NOTICE OF ELECTRIC RATE INCREASE

To All Detroit Lakes Electric Customers

The Detroit Lakes Municipal Electric Utility has contracts for purchase of wholesale electricity from both the U.S. Department of Energy’s Western Area Power Administration (Western) and from Missouri River Energy Services (MRES).  In 2009 the utility will purchase approximately 35% of its power requirements from Western and 65% from MRES.  Power production costs to both Western and MRES continue to escalade for various reasons which include large increases for transportation of coal, an extended draught limiting hydroelectric generation, ever increasing conservation and environmental regulation costs, and increased natural gas costs which drive up the cost of electricity on the open market when more and more power must be bought on the market to replace hydro power not available due to the draught, to back up new wind resources, and to supplement base load plants as they become fully loaded.

Due to these increased costs Western has announced a 20.7% increase and MRES an 18.5% increase to our Detroit Lakes wholesale power rates for 2009.  In order to meet these increased costs the Detroit Lakes Public Utilities Commission has determined that an additional $1,435,461 will be required for the purchase of electricity in 2009.  Therefore in order to assure sufficient revenues to maintain a financially sound and reliable utility, the Commission has recommended new retail electric rates whereby most residential and small commercial customers will experience a 13% to 16% increase in their rates while large commercial/industrial rate increases will be in the 8.5% to 11.5% range.

Based on these needs and pursuant to the recommendation of the Public Utilities Commission, the Detroit Lakes City Council, at their regular meeting held November 12, 2008, approved the following electric rates, which will become effective with all electric bills being billed after January 1, 2009.

Residential Electric      

Service Charge                                                    @ $11.50 per month

First 1,000 Kwh                                                   @ 8.6¢ per KWh

Balance Kwh payable July-Sept                              @ 8.6¢ per KWh

Balance Kwh payable Oct-June                              @ 6.0¢ per Kwh

Seasonal Cottage

Service Charge                                                    @ $110.00 per year

All Kwh per billing                                               @ 8.6¢ per KWh

General Service

Single Phase Service Charge                                 @ $20.00 per month

Three Phase Service Charge                                  @ $26.00 per month

All Kwh per month                                               @ 7.6¢ per KWh

Large Commercial

Service Charge                                                    @ $40.00 per month

All KW Demand per month                                   @ $12.00 per KW

All Kwh per month                                               @ 3.2¢ per KWh

Monthly Minimum                                                @ $125.00 per month

Minimum monthly bill to be charged even if service is disconnected.

Off-Peak Heating

Service Charge                                                    @ $5.00 per month

All Kwh per month on bills payable Oct-Jun            @ 4.1¢ per KWh

All Kwh per month on bills payable Jul-Sep            @ 8.6¢ per KWh

Controlled Water Heater

A credit of $2.00 per month to customers operating water heaters allowing utility load management control of heater. Not available to customers taking advantage of other utility sponsored electric water heater incentives or rebate programs.

Irrigation – Time-of-Use

Service Charge                                                    @ $90.00 per month

All Kwh used between 6:00 p.m. and 10:00 a.m.     @ 5.8¢ per KWh

All Kwh used between 10:00 a.m. and 6:00 p.m.     @ 37.0¢ per KWh

Area Lights                                  Unmetered                     Metered

100 Watt HPS                                 @ $  7.10 per month         @ $ 4.35 per month  

250 Watt HPS                                 @ $11.70 per month          @ $ 5.60 per month

400 Watt HPS                                 @ $15.75 per month          @ $ 6.25 per month

Street Lighting

All Kwh per month                                     @ 12.0¢ per Kwh

Power Cost Adjustment

A Power Cost Adjustment (PCA) shall increase all KWh rate charges on billings in any month in which the City’s actual wholesale power and transmission costs exceed a base cost of 5.75¢ per Kwh in June through September and 5.35¢ per Kwh in October through May, with such increase adjustment being the difference exceeding base cost.

Additional information concerning utility rates, regulations or policies can be obtained upon request from the Public Utilities office at 1025 Roosevelt Avenue in Detroit Lakes or by calling (218) 847-7609.