESS DEBT PRINCIPAL PMTS 704,051
CAPITAL EQUIPMENT/CONSTRUCTION 2,200,500
CMMPA & MMTG 120,000
BONDING
NET (1,616,449)
DEPRECIATION 1,905,500
NET TO RESERVES 289,051
WATER BUDGET SUMMARY 2008
WATER REVENUE 2,585,837
WATER EXPENDITURES 2,378,401
WATER NET FOR CAPITAL 207,436
DEBT RETIREMENT 395,000
GROSS (187,564)
CAPITAL PROJECTS 929,500
BONDING
NET (1,117,064)
DEPRECIATION 901,250
NET TO RESERVES (215,814)
BUDGET SUMMARY2008
ELK RIVER MUNICIPAL UTILITIES
2008 ANNUAL REPORT
ADMINISTRATION -Vance Zehringer /General Manager
ERMU remotely controls over 1,300 customer loads to help reduce wholesale power costs and customer
utility bills. They consist of: 180 energy storage water heaters, 154 dual fuel heating systems, and 977
cycled air conditioners.
2. ERMU sold 400,000 kWs from wind generators in 2009.
3. ERMU rebated its first whole-house (4.68 kW) photovoltaic system in 2009.
4. ERMU's landfill gas electric generating plant produced 262 million kWh in 2009. The annual load factor,
which is a measure of plant availability, was 93.5%.
5. The Energy City wind generator produced 829 thousand kWh in 2009. The annual load factor is low at
14.3% partially due to the lack of sufficient wind resource available in this part of the State.
6. ERMU rebated $338,000 to customers that participated in the Conservation Improvement Programs (CIP)
in 2009. Of these rebates, $182,000 was reimbursed by Great River Energy. Rebates were paid out on
2,450 CFL's; 133 AC tune-ups; 41 energy star air conditioners; 10 heat pumps; 70 energy star dishwashers;
77 energy star refrigerators; 90 energy star clothes washers; 125 AC trees; 1 photovoltaic system; and
several large commercial HVAC, lighting, motor, and VFD installations.
7. Elk River Municipal Utilities initiated a free fluorescent lamp recycling program with Walmart in 2009.
This is an effort to keep mercury out of the waste stream. The program is enjoying only limited success
probably due to lack of significant advertising.
ADMINISTRATION -Theresa Slominski /Finance Director
1. Remained active in MMUA and APPA in industry restructuring and energy policy issues.
2. Remained active in Energy City activities.
Continued to successfully handle the increase in customers, monthly billing, and collections. Customer
monthly billing included approximately 9,200 electric, 4,500 water, 4,450 sewer, and 5,900 garbage
accounts.
2008 Annual Report
Page 2 of 3
4. Participated in MMTG as a vehicle to invest in CAPX 2020 electric systems expansion. This is a strategy
to keep our electric retail rates as low as possible.
5. Brought printing and mailing of utility bills back in-house and returned to manual processing of checks for
payment.
ENGINEERING SERVICES -Troy Adams /Engineering Manager
1. Increased security system accounts from 612 to 653, approximately 6.7% growth.
2. Added approximately 90 new or upgraded CIP radio controllers for off-peak and Cycled AC customers.
3. Continued meter conversion with installation of approximately 1,100 electronic radio read meters.
4. Continued electric and water mapping. Created map book for water distribution system.
5. Continued substation maintenance program with inspection and testing of Station 14, Bank 3.
6. Completed approximately 3,400 locates. Once again, locates were completed without damage claims
resulting from workmanship.
7. Continued with electronic documentation for maintaining and analyzing metering data.
8. Started transformer loading analysis and implemented results to optimize system efficiencies.
9. Connected the first solar cogeneration customer to electrical distribution system.
WATER DEPARTMENT -David Berg /Water Superintendent
New 12" water main connection across Highway 10 (near feed store / Hardee's) and replaced 4th Street
water line that connects Jackson Street to the Highway 10 crossing.
2. Looped water main on Carson Street (Guardian Angels) to relieve dead end.
Started 2009 Water Conservation Seminar plans with the City and County to present to associations and
large water consumers. Neighboring cities invited.
4. Eco-grass planted at test spots and one residential plot to evaluate efficiency.
5. Meter change outs, ERT installments.
2008 Year in Review
Page 3 of 3
6. Produced 854 million gallons of water for a decrease of 2.3% from 2007. Peak day use of 5.4 million
gallons for a decrease of 23% from 2007.
7. Connected 95 new water services to water system for a total of 4,508.
8. No safety incidents.
9. Took bids from chemical companies and changed over to DPC from Hawkins at a savings of approximately
$13,000 per year.
ELECTRIC DEPARTMENT -Mark Fuchs /Line Superintendent
1. Constructed new feeder across US Highway 169 from Station 14, Bank 4
2. Added 52 commercial accounts for a total of 1,071. Added 206 residential accounts and 36 loan
management meters for a total of 8,462.
3. Continued system maintenance and implementing fuse coordination study recommendations with changing
of cutouts and resizing fusing.
4. Our 2008 reliability indices are: SAIDA - 17.31, CAIDI - 28, SAIFI - .618 reflects excellent reliability.
5. Rebuilt underground distribution in both Brentwood and Deerfield (Area 18).
6. Converted an area of underground distribution in Ridgewood East from 2400V to 7200V distribution.
7. Replaced temporary overhead distribution to underground in Otsego's Waterfront East development.
8. Added 3`d phase to overhead distribution and added 3-phase underground distribution to demarcation
territory boundary on County Road 39 in Otsego.
9. Purchased approximately 242 million kWh of energy with a peak day of 57 MW, in increased usage of
6.9% over last year.
10. Acquired Deerfied (Area 18) from Connexus Energy with 101 customers.
ELK RIVER MUNICIPAL UTILITIES
2009 GOALS
Elk River Municipal Utilities (ERMU) goals are in part reflected in our annual budget which is not
included in this report due to its length. It is safe to say this budget requires Elk River Municipal
Utilities to continue to provide reliable, cost effective electric and water utility services in a safe
and environmentally friendly fashion. ERMU staff spends a significant amount of time analyzing
past trends and predicting the. future for physical plant items, financial requirements, and human
resource needs to ensure we have adequate capacity to successfully carry on our utility business.
The goals for 2009 in order of priority are as follows:
1. Satisfy 2009 budget requirements and complete projects started in 2008.
2. Continue to investigate and solve long term physical and financial growth needs while
maintaining existing systems. Increase emphasis on maintenance.
3. Explore options and programs for customers to use credit cards to pay utility bills.
4. Review system to streamline and improve accuracy for billing cycle from meter
reading to customer billing.
The wholesale electric rate from Great River Energy / Connexus is continuing to rise
in the next few years. Staff must continue to explore different strategies to offset
these increased costs to minimize electric rate increases.
6. Great River Energy / Connexus Energy has exercised the contract termination clause of ERMU's
Wholesale Power Agreement effective October 2018. Staff will concentrate on securing a reliable,
low cost power supplier beginning in October 2018 or before.
7. Stay current on electric industry issues and service territory issues.
8. Continue to support Energy City activities.
Elk River Municipal Utilities Security System
Customers
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