ERMUSR EDUCATION 07-06-2004 Elk River
Municipal Utilities
13069 Orono Parkway phone: 763.441.2020
Elk River,MN 55330 Fax.763 441.8099
June 30, 2004
To: Elk River Municipal Utilities Commission
Jerry Takle
Jim Tralle
John Dietz
From: Bryan Adams
Subject: 2004 APPA Annual Meeting Report
I had the opportunity to attend the National APPA Conference in Seattle, WA from June
21-23, 2004. The following is a synopsis of the highlights of the conference.
Federal Legislative Issues—Good discussion concerning the energy bill and deregulation.
It is apparently too big of an issue for Congress to get their hands around and legislation
will probably not pass this year. It is projected Congress will let this issue rest for a year
and take it up in 2006. FERC is still pushing for open transmission access with ISO but
still experiencing much resistance. The ISO's are adding a lot of cost with no appreciable
benefit. It is becoming apparent by many in government, that there is no one solution for
everyone and the electric industry is to complicated technically, and to important to
further mess-up. So far there is ineffective co-mingling of regulation and competition.
There is growing tensions between the electric industry and environmental interest.
Threat of deregulation has provided a clear lack of accountability and incentives for the
electric industry to grow and help solve the infrastructure issues.
Incorporating Ethics & Sarbones-Oxley Act Principles Into Municipal Utility
Governance. This act is Congress' response to Enron and World Com's lack of corporate
responsibility. Although this act only applies to companies subject to the Securities
Exchange Act of 1934, non profits should consider following it. This legislation
addresses document destruction, whistle blower protection, audit committees and
independence from management, code of ethics, executive loans, and compensation, and
ethical obligations of attorneys.
Security Vulnerability—A disturbing session on electric system security and our
vulnerability. Biggest concern is loosing the transmission grid system knowing the
transmission system is almost impossible to protect. Standard military procedure is to
make inoperable, the electric system first. We will be spending a lot of money on
security in the future without accomplishing much in regard to hardening our system.
Largest emphasis is protecting the grid system and not individual communities. This is
not Elk Rivers' priority. Computer systems and SCADA system protection is also of big
concern.
Distribution Efficiency—Programs were discussed which promoted system voltage
reduction to lower demand costs and system losses. They were promoting lowering the
voltage to 114 volt at customers' end point or 118 volt at the meter. Very questionable
program for industrial load with motors.
Financial Reporting to Utility Board— Good discussion of what financial information is
presented to the governing board and is it the information and form that the board desires.
Elk River Municipal Utilities is supplying the information suggested by the presenter.
Internet Service in Manassas—This technology uses a power line carrier to deploy
broadband. Installation continues with better than expected reception. There is a lot of
interest by municipals in offering this technology.
Customer Oriented Reliability—Discussion addressed the CAIDI, SAIFI, SAIDI
indicators are the traditional indexes used to measure reliability but they may not be the
best indicator. The presenter gave the results of his customer surveys and they found the
customers were generally satisfied with the electric reliability if outages were less than
three outages/year, less than 10 hours duration, and less than five days total outage for a
major event, (flood, hurricane or tornado). They discussed tracking the causes of outages
and other preventative maintenance issues. Elk River far exceeds this presenters
expectations.