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6.1. ERMUSR 08-12-2014 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: August 12, 2014 6.1a SUBJECT: Staff Updates—General Manager DISCUSSION: • On July 21st, City staff held a kick-off meeting for the gravel mining area study project with WSB &Associates and ERMU staff to discuss required background data, stakeholder engagement, and project schedule. A stakeholder meeting specifically for ERMU will be held with WSB during the September 9th Regular Commission Meeting. This will be a workshop for the Commission, staff, WSB, and City staff to discuss how the future development of the Elk River gravel mining area would impact ERMU. • Minnesota Municipal Utilities Association(MMUA)held a budget meeting on August 8th in Plymouth and will hold their next board meeting in conjunction with their Annual Summer Conference on August 18-20 in Alexandria, MN. • The Minnesota Municipal Power Agency(MMPA)Annual Meeting and Dinner was held in North St. Paul on Tuesday, July 22. The 2013 MMPA Annual Report is attached. ATTACHMENTS: • 2013 MMPA Annual Report Ira EPOWEI1E0 8 1 I11 Page 1 of 1 NA UPE Reliable Public Power Provider P O W E R E D T o S E R V E 114 Minnesota Municipal Power Agency I Annual Report 2013 115 _our oo - - ° The-American-Public Power Association - - _- _ - _ _- ___ z - _ -- -----_- 4 recognized /1MPA's_2012 annual-report _ - - _ _ - - -- -- - _ _ - - - ,Mth,an "Award Merit'=one-of only - _ - - - _; _ - -:_ two awards presented in the Agency's size-based class. MMPA had a number of notable achievements in 2013, including the addition of a new member and the completion of the Agency's newest renewable facility. In May,Elk River Municipal Utilities(ERMU)requested membership in MMPA,citing the Agency's competitive rates and effective governance as some of its reasons for wanting to join.MMPA approved the request and will begin providing power and energy to Elk River in 2018.The addition of ERMU will increase the Agency's size by approximately 20%. Hometown BioEnergy,an 8 MW renewable energy facility that converts food processing and agricultural waste products into biogas and then electricity,was placed into service in December.This innovative and efficient project is the largest of its kind in the United States. 4R •*' 11 In addition to producing dispatchable,on-peak renewable energy,the project 4, ,g ' I {' also generates two by-products-a liquid by-product to be used by local farmers as ,l v n c - r 1 fertilizer and a dried digestate that has a number of uses including boiler fuel,soil A ,i A 1 r amendment,and animal bedding.The project is interconnected with the electric sK "' distribution system of the MMPA member community of Le Sueur. k' r } MMPA also became a transmission-owning member of the Midcontinent Independent 4 System Operator in 2013.This could allow the Agency to invest in transmission ., facilities to control costs. MMPA had these successes while continuing to deliver on its mission of providing y _ reliable,competitively-priced energy to its members and creating value for the Steve Schmidt Agency and its members. Chairman,MMPA Board of Directors We hope that you find this report informative.We look forward to continuing to be Derick O. Dahlen "The power of your hometown." Executive Manager, MMPA Sincerely, President and CEO, Avant Energy,Inc. Clad o. OA- Steve Schmidt Derick O.Dahlen Chairman,MMPA Board of Directors Executive Manager,MMPA President and CEO,Avant Energy,Inc. Who We Are v V PA is composec of twevc memoer municipal utilities in the state of Minnesota. Together, our memoers orovice electricity to over 69000 customers. Our Mission Our Members The Minnesota Municipal Power Agency (MMPA) is MMPA's members are the cities of Anoka, Arlington, composed of twelve member municipal utilities in Brownton, Buffalo,Chaska, East Grand Forks, Elk River, the state of Minnesota. The Agency's mission is to Le Sueur, North St. Paul,Olivia, Shakopee,and Winthrop. provide reliable, competitively-priced power to its The City of Elk River, Minnesota became the twelfth members and to create value for both the Agency and newest member of MMPA in 2013. Elk River and its members. MMPA accomplishes this while decided to join MMPA after reviewing a number of being innovative, well-managed, and financially power supply alternatives. Elk River will begin buying conservative, its wholesale power requirements from MMPA on The electric utility industry is highly competitive. Our October 1, 2018. members compete to attract new customers and The Agency's members have a combined population retain existing customers based on price, reliability, of nearly 150,000 and provide power to approximately and customer service. MMPA's objective is to provide 69,000 residential, commercial, and industrial energy and other services to enable our members to customers. Two members also have contracts with compete successfully. the Western Area Power Administration (WAPA). Highlights of Our History 1992 1995 2001 2004 MMPA Founded as Began Supplying Minnesota East Grand Forks Political Subdivision Power to Its River Station & Shakopee of the State of 8 Members: Completed Join MMPA Minnesota Anoka Le Sueur Arlington North St.Paul Brownton Olivia Chaska Winthrop 2 2013 MMPA Annual Report Who We Are Our Management MMPA is managed by Avant Energy, Inc.,an energy Avant 4P. AVANT management company based in Minneapolis, Management Minnesota. Avant has over 25 years of experience f and provides a wide range of services to the Agency (1.# f under long-term contracts, including strategic management, day-to-day operations, power plant Ir development, energy trading, accounting and Derick O.Dahlen Joseph V.Fulliero 9::_ ,,„finance, and regulatory compliance. President and CEO Vice President, A Operations Avant's expertise in energy markets, power supply planning and development of power plants is ,,7::,,,,,,,,,,:.:,,,,: , ` important to MMPA's long-term success.Avant is an innovator, pursuing forward-thinking solutions in i the areas of power generation,energy conservation, Kelsey E. Dillon Oncu H.Er David W. Niles and renewable energy. Vice President, Vice President, Vice President BioPower Planning &Controller Sales to Members Coincident Peak Load in megawatt hours in megawatts 350— 1,600,000 — 1,400,000 — 300— 321.3 1,483,077 1,488,033 320.9 314.4 1,200,000 — MWh,979 250 MWh MWh MW MW MW — 1,000,000 — 200— 800,000 — . 150 600,000 ;'Zi"" n , :"&i... ..,' - - - 400,000 _._ 100 — 200,000 — _ "°'' - 50 _ �� 0 _ 0 — 2011 2012 2013 2011 2012 2013 2005 2007 2010 2011 2013 Buffalo Faribault Energy Hometown Oak Glen Elk River Joins MMPA Park Grand WindPower Wind Farm Joins MMPA First Phase of Opening Completed Completed Hometown Faribault Energy (2nd Phase BioEnergy Park Completed Completed) Completed 2013 MMPA Annual Report 3 - Welcome to R • Elk Allit 14, 1 ' = .ti Our Newest Member Ek River In 2013, Elk River Municipal Utilities (ERMU) became the 12th member of the Agency. ERMU serves 9,300 metered electric customers in a 44 square mile area and has a peak demand of approximately 60 MW. Elk River's membership in MMPA follows the addition of Shakopee and East Grand Forks in 2004, and Buffalo in 2005 to the original eight members that formed MMPA in 1992. The Agency will begin providing wholesale Adams said other factors leading Elk River to power to ERMU on October 1, 2018, under a select MMPA are the Agency's modern facilities Power Sales Agreement that runs through and innovative renewable energy program, 2050. Troy Adams, ERMU's General Manager, as well as ERMU having a seat on the MMPA said choosing to partner with MMPA was a Board of Directors along with every other careful process. "We spent five years looking member utility. MMPA member cities have at our future power supply partner. As a public common interests and focus on value creation power municipal utility, we sought competitive for the Agency as a whole, which also fits with rates, and we wanted to be aligned with other Elk River's long-term vision. like-minded utilities," he said. "Elk River is a great fit for MVPA. It is a progressive and growing community. Like the other MVPA members, ERMU is committec to oroviding their community with competitively-pricec electricity." —Derick O. Dahlen, Executive Manager, MMPA 2013 MMPA Annual Report 5 s ' W � 1� ?_ Financial Highlights i 1 1 WE ,:``ta i i w�li� 1''! 2013 continuec 1,a1 i _ 1 t ._iii ! @ V V PA's track record _ i \ � ': of stronc financial -- - s performance while. . . ',, .. ,� maintaining , i 3 er---- competitive p_ Aar. rates . . ,..__.,„,..,,„:4,:,,,,,. _ _ . , , or ..„...„...„ _:_- _ . .- Aigo . „..,..-„..,,-.$ % Member Rates MMPA's average rate to members in 2013 was 8 per W The n average rate $6 24 pe MWh. Th Agency's age =f was lower than that of a comparable investor- b ,,.y owned utility, generation and transmission " ..-, cooperative, and municipal power agency in .; ., f the state of Minnesota for the year. MMPA's - - '` 4 strategic planning and financial focus has liP resulted in the Agency's rates being competitive with other local power supply providers since ,----=',1*-VRS-z— ' , .44.al: -,_., 4//tr ® its inception. Average MMPA Rate to Members .rrl�b in dollars per megawatt hour i� 70 ._ _ 68.24 60 .— 6423 65.06 $/MWh '' � ! _+ 643 '‘11111 �7 50 $/MWh $/MWh 40— /h 30 •> ' e` _ ,,, I,71/1 �_. 20 _ �• 10 O 2011 2012 2013 /Artie' :_/ .s ,--,;;:- Ai -AWAY i .1-' ( .,_ Financial Highlights Year-Ending Rate Year-Ending Unrestricted Cash Stabilization Balance in thousands of dollars in thousands of dollars 40,000 — 30,000 _ S41,Q35 $29,300_ 35,000 --- - 25,000 -- 30,000 $33,443 - 20,000 .— - 25,000 --- _ $21,500 15,000 __ 20,000 — $21,950 15,000 -- 10,000 _ $11 500 10,000 5,000 5,000 -- 0 — 0 __ 2011 2012 2013 2011 2012 2013 Rate Stabilization Fund Strong Cash Position At the end of 2013, the rate stabilization fund MMPA's cash position strengthened in 2013, balance was $29.3 million. This gives the with the Agency ending the year with more Agency financial flexibility and the ability to than $41 million of unrestricted cash and cash set rates to members based on long-term equivalents. MMPA had an increase in unrestricted energy price expectations. MMPA maintains its cash of more than $7 million during the year. rate stabilization fund with the goal of avoiding The Agency's cash balance at the end of 2013 volatile price changes to members. represented more than three months of operating The Agency budgets an annual contribution to expenses and interest expense. MMPA also has the rate stabilization fund and makes further a $5 million line of credit with U.S. Bank that additions to the fund based on financial results. provides additional liquidity. 2013 Bond Issue Net Income in thousands of dollars MMPA issued $18 million of electric revenue 6,000 bonds in the fall of 2013 to finance the Home- $6,062 town BioEnergy project. As part of the bond 5,000 --- $5,200 - issue, MMPA obtained an A rating with a stable 4,000 outlook from Fitch. Moody's maintained its A3 $3,996 rating for MMPA while improving the Agency's 3,000 -- outlook from stable to positive. 2,000 1,000 ---- o 2011 2012 2013 2013 MMPA Annual Report 7 -- Financial Highlights ,- r f_ ,- Forward-Looking Energy Adjustment Clause ; � MMPA's rates to members include a forward- g - looking energy adjustment clause (EAC). At the beginning of each month,the Agency sets rates .4111/N,\., to members based on projected costs. Having i' a forward-looking EAC helps MMPA maintain .g liquidity and a strong financial position by .R i - - keeping revenues and expenses balanced 4 without a time lag. • �. + Debt Service Coverage ;;,z. , . In 2013, the MMPA Board of Directors approved -,i 'Ili!, is � �� - `.� ',�' a policy stating that it would adopt a budget Et _ ; . 'i , each provides coverage , 1 year that rovides debt service covers 1 of at least 1.20 times debt service coverage. it [;' - - j----- r r This policy sets a target in excess of the 1, = 1.15 times debt service coverage that is required Wij `P r • by MMPA's bond indenture and is intended to 4,; , , y` e % .,It'h! s ,� - '� � .�� t Q give MMPA the flexibility to withstand unexpected ,�•: 1ctM ctf 4 r �� r , `t .,.,, N ';tt .,` events without necessarily having to increase »c .Y i e m � C.f1 ' 1` ,. J � if.,--''1 - rates to members to maintain required debt r , ,7"., ' x'� , service coverage. The Agency exceeded its tit I ,J 7 ` '- / 1 �,;= 4-_r target in 2013 with a debt service coverage I� " - - / `'' ratio of 1.24 times debt service coverage. Debt Service Coverage Ratio r, .` _j d, , J = _ 1.25 _. *" ,,,-_,.. . . 1.24 -„'', ' '. ,,, A ....;,:‘,..... ,tvtit„„,t .. .t. -- -,.. -40.. -----,-. 118 , , 44.4A1111-24114 4#; ..t...,t.X ......, -... ,41? Attie's,-. k.:,f, ,,, . . 1.15 -- ° )444. # 44 , f •, 1.05 __ f• ,•, ,t ; d t € '4 t ' tt '1, 1.00 2011 2012 2013 tiloka Power Suppy _ _ Panning MMPA's power supply planning - approach is designed to give the - _ Conventional __ Agency flexibility in the competitive and rapidly-changing electric utility . ENERGY PARK -- industry. F-- MINNESOTA RIVER STATION = - - Resource planning is a challenging undertaking because the electric utility industry faces a high SILVER LAKE PLANT r degree of uncertainty related to commodity :_ POWER PURCHASES '- prices, environmental regulations,and technology. - ` MMPA's power supply planning goal is to - - assemble a diverse portfolio of conventional and _ _ renewable resources that positions the Agency = -?tea _ well for the future. We do this by having projects l-en vvab1e" at various development stages to provide -- - Resources - == MMPA with planning flexibility. When evaluating resource prospects, the Agency considers fixed HOMETOWN BIOENERGY _ _ _ _ and variable costs, environmental factors, and operating characteristics. -- OAK GLEN WIND FARM --- _ _ Like other utilities in the Midwest, MMPA __ _ HOMETOWN WINDPOWER _ _ _ purchases all of its load requirements from _ RENEWABLE ENERGY CREDITS = - and sells all of its generation output to the Midcontinent Independent System Operator - - - (MISO). However, MMPA's physical and contract - . - - - assets act as caps on market prices. We also - engage in energy hedging activities to promote _ .- rate stability. The Agency buys both electricity and natural gas in forward markets to manage energy price risk. 2013 MMPA Annual Report 9 ...., . .,. .- 4 I 1 1 Immirvumpolata. williffi ...- , _..........‘ .....______, , ..... . - _ , •, , . . .,..., ....- - --- ' ''''''..;.;'t,.---, -11: il _„, ' . ,t I, 7„,,._ , .: ._,,,,,:, .'-'77--._,..•_,...,-.--.:i.J.,' Irak- - ' lif il'i) - • ' it • W • . ..... .. ,,_ . ..... . .. . .. _ ... ... _ „......... ..,,,, •- ,....„....„ ___ ;,:.tgl ....,,,t 1_ . r'' '11' • • _ -,_ - -- _ . - .•. , - ...... • . . ,. - -- • ..-- .. ... _ .,;,-,',1,__ - . '•_ 11-:-. --- -r - --:,- - ---,--- .„- #11 - ......%., 1 , f . . , . . . - f:, i ,1^,t _ , 1 , .% d;k,*, .-, Y I A ',.' , ' 2 41 . 4,•. • , . *. .4 * . 10, ., ' ft : . -- ...rf' . - t • 1: .,..... , .., . 4 - 4 Electricity Supply Conventona I Resources MMPA maintains a portfolio of resources to provide electricity to its members. Conventional resources include a mix of owned and contracted generation. These resources include: Faribault Energy Park Faribault Energy Park goes far beyond being to freeze protection systems for the plant simply a power plant. The 300 MW combined- and improvements to the facility's chemical cycle facility in Faribault, Minnesota was built feed system. as a model of environmental responsibility The facility's grounds, including walking trails, and innovation. educational displays, gazebo, and rainwater The plant runs primarily on natural gas but collection ponds, are open to the public during uses fuel oil as a backup fuel source. In 2013, daylight hours. Students and residents are the Agency successfully completed a major welcome to tour the facility and are able to maintenance outage on FEP's steam turbine view the control room and the steam turbine generator (STG). This outage was part of the from the observation room.The plant also hosts Agency's preventative maintenance program the Agency's Energy Education Program, and, in addition to confirming the good which saw approximately 1,600 fourth grade condition of the steam turbine, also improved students from MMPA member and project host the plant's output and heat rate. In 2013, the communities visit FEP in 2013. Visitors are plant won a second consecutive Best Practices able to use the facility's 35 acres of park-like Award from Combined Cycle Journal. The award wetlands as a recreation area and even drop recognized the Agency's innovative approach a fishing line into one of the ponds. Not Just a Plant, But a Park t-- 4N-r, � •- _{'''.. -.*:0.=SSi*..'t,''''43' # ...;•==-^'e.., ..- 2013 MMPA Annual Report 11 - I ' 1 i i I "r- .;. . i ' t i , t , - - -. , V , I' ■ ' . . 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'' 1: 1 II '--- 'LT' ' 71‘ ---- _ = - -- - , , Ulte ' --..• ', ,. .-... ! - i •; -;:7-1-.-,---,.-'-; -ft\f.,?-;:-.- -:-;,-;,..::-1.-i-..1-1,- ..4*,..... _--,--4,---.:,7,-----,- .-,..-. 7..,' ::::.- Electricity Supply Conventions I Resources Minnesota River Station MMPA Plans to Locate The Minnesota River Station (MRS) is a 49 MW Generation Close to Load simple cycle dual fuel plant that entered service in 2001, and provides peaking power for the Distributed Generation Agency. The plant is located in and owned by With member demand increasing, MMPA the MMPA member community of Chaska, Min- is focusing on efficient projects that help nesota. The Agency has a long-term lease with MMPA manage risks related to energy pricing, the City of Chaska for the facility through 2031. transmission, and environmental regulation. Silver Lake Plant MMPA is planning to place Agency-owned MMPA's 20 year contract with Rochester Public natural gas fired distributed generation in its Utilities' (RPU's) coal-fired Silver Lake Plant, member communities. located in downtown Rochester, is nearing Distributed generation is electric generation completion. This 25 MW contract began in 1995 which connects to local distribution systems and expires in 2015. The Agency also has a rather than the high-voltage transmission system. contract to market the entire output of this By interconnecting locally, MMPA avoids plant, along with several other RPU resources, transmission interconnection uncertainties, to MISO. and increases the reliability of our member Purchases from Other Utilities communities' electric systems. The Agency also makes short- and medium- The first group of MMPA member communities term capacity purchases from other utilities to potentially host distributed generation when economic. These purchases help includes: Anoka, Chaska, and Shakopee. In MMPA manage the timing of long-term the spring of 2013, the Agency worked with Agency-owned resource additions. the Minnesota legislature to pass special legislation supporting the development of MMPA's distributed generation program. 2013 MMPA Annual Report 13 b. ,, • • �' , • �l, Electricity Supply Renewable Resources Our Approach MMPA is developing a portfolio of renewable resources (wind, solar, and biomass) to meet customer demand for renewable energy and to meet the Minnesota Renewable Energy Standard (RES) which currently requires 12% of the Agency's energy to come from renewable sources and increases to 17% in 2016 and ultimately 25% in 2025. Hometown WindPower Solar In 2010, MMPA became the first municipal The Agency is planning to include solar power agency in the country to have a wind demonstrations at each of its distributed turbine in each member community. The generation facilities. MMPA is also investigating Agency's innovative Hometown WindPower the construction of larger-scale solar facilities program placed a 160 kW wind turbine in to enhance the Agency's renewable resource each member community and at its Faribault portfolio. Energy Park facility. These turbines are a resource to help community members Renewable Energy Credits MMPA balances its physical renewable assets learn about the benefits and operating with purchases of Renewable Energy Credits characteristics of wind power. (RECs) from many suppliers representing a Oak Glen Wind Farm variety of generating technologies. These The Oak Glen Wind Farm (OGWF) is a 44 MW REC purchases help the Agency maintain wind project located near Blooming Prairie, flexibility in meeting MMPA's renewable energy Minnesota. OGWF's 24 turbines produce requirements for each year. renewable energy for the Agency. In 2013, the Additional Wind Resources project continued its track record of excellent The Agency is currently working with several availability, with the turbines capable of wind project developers to explore additional producing wind power more than 99% of wind opportunities for MMPA. These resources the time. MMPA installed a gazebo and could either be power purchase agreements educational signage about wind energy at a park in Blooming Prairie in appreciation of (PPAs) for the output of a wind facility or full the community hosting the OGWF project. or partial ownership of a wind project. 2013 MMPA Annual Report 15 �u ` r • Electricity Supply Hometown BoEnergy Now Producing Electricity from Biomass Hometown BioEnergy diversifies MMPA's renewable portfolio with dispatchable, on-peak renewable energy. Located in the MMPA member community of \' 7,f-- Le Sueur, Hometown BioEnergy is an 8 MW biomass facility that is the largest of its kind < ` in the United States. The facility was placed ., _ - in service on December 18, 2013. The facility uses anaerobic digestion technology . - d to produce biogas from agricultural and food `` ` t_. processing wastes.The biogas is then burned in 1• reciprocating engines to produce electricity.The • i facility also creates two valuable by-products— Senator Amy Klobuchar tours the facility with Kelsey Dillon of Avant Energy. a liquid by-product to be used by local farmers as fertilizer and a dried digestate that has a wastes to create a renewable source of elec- number of uses including boiler fuel, soil tricity that flows directly into the Le Sueur amendment, and animal bedding. Anaerobic power system. digestion was selected as a technology because The project adapted European technology it is especially well suited to the high moisture content of Minnesota's agricultural and food to the U.S. with an aggressive twelve-month processing wastes. construction schedule. As the photo on the left shows, the final result is an aesthetically Hometown BioEnergy supports the local pleasing facility that fits the local community. community by collecting and processing local la i i 1 g', 1 ¢ _, . As� ��liL iii l ` , -„�� , -.._^ 1� �.k„p. lu.�y#5 s,A� ,T.;, , , _ 1 1, �. vg i:. ` •_ _ 40.,...600' - a. 2013 MMPA Annual Report 17 \ \'- '''\'---,,,,„:',-.-L---'''--;__-_- -i,....- .--.. --_. —-- - — - ' -- - --,,, — - ,\\ ,\\\ .\\\\„, .., .,„..„ ,_ \, \\ \\\\\\\\ ,,,,,;','N. \\\ ‘. . \ . 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Transmission is currently the fastest- is currently being built by Great River Energy. growing component of MMPA's cost structure. Today, MMPA purchases transmission service As a result, MMPA is investing in transmission from Xcel Energy and MISO. Beginning in facilities to control costs. 2016, all of MMPA's transmission purchases The Agency has an agreement to purchase are expected to be from MISO. Conservation The Agency is pursuing a range of conservation MMPA's Hometown GeoPower program completed activities, including investments in demand side the installation of an underground vertical heat management and energy efficiency.Conservation exchanger (or ground loop) in 2013 at a new is an important component of the Agency's affordable senior housing facility in the member long-term planning and can help a utility defer community of Chaska. Heat pumps connected investment in new generating assets or additional to the ground loop will deliver lower cost heating power purchases. and cooling to the facility because of the greater In 2013, MMPA's conservation program achieved efficiency of the system compared to traditional kWh savings of 1.5%of average retail sales. systems. These heat pumps also reduce MMPA's MMPA's conservation offerings improve efficiency, summer peak load compared to traditional put money back into member communities, cooling systems. and help support local economic development. The program includes a range of conservation �= methods, such as lighting retrofits, energy audits, and custom commercial and industrial ' s i IJ5 projects. One highlight of the Agency's 2013 .,, // l conservation program was the addition of i°1r`Ell III_( rebates for residential LED lights and fixtures. 1 The Agency also continued its focus on conservation programs that serve low The Landing Senior Living Community,Chaska income customers. 2013 MMPA Annual Report 19 ' 81?0,,,. ..- _ _ 11°: g*4-.'...7.. : ' ,,..*....'- ' - ,..,,,,,, ... _ . . „.._ .. 1.,..::-,. . . .. _ __ _ ,,, „.... . . .. . .. .._. ... ,..4._:.:*,,,,, 416f . ,.... . .... 4..:___:„._ . _ • _....,..,. 1 .. . N.:\ .,._ ... .. . .. . ,...,, _ _ . ,t . 1 4, 8 , . • , ... ........ .. .. . . . ., ....... d N` S \$,. ° § r A ' - :,,;',-.__. tit:- ..-_-1:1:._-______:-'_- ' . - ' _1" --11::-. - -2.:72-_-_41.:-;•-•-•=.''' A_ li'''.,..._ -' - -- ''', s. .3 /• 8 F F r {,r -- , ‘tt 11 f Ap >-, g ,Air Energy Education Reachng Students through a Unoue Eoucatona Excorionce MMPA's Energy Education Program demonstrates the Agency's commitment to provide educational resources about energy for schools in its member communities and project host communities. MMPA's Energy Education Program aligns with specific energy lesson ranging from the Minnesota's 4th Grade Science Standards and concept of energy and energy sources to focuses on how energy is generated, transmit- how a power plant, such as FEP, generates ted, and used. Students learn these concepts electricity and provides power to their homes. through MMPA's Energy Education Workbook, As part of MMPA's commitment to its member interactive tours, and in-school assemblies. communities,the Agency sponsors the program A key component of the program is the tour so that all students have an equal opportunity at Faribault Energy Park (FEP), MMPA's 300 MW- to learn and participate. capacity natural gas facility. While visiting the In 2013, MMPA reached over 1,600 students facility, students view the control room, steam through its Energy Education Program. During turbine, and the wind turbine. For schools the month of May, students from 22 schools not easily accessible to the power plant, the attended the Tour Event. program has expanded to include an in-school educational assembly option. At FEP,fourth graders rotate through educational stations located throughout the facility and its wetlands park. Each station focuses on a ``This was a terrific fielc trip anc it aligns with our science curriculum on electricity. Thank you for the osportunity!" — Nicole Wyatt, Franklin Elementary Teacher, Anoka 2013 MMPA Annual Report 21 Minnesota Municipal Power Agency Statements of Net Position December 31 December 31 Assets 2013 2012 Current assets: Cash and cash equivalents $ 41,035,465 33,442,632 Restricted cash and cash equivalents 5,633,179 5,039,754 Grant receivable — 24,299 Accrued interest receivable 216,141 210,934 Power sales receivables 8,327,246 8,282,040 Other receivable 2,081,549 899,494 Fuel inventory 935,017 494,027 Plant inventory—spares 1,610,280 1,406,814 Prepaid expenses 564,324 550,418 Total current assets 60,403,201 50,350,412 Noncurrent assets: Capital assets: Equipment 765,116 661,394 Capital lease asset 29,080,531 29,080,531 Land 1,132,083 1,140,665 Electric plant 303,409,822 262,036,603 Rotable combustion turbine parts 6,063,531 6,063,531 Less accumulated depreciation (64,035,094) (53,885,376) Property and equipment, net 276,415,989 245,097,348 Construction in progress 4,598,781 12,745,248 Total capital assets, net 281,014,770 257,842,596 Restricted cash and cash equivalents 283,156 11,761,080 Restricted investments 22,072,759 19,945,133 Prepaid expenses 591,948 622,653 Future recoverable costs 30,425,628 25,649,748 Total noncurrent assets 334,388,261 315,821,210 Total assets 394,791,462 366,171,622 Deferred Outflows Deferred outflows of resources — 98,140 Total assets and deferred outflows of resources $394,791,462 366,269,762 Liabilities Liabilities: Current liabilities: Accounts payable and accrued liabilities $ 14,033,294 11,840,005 Retainage payable 1,147,679 — Accrued interest payable 3,380,575 3,233,586 Long-term debt due within one year 8,058,334 6,333,333 Capital lease liability due within one year 770,782 727,359 Derivative instruments—futures — 98,140 Total current liabilities 27,390,664 22,232,423 Long-term debt, net 269,381,358 257,859,891 Capital lease liability 21,592,855 22,363,637 Total noncurrent liabilities 290,974,213 280,223,528 Total liabilities 318,364,877 302,455,951 Deferred Inflows Deferred inflows of resources—rate stabilization 29,300,000 21,500,000 Deferred inflows of resources—other 5,915,990 7,165,491 Total liabilities and deferred inflows of resources 353,580,867 331,121,442 Net Position Net position: Net investment in capital assets 9,719,015 8,010,528 Restricted for debt service 5,733,585 5,143,346 Unrestricted 25,757,995 21,994,446 Total net position 41,210,595 35,148,320 Total liabilities and deferred inflows of resources and net position $394,791,462 366,269,762 22 2013 MMPA Annual Report Minnesota Municipal Power Agency Statements of Revenues, Expenses, and Changes in Net Position Year ended Year ended December 31 December 31 2013 2012 Operating revenues: Power sales to members $102,076,404 96,857,967 Power sales to nonmembers 4,027,415 4,258,371 Total operating revenues 106,103,819 101,116,338 Operating expenses: Power acquisition expense 48,813,970 49,324,302 Transmission 10,787,136 9,329,735 Other operating expenses 19,212,613 17,741,244 Depreciation 10,149,719 10,399,042 Total operating expenses 88,963,438 86,794,323 Operating income 17,140,381 14,322,015 Nonoperating revenues(expenses): Amortization of premium on long-term debt, net 138,554 197,631 Interest expense (14,186,323) (14,999,756) Investment income 933,084 923,752 Loss on disposition of property (2,567,317) — Gain on sale of investments — 317 Gain on bond retirement — 242,696 Grant revenue 16,568 25,409 Total nonoperating revenues(expenses), net (15,665,434) (13,609,951) Change in net position before future recoverable costs 1,474,947 712,064 Future recoverable costs 4,587,328 4,487,791 Change in net position 6,062,275 5,199,855 Total net position, beginning of year 35,148,320 29,948,465 Total net position, end of year $41,210,595 35,148,320 Visit www.mmpa.org to see complete audited financial statements and learn more about MMPA, MMPA MMPA ,onw,axawkN4ri1.•.w . pop 2013 MMPA Annual Report 23 MMPA Board of_ _ _ _._0411,711 1 �i .ter• ,t •fir„. 3 ,w.4. t^.-Y y ., 1 tee: .a.' J �'et may`'} �., .v.a ( ,� -`, tai b__5, , 4:P.' Vt'''L'.:*: : MMPA is governed by a Board of MMPA Anoka Elk River Directors.The Board is responsible Officers Steve Schmidt Troy Adams for setting policy, for approving Councilman Utilities General Manager investments in new plants,and Ed Evans* Allan Nadeau* for overseeing management. Utility Advisory Utilities Commissioner Each MMPA member has a _' ''': Board Member representative on MMPA's Board .. ` Le Sueur Arlington Tom Telli ohn and an alternate representative. ( 1 Liza Donabauer Councilman Steve Schmidt City Administrator Chairman Greg Drent* Each member community Lisa Tesch* Electric Director Deputy Clerk benefits through representation North St. Paul Brownton on MMPA's Board of Directors. �` Brian Frandle - - Jay Werner Director of The board shapes strategy gy , / Mayor Electric Utilities and makes important policy Mark Streich* Jason Ziemer* decisions on energy for its Matt Podhradsky Public Works City Manager gy Supervisor Vice Chairman member communities. Olivia Buffalo Dan Coughlin ; Merton Auger City Administrator City Administrator r J-:, Suzanne Hilgert* _' + Joseph Steffel* Mayor Utilities Director ty't Shakopee Dan Boyce Chaska John Crooks Secretary Matt Podhradsky Utilities Manager City Administrator Bryan McGowan* Greg Boe* Utilities Commissioner Councilman Winthrop .. / �� 1 East Grand Forks Peter Machaiek Dan Boyce Alderman General Manager Mark Erickson* John Crooks Scott Grayseth* City Administrator Treasurer Electric Utility Manager *Alternate 24 2013 MMPA Annual Report _ East Grand-Forks= - _ ---- _ tow-- -- n _ __ . _ _ _ _ _ _ _ . _ _ _ y _ Brownton . BiY .- - - - - -_ --- 'Winlhirop`_ >._� -_ - >_ _ _ Sfmkopee - _ - _ _ fl t i v r a -. ' _-_-' - _ -_ =r s _ C° -: _ - - - _ = N6- - Paul- = - haslsa_- - _- - - _ Arlington =-- _ - - - Le- i6w-_- 147/112 MMPA Member City Population 1 (2010.U.S.Census) 69 /159 Total Retail Customers Served 1 (2013) �. MMPA_ _ • • £. Minnesota Municipal Power Agency� 220 South Sixth Street,Suite 1300 612.349.6868 Minneapolis,MN 55402 www.mmpa.org .g„ 142 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: August 12, 2014 6.1b SUBJECT: Staff Update DISCUSSION: We had 2,456 credit card payment transactions in July, compared to 2,587 in June. The fee for July should be $5,526. An update on the software conversion: • We are preparing for our conversion transition for the accounting module. We "go live"on August 18th and need to complete all preparation and posting by end of day August 12`h • NISC will be here for our first live week on the accounting module of the software August 18`h through August 21St • We will have an on-site visit from the Customer Billing team for the analysis work August 6th through the 8th • I have received acknowledgement of our notice to our current credit card provider for the termination of our association with them, effective June 8th 2016. I have requested the buyout of the remainder of our term with them past the February 2015 implementation date. To update on the PCAs, we have received high PCAs every month through June in 2014. The July bill is an additional$30,021 for an accumulated total of$832,328. We charged 6 mils in May collecting$130,131, 6 mils in June collecting$131,188, and 2 mils in July collecting $46,277. This leaves us the uncollected balance at $524,732. If we receive no other PCAs, we only have 1 mil to collect to bring us to the $500,000 we established as the amount we were willing to absorb. We will continue to monitor this and provide the updated balances. wm� PVOWEBED ® r INA Page 1 of 1 NATURE Reliable Public Power Provider P O W E R E D T 0 S E R V E 143 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: August 12, 2014 6.1c SUBJECT: Staff Update DISCUSSION: • Had one new service. • Continue working on collecting data with the GPS for our ArcView maps as time permits. • Finished rebuilding Baldwin Ave and Line Ave by replacing rear lot line overhead with front lot line underground. There are some poles that need to be pulled when Cable Company removes their lines. • Continue working on feeder 74 rebuild. We have the wire installed and are working on terminating wire and placing equipment. • Continue working on changing out some of the rusty junction boxes. • Continue working on changing out fuse pads. This has been an ongoing project that had to be done due to our high fault current. • Had to bore in some new primary wire and move the transformer at 365 Evans Avenue. They're building a new apartment building at that location to replace the one that burned down last December. • Had a primary underground fault and a secondary service fault that needed to be replaced. w In 'POWERED 1 l r3 Page 1 of 1 NATURE Reliable Public Power Provider P O W E R E D T O S E R V E 144 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: August 12, 2014 6.1d SUBJECT: Staff Update DISCUSSION: • The Locating department had a total of 502 locate tickets in July; five of them being emergency tickets, 10 cancellations, 12 meets,417 normal tickets, two boundary surveys, and 56 updated tickets. The Locating department has been very busy. • In July, the Security Systems Department had a total of 104 phone contacts, eight systems quoted, nine system sales made, 11 installs completed,31 service calls and eight personal visits. Rick also participated in the Sherburne County Fair's Parade. • Electric Technicians continue with the meter reading,power bill, substation checks, hanging red-tags,meter read-outs and dealing with meter and off-peak issues. They continue to change out the three phase meters to radio read meters and help with the monthly engine runs. They have been doing all of the locating lately. • The power plant staff did the monthly engine run on July 15th. Everything ran smoothly. • The Orono Dam gates were finally closed in mid-July as water has slowed down considerably. • Staff continues to collect data with the GPS for our ArcView maps as time permits. The system inventory of ArcView maps is about 30 percent complete. ATTACHMENTS: • Security Systems Weekly Update • Security Systems Analysis ■�� POWERED DI IIr3 Page 1 of 1 NATURE Reliable Public Power Provider P O W E R E D T o S v E 145 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) July-14 July-14 Number of Contacts 104 104 Number of systems quoted 8 8 Number of sales made 9 9 Number of Installs completed 11 11 Number of service calls 31 31 Personal Visits 8 8 Revenue Jun-14 $ 24,542 Expense Jun-14 $ 14,136 Margin* Jun-14 $ 10,406 YTD Revenue Jun-14 $ 146,674 YTD Expense Jun-14 $ 93,467 YTD Margin* Jun-14 $ 53,207 *Margin calculations exclude depreciation,payroll taxes, benefits coverage and office support ** Excludes correction for 40K overbilling on security services. 146 ` O O O ` O O O RS O O O CC O O O 0) O O O 0) O O O (C ( Lri O co N d' - C1- -O N N -0 N N Lo 7 0. 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O C N N I` ti C ,- r- N N CO CO C7 .2 d) co C CO CO N N CO CO •C) R N N N C CO CO Q .0 co ' N N c- ' x n - V C C S Ca CC (7 0) 0) X 7 7 co C a) a) > a) N 0 C O x C Cn x CO Ce C C C C C C a) a) a) a) m m - 7 C1) x (II - �' x CO v •L c W c W C 2 c C c W •c c U a) 0 Q 0 °)0 U a) 0 QD °)0 m f!) CC >- W > 2 >- V) ( >- W } 2 > Nr m CA o 'C N l CO \S / _ M 0 N / I /f N 'l T O ' II( \ N a O N ' C m ca * N III O ci CD - a O 0 X O oo w = N CO III i L CD �4-. I C CD O co > V 0 N °'Ce lll v co o 0 N N O O N O O O O O O O O O O O O O O O O ER O O O O O O O O O In O O Lo O O O Lo Ix> co co N N ER ER ER EA EA ER ER EA 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: August 12, 2014 6.1e SUBJECT: Staff Update DISCUSSION: • Delivered 3 new residential water meters. • Sealed the water meter and took curb stop ties from 6 water services. • Shut off 4 water services and 3 electric services, also turned on 4 water services and 3 electric services. • Went on 11 service calls. • Completed 3 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 7 raw water nitrate samples, 7 treated water nitrate samples, and 2 radiochem samples. All samples are routine samples that we must do in order to fulfill our testing requirements with the Minnesota Department of Health. • 28 of the 40 rain barrels have been sold so far. Michelle Canterbury has been putting notices in The Connector to let our customers know there are still some left for purchase. • 228 fire hydrants have had maintenance performed on them so far this summer. • One Way Building Services has been working on installing the Verizon Antennas on the Gary and Johnson Towers. Both projects are expected to be completed by the end of August. • Pete has completed 595, of the over 800 curbstop ties, that are missing from our curbstop ties catalog. • Rodney Schreifels from the Parks Department called me a couple of weeks ago concerning a noisy irrigation meter at the Chamber of Commerce building. I went over to check it out and discovered that we have no record of the meter they're using for irrigation. We looked back in the billing, and to the best of our knowledge they have never been billed for the 5.2 million gallons of water they have used to irrigate their property. Rodney and Cal Portner are working with the Chamber to figure out how to get the situation resolved. MI POWERED DY Page 1 of 2 NATURE Reliable Public Power Provider P O W E R E D T o S E R V E 145 • Alex has been very busy painting. He has painted many, many hydrants and a few things around the plant. • The last piece of pipe for Well#4 has been installed. • We installed a new conduit for the transducer at Well#4. We borrowed the mini- excavator from the electric department to complete the work. ATTACHMENTS: • July Pumping By Well ■I% POWERED BY l$ Page 2 of 2 NATURE Reliable Public Power Provider P O W E R E D T o S E R V E 146 J JO 1-1 Co C✓ CC M '-4 o Q r E I-4 M r M • rI CT N a N 00 l0 0 It '-4 M a Q1 ra G1 +JC CI) _ N OJC L it a_ CO _� y 41 Q 0.0 _ E C . a Q %-uc _ _ c o -- _°_ -_ _ - t7 CL O = s _ — s N- ` `- 0 C G1 i _ ,t 0 o 3 -_ ri To Cr N - c r-i \ 0 c �p C1 N LO _ - 2 c N - - - - -- 0 Co T *k :_-_ - - _ _- co vl ) g■ M 0 LO e-I C1 Z rI v) Ill M a) LA n i-I > tD Elk River 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: August 12th, 2014 6.1f SUBJECT: Staff Update DISCUSSION: • Toured another MN facility that treats landfill leachate on July 14th to explore the possibilities for the Elk River Waste Water Treatment Facility to process similar leachate at the new facility being built. The tour and conversations have gone well and the City of Elk River is working with Waste Management on the next steps. • Attended the Elk River Rotary weekly lunch meeting and provided a high level overview of what Energy City is and all it has to offer to the local community and regionally. There were many questions and the interest was high. People were very excited to hear about all the different tour options that are available and how they can save money in their homes and businesses. ERMU has been asked to come back July 31st to complete the overview. The attendees were very interested in all topics and were given the option to schedule tours with Kristen Mroz. • Working with Wright Hennepin on a service territory resolution for Mississippi Cove and Wild Flower Meadows. The territory proposal has been sent to Wright Hennepin for their review. The proposal consists of swapping 7 residential lots(2 lots have homes currently) for bare ground that is platted for multi-family townhomes (12-14 units). Wright Hennepin was concerned about the energy use that their existing customers have as a result of the Off-Peak programs. Since ERMU offers very similar Off-Peak programs it makes sense to compare all energy used by existing customers for the calculations of average load per unit. Wright Hennepin is drafting a document for ERMU to review. • Provided a tour to North Hennepin Community College. There were 10 students that participated in the tour. The tour consisted of the Landfill Gas Plant,Great River Energy RDF Facility and Power Plant,and the Elk River Library. — P B Mt Page 1 of 1 NATURE Reliable Public Power Provider P O F O E D T o S r r v a 148