6.2 ERMUSR 02-13-2018 Elk River
Municipal Utilities UTILITIES COMMISSION MEETING
TO: FROM:
ERMU Commission Tom Sagstetter—Conservation and Key Accounts Manager
MEETING DATE: AGENDA ITEM NUMBER:
February 13, 2018 6.2
SUBJECT:
Landfill Gas Plant to Electric Generation Facility Performance for 2017
ACTION REQUESTED:
None
BACKGROUND:
Consistent with contractual provisions, each year ERMU can provide bonus payments to
Sherburne County and Waste Management/Elk River Landfill provided the financial means and
plant capacity factors are met.
DISCUSSION:
For the calendar year of 2017 the landfill gas plant had a capacity factor of 93.3% and generated
approximately 25 million kWh. The production was steady and the overall costs of the plant
were manageable. The production level fell below the 95%capacity factor threshold;therefore
no bonus payment will be made to Waste Management.
The overall operating costs for the landfill gas plant acceptable for 2017 with no extra ordinary
expenses or failures. Also, Waste Management was very efficient in the routine maintenance for
2017 and kept the operation and maintenance costs very reasonable. Based on the 2017 overall
performance of the landfill gas plant project Sherburne County will receive a payment of
$25,000.
The landfill gas plant 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%of ERMU total sales for 2017.
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.
FINANCIAL IMPACT:
As outlined above.
ATTACHMENTS:
• Letter to Waste Management—LFG to Electric Generation Facility Performance for 2017
• Letter to Sherburne County—LFG to Electric Generation Facility Performance for 2017
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Elk River
Municipal Utilities
13069 Orono Parkway•P.O.Box 430 Phone:763.4412020
Elk River,MN 55330-0430 www.elkriverutilities.corn
Elk River Landfill February 7,'2018
Mr.Don Yurecko
22460 Highway 169
Elk River,MN 55330
Subject: LFG to Electric Generation Facility Performance for 2017
Dear Mr. Yurecko;
The landfill gas to electric facility had a delivered capacity factor of 93.3%for 2017. As a result of the
delivered capacity factor being less than 95%Elk River Municipal Utilities(ERMU)could charge a
penalty.ERMU will not charge Waste Management a penalty for 2017.
The landfill gas to electric generation plant still achieved great things in 2017. The facility produced
approximately 24.85 million kWh in 2017. That is equivalent to the average annual energy consumption
of 2,580 residential customers of ERMU.
ERMU recognizes and greatly appreciates your willingness to work cooperatively to keep the operating
costs manageable for this partnership. We appreciate all of your efforts to operate the plant in a clean,
efficient,and safe manner.
If you have any questions,please feel free to contact Tom Sagstetter at(763)635-1332.
Best regards,
----a/ ....1,',/ / -
,,,,,
Thomas J. agstetter
Conservation and Key Accounts Manager
Cc: Elk River Municipal Utilities Commission
Troy Adams—Elk River Municipal Utilities General Manager
Dave Lucas—Solid Waste Administrator
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Elk River -�--,
Municipal Utilities
13069 Orono Parkway•P.O.Box 430 Phone:763.441.2020
Elk River,MN 55330-0430 www.elkriverutilities.com
Sherburne County February 7,2018
Mr.Dave Lucas
Solid Waste Administrator
13880 Business Center Drive
Elk River,MN 55330
Subject: LFG to Electric Generation Facility Performance for 2017
Dear Mr.Lucas;
While the landfill gas electric generation facility did not achieve the production goal they did achieve
operational efficiency.As a result of the efficiency Elk River Municipal Utilities(ERMU)is providing
Sherburne County with a check for$25,000 for the overall operation of the landfill gas to electric
facility for 2017.
The facilities capacity factor was 93.3%.As a result of the delivered capacity factor being less than 95%
ERMU will not penalizing Waste Management for the lower than expected production because of the
operational efficiency that was achieved. ERMU recognizes and appreciates the care taken to operate
the facility in a safe and efficient manner that benefits the partnership.
The landfill gas to electric generation plant still achieved great things in 2017. The facility produced
approximately 24.85 million kWh in 2017. That is equivalent to the average annual energy consumption
of 2,580 residential customers of ERMU.
If you have any questions,please feel free to contact Tom Sagstetter at(763)635-1332.
Best re ards,
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Thomas J. gstetter
Conservation and Key Accounts Manager
Cc: Elk River Municipal Utilities Commission
Troy Adams—Elk River Municipal Utilities General Manager
Don Yurecko-Elk River Landfill Gas Plant Manager
Kathleen Heaney- Sherburne County Attorney
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