4.1. ERMUSR 07-13-2010UTILITIES COMMISSION MEETING
TO: FROM:
Elk River Municipal Utilities Commission Troy Adams, P.E. - Director of Operations
John Dietz, Chair
Jerry Gtunphrey, Vice Chair
D 1 Thom son, Trustee
MEETING DATE: AGENDA ITEM NUMBER:
Jul 13, 2010 4.1
SUBJECT:
Power Su ly tions 1 Resource Plannin U date
BACKGROUND:
hi September 2008, Connexus Energy terminated the 10-year rolling "all requirements" power contract
with Elk River Municipal Utilities. In Apri1201Q the Utilities Commission authorized entering into
"Phase 1" of a resource planning study with a coalition which includes Central Minnesota Municipal
Power Agency (CMMPA) as a participant.
L15l.US.l1V1V:
The Resource Planning Coalition held a conference call on June 21 s`. During this call, the Resource
Planning Coalition Confidentiality Agreement and Participation Agreement were finalized. Also, the
scope of the planning will now take into consideration the Environmental Protecflon Agency's (EPA) new
Reciprocating Internal Combustion Engine (RICE) regulations included in the EPA's efforts to regulate
greenhouse gasses. These regulations will have emission requirements that will go into effect May, 2013.
(Recently, the Senate rejected a resolution by Senator Murkowski, R-Alaska, that would have removed
the authority the EPA is taking from the Clean Air Act to regulate greenhouse gases. The resolution was
rejected by a vote of 53-47. This push by the EPA to regulate greenhouse gases really comes a reactive
response from the current Administration in the wake of the failed Waxman/Mazkey "cazbon tax"
legislation). The Coalition also approved a press release announcing the participants and the resource
planning efforts. This press release is attached for you review. There is a conference call scheduled for
July 9`". On July 20"`, there is a meeting in Blue Earth, MN scheduled to review results from Phase 1 of
the resource planning study.
After the press release, Connexus Energy contacted me to talk about ERMU's plans for territory
acquisition and our power supply. On June 30`", I met with representatives from Connexus to talk about
the big picture with respect to these topics. Attached is a confidentiality agreement between Coanexus
and Elk River Municipal Utilities which will need to be executed prior to having any further power
contract discussion with Connexus.
ACTION REQUESTED:
Staff recommends the Commission give authorization to execute the confidentiality agreement between
Connexus and Elk River Municipal Utilities.
~~ News Re%ase
UTILITIES ANNOUNCE NEW RESOURCE PLANNING COALITION
Joint planning is an economic and effective step in managing customers' electric rates
FOR IMMEDIATE RELEASE MEDIA CONTACT
June 16, 2010 Lori Frisk-Thompson
507-526-2193
Blue Earth, MN -The Central Minnesota Municipal Power Agency (CMMPA), Upper
Midwest Municipal Power Agency, Nashwauk Public Utilities Commission, Elk River
Municipal Utilities, Willmar Municipal Utilities, Dahlberg Light and Power Company,
Northwestern Wisconsin Electric Company and North Central Power Co., Inc., announce the
formation of a Resource Planning Coalition. The Coalition will conduct power supply planning
for the Participants to look at their aggregate long term resource needs. The Coalition then
intends to go out for an aggregated Request For Proposal (RFP) in early fall to find resources to
serve the power supply needs of each of the individual participants. Collectively the Coalition
will be looking for up to 700 MWs of base load, intermediate and peaking resources, including
both long term purchases and project ownership opportunities, to supply their aggregated needs
for the next 5 to 30 year [imeframe.
"We are very pleased that the Participants are willing to work together to seek options for their
individual and mutual benefit and to achieve economies of scale in such activities," said Bruce
Gomm, Willmar Municipal Utilities General Manager and the Chairman of the Resource
Planning Coalition Coordinating Committee. "Our collective goal is to find the best long term,
stable prices possible for the retail customers we serve "
According to Steve Thompson, Deputy CEO of CMMPA, "CMMPA will be acting as the
Coalition Project Manager and will manage the Planning and RFP evaluation process. We will
analyze and assess the power supply needs of the individual Participants and identify the
optimal resource mix which results in the "least cost plan" for each of the participants."
About the Participants
CMMPA is a joint action agency of twelve municipally-owned member utilities located in
south central Minnesota. CMMPA's twelve member cities serve more than 20,000 retail
customers. CMMPA is aproject-oriented agency and manages the power supply portfolios on
behalf of its Members providing future Power Supply Planning and Procurement Services and
MISO Market Scheduling Services. CMMPA was created in 1987 under Minnesota Statutes,
Sections 453.51 through 453.61. For more information, visit www.cmmpa.org.
Upper Midwest Municipal Power Agency (UMMPA) is a municipal power agency with
members in Iowa (four), Minnesota (two) and Wisconsin (ten). The Agency was formed in
2005 under Iowa law to investigate and implement a cost effective and reliable power supply
program for its members. UMMPA's sixteen member cities serve more than 17,000 retail
customers.
Nashwauk Public Utilities Commission (NPUC) is a municipal utility located in the City of
Nashwauk, Minnesota. The NPUC currently provides water, sewer, garbage and retail electric
service to over 600 customers. A large iron mine, taconite plant and steel mill is currently
under development by Essar Steel Minnesota Limited within Nashwauk and the NPUC will be
serving its water, sewer, and retail electric needs.
Elk River Municipal Utilities (ERMU) is a municipal utility located in the City of Elk River,
Minnesota. ERMU provides water and electric services, currently servicing over 9,000 electric
customers.
Willmar Municipal Utilities (WMU) is a municipal utility located in the City of Willmar,
Minnesota. WMU provides electric, water and heating services, currently servicing over 9,200
electric customers.
Dahlberg Light and Power Company (DLP) is an investor-owned utility providing electric
service to over 12,000 customers in Douglas, Washburn, and Bayfield counties in Wisconsin.
DLP was incorporated under Wisconsin iaw in 1930.
Northwestern Wisconsin Electric Company (NWE) is an investor-owned utility providing
electric service to over 13,000 customers in Burnett and Polk counties in Wisconsin and Pine
County in Minnesota. NWE is a Wisconsin corporation organized in 1920.
North Central Power Co., Ina (NCP) is an investor-owned utility providing electric service to
over 4,500 customers in Sawyer, Rusk, Washburn, and Bayfield counties in Wisconsin. NCP
was incorporated as Winter Electric Light and Power under Wisconsin law in 1928.
###
CENTRAL MINNESOTA MUNICIPAL POWER AGENCY
459 South Grove Street Blue Earth, Minnesota 56013 507-526-2193
CONFIDENTIALITY AGREEMENT
THIS CONFIDENTIALITY AGREEMENT is entered into as of the 30th day of June 2010, by
and between Connexus Energy, a Minnesota electric cooperation with its principal place of business at
14601 Ramsey Blvd NW, Ramsey, MN 55303 (hereinafter "Connexus"), and Elk River Municipal
Utilities, a Minnesota municipal utility with its principal place of business at 13069 Orono Pazkway, P.O.
Box 430, Elk River, MN (the "Receiving Party").
WHEREAS, Connexus is a electric distribution cooperative in Minnesota, serving the energy
needs of customers across portions of Anoka, Chisago, Hennepin, Isanti, Ramsey, Sherburne, and
Washington counties.
WHEREAS, Elk River Municipal Utilities is a Municipal Utility, providing electric and water
service to the City of Elk River.
WHEREAS, Connexus has entered into discussions with the Receiving Party regarding the
provision of electric energy and capacity to Receiving Party under along-term power purchase agreement
("Power Supply Negotiations");
WHEREAS, for the mutual benefit of the Parties, Connexus may provide Trade Secret
Information (as defined below) to the Receiving Party; and
WHEREAS, the Parties wish to define their respective rights and obligations with respect to such
Trade Secret Information;
NOW THEREFORE, in consideration of the mutual covenants contained herein, the Parties
agree as follows:
1. As used herein, the term "Trade Secret Information" means information which is of anon-public,
proprietary or confidential nature to Connexus, including all reports and analyses, technical and economic
data, studies, forecasts, trade secrets, reseazch or business strategies, financial or contractual information
or other written or oral information regazding Connexus or the Power Supply Negotiations. Trade Secret
Information may be in any form whatsoever, including writings, computer programs, logic diagrams,
component specifications, drawings or other media. All information disclosed by Connexus that is
cleazly labeled as "'T'RADE SECRET INFORMATION -NOT FOR PUBLIC DISCLOSURE" and
provided to the Receiving Party shall be treated by Receiving Party as Trade Secret Information pursuant
to Minnesota Statutes Section 13.37, subdivision 1 (b), unless otherwise provided by law or expressly
agreed in writing by Connexus.
Receiving Party expressly acknowledges Connexus' claim that information provided by
Connexus relating to the Power Supply Negotiations is Trade Secret Information (1) provided by
Connexus (2) that is the subject of efforts by Connexus that are reasonable under the circumstances to
maintain its secrecy, and (3) that derives independent economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means by, other persons who can obtain
economic value from its disclosure or use.
2. Notwithstanding the provisions of pazagraph 1, the term "Trade Secret Information" shall not
include, and the Receiving Party shall not be under any obligation to maintain in confidence or not use,
any information (or any portion thereof) disclosed to it by Connexus to the extent that such information:
(i) is in the public domain at the time of disclosure; or
(ii) following disclosure, becomes generally known or available through no act or omission
on the part of the Receiving Party; or
(iii) is known, or becomes known, to the Receiving Party from a source other than Connexus
or its Representatives (as defined herein), provided that disclosure by such source is not
in breach of a confidentiality agreement with Connexus; or
(iv) is independently developed by the Receiving Party without violating any of its
obligations under this Agreement; or
(v) is legally required to be disclosed by law or by judicial or other governmental action;
provided, however, that prompt notice of such judicial or other govenunental action shall
have been given to Connexus and that Connexus shall be afforded the opportunity
(consistent with the legal obligations of the Receiving Party) to exhaust all reasonable
legal remedies to maintain the Trade Secret Information in confidence.
Trade Secret Information shall not be deemed to fall within the exceptions of subparts (i) to (iv) above
merely because it is included in a document which also includes information that does fall within such
exceptions.
3. The Receiving Party shall keep the Trade Secret Information confidential to the extent permitted
by law and shall use the Trade Secret Information solely in connection with the Power Supply
Negotiations and make all reasonable efforts to prevent its disclosure under the Minnesota Government
Data Practice Act, Chapter 13 of Minnesota Statutes. The Receiving Party shall not disclose the Trade
Secret Information to any person, except that the Receiving Party may disclose Trade Secret Information
to any directors, officers, employees, attorneys, accountants, consultants, advisors and agents
(collectively, "Representatives") of the Receiving Party who require access to such information in
connection with the evaluation of the Project. Before disclosing any Trade Secret Information to a
Representative, the Receiving Party shall inform such Representative of the confidential or proprietary
nature thereof and of the Receiving Party's obligations under this Agreement. The Receiving Party shall
be responsible for any use or disclosure of Trade Secret Information by any of its Representatives.
4. All rights to Trade Secret Information disclosed pursuant to this Agreement aze reserved to
Connexus. No license or conveyance of any rights relating to the Tmde Secret Information is granted or
implied by Connexus to the Receiving Party.
5. This Agreement shall commence as of the date first set forth above and shall continue in effect
until five yeazs from the date hereof.
6. Nothing in this Agreement shall obligate Coanexus to disclose any Trade Secret Information to
the Receiving Party, and any disclosure of Trade Secret Information shall be at Connexus' sole discretion.
This Agreement does not constitute a commitment or promise by Connexus to proceed with any
transaction. Connexus does not make any representation or waaanty as to the accuracy or completeness
of any Trade Secret Information. Neither Connexus nor any of its respective Representatives will have
any liability relating to or arising from any use of or reliance upon the Trade Secret Information.
7. Upon Connexus' request, the Receiving Party shall use its best efforts to return to Connexus as
promptly as practicable, but in any event within thirty (30) days, all Trade Secret Information in the
possession of the Receiving Party or its Representatives, including all copies of such Trade Secret
Information, all notes or other documents with respect to or reflecting such Trade Secret Information.
8. This Agreement embodies all of the understandings between the Parties hereto concerning the
subject matter hereof, and merges all prior discussions and writings between them as to confidentiality of
information other than as expressly provided in this Agreement, or as duly set forth subsequent to the date
hereof in writing and signed by both Parties. This Agreement may not be assigned by either Party
without the prior written consent of the other Party except in connection with the sale of all or
substantially all of the business or assets of the assigning Party.
9. Without prejudice to the rights and remedies otherwise available to Connexus, Connexus will be
entitled solely to equitable relief by way of injunction if there is a breach or threat of a breach of any of
the provisions of this Agreement by the Receiving Party. The Parties agree and acknowledge that
damages would not be an adequate remedy in the event of a breach of this Agreement.
10. This Agreement shall be governed by the laws of the State of Minnesota.
11. This Agreement may be executed in counterparts, each of which shall be deemed to be an original
and all of which shall constitute one and the same document.
12. The provisions of this Agreement are severable, and if any one or more of such provisions is
determined to be judicially unenforceable, the remaining provisions shall nevertheless be binding and
enforceable.
13. The prevailing party in any dispute or litigation arising in connection with this Agreement shall
be entitled to recover its reasonable attorneys' fees and costs.
IN WITNESS WHEREOF the Parties have signed this Agreement as of the date fast set forth
above.
Addresses:
Elk River Municipal Utilities
13069 Orono Pazkway By:
P.O. Box 430
Elk River, MN 55330-0430 Title:
Connexus Energy
14601 Ramsey Blvd NW
Ramsey, MN 55303
By:
Title: