RES 12-40 Exhibit A
• RESOLUTION No. I2- 40
A RESOLUTION FOR THE CITY OF ELK RIVER
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ELK RIVER
SUPPORTING THE EXTENSION OF THE ELK RIVER MUNICIPAL
UTILITIES ELECTRIC SERVICE TERRITORY WITHIN THE CITY OF
ELK RIVER
WHEREAS, the Village Council of the Village of Elk River, by resolution adopted on July
11, 1947, created a Water,Light, Power and Building Commission in and for
the Village of Elk River; and
WHEREAS, the Water,Light,Power and Building Commission in and for the Village of
Elk River became,in 1949, by operation of Minnesota Statutes j!j 412.331-
412.391, a municipal utility now known as Elk River Municipal Utilities
(ERMU);and
WHEREAS, ERMU's original electric service territory included the Village of Elk River
and portions of immediately adjacent communities; and
• WHEREAS, ERMU has been authorized since 1974 to provide electric service to all areas
within the city limits of the City of Elk River;and
WHEREAS, in 1977 the town of Elk River and the old city of Elk River consolidated to
form the new city of Elk River; and
WHEREAS, in 1991 ERMU entered into a 20-year orderly electric service territory
acquisition plan with Connexus Energy to acquire, over a period of 20 years,
electric service territories that were previously within the town of Elk River;
and
WHEREAS, the 1991 agreement with Connexus Energy has now expired and there
remain approximately 7,723 acres (1,774 existing properties) of area within
the city limits of the City of Elk River which are not currently provided
electric service by ERMU;and
WHEREAS, approximately 1,807 acres (914 existing properties) of this area are currently
within the City of Elk River's urban service district and have, or are planned
to have, City water service which is provided by ERMU; and
WHEREAS, the Board of Commissioners (Board) of ERMU has determined that it is in
the best interests of the existing customers of ERMU, and believes it is in the
best interests of all the citizens of the City of Elk River, for ERMU to
provide electric service within the corporate boundaries of the City of Elk
River, including in particular those areas within the Cit\- of Elk River's
designated urban set-vice area, for the following reasons: •
1. As ERMU's electric service territory has grown since 1991 ER'\IL-has
realized increased economies of scale which has helped reduce unit costs
and improve the value of electric services provided to customers.
Continued expansion will further improve these economies of scale and
reduce electric costs for all citizens of the City in the future.
2. The increased customer base and load which ERMU has realized since
1991, and which would continue to build if ER'NIU's electric service
territory continues to expand, has improved the City and ERMU's ability
to market Elk River as a desirable location for large power users, such as
data centers.
3. Having a uniform service territory for all municipal services will improve
planning by the City and ERMU for future development, facilities and
maintenance for water,wastewater, storm sewer and electric service
throughout the City of Elk River.
4. Having ERNILU provide electric service to areas within the City which the
City is promoting for economic development, particularly areas within
the City currently designated for urban services,will create additional
opportunities for cooperation and collaboration between the City and
ERMU to promote economic development.
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5. Having uniform municipal services throughout the city limits enhances
the ability of the City and ERMU to provide services with local control
and local accountability and will cause less confusion for electric
customers.
6. ERMU,being locally based and serving the bulk of the City of Elk River
already,would be able to provide the expansion areas with reduced
dispatch distances and reductions in response time when electric utility
personnel respond to outages, fires and traffic accidents involving
energized electrical utility equipment.
7. As ERMU enters the market over the next six years for a wholesale
power supplier, the increased customer base and load which an
expansion of ERMU's electric service territory within the City would
provide would improve ERMU's marketability to a wholesale power
supplier or power agency, therefore potentially reducing electric costs for
citizens within the city limits of the City of Elk River.
8. Increasing ERMU's customer base and revenues would increase the
annual revenue transfer which ERMU contributes to the City.
•
9. Expansion of ERMU's electric service territory would be at no cost to
the City or the City's taxpayers.
WHEREAS, in light of these benefits the Board, on June 12, 2012, began the process of
developing an offer or offers to acquire all or portions of the electric service
territory within the corporate limits of the City of Elk River which it does not
currently serve; and
WHEREAS, the Board believes it would be beneficial, as the process of developing and
presenting an offer or offers to Connexus Energy proceeds, to have the
support of the Elk River City Council for expansion of ERMU's service
territory; and
WHEREAS, the City Council has considered the Board's request and the benefits the
Board identifies for extending ER1'\1U's service territory within the City so
that residents of the City can have uniform municipal services; and
WHEREAS, the City Council agrees with the Board that extending ERMU's service
territory would have substantial benefits to the citizens and taxpayers of the
City,including the benefits which the Board has identified.
NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Elk River
adopts this resolution supporting the extension of ERMU's service territory
within the City of Elk River.
•
Passed and Adopted this 6 rh day of August, 2012.
Ilk ILA
Jo it J. Di,tz, May.7
A T:
Tina Allard, City Clerk
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