6.1. ERMUSR 03-18-2014 )1/44-h
Elk River
Municipal Utilities UTILITIES COMMISSION MEETING
TO: FROM:
Elk River Municipal Utilities Commission Troy Adams, P.E. —General Manager
John Dietz—Chair
Al Nadeau—Vice Chair
Daryl Thompson—Trustee
MEETING DATE: AGENDA ITEM NUMBER:
March 18, 2014 6.1a
SUBJECT:
Staff Updates—General Manager
DISCUSSION:
• On February 12, I met with representatives from GRE, Connexus, and MMPA. The
meeting included discussion on the upcoming transition of wholesale power supply from
GRE to MMPA. We also discussed other opportunities. Overall, it was a very positive
meeting.
• MMPA is looking to its members to extend their membership contract end date from
2040 to 2050. ERMU had already agreed to this when joining MMPA in 2013. In part,
the reason for the extension is to improve the agency's positioning for issuing debt at a
lower cost. I had been asked by Greg Drent, the Electric Utility Director in Le Sueur, to
speak to the Lc Sueur City Council about ERMU's process in deciding to join MMPA. I
spoke at their February 24 council meeting. Attached is an article from their local paper.
• On February 25 after the MMPA Board Meeting, the Board members had an opportunity
to tour MMPA's newest generation facility,their 8MW Hometown BioEnergy generation
facility that just opened in Le Sueur, MN. An article from APPA on this facility is
attached.
• The annual review for the General Manager is in April. Staff will work to update the
previously used review material to a digital survey format. If there are any additions or
questions the Commission would like to include in this year's review, please contact our
Executive Administrative Assistant.
• Attached is an article on the City of Davis, California, and their efforts of forming a
municipal electric utility.
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ATTACHMENTS:
• Le Sueur News Herald—Le Sueur City Council wants more time to consider power
agency contract—2-25-2014
• APPA Public Power Daily—MMPA producing power from food processing, agricultural
waste—2-7-2014
• APPA Public Power Daily—City of Davis, Calif, to study forming a public power utility
—2-10-2014
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Le Sueur City Council wants more time to consider power agency contract- Le Sueur M... Page 1 of 2
Le Sueur City Council wants more time to
consider power agency contract
By CJ SIEWERT csiewert @lesueurnews-herald.com I Posted: Tuesday, February 25, 2014
9:00 am
Predicting the electrical needs of Le Sueur nearly three decades from now is a tough task and the
City Council decided it needs more time to consider its power sales contract.
The council Monday unanimously approved a motion asking for a 90-day extension to its
contract-signing deadline with Minnesota Municipal Power Agency. MMPA is asking the city for
a decision by March 31 on extending its power supply contact from 2040 to 2050.
Discussion of the topic continued from the Feb. 10 meeting when conversations turned heated.
Monday night's discussion proved to be more constructive with insight from the utility general
manager of MMPA's newest member city.
Troy Adams, general manager of Elk River Utilities, spoke to the City Council on how the city of
Elk River went through the process of choosing MMPA as its wholesale power supplier. Elk River
officials approached several power suppliers to discuss options for their city. A few items they
considered with each supplier were business model, power supply, membership, governance,
contract relationship, generation, transmission and carbon footprint.
After weighing the pros and cons of six different power suppliers, Elk River officials saw MMPA
as the power supplier that best fit their needs, Adams said, adding that the closest comparison to
MMPA was Great River Energy.
"In comparison the Great River Energy, MMPA has better rates, but in my opinion, [MMPA]
seems to be positioned and staffed to maintain a competitive advantage," Adams said.
Another positive for Le Sueur to extend its contract with MMPA, in Adams' opinion, is a
favorable credit rating.
"We ended up with a AA3 rating, which for a municipal load is very good," Adams said. "One of
things that [bond rating agency] Moody's put in the report was because we had signed up with
MMPA, we were helping protect ourselves against future risk, especially related to carbon."
Many questions were brought forward about the details of MMPA's proposed contract extension.
A major negative in one councilor's opinion is MMPA's power to prohibit independent
purchasing of power from other facilities.
htup://www.southernminn.com/le sueur news herald/news/article 3c162e8b-39f8-595e-8... 2/26/2014
Le Sueur City Council wants more time to consider power agency contract- Le Sueur M... Page 2 of 2
"We are proposing to agree to a contract with an unregulated municipal power agency that has an
absolute monopoly of the city's electric power and energy needs?" Council member John Schultz
said.
Council member Tom Tellijohn, who is also Le Sueur's representative on the MMPA Board, said
he will tell MMPA officials the city is seriously considering the contract extension, but needs
more time to talk with the city's major power customers.
"The second step is to get together with our local industries and determine exactly what it is we
want from MMPA and then we can go in and negotiate with them," Tellijohn said.
7
http://www.southemminn.com/Ie_sueur news_herald/news/article_3cI62e8b-39f8-595e-8... 2/26/2014
MMPA producing power from food processing, agricultural waste Page 1 of 2
Public Power Daily
Friday,February 7,2014
MMPA producing power from food processing, agricultural
waste
The Minnesota Municipal Power Agency (MMPA) is generating power from food processing and
agricultural waste. The agency's 8-MW bioenergy facility is one of the largest of its kind in the
country to employ an anaerobic digestion process, the joint action agency said. The "Hometown
BioEnergy" facility is located in Le Sueur, Minn., original home of the Green Giant Co., and one of
12 municipal utility members of MMPA.
The concept and design vision for the facility were developed by Avant Energy, a Minneapolis-based
energy management company and long-time partner with MMPA. Avant also managed regulatory
approvals and construction.The plant uses biogas technology developed by Xergi A/S, a Danish
company. It began operating in December after a one-year construction cycle.
"We're generating valuable, renewable and dispatchable on-peak electricity with this process," said
Kelsey Dillon, vice president of biopower at Avant Energy. "At optimal times when the power is
needed and its value is highest, we draw off the biogas from storage to fuel the generators," she said,
pointing out that this ability to time power production is a significant advantage compared to
intermittent renewables such as solar and wind.
The digestion process results in two by-products—a liquid that will become a nutrient-rich fertilizer
for area fanners and solid fuel that will be sold for boilers. The digestion takes place in continuously
stirred reactors over 30 to 45 days. Heat from the generators dries the solid fuel by-product.
The project's infrastructure includes:
• Two 1.6 million-gallon capacity anaerobic digestion tanks.
• Gas cleaners to remove hydrogen sulfide from biogas prior to electric generation.
• Gas storage.
• Four 2-MW Cummins generators.
• Indoor feedstock receiving and storage area.
• Biofilter technology to treat process air.
• Lined storage ponds designed to hold a year of liquid fertilizer production.
Feedstock for the plant varies, depending on season and availability, including vegetable processing
residuals from plants in the area, silage, manure and other food processing byproducts. Avant is
working with area businesses and communities to identify waste that can be converted to energy.
Electrical output from the plant will become part of the renewable generation profile of all 12 of its
members, MMPA said. Minnesota's renewable energy requirements call for at least 25 percent of
power to be generated through renewable means by 2025. MMPA also operates a 44-MW wind farm
in southern Minnesota, which began operating in 2011.
"Homeowners and businesses who rely on our member municipal utilities will benefit from our mix
of cost-effective and local renewable energy generation sources," said MMPA board Chairman Steve
Schmidt, a member of the Anoka, Minn., City Council.
http://www.naylometwork.com/app-ppd/articles/prl6-V2.asp?aid=252496 2/10/2014
MMPA producing power from food processing, agricultural waste Page 2 of 2
Besides producing renewable energy, the Hometown BioEnergy facility has a desirable environmental
profile, MMPA said. In April 2012, the Citizen's Board of the Minnesota Pollution Control Agency
voted unanimously that an environmental impact statement was not required for the project. The
facility was built in a depleted gravel mine, reclaiming the property into a job-producing green energy
plant.
"Innovation is rarely easy and this project was no exception," said Dillon. "It's a great feeling to be
complete and in operating mode."
1'opyngh�!.20N 1Tulf'icen Ibbhc kJ!,
http://www.naylornetwork.com/app-ppd/articles/print-V2.asp?aid=252496 2/10/2014
City of Davis, Calif., to study forming a public power utility Page 1 of I
lu :in
City of Davis, Calif., to study forming a public power utility
The city of Davis, Calif., will takc another look at the possibility of unplugging its private power
provider,Pacific Gas & Electric Co., and creating a municipal utility. City officials on Jan. 28
authorized spending up to $600,000 for a feasibility study of public power for Davis.
There was an effort to bring public power to the California city a decade ago. The matter came to a
vote in 2006, but the public power plan was defeated after PG&E spent millions of dollars to fight it.
In the 2006 vote, residents of Sacramento rejected a proposal for the Sacramento Municipal Utility
District to take over electric service to Davis and other parts of Yolo County that are served by
PG&E. Voters defeated two of three ballot measures that would have been needed to give SMUD the
go-ahead to extend its service territory into the cities of Davis, West Sacramento and Woodland. The
three communities are across the river from Sacramento, in Yolo County.
PG&E stood to lose more than 70,000 customers if SMUD had annexed the Yolo County areas. The
utility was reported to have spent more than $11 million opposing the plan.
Elected officials in Davis, West Sacramento and Woodland, and in neighboring unincorporated areas
of Yolo County, had asked SMUD to annex them,pointing out that the municipal utility's rates were,
on average, nearly 30 percent lower than PG&E's. In 2005, SMUD's board of directors approved the
plan to annex the Yolo areas, after a study by the utility estimated that the annexation would bring
savings to its existing customers, as well as to residents of the three Yolo communities.
Supporters of the plan to annex the Yolo areas raised about$1 million to support the measure but
PG&E outspent them, 11-1, according to the Sacramento Bee. SMUD, as a public entity, is prohibited
from spending money or issuing public statements to influence ballot measures.
Pacific Gas & Electric Co. ran attack ads, push surveys and sent "an avalanche of mailers" to keep
Yolo County in its service territory, the Davis Enterprise newspaper reported Feb. 2. In Davis, voters
had approved the proposed annexation.
Brandi Ehlers, a spokeswoman for PG&E, said the private utility's electric equipment in Davis is not
for sale, the Sacramento Business Journal reported Feb. 3.
Davis Mayor Joe Krovoza told the Enterprise that city leaders are "methodically exploring the issue,"
but said no decision has been made yet. "If we learn there's not a benefit to the community or much of
a benefit to the community, we will change course," he said. —JI�:ANNINI: ANDERSON
http://www.naylornetwork.com/app-ppd/articles/pr ntt-V2.asp?aid=252789 2/10/2014
Elk River
Municipal Utilities UTILITIES COMMISSION MEETING
TO: FROM:
Elk River Municipal Utilities Commission Theresa Slominski—Finance and Office Manager
John Dietz—Chair
Al Nadeau—Vice Chair
Daryl Thompson —Trustee
MEETING DATE: AGENDA ITEM NUMBER:
March 18, 2014 6.1b
SUBJECT:
Staff Update
DISCUSSION:
We had 2,271 credit card payment transactions in February, compared to 2,347 in January. The
fee for December should be$5,109.75.
We received a PCA charge of$269,812.29 for February's billing. The PCA was a result of
January's energy purchases and was justified to me via the explanation below from GRE's
president:
January was an unusual month. In terms of heating degree days, it was the 17th coldest in Minnesota over
the past 142 years. GRE's energy load was 5.3 percent over budget and 6.7 percent over 2013, and
coincided with fuel supply constraints and volatile energy prices across the country. Frigid sustained
temperatures.propane shortages, and high gas prices(due in part to a pipeline fire)were major reasons
for extreme and unanticipated price volatility in MISO.
In January, we paid significantly more for energy purchased than the revenue received for the energy we
generated and sold In short, we had high load and paid high prices for that load This was the major
reason for the PCA.
This leaves us with a balance of$367,995.68 accumulated PCA from January and February. We
will continue to monitor the PCA balance to determine if charges will need to be passed along to
our customers.
The auditors were here February 27ih and 28th for field work and all went pretty well. The
auditors are anticipating presenting the audit at the April 8th Commission Meeting.
We are preparing for our first site visit from NISC March 31" through April 4th for the business
practices analysis component related to the software conversion for the accounting side. We
have a document to complete prior to their arrival that is a series of questions on how we
currently complete tasks. After this site visit, the next step will be to send current data from our
software to NISC to begin the actual data conversion.
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Elk River
Municipal Utilities UTILITIES COMMISSION MEETING
TO: FROM:
Elk River Municipal Utilities Commission Mark Fuchs—Electric Superintendent
John Dietz—Chair
Al Nadeau— Vice Chair
Daryl Thompson—Trustee
MEETING DATE: AGENDA ITEM NUMBER:
March 18, 2014 6.1c
SUBJECT:
Staff Update
DISCUSSION:
• Had four new services.
• Continue working on the Triple Deck Feeder rebuild.
• Continue tree trimming.
• Working on fixing problems that the infra-red camera finds. The transformer at Menards
had a heating elbow that could not be removed and also had a few small oil leaks so we
ended up scheduling an outage to change out that transformer. We sent the transformer
away to get repaired.
• Finished changing out 18 high pressure sodium light fixtures to LED fixtures on Freeport
Avenue between Jackson Street and School Street.
• Diversified completed annual inspections on the bucket and digger trucks. The
inspections include: Visual/Operational, Magnetic Particle, Dielectric, Load and Acoustic
Emission Testing.
• A car hit a pole on February 15th on County Road 1. Elk River Police Department was a
huge help with traffic control as the overhead wires were hanging over one lane of traffic.
• The City shop does D.O.T.'s for our trucks and trailers. They will be doing these during
February, March and April.
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Elk River
Municipal Utilities UTILITIES COMMISSION MEETING
TO: FROM:
Elk River Municipal Utilities Commission Eric Volk - Water Superintendent
John Dietz—Chair
Al Nadeau—Vice Chair
Daryl Thompson—Trustee
MEETING DATE: AGENDA ITEM NUMBER:
March 18, 2014 6.1e
SUBJECT:
Staff Updatc
DISCUSSION:
• Delivered 5 new residential water meters.
• Sealed the water meter and took curb stop ties from 3 water services.
• Shut off 4 water services and 3 electric services, also turned on 2 water services and I
electric service.
• Went on 4 Water Meter Service calls.
• Completed 6 locates.
• Completed 25 BACTI/Total Chlorine Residual Samples; all confirmed negative for
Coliform Bacteria.
• Completed 20 routine fluoride samples. All samples met MDH standards.
• Completed 8 raw fluoride samples that were sent to the Minnesota Department of Health.
The testing is being done so the EPA can make a decision if the fluoride limits in the
water should be reduced or left the same. Currently the fluoride target is 1.2 ppm. The
discussion in the past has been if the target can be lowered to .7 ppm.
• 52 of 78 Businesses have signed up for the private hydrant maintenance program. With
those 52 businesses signing up that puts the total at 127 of 191 hydrants.
• Mike, Angela, and Pete continue to perform well house and filter maintenance. They
have spent some quality time in the well houses fixing various items. They have also
spent a lot of time grinding and painting the filtration system in well #6 and Well #7.
• Sprint has started their final upgrade installation on Gary and Johnson Street Towers. We
are currently in contract talks and plan reviews with Verizon to install antennas on the
Gary and Johnson Street Towers.
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Elk River
Municipal Utilities UTILITIES COMMISSION MEETING
TO: FROM:
Elk River Municipal Utilities Commission Mark Fuchs— Electric Superintendent
John Dietz—Chair
Al Nadeau—Vice Chair
Daryl Thompson—Trustee _
MEETING DATE: AGENDA ITEM NUMBER:
March 18, 2014 6.1c
SUBJECT:
Staff Update
DISCUSSION:
• Had four new services.
• Continue working on the Triple Deck Feeder rebuild.
• Continue tree trimming.
• Working on fixing problems that the infra-red camera finds. The transformer at Menards
had a heating elbow that could not be removed and also had a few small oil leaks so we
ended up scheduling an outage to change out that transformer. We sent the transformer
away to get repaired.
• Finished changing out 18 high pressure sodium light fixtures to LED fixtures on Freeport
Avenue between Jackson Street and School Street.
• Diversified completed annual inspections on the bucket and digger trucks. The
inspections include: Visual/Operational, Magnetic Particle, Dielectric, Load and Acoustic
Emission Testing.
• A car hit a pole on February 15th on County Road 1. Elk River Police Department was a
huge help with traffic control as the overhead wires were hanging over one lane of traffic.
• The City shop does D.O.T.'s for our trucks and trailers. They will be doing these during
February, March and April.
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Elk River
Municipal Utilities UTILITIES COMMISSION MEETING
TO: FROM:
Elk River Municipal Utilities Commission Wade Lovelette— Superintendent of Technical
John Dietz—Chair Services
Al Nadeau—Vice Chair
Daryl Thompson—Trustee
MEETING DATE: AGENDA ITEM NUMBER:
March 18, 2014 6.1d
SUBJECT:
Staff Update
DISCUSSION:
• The Locating department had a total of 64 locate tickets in February; five of them
being emergency tickets, one cancelation, one meet, 51 normal tickets, two boundary
surveys and four updated tickets.
• In February, the Security Systems Department had a total of 82 phone contacts,
seven systems quoted, three system sales made, five installs completed, 39 service
calls and seven personal visits.
• Electric Technicians continue with the meter reading, power bill, substation checks,
hanging red-tags, meter read-outs and off-peak issues. They continue to change out
three phase meters to radio read meters and help with the monthly engine runs.
• The power plant staff did the monthly engine run on February 11th. The engines ran
good. Engine three has got a smoking problem and we are looking into resolving this
issue. They also performed the megging of the generators and everything was well
within the allowable tolerances.
• Staff continues to collect data with the GPS for our ArcView maps as time permits.
• Jeff continues to conduct infrared tests on our electric system.
• Tony attended the Upper Midwest Metering Association conference in Morton, MN.
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Elk River
Municipal Utilities
13069 Orono Parkway
P.O. Box 430
Elk River, MN 55330-0430
Elk River Municipal Utilities
Security System Weekly Update
(sum of weeks) (total for calendar month)
Month of Feb-14 February-14 Month Februray-14
Number of Contacts 82 82
Number of systems quoted 7 7
Number of sales made 3 3
Number of Installs completed 5 5
Number of service calls 39 39
Personal Visits 7 7
Revenue Jan-14 $ 29,110.14
Expense Jan-14 $ 12,292.14
Margin* Jan-14 $ 16,818.00
YTD Revenue Jan-14 $ 29,110.14
YTD Expense Jan-14 $ 12,292.14
YTD Margin' Jan-14 $ 16,818.00
Margin calculations exclude depreciation, payroll taxes,benefits coverage and office support
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t Elk Riv
Municipal Utilities UTILITIES COMMISSION MEETING
TO: FROM:
Elk River Municipal Utilities Commission Tom Sagstetter - Conservation and Key Accounts
John Dietz—Chair Manager
Al Nadeau—Vice Chair
Daryl Thompson—Trustee
MEETING DATE: AGENDA ITEM NUMBER:
March 18, 2014 6.1f
SUBJECT:
Staff Update
DISCUSSION:
• Continued to work with City Staff and Waste Management on the feasibility of leachate
processing and the potential expansion of the Landfill Gas Generating Station.
• Determined that the catastrophic failure of engine two at the landfill gas generating facility is not
covered by any warranty. The warranty from Motion Dynamics is for defective parts and labor
that occur within 6 months of operation. The engine that failed was in service for over 45,000
hours so there is no warranty.
• Competed MMUA Meter School and Basic Metering Pre-Conference in Marshall, MN.
• Working with commercial customers on rate programs that fit their business needs.
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gLK RIVER MUNICIPAL UTILITIES EDUCATION/ SEMINAR REPORT
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TITLE OF EDUCATION SEMINAR fry;
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DATES ATTENDED fle, 2 / 3 7-! YZOi
LOCATION /I< -'i ✓ ( 1 e c% /� / /s•ac 74:4,7
WHY DID EMPLOYEE CHOOSE TO ATTEND /4/ .e “b15 45 ,r
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WHAT INFORMATION WAS LEARNED BY ATTENDING rst.n.4r j tC z ¢3-
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WAS INFORMATION CONVEYED TO SUPERVISOR AND CO-WORKERS AND TO WHO
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IGNATURE
88
ELK RIVER MUNICIPAL UTILITIES EDUCATION I SEMINAR REPORT
DATE 3/7/2014
EMPLOYEE NAME Eric Volk
TITLE OF EDUCATION/SEMINAR Firstline Supervision
ORGANIZATION SPONSORING EDUCATION SEMINAR MMUA
DATES ATTENDED 26-28 February 2014
LOCATION MMUA Plymouth
WHY DID EMPLOYEE CHOOSE TO ATTEND To expand their skillset in supervision and being a leader
WHAT INFORMATION WAS LEARNED BY ATTENDING
Eric completed the following training modules:
Coaching: Bringing out the Best in Others
Expressing Yourself: Presenting Your Thoughts and Ideas
Giving and Receiving Constructive Feedback
Customer Relations
WAS INFORMATION CONVEYED TO SUPERVISOR AND CO-WORKERS AND TO WHO
Eric shared the "Fish Sticks" Philosophy which is use by The Pikes Place Fish Market, and the "Fun is
Good" Philosophy which is use by The St. Paul Saints.
SIGNATURE
89
ELK RIVER MUNICIPAL UTILITIES EDUCATION / SEMINAR REPORT
DATE 3/11/2014
EMPLOYEE NAME Torn Sagstetter
TITLE OF EDUCATION/SEMINAR 2014 Meter School and Basic Metering Pre-Conference
ORGANIZATION SPONSORING EDUCATION SEMINAR MMUA
DATES ATTENDED March 4th- 7th
LOCATION Marshall, MN
WHY DID EMPLOYEE CHOOSE TO ATTEND To learn about basic metering and more detailed
information on how meters work. The focus was to understand the specifics of both commercial and
residential meters and how they provide billing information based on how they are installed.
WHAT INFORMATION WAS LEARNED BY ATTENDING
We focused on wiring the meters that are installed on the majority of ERMU residential and commercial
customers. We learned how the different applications of current transformers and voltage transformers
make working in metering equipment safer and easier for billing purposes. The hands on work
with actual meters and current transformers allowed us to test and find mistakes that will be now be
avoided in the field. The meters are the cash register and its incredibly important to make sure that the
equipment is in stalled correctly and is maintained over the years to ensure quality billing information.
WAS INFORMATION CONVEYED TO SUPERVISOR AND CO-WORKERS AND TO WHO
I provided feedback to Troy and Wade on the benefits of the course and the importance of ongoing
training. As part of the class we received update manuals that can be shared with all field staff at
ERMU. Overall the hands on training was the best the classroom work needs improvement.
SIGNATURE
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