4.1. ERMUSR 11-15-2011Elk River:
Municipal U
13069 Orono Parkway • P.O. Box 430
Elk River, MN 55330-0430
UTILITIES COMMISSION MEETING
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Phone: 763.441.2020
Fax: 763.441.8099
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Elk River Municipal Utilities Commission Troy Adams, P.E. -Utilities Director
John Dietz -Chair
Daryl Thompson -Vice Chair
AI Nadeau -Trustee
MEETING DATE: AGENDA ITEM NUMBER:
November 15, 2011 4.1
SUBJECT:
Power Su 1 O tions /Resource Plannin Update
BACKGROUND:
In September 2008, Connexus Energy terminated the 10-year rolling "all requirements" power
contract with Elk River Municipal Utilities. In Apri12010, 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. In September 2010, the
Utilities Commission authorized entering into "Phase 2" of a resource planning study which
includes the release of a Request For Proposal (RFP). The RFP was issued on November I5,
2010. In May 2011, the Utilities Commission authorized entering into "Phase 2b" of the
resource planning study which will include risk assessment of the proposals. In addition to
working with the Resource Planning Coalition, staff continues to explore other power supply
options.
DISCUSSION:
This last month Commissioner Al Nadeau and staff attended CMMPA 2011 Annual Agency
Member Meeting. Although Elk River Municipal Utilities (ERMU) is not a full member of
CMMPA, ERMU has an associate membership for the Resource Planning Coalition and
CAPX2020 Brookings Project. At the meeting, CMMPA discussed: National Emissions
Standards for Hazardous Air (NESHAP) /Reciprocating Internal Combustion Engines (RICE),
the Environmental Protection Agency (EPA) and future industry regulations, CAPX2020 and
transmission outlook, Renewable Energy Standazd (RES) and Conservation Improvement
Program (CIP) updates, as well as aggregated results from the Resource Planning Coalition RFP.
This meeting was a good opportunity for Commissioner Nadeau and staff to gauge CMMPA as
potential agency for ERMU as well as an update on the RFP process.
Staff has also communicated with Minnesota Municipal Power Agency CMMPA) regarding
potential membership in their agency. This agency is owned by its 11 member municipal
utilities and provides an all requirements type service. The exploratory discussions between
ERMU and MMPA have indicated that ERMU would be a potential good fit as a new member of
their agency. Confidentiality Agreements have been executed between ERMU and MMPA.
Commissioner Nadeau and staff have toured MMPA's Faribault Energy Park and Oak Glen
Wind Farm. Staff now is exchanging information with MMPA to further analysis this agency as
an option for future power supply.
There has also been discussion with Connexus and Great River Energy regarding the current "all
requirement" power supply contract. In addition to this discussion of our current power contract,
CMMPA and the Resource Planning Coalition RFP, and MMPA, staff will also do high level
analysis on other potential agency options. The high level analysis of these options should be
considered by the Commission prior to committing further to any one option. The ERMU
specific results from the Resource Planning Coalition RFP will be presented to the Commission
within the next few months. A letter of intent will be requested by CMMPA as they begin
negotiations with the bidders. Staff will work to have high level power supply option analysis
results for consideration in conjunction with a decision on the RFP and a letter of intent.