5.2. ERMUSR 02-08-2005Elk River
Municipal
ities
13069 Orono Parkway Phone: 763.441.2020
Elk River, MN 55330 Fax: 763.441.8099
January 27, 2005
To: Elk River Municipal Utilities
Jerry Takle
Jim Tralle
John Dietz
From: Bryan Adams
Subject: 2005 Territory Acquisition
The 2005 budget contains a $570,000 item for electric service territory acquisition. The
attached drawing reflects our past and proposed service territory acquisition. The
schedule indicates area 16 will be acquired this year which contains approximately 175
customers and an estimated cost of $525,000 plus an additional estimated $45,000 for
lost revenues from previous purchases. On the dark side of this purchase, this area will
need cable replacing next year. Connexus has shared with us the age, material, and fault
history for this area. There is a lot of 175 mil 20 to 30 year old cable with a number of
previous faults. This cable has reached the end of its life. The estimated cost to replace
is in the $200,000 range.
Staff recommends we acquire area 16. The attached drawing also shows we have come a
long way in our territory acquisition endeavor starting in 1992. Our territory acquisition
agreement ends in 2008. I am assuming this commission desires to extend this agreement
to include the remaining portions of Elk River being western Elk River and south east Elk
River along the Hwy 10 corridor including the Cargill property.
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