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6.1. ERMUSR 04-10-2012Elk River Municipal Utilities 13069 Orono Parkway • P.O. Box 430 Elk River, MN 55330-0430 UTILITIES COMMISSION MEETING c~ c~ Phone: 763.441.2020 Fax: 763.441.8099 www.elkriverutilities.com TO: FROM: Elk River Municipal Utilities Commission Troy Adams, P.E. -Utilities Director John Dietz -Chair Daryl Thompson -Vice Chair Al Nadeau -Trustee MEETING DATE: AGENDA ITEM NUMBER: A ril 10, 2012 6.1 SUBJECT: Staff U dates -Utilities Director DISCUSSION: Over the past month, staff has been working with a customer in Otsego to resolve an easement issue. The underground feeders that were installed in the transmission easement aze in question due to their location outside of road right of way. After consulting with ERMU legal counsel, Great River Energy, and Wright County, ERMU staff has been working with the customer to resolve the issue. Staff has hired Meeks Appraisal & Consulting, Inc. to prepare a report on the value of an easement on that property analyzing the market trends and site specifics. The report has been completed. The owner and staff have come to an agreement in terms on the acquisition of an easement purchase. The easement documentation is currently being prepared. On Apri19, the City Council and the Sherburne County Boazd of Commissioners held a joint meeting. Agenda topics included the presentation of a scheduled payment to the County by ERMU and progress on new data centers. An update will be provided to the Commission at the meeting. The Jackson Street Water Tower has been advanced by the State Review Board to be review for the Nation Register of Historic Places. Rebecca Haug, the City of Elk River's Environmental Administrator, will provide an update to the Utilities Commission in May. On Apri12, the HRA reviewed and approved a plan for the Downtown Parking Lot adjacent to Elk River Meats. Staff is working with City staff in facilitating the electrical work that will need to be completed by a third party. At the March Utilities Commission meeting, the Commission directed staff to research the MMUA Bovitz Memorial Scholazship Award Program to determine whether or not ERMU should participate. Due to the April submission deadline, we will need to consider this program for next year. Staff will work to develop a program and bring back this topic later in 2012. PONEREO 8Y I`~A~`UR~ POWERED T O S E R V E PrintFriendly.com: Print web pages, create PDFs Page 2 of 3 Hanafin Berg noted that the Preservation Alliance had named the Elk River water tower one of the 10 most endangered historic places in Minnesota in 2011. "We are extremely pleased to see that the community has pursued National Register designation,' she wrote. The water tower is owned by the city of Elk River and was nominated for the National Register by the city's Heritage Preservation Commission. The National Register of Historic Places is the official list of America's historic places. A slgn near the chamber office alerts motorists that they are entering historic downtown Elk River. The water tower is visible in the background. Gardner said the water tower was built in 1920 by the Minneapolis Steel and Machinery Co. "The elevated tank is what is known as a hemispherical bottom, a name derived from its design which includes ahalf-globe-shaped bottom," he said. The design was common from the 1890s to about 1940, he said. The water tower was part of an effort to protect Elk River from fire. The village of Elk River was incorporated in 1881. Before the water tower was built in 1920, the .. community relied on a water tank and a length of hose belonging to the Great Northern Railway. "The Elk River water tower was the community's response to fire, which devastated the business district in 1898. The town experienced additional fires in 1902, 1903 and 1915," Gardner said. Insurance companies threatened to increase fire insurance premiums if the community didn't install adequate fire protection and, ultimately did raise premiums. That spurred Elk River to update its fire protection system. 'The adequate fire protection included the creation of a permanent fire department, including a motorized fire truck, as well as a modern reserve water supply system which is represented by this tower," Gardner said. There are five water towers of this type in Minnesota in the National Register, Gardner said. All five are on the Iron Range at Ironton, Trommald, Deerwood, Cuyuna and Crosby. No one knows how many others are left, because no study has been done, he said. http://www.printfriendly.com/print?tul=http%3A%2F%2Ferstatnews.com%2F2012%2F03... 4/4/2012 PrintFriendly.com: Print web pages, create PDFs Page 3 of 3 The Elk River water tower is historically significant because it provided a ready reserve of water for protection against fire, Gardner said. "It is also significant for its engineering, representing a specific type of water tower -the hemispherical bottom -which replaced the earlier flat-bottomed type," Gardner said. In his letter of support, Fox of the Kelley Farm said the water tower is a significant link to Elk River's past. When the water tower was built in 1920, many buildings were constructed of wood. Lanterns with open flames were commonly used for lighting. The combination often had catastrophic results, and community development was hampered by the fires that often spread throughout the community, Fox wrote. Construction of the Elk River water tower, and others like it, helped stabilize communities and enable economic progress. Water towers greatly enhanced fire departments' abilities to quickly put out fires and keep them from spreading. "When built, it was a great technological leap forward for the community, and today it stands as a landmark in the city of Elk River," Fox said in his letter. Gardner said the tower was originally painted silver with a red lid and Elk River in black letters on the side. It was painted with the current logo and color scheme in 1984. A member of the State Review Board wondered if the original color scheme will be re-established. Rebecca Haug, staff liaison to the Elk River Heritage Preservation Commission, said that has been discussed but it will depend on funding. Another State Review Board member said of the water tower: "I think it's particularly important in a place like Elk River that has been a small town, and still is in a lot of ways, but is also growing rapidly. It kind of anchors the community." The National Register of Historic Places can include districts, sites, buildings, structures and objects. These places must meet criteria in order to be listed in the National Register. Since its inception in 1966, more than 80,000 properties have been listed in the National Register. Tags: EII< River, featured, National Register of Historic Places, water tower http://www.printfriendly.com/print?url=http%3A%2F%2Ferstamews.com%2F2012%2F03... 4/4/2012 USBusinessExecutive www. usbusinessexecutive.com ~ ENERGY&POWER Central Minnesota Municipal Powe r Age n cy Preparing for Tomorrow's Needs Today ~'~o~Elice~i by ~?9~ert f~14ic~~~a~ ~: W~it[en by Camila C~sorno Pazmerships aze at the core of Central Minnesota Municipal Power Agenry (CMMPA), and the 13-person staff works hard to collectively prepaze for [he current and future electricity needs of its municipal utility members. The agenty supplies wholesale power to 12 small south-central Minnesota municipal electric utilities. "Our primary focus is on power-supply planning and transmission planning for our members. In addition, we also provide energy scheduling services for our members' resource portfolios in [he MISO Energy Mazke[, including making the necessary azrangements for transmission delivery. We provide our members the benefits of being an aggregated purchaser by providing them access to more power-supply alternatives than would be available to them as a smaller independent purchaser," explains Steve Thompson, CEO of CMMPA. Energy "A small municipal that has only atwo-MW load will have a difficult time finding a competitive supplier that will contract for such a small quantity of power and the final costs for such a small transaction can be significantly higher. Aggregating loads of multiple municipals allows us to buy lazger quan[icies of power and at lower costs," Thompson continues. Since its inception in 1987, CMMPA has represented the energy interests of municipal utility members with the ability to secure competitive rates collectively while retaining [he Hexibility to supply a portion, or all, of its members' needs. More recently, CMMPA has expanded its list of member services [o assisting its members with transmission tariff recovery from MISO for member-owned transmission asses. 64 ~ USBusinessExecutive WINTER ZO1Z small size, CMMPA has partnered together with other utilities on vazious projects. In 2009, CMMPA members became pazt owners of the Nebraska City Two G82-megawatt base load coal generating station. This project gave the members access to low cost energy that wuldn't be found anywhere else in the region. Every municipality's needs are different and the agenry has found success in providing individualized a la carte services through its unique projectoriented structure. Some CMMPA members rely upon the agency for a portion of its needs and supplement by owning and operating wind, gas, diesel and hydroelectric generating plants. Other members take advantage of CMMPAs services for 100 percent of their needs. The project-oriented approach allows CMMPA to act as the technical advisor for members' current and future power supply and transmission needs. Each member maintains autonomy over their own portfolio decisions. Members also have an individualized power-supply portfolio, not aone-size- fits-all socialized portfolio. The flexibility of this approach also allows CMMPA to provide services at the lowest cost possible, achieving economies of scale and to provide these same services to municipal utilities that aze not members of CMMPA or any other agenry. Responsible and Reliable Parmera Facilitate Success In total, Thompson states CMMPA supplies around 120 megawatts and is a smaller-scale energy provider. Because of its To further defray future transmission tariff costs, the members aze becoming owners of impending transmission upgrades. "We aze panicipating in one of the four major projects being developed by the CapX2020 utilities. Due to increased demand and the large-scale expansion of renewable in the region, we aze paztnering with four other investor-owned utiities, power agencies and woperatives to build the necessary transmission lines required," Thompson continues. CMMPA will be a co-owner in the Brookings County- Hampton project, which involves the building of 200 miles of 345-kilovolt transmission line to serve communities across South Dakota and southern Minnesota, to just south of [he Minneapolis-St. Paul area. The CapX2020 partnership represents a first of its kind joint initiative from 11 regional utilities m increase total transmission lines to handle a demand of 6,000 megawatts it expects to see by 2020. "This project allows our members to be a transmission owner versus always being a renter. It provides us the ability to make return on our transmission investment to help hedge against future increases in MISO transmission usages charges," Thompson says. Regulatory Responsibilities CMMPA has aggressively developed energy efficienry programs to assist the reduction of energy costs to the residential, commercial and industrial customers of its member communities. "In 2010 we achieved 1.8-percent energy savings on our overall member load. Starting in 2010, the requirement in Minnesota was to save 1.5 percent. We aze proud that we exceeded that goal in our first year;' says "Thompson. 65 ~ ENERGY& POWER to secure better pricing;' says Thompson. CMMPA successfully renego[ia[ed i[s supply contract [hrough 2012 with a supplier to secure 30-percent lower wholesale electricity rates, saving the members and ultimately its retail customers $12 million for the remainder of the contra[[. In the past, a significant portion of the energy CMMPA procured for its members was subject to marke[ fluctuations. Strategically, this made economic sense when regional generation surpluses existed and wholesale energy costs were cheap. As a result through the agency's most recent planning and procurement efforts, it has reduced its risk exposure to market volatility with both short- and long-term fixed price contracts. CMMPAs ws[s have been decreasing over that past five years and the agency's rates are now very compe[itive to the ocher neighboring public power municipals, agencies, cooperatives and investor- owned utilities. The agency is now focused on securing energy For its members beyond 2016. Last yeaz CMMPA formed a coalition with another power agenry, other municipals and small investor-owned utilities [o conduct apower-supply planning study for the coalition pazticipants to look at its aggregate long- term resource needs. The coalition then went out for The stale of Minnesota also requires all utilities in the state to supply 12 percent of the state's retail load with energy created by renewable resources by 2012, and 25 percent by the year 2025. "We are proud to say that the CMMPA members will collectively supply over 20 percent of [heir energy from renewables in 2012. And this doesn't take into consideration the 15 percent of energy that is coming from federal hydroelectric projects;' says "Thompson. CMMPA is continually looking into emerging technologies in order to determine how the agency will benefit the portfolios of its members. For the past several yeazs CMMPA was involved with determining the feasibility of a wmpressed air storage project in Iowa and has recently been researching the viability of energy storage through lazge batteries the size of semi-[milers. an aggregated Request For Proposals to find resources to serve the future power supply needs of each of the individual participants. Collectively, the coalition is looking for up to 350 MWs of base load, intermediate and peaking resources, including both long-term purchases and project ownership opportunities, to supply its aggregated needs for the next five- to 20-year timeframe. Though the future of the energy industry is far from certain, Thompson and the CMMPA team see no reason not to prepare For the future. ""There are a lot of uncertain issues that will determine the future of the energy industry from natural gas prices, future EPA regulations, carbon emission regulations and the extreme shortage of transmission capacity, but we remain hopeful that regulamrs will get is rights and keep the impact on retail customers in mind:' Balancing Both the Short- and Long-term Of course, responsible power agencies have to plan for the future using lessons learned through previous experiences. "The agency was quick [o react to a slump in demand following the economic downturn. "We did see our total demand fall, and it has since rebounded in terms of mtal energy sales. The silver lining for us was that the decline in demand actually enabled us "We spend about as much time assessing risk as assessing cost," says Thompson. For CMMPA Thorough planning and due diligence has always been an essential pazt of the agency's success. CMMPA is here co serve its municipal utility members and keep costs as low as possible, enabling Central Minnesota Municipal Power Agenry to provide safe, reliable and low cost service to its customers. 66 ~ USBusinessExecutive WINTER ZO12 Crisson: EPA rule "effectively kills coal," may lead to higher electric rates Page 1 of 1 Public Power Daily Thuradey, March 29, 2012 Crisson: EPA rule "effectively kills coal," may lead to higher electric rates APPA "is extremely disappointed" with the proposed New Source Performance Standazd announced by the U.S. Environmental Protection Agency on March 27, President and CEO Mark Crisson said yesterday. "In our view, this proposed rule effectively kills coal going forwazd as a resource for electricity generation and contradicts the Obama Administration's claim that it will pursue an'all of the above' fuel strategy for meeting the nation's energy needs," Crisson said. "This will limit our future resource options and could likely lead to higher electricity rates in the coming years." Through this rule, "the EPA is also inexplicably mandating that the nation's utilities utilize cazbon capture and sequestration (CCS) technology to reduce emissions when this technology has not even been proven to be commercially viable and, according to several studies conducted by APPA (h_ptt •//www nublicpower org/files/htm/ccs html), will not be anytime soon," Crisson said. EPA Administrator Lisa Jackson herself recently admitted to reporters that CCS technology would take up to 10 yeazs to be commercially available, he said. "This will therefore effectively force utilities to switch fuels to natural gas or face heavy fines for non- compliance with the rule," Crisson said. APPA staff and legal counsel will review the rule more closely in the coming days and may have additional comments on the proposed rule after they complete their review, he said. -JEANNINE ANDERSON Copyright ®2012, American Public Power Association http://www.naylornetwork.corn/app-ppd/articles/print-V2.asp?aid=171903 3/29/2012 Sierra Club targets natural gas as `dirty, dangerous' Page 1 of 1 Public Power Daily Thursday, March 29, 2012 Sierra Club targets natural gas as `dirty, dangerous' The natural gas industry "is dirty, dangerous and putting American families at risk," Siena Club Executive Director Michael Brune said in an editorial in USA Today. "The only safe, smart and responsible way to address our nation's energy needs is to look beyond coal, oil and gas, and focus on clean, efficient energy sources such as wind, solaz and geothermal," he said. The editorial cited the risks of fracking and "the lack of effective oversight for an industry run amok." The environrnental group had made news with its recent disclosure that it accepted $26 million in donations from individuals and subsidiaries of Chesapeake Energy for its "Beyond Coal" campaign before deciding in 2010 to turn down further donations from fossil fuel companies or executives. Copyngh[ O 2012, American Public Power Asswiatlon http://www.naylometwork.com/app-ppd/articles/print-V2.asp?aid=171859 3/29/2012 More room for data centers in Elk River Posted: 2:59 pm Tue, Mazch 27, 2012 By Chris Newmarker Tags: Collin Bazr, data center, Dennis Spalla, Elk River, Luci Botzek. UnitedHealth Groun The UnitedHealth Group recently expanded its data center in Elk River, northwest of the Twin Cities. (Submitted photo: city of Elk River) UnitedHealth recently finished $6.2 million data center expansion Elk River still has room for more data centers, even after the UnitedHealth Group's recent $6.2 million expansion of its center in the northwest Twin Cities suburb. Sherburne County is marketing 10 acres, which aze adjacent to its Elk River government center at 13880 Business Center Drive. Luci Botzek, the deputy administrator for the county, thinks there could be room for two large data centers on the land. The land is in the same azea as the UnitedHealth data center at 14100 Business Center Drive. Last October the health insurer completed a 54,000-squaze-foot addition to the 185,000 square feet it has had on the site since 2008. Minneapolis-based Mortenson Construction built both projects. In the same vicinity, the Target Corp. completed a 161,300-squaze-foot data center on 30 acres in 2007. The Minneapolis-based Ryan Cos. constructed the building. Dennis Spalla, director of real estate services at UnitedHealth, said the Minnetonka-based health insurer looked at multiple sites to further increase its data center capacity before deciding that expansion in Elk River was the best option. "From the outset, the city and staff were very knowledgeable and helpful. They understood our goals, and they seem to recognize what a good business needs to be a success," Spalla said in a news release. UnitedHealth also recently built a $26 million, 220,000-square-foot data center northwest of the interchange of County Road 10 and U.S. 212 in Chaska. Mortenson handled the construction. Minnesota and the nation are experiencing a data center building boom as companies and other organizations increasingly store data and run software off-site, taking advantage of cloud computing. Data centers have become a hot commodity for economic development officials. They azgue that the centers can each create hundreds of technology support jobs, even though the centers themselves may only directly support a few dozen jobs apiece. To make Minnesota more competitive in landing data centers, the state budget passed last year included an expanded sales tax exemption for new data centers. Minnesota has had a sales tax break for data center equipment for about a dozen yeazs, but the centers had to provide content for the Internet or hold patient records. The new measure provides exemptions on equipment, softwaze and electricity and lifted the restriction on the type of data being stored. The city of Elk River has proved adept at bringing in lazge data centers. The city's advantages include Elk River Municipal Utilities. (Chaska has its own local electricity utility, too.) Having its own cooperative electricity utility gives Elk River more flexibility in negotiating rates - a major cost for a data center. Elk River and Sherburne County officials also have a track record of coordinating on data center projects, said Collin Barr, vice president of development for Ryan Cos. ElkRiver ---~ Municipal Utilities UTILITIES COMNIISSION MEETING PONEAEI er I`riA1UI~E P OWEREO TO SERE TO: FROM: Elk River Municipal Utilities Commission Theresa Slominski -Finance and Office John Dietz -Chair Manager Dazyl Thompson -Vice Chair AI Nadeau -Trustee MEETING DATE: AGENDA ITEM NUMBER: A ril 10, 2012 6.1 SUBJECT: Staff U dates -Finance and Office Mana er DISCUSSION: We had 1199 credit cazd payment transactions in March, compazed to 1163 in Februazy. The fee for March should be $2,697.75. The new interface for online account information has 305 customers signed up for bill suppression (where we will not send them a paper bill and they will instead go online to retrieve it) and 59 customers have scheduled future payments. There have been numerous phone calls of customers calling to ask questions or request help with the new system and the feedback has been very positive. The audited Financial Statements Report has been sent to the auditing firm of Abdo, Eick, and Meyers (AEM) for review. We had an April 15` deadline to provide it to AEM for review in order to be able to present it to the commission in May. This was a tedious and time consuming project, just because of the learning curve involved this first year but future yeazs should be better. AEM was very helpful in assisting us this first yeaz. I am very appreciative of the talents and abilities of our staff, especially Lori Franz, in completing the audit report this year. At the Chamber and Energy Expo, we had short survey to obtain some feedback on the customer service we provide. There was a drawing fora $50 credit on a bill as an incentive to participate. Bob Andresen was the winner of the drawing. The survey received very positive responses and identified some opportunities for individual follow-up to answer questions or provide information. At our staff meeting, we took those opportunities and assigned them to various staff for follow-up, and identified some potential article items to include in our vazious publications. It was also discussed to have this survey, or a similar one, on our website for anyone to complete at any time (with no incentive, however.) We received a check from Keane Legal Claimant Services for the unclaimed property notice we had received last year. If you remember, we were very skeptical that anything would come of it. As it turns out, sometime prior to 2001, ERMLJ had insurance services with Principal Financial Group. In 2001, the company went public, and through a de-mutualization process, had a one- time issuance of stock. The address of record was 322 King Ave and since they were unable to contact us at that address, they enlisted the services of Keane to help distribute their unclaimed property. The liquidation of the stock was for $14,769.71 and Keane's fee was $1,476.97, so our net proceeds were $13,292.74 which was received in check form on Apri12"d, 2012. POwERER R1 ~IpTUI~~ P p W E 0. E D T O S E R V E Elk Ri Municipal Utilities UTILITIES COMMISSION MEETING POWERED er ~-~U~"~ P OVVERED T O S ERV E TO: FROM: Elk River Municipal Utilities Commission David Berg John Dietz, Chair Water Superintendent Dazyl Thompson, Vice Chair Al Nadeau, Trustee MEETING DATE: AGENDA ITEM NUMBER: A ril 10, 2012 6.1 SUBJECT: Staff U dates Discussion: The Water Confidence Report Youth Picture Contest had several entries. First place winner receives $50.00 and although this is a very nice incentive for participants, I feel to try and keep an interest in the program; we should offer a second place prize of $25.00. The submitted pictures were great, but the selection process for just one picture is a bit difficult especially with the varied styles that were entered. We would like to put another $25.00 into the picture contest for second place to reward the youth for their hard work and creativity. Elk River:-; Municipal Utilities UTILITIES COMMISSION MEETING ppNppEAEO B~ !~'~~V~~ P O W E R E D T O S E R V E TO: FROM: Elk River Municipal Utilities Commission Mark Fuchs John Dietz, Chair Line Superintendent Daryl Thompson, Vice Chair Al Nadeau, Trustee MEETING DATE: AGENDA ITEM NUMBER: A ril 10, 2012 61 SUBJECT: Staff Updates DISCUSSION: • Continue working on converting Islandview Drive from 2400 volts to 7200 volts. • Continue tree trimming. • Had six new house services. • Working on changing out our overhead cutouts and fuses. With this we go through checking padmount transformers and padmount switch gear making sure nothing is leaking, the proper tags are in place, the map book matches the tags, and all the warning stickers are on the outside. • Completed testing the overhead and underground protective grounds. We also completed testing the fiberglass hot sticks. Both of these are done annually. • The City shop finished doing D.O.T.'s on all our trucks and trailers. We do half in February and half in March. • Diversified did our annual inspections on the bucket and digger trucks. The inspections include: Visual/ Operational, Magnetic Particle, Dielectric, Load and Acoustic Emission Testing. • Had the new gasboy installed at the plant. The City had installed new pumps at their shop site so we upgraded ours. The gasboy keeps track of the hours and mileage of our vehicles for maintenance. Elk River~.~ . Municipal Utilities UTILITIES COMMISSION MEETING ppWpEAEO B1 /'~~~~~~ P O W E R E D T O S E R V E TO: FROM: Elk River Municipal Utilities Commission Wade Lovelette-Superintendent of Technical John Dietz, Chair Services Daryl Thompson, Vice Chair AI Nadeau, Trustee MEETING DATE: AGENDA ITEM NUMBER: A ril 10, 2012 6.1 SUBJECT: Staff Updates -Superintendent of Technical Services • The Locating department had a total of 203 locate tickets for the month of March, five of them being emergency tickets. The number of locate tickets coming in are indicative of the early frost out. • In December, the Security Systems Department had a total of 64 phone contacts, 13 new systems quoted, 10 system sales made, 15 installs completed, 21 service calls made and l3 personal visits. • The Meter shop continues changing electric and water meters. • The power plant staff did the monthly run of the generators. Last month was also the month where they did the annual megging of the generators. All the tests turned out very good. • All old hand-held radios, repeater, patch radio and people finder have all been narrow banded to meet the new FCC ruling for 2013. P O p E fl E 0 fl Y a~~~~ P O W E R E D T O S E R V E Elk River. Municipal Utilities UTILITIES COMMISSION MEETING TO: FROM: Elk River Municipal Utilities Commission Tom Sagstetter -Conservation and Key John Dietz -Chair Accounts Manager Daryl Thompson -Vice Chair Al Nadeau -Trustee MEETING DATE: AGENDA ITEM NUMBER: April 10, 2012 6.1 SUBJECT: Staff U dates DISCUSSION: • Provided commercial customers information on the new online newsletter provided by ERMU. • Working with Economic Development on retrofitting an existing vacant gas station with high efficient equipment to make operating costs more affordable. • Completed program updates for Cycled Air Conditioning, Central Air Conditioner Tune- Up, and Wind Power. • Working with staff on updating Cycled AC program brochure and application process. • Attended Business Energy Expo with ERMU staff on March 25`h. • Annual CIP data collection for regulatory reporting in April. • Project Conserve Energy Audits for customer reports.