5.2 ERMUSR 03-13-2017 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:
March 13, 2017 5.2
SUBJECT:
Landfill Gas Plant to Electric Generation Facility Performance for 2016
BACKGROUND:
Each year ERMU can provide bonus payments to Sherburne County and the Waste
Management/Elk River Landfill provided the financial means and plant capacity factors are met.
DISCUSSION:
For the calendar year of 2016 the landfill gas plant had a capacity factor of 93.68%and
generated approximately 25 million kWh. 2016 was a challenging year and the production level
fell below the 95%capacity factor threshold; therefore no bonus payment was made to Waste
Management or Sherburne County. Some of the challenges include the catastrophic failure of an
engine in March, and a change in the regular scheduled maintenance protocol. As a result of the
engine failure energy production decreased.
Despite the challenges the plant still produced approximately 25 million kWh which is enough
electricity to supply 2,850 average residential customers in Elk River for one year. The landfill
gas to electric plant generated the equivalent of 8.5% of ERMU total sales for 2016.
The bonus payments are not guaranteed and can change or be eliminated based on the variability
of labor, material, unexpected or increased maintenance costs, or loss of production for various
reasons.
ATTACHMENTS:
• Letter to Waste Management—LFG to Electric Generation Facility Performance for 2016
• Letter to Sherburne County—LFG to Electric Generation Facility Performance for 2016
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Elk River
Municipal Utilities
Phone: 763.441.2020
13069 Orono Parkway•P.O.Box 430 Fax: 763.441.8099
Elk River,IN 55330-0430 www.elkriverutilities.com
February 23,2017
Elk River Landfill
Mr.James Hamann
22460 Highway 169
Elk River,MN 55330
Subject: LFG to Electric Generation Facility Performance for 2016
Dear Mr.Hamann;
Elk River Municipal Utilities(ERMU)is not able to provide a bonus this year as a result of the
challenges that occurred during the year.As a result of the challenges with the facility the capacity
factor was 93.68%. As a result of the capacity factor being less than 95%ERMU will not be issuing a
bonus payment for 2016.
ERMU recognizes and greatly appreciates your willingness to work with the partnership during this
difficult time of an engine failure and increasing costs. We appreciate the waiver of gas cost for the
majority of 2016 which helped tremendously in a financially difficult year.
The measured production for 2016 was approximately 24.9 million kWh. That is equivalent to the
average annual energy consumption of 2,580 residential customers of Elk River Municipal Utilities.
If you have any questions,please feel free to contact Tom Sagstetter at(763)635-1332.
Best regards,
--liliteQ P ;l'if
Thomas J. agstetter
Conservation and Key Accounts Manager
Cc: Elk River Municipal Utilities Commission
Don Yurecko-Elk River Landfill Gas Plant Manager
Troy Adams—Elk River Municipal Utilities General Manager
P...
OWERED BY
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Reliable Public POWERED TO SERVE
Power Provider
Elk River
Municipal Utilities Phone: 763.441.2020
13069 Orono Parkway•P.O.Box 430 Fax: 763.441.8099
Elk River,MN 55330-0430 www.elkriverutilities.com
February 23,2017
Sherburne County
Mr.Dave Lucas
Solid Waste Administrator
13880 Business Center Drive
Elk River,MN 55330
Subject: LFG to Electric Generation Facility Performance for 2016
Dear Mr.Lucas;
The landfill gas electric generation plant had some challenges in 2016. The lower production as a result
of a failed engine and increases in maintenance costs have resulted in a tough financial year.ERMU will
not be making any bonus payments for 2016 production.
The capacity factor of the landfill gas to electric generation plant was 93.68%that lead to the production
of approximately 24.9 million kWh in 2016. That is equivalent to the average annual energy
consumption of 2,580 residential customers of Elk River Municipal Utilities.
If you have any questions,please feel free to contact Tom Sagstetter at(763)635-1332.
Best regards,
-7711.14 . fl i 1/r/
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Thomas J. agstetter
Conservation and Key Accounts Manager
Cc: Elk River Municipal Utilities Commission
Troy Adams—Elk River Municipal Utilities General Manager
Jim Hamann-Waste Management District Manager
Don Yurecko-Elk River Landfill Gas Plant Manager
Kathleen Heaney- Sherburne County Attorney
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