4.1. ERMUSR 10-09-2012 Elk River .M.
Municipal Utilities UTILITIES COMMISSION MEETING
TO: FROM:
Elk River Municipal Utilities Commission Troy Adams, P.E. —General Manager
John Dietz—Chair
Daryl Thompson—Vice Chair
Al Nadeau—Trustee
MEETING DATE: AGENDA ITEM NUMBER:
October 9, 2012 4.1
SUBJECT:
Power Supply Options /Resource Planning Update
BACKGROUND:
In September 2008, Connexus Energy terminated the 10-year rolling "all requirements" power
contract with Elk River Municipal Utilities. In April 2010, 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 15,
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:
The following are a few updates regarding the research into ERMU's next wholesale power
supply contract:
1. Staff attended a Missouri River Energy Services (MRES) board meeting September 13 in
Sioux Falls, SD. An update will be provided at the meeting. MRES will also be holding
an Area Meeting in Alexandria, MN on October 25 at 9:00am. An invitation has been
extended to ERMU to attend.
2. ERMU is currently an Associate Member of CMMPA. This was done during in
conjunction with the Resource Coalition work. The associate membership is $2,500 and
renews month to month. CMMPA has contacted ERMU staff about possibilities of
participating in an upcoming resource planning project.
r l I P O I S E R E D 1
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Reliable Public
Power Provider POWERED T o SERVE
3. On September 21, Staff met with GRE and Connexus to discuss the power contract. The
discussion was informal and GRE was open to discuss ERMU's concerns to find a
solution to retain ERMU's load.
4. Staff has prepared a grid comparing the wholesale power providers the ERMU is
currently reviewing. This grid can serve as overview and discussion point as to the
direction the Commission wants to research.
ATTACHMENTS:
• ERMU Wholesale Power Supplier Comparison Grid—dated September 24, 2012
INATURE1
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Reliable Public P O W E R E D T O S E R V E
POWs/Provider
Elk River Municipal Utilities
Wholesale Power Supplier Compairison Grid
9/24/2012
Connexus Energy Central Minnesota Southern Minnesota
8y- Minnesota Municipal Missouri River Energy
Current power supplier
River Energy(G RE) Municipal Power Agency Municipal Power Agency
)CMMPA) (SMMPA) Power Agency(MMPA) Services(MRES)
Headquarters Ramsey,MN Maple Grove,MN Blue Earth,MN Rochester,MN Minneapolis,MN Sioux Falls,SD
Distance from Elk River,MN 10 miles 20 miles 150 miles 125 miles 35 miles 265 miles
Business Model MN Cooperative-Elec MN Cooperative- Municipal power agency-Municipal power agency-Municipal power agency-Municipal power agency-
Distribution Generation and MN MN MN MN SD,ND,IA
Transmission
Power supply All requirments member Resource planning for Project focused agency. Resource planning for Resource planning for Resource planning for
of GRE the full membership Members have the full membership the full membership the full membership
significiant
independence in
portfolio
Membership 125,000 Customers 28 member cooperatives 12 member municipals 18 member municipals 11 member municials 61 member municipals
Typical membership Rural and suburban Rural electric Small municipal utilities Large and small Large and small Large and small
electric distribution distribution cooperatives municipal utilities municipal utilities municipal utilities
customers
ERMU in comparison to their N/A Middle Largest Top Five Top Five Top Five
membership
Governance 8 member board of 26 member board. 12 member board of 7 member board-3 11 member board of 13 member board of
elected customers directors fixed for largest directors directors
members,4 elected from
remaining 15 members
Representation for ERMU in None Board seat as member Board seat as member Need to be elected Board seat as member Need to be elected
governance
Governance comments There would be no ERMU would be' Decisions are largely that ERMU would be close to Members are,for the ERMU would fit the
opportunity through municipal on a board of of the individual having a lock for a board most part, current direction and
governance for ERMU to cooperatives with municipals. Lots of seat,but likely would geographically similar to goals of the MRES board.
provide direction to this opposing views on freedom for need to wait until 2030 ERMU. The members Board discussion
orgainization. service territory independence and when Rochester and are also very similar in includes member not
acquisition. ERMU choice. Many dicisions Ausitn leave. Decisions size,needs,and goals. represented on the
would be different from need to go back to the are made by the board ERMU would bea board.
the other members and individual municipal's for the whole contributor on this
may not have much governing body. ERMU membership. Board board.
influence in direction. would be different in discussion includes
goals and needs because members not
ERMU is so much larger represented on the
that the other members. board.
Contract Relationship Power sale Member Member Member Member Member
Generation Comments Doesn't own generation. Long on generation Project oriented. Heavy into coal. Heavy into natural gas Most MRES members
Receives power through assets. Heavy into coal. Worked on Big Stone n with hedges of coal. are Western Area Power
all requirements contract Owns new coal power and Resource Power Administration)WAPA)
with GRE. plant in ND that has yet Coalition with ERMU. hydro power eligible.
to be used. Owns a ERMU would not be.
significant amount of Exlcuding hydro MRES is
natural gas peaking heavy into coal with
facilities. some nuclear.
Transmission Comments Doesn't own Owner of transmission, Owner. ERMU has a Long time owner of In the process of Also an owner in the
transmission. Receives ERMU has facilities downstream contract transmission. Owner in purchasing transmission. CAPX Brookings Project.
through all requirements within GRE substations. with CMMPA for the CAPX transmission
contract with GRE. CAPX Brookings Project. projects,
CMMPA handles ERMU's
Attachment 0 filings,