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6.5. ERMUSR 08-14-2007
~j Elk River Municipal Utilities 13069 Orono Parkway • I?O. Box 430 Elk River, MN 55330-0430 July 27, 2007 To: Elk River Municipal Utilities Commission Jerry Takle Jerry Gumphrey Jim Tralle From: Bryan Adams Subject: 2008 Wholesale Electric Power Costs Phone: 763.441.2020 Fax: 763.441.8099 Great River Energy has just informed us of their proposed 2008 rate structure and it does present some opportunities. Attached are Great River Energy's proposed rates and a large spreadsheet reflecting how it affects us. In summary, the key changes are as follows. a) Rate philosophy change from a two tier base and growth rate structure to a market base time of use and critical peak pricing. b) Proposed 8.5% rate increase. As a point of interest, our 2007 budget power cost is approximately $11,714,000. The estimate 2008 power cost will increase to approximately $14,400,000 due to the 8.5% rate increase and 9.25% increase in consumption. c) This is GRE's first cut on the rate design and rate increase. As more discussion takes place, the level of rate increase will change. At our commission meeting, I will cover the details of the new rate design and the implementations for Elk River as shown on the spread sheet. This rate change will require us to address three other issues that are: 1) Should we be seriously considering time of use rates? 2) We are now in the process of an electric meter replacement program and replacing all electric meters with radio read devices. Should these meters be capable of time of use also? 3) Create more news articles and reasons why the increases to prepare our customers for ongoing electric rate increases. Proposed GRE DSM rates, in millslkwh Note -the effective rate, not credit is shown Year 2007 2008 2009 2010 2011 2012 ETS water & space 16.5 18.0 19.5 21.0 22.5 24.0 Peak Shave water 21.5 23.1 24.7 26.3 27.9 29.5 Dual Fuel 19.5 21.3 23.1 24.9 26.7 28.5 Rate structure change effective for 2008 Eliminate base and growth rate design. Replace flat energy rate with on-peak, off-peak, and critical peak energy pricing Example: 2007 GRE rates restated in new structure Generation Price Units Comments Sprin /fall 4.11 $/kw Winter 8.22 $/kw Summer 12.33 $/kw Ener Off- eak 0.02477 $/kwh On-peak 0.03880 $/kwh on-peak = 10AM - 8PM Mon-Fri Critical Peak 0.09596 $/kwh Max 80 hours per year Transmission & anc. $4.75 $/kw 2008 GRE rates Not available yet. Assume 8.5% increase for planning purposes Elk River Municipal Utilities 2008 Wholesale Electric Rate Structure 2007 Rate Design Load Management 1st Tier 1 st Tier 5 % Option Growth Above Base Year 2001 - 2003 Maximun Base (2004) Total Total Total Base Demand & Energy Base(2004) Duel Energy 2007 2007 2008 2008 2008 2008 2008 2008 2008 2008 2008 Demand E nergy C & I Fuel Storage Demand Energy Demand Energy C & I Demand Energy Demand Energy Demand Energy Jan 24,159 13,881,700 552 58,985 105,224 30,928 17,926,836 33,093 19,585,068 536 24,159 13,881,700 8,934 5,703,368 Feb 24,417 12,461,700 544 74,915 106,260 31,898 16,727,135 34,131 18,274,395 549 24,417 12,461,700 9,714 5,812,695 Mar 23,668 13,089,576 540 42,573 86,637 29,317 16,770,128 31,369 18,321,365 549 23,668 13,089,576 7,701 5,231,789 Aprit 22,182 12,496,700 939 37,869 79,492 27,156 16,555,757 29,057 18,087,165 561 22,182 12,496,700 6,875 5,590,465 May 27,888 12,958,600 833 14,947 52,539 34,660 18,328,269 37,086 20,023,634 769 27,888 12,958,600 9,198 7,065,034 June 33,061 14,485,296 1,135 0 39,372 45,323 20,838,976 48,496 22,766,581 1,123 33,061 14,485,296 15,435 8,281,285 July 36,032 17,084,149 1,135 0 37,668 48,474 24,545,046 51,867 26,815,463 1,133 36,032 17,084,149 15,835 9,731,314 Aug 39,754 17,949,636 1,086 0 41,447 41,652 21,490,529 44,568 23,478,403 1,133 39,754 17,949,636 4,814 5,528,767 Sept 35,339 14,411,558 1,037 13,076 45,574 41,146 18,918,442 44,952 20,668,398 1,040 35,339 14,411,558 9,613 6,256,840 Oct 23,679 13,659,479 891 12,048 54,091 28,876 17,206,414 31,547 18,798,007 891 23,679 13,659,479 7,868 5,138,528 Nov 25,133 13,221,331 653 26,877 57,009 31,227 16,779,726 34,115 18,331,851 653 25,133 13,221,331 8,982 5,110,520 Dec 26,621 14,393,212 653 32,774 71,118 33,121 18,118,593 36,185 19,794,563 653 26,621 14,393,212 9,564 5,401,351 341,933 170,092,937 314,064 776,431 423,778 224,205,851 456,466 244,944,892 7.80 % 9.25° Rate Structure in 2007 Base Growth 2007 1st Tier Rates 2007 Growth Rates Generation Winter $7.06 7.25 $7.06 $11.81 $7.25 $12.00 Generation Spring/Fall $3.53 7.25 $3.53 $8.28 $7.25 $12.00 Generation Summer $14.12 7.25 $14.12 $18.87 $7.25 $12.00 Transmission $4.14 $4.14 $4.14 $4.14 Ancillary Services $0.61 $0.61 $0.61 $0.61 Energy $0.03004 0.03168 -0.01054 -0.01354 0.03004 0.03004 0.03168 0.03168 Annual Costs Jan ($6,519) ($622) ($1,425) $285,318 $417,006 $107,208 $180,683 Feb ($6,425) ($790) ($1,439) $288,365 $374,349 $116,566 $184,146 Mar ($4,471) ($449) ($1,173) $195,971 $393,211 $92,414 $165,743 April ($7,775) ($399) ($1,076) $183,667 $375,401 $82,499 $177,106 May ($6,897) ($158) ($711) $230,913 $389,276 $110,378 $223,820 June ($21,417) $0 ($533) $623,861 $435,138 $185,215 $262,351 July ($21,417) $0 ($510) $679,924 $513,208 $190,022 $308,288 Aug ($20,493) $0 ($561) $750,158 $539,207 $57,764 $175,151 Sept ($8,586) ($138) ($617) $292,607 $432,923 $115,356 $198,217 Oct ($7,377) ($127) ($732) $196,062 $410,331 $94,416 $162,789 Nov ($5,407) ($283) ($772) $208,101 $397,169 $107,790 $161,901 Dec ($7,712) ($345) ($963) $314,394 $432,372 $114,764 $171,115 ($124,497) ($3,031) ($9,822) ($137,350) $4,249,340 $5,109,592 $1,374,393 $2,371,310 2007 Rates,2008 Consumption $13,241,986 Unit Price $0.05906 2007 Rates New Rate Design Generation Winter $8.22 $12.97 Generation Spring/Fall $4.11 $8.86 Generation Summer $12.33 $17.08 Transmission $4.14 Ancillary Services $0.61 Energy Off Peak $0.02477 Energy On Peak $0.03880 Energy Critical Peak 2007 $0.09596 2007 2008 2008 Alternate 2008 2008 Demand Ener Demand Ener °/ On Peak Demand Ener Critical Peak % On Peak Demand Ener Critical Peak 928 Jan 30 17,926,836 33,093 19,585,068 35% $429,216 $581,295 0 34% $429,216 $578,547 $0 , 898 Feb 31 16,727,135 34,131 18,274,395 35% $442,677 $542,393 0 34% $442,677 $539,829 $0 , 317 Mar 29 16,770,128 31,369 18,321,365 35% $277,931 $543,787 0 34% $277,931 $541,217 $0 , April 27,156 16,555,757 29,057 18,087,165 35% $257,444 $536,836 0 34% $257,444 $534,298 $0 May 34,660 18,328,269 37,086 20,023,634 37% $328,584 $599,930 0 35% $328,584 $594,311 $0 323 June 45 20,838,976 48,496 22,766,581 40% $828,305 $691,694 0 37% $828,305 $682,112 $0 , July 48,474 24,545,046 51,867 26,815,463 45% $885,891 $833,518 $213,460 35% $885,891 $795,896 $213,460 Aug 41,652 21,490,529 44,568 23,478,403 45% $761,215 $729,791 0 34°/ $761,215 $693,557 $0 Sept 41,146 18,918,442 44,952 20,668,398 40% $398,275 $627,947 0 34% $398,275 $610,549 $0 876 Oct 28 414 206 17 31,547 18,798,007 35% $279,507 $557,934 0 34% $279,507 $555,297 $0 , 227 Nov 31 , , 779,726 16 34,115 18,331,851 35% $302,263 $544,098 0 34% $302,263 $541,527 $0 , 121 Dec 33 , 18,118,593 36,185 19,794,563 35% $469,315 $587,513 0 34% $469,315 $584,735 $0 , 423 778 205,851 224 456,466 244,944,892 $5,660,624 $7,376,737 $213,460 $5,660,624 $7,251,875 $213,460 , , 2007 Rates ,2008 Consu mption Total $13,388,172 Total $13,263,310 Unil Price $0.05466 Unit Price $0.05415 2008 Rates Generation Winter $8.92 $14.07 Generation Spring/Fall $4.46 $9.61 Generation Summer $13.38 $18.53 Transmission $4.49 Ancillary Services $0.66 Energy Off Peak $0.02688 Energy On Peak $0.04210 Energy Critical Peak $0.10412 2007 2007 2008 2008 Demand Ener Demand Ener % On Peak Demand Ener Critical Peak Jan 30,928 17,926,836 33,093 19,585,068 34% $465,699 $627,723 0 Feb 31,898 16,727,135 34,131 18,274,395 34% $480,305 $585,715 0 Mar 29,317 16,770,128 31,369 18,321,365 34% $301,555 $587,220 0 April 27,156 16,555,757 29,057 18,087,165 34% $279,327 $579,714 0 May 34,660 18,328,269 37,086 20,023,634 35% $356,513 $644,828 0 June 45,323 20,838,976 48,496 22,766,581 37 % $898,711 $740,091 0 July 48,474 24,545,046 51,867 26,815,463 35% $961,192 $863,548 $231,605 Aug 41,652 21,490,529 44,568 23,478,403 34% $825,919 $752,509 0 Sept 41,146 18,918,442 44,952 20,668,398 34% $432,128 $662,445 0 Oct 28,876 17,206,414 31,547 18,798,007 34% $303,265 $602,497 0 Nov 31,227 16,779,726 34,115 18,331,851 34% $327,956 $587,556 0 Dec 33,121 18,118,593 36,185 19,794,563 34°h $509,207 $634,438 0 423,778 224,205,851 456,466 244,944,892 $6,141,777 $7,868,284 $231,605 2007 Rate s,2008 Consu mption Total $14,379,016 Unit Price $0.05870 Electric W holesaleRate2007