ERMU Misc. 08-16-2005 Elk River
' Municipal Utilities
13069 Orono Parkway phone: 763.441.2020
' Elk River,MN 55330 Fax:763.441.8099
August 11, 2005
To: Elk River Municipal Utilities Commision
' Jerry Takle
Jim Tralle
John Dietz
From: Bryan Adams
' Subject: Miscellaneous Issues
Enclosed is the packet for Tuesday August 16, 2005 commission meeting at 4:00 p.m.
' With the hot& dry weather, the electric and water usage is up. The graph in the financial
section reflects the increased usage. To date electric &water usage is up 9.56% & 6.55%
respectively over last year.
The water construction phase of the 5th Street project is completed. Many of the water
' service lines we were concerned about were plugged causing low flow in the customers
homes. These service lines were reamed out. Flow to these homes are much improved but
not 100%. The water piping inside people's homes may still have build up thus reducing
' the flow. Your staff has expended extra effort in many cases to improve the water flow
for these customers. In areas where the water main was not replaced we found 8 to 10
water service lines of non-copper construction that were replaced from the main to the
curb stop with copper pipe.
Jerry Takle and I attended MMUA's annual summer meeting. We will update you at our
meeting.
Enclosed is the following information for your review:
' 1. July 29, 2005, issue of the Kiplinger letters addressing energy issues.
' 2. "Wind Turbine maintenance parts growing issues at municipal installations"taken
from MMUA's Resource news.
3. MMUA's brochure explaining municipal finance program. As you may recall, Elk
River Municipal Utilities is already a member of Midwest Consortium of
Municipal Utilities (MCMU) and this finance program is available to us. I have
Itaken the liberty of asking MCMU to price a $3,500,000 bond issue using their
program vs. conventional funding to verify any cost savings. This is in
preparation of the potential Target project.
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4. As of Jay 1, 2004 the City of Elk River's population was estimated at 20,224.
The attached data from the State Demographer's office is approximately 16
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months old. If you assume that the city has grown approximately 6.5%
(approximately 454 homes) over this period of time, then it is safe to say that the
city's current population is in excess of 21,500.
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Th
e Kiplinger Letter;11
FORECASTS FOR MANAGEMENT DECISIONMAKING
I
1729 H St. NW, Washington, DC 20006-3938 • KiplingerForecasts.com •Vol. 82, No. 30
II
Dear Client: Washington, July 29, 2005
Fifteen new nuclear plants over 15 years LEGISLATIVE FORECASTS
t are likely. . .a wave of U.S. power projects
to meet a voracious appetite for electricity. ratHighway bill
The first. . .an abandoned reactor in Ala. Ready for Bush's signature
I
being refurbished. . .will be ready in two years. Social Security overhaul
Two of three new plants in the works. . .in Va. , Dead, unless Bush drops
Miss. and Ill. . .will come onstream by 2012. 1 Private accounts
By that decade's end, a dozen more will follow. Energy bill
' kyji Set for signing.Alaska drilling
In 2020, one-fourth of U.S. electricity willbeapprovedi- September
ENERGY Estate tax changes
will come from nuclear facilities. . .
still less than in 18 other countries now. Higher exemption,lower rates;
II ,
South Korea gets 40% of its power from nukes. if not this year,then next
(?5They provide a whopping 78% of France's power. 'Tax break extensions
,Sure to pass this fall
Nuclear generating capacity will zoom ..
II to 1400 billion kilowatt-hours by 2020, i Patriot Act
from 800 billion now. Already, U.S. capacity 1 An extension will give Bush
to make power is nearly twice that of France. most of what he wants
N Pension reform
What's behind nuclear's renaissance? . .Some relief for employers in'06
1 •
Soaring energy demand. . .up 50% by 2020. xstemceiiresearc
h
Low costs. At 1.680/kWh now, the cost Bush veto won't be overridden
of producing electricity at a nuclear plant
is headed toward just 1C/kWh as new, efficient facilities come on line.
In contrast, power from coal comes in at about 1.`92c/kWh. Natural gas,
II
at 5.87c/kWh and rising. Moreover, future plants will cogenerate hydrogen
for fuel cells, adding value to nuclear production as technology advances.
IIWaning environmental objections. Green groups certainly still fret
about nuclear power, especially the disposal of waste. But growing worries
NUCLEAR POWERS UP about global warming and greenhouse gases
II FORECAST from coal and natural gas blunt those concerns.
100% 'c ' Utilities increasingly favor emission-free nukes.
80% And by early next decade, waste disposal issues
will be resolved, with storage at Yucca Mountain,
II
60% 11 n IN 11 ,; the proposed federal central repository in Nev.
Sources of
40% Electric Energy
MydroelectrlcG Cheaper, easier government licensing procedures,
I
=CoalFe including preapproval for standard plant
20% -Nuclear designs,
I�Natural Gas plus a combinedprocess for gettingconstruction
Coal&Fuel ou
0% 1970 1980 1990 2000 2010 2020 and operating licenses. Also coming. . .tax credits
Sources Energy Dept,ardour Capital,Kiphnger and loan guarantees to help with building costs.
ILI. Sure, the rebirth of nuclear power could miscarry. A big accident
or devastating terrorist strike on a reactor would quash prospects.
II
But barring a disaster, the prognosis for the industry is good.
The Keplinger Letter(ISSN 1528 7130)is published weekly for 584/one year,$154liwo years,8222/three years SubScnption inquiries. 800-544-0155 or sub services@InplInger corn
I
by The Klplmger Washington Editors.1729 H St,NW,Washington,DC 20006 3938 Edltonal information Tel,202-887-6462,Fax,202 778-8976,
Penodreals postage paid at Washington DC
POSTMASTER Send address changes to The Kiplinger Letter,PO Box 3295,Harlan,IA 51593 E-mail,letters@kiplrngercom,or Web site,KiplingerForecasts corn
111111A0111111 111111 IIIIN Eli I MIN ir
lor
Wind turbine maintenance, parts growing issues at municipal installations
Municipal ut4lities have corn- notably unreliable While the servicing existing installations four years of operation in Moor- f
plied with Minnesota's green general unpression today is that Mooi head Public Service head, with the wind turbine man-
pricing mandate and Renewable those problems have been solved, (MPS) owns and operates two ufacturer providing maintenance I
Energy Objective (REO), in part, quality service, parts, and techni- 750-kilowatt wind turbines personnel from their office in -
by installing wind turbines In cians have become elusive MPS' first turbine, `Zephyr,' was Marshall.Then there was a mer '' _•
fact, programs like Moorhead Problems with gearboxes, oil installed in 1999, its second tur-. er, with key service and manage- --
Public Services' "Capture The pumps, blades and software have bine, `Freedom' was installed in ment staff leaving the company - - -
Wind®", Missouri River Energy all led to substantial lost produc- 2001 Energy Services Coordma- Both turbines have been under a -
Services' "RiverWinds®" and tion at municipal wind installa- for Kevin Bengtson views the five-year parts and labor warran-
Southern Minnesota Municipal tions if these problems occurred turbines as a good, environmen- ty, with an additional mainte
Power Agency's Wind Power with a car, there would be a story tally-friendly resource, but ac- nance contract, since their instal ;'; _ 3 ':
P gutility " g Recently,
programs meet and exceed the on 60 Minutes and talk of a o- knowledges the is haven lation Recentl there has been •�'•=,.�rY �;r
good faith effort mandate" set tential recall As it stands, the some trouble"with availability of -"a rash of problems," Bengtson -,0,T.%=!.;.!-
forth
"tal.
forth by the Minnesota legisla- public continues to demand the turbines said With warranty times dwin- �=`_ _ �•�'-�
ture wind-generated electricity and "When they run they have a tiling, he is concerned
However,there may be a fly in politicians continue to pass re- good power output," Bengtson One issue seems to be the lo- ""' -
the ointment that could affect the newable-friendly legislation All said "But people tend to ignore cation of community-based wind
economic viability of future wind of which keeps the primary inter- operation and maintenance costs projects in relation to the mann- Environmentally friendly? This
projects for these small, commu- est of manufacturers and con- that are still there, just like any facturer's service centers Corn- picture of a burning German
nity-based utilities Wind tui- struction companies focused on piece of mechanical equipment " wind turbine was taken from an
hires of a decade or two ago were new installations rather than Things went well for the first Wind see page 2 please Irishman's 'III Wind' website
•
Wind: Utilities experience 100 percent failure rate from a leading vendor
continued from front page en off substantially vices, said there have been"some
"We're frustrated," Bengtson issues on availability" with tur-
munity-based wind projects tend said "These turbines are sup- bines owned and operated by
to he small-scale and located near posed to last 20 to 25 years But, MRES 1 hese issues include tur-
the community that supports we are going through gearboxes bines idled by both mechanical
them Oftentimes, this location in four to six years That is a 100 and software problems There
may not be the best wind re- percent failure rate " have also been difficulties in get 14111144444.0.00000111 ,
-
source for a wind turbine, but it Dan Hayes of the Southern ting timely repair services, even
can still be economically feasible Minnesota Municipal Power though the machines are under .
and provides a sense of pride for Agency said SMMPA has had warranty. .
the community "several problems" with the two Following a merger of two
On the other hand, manufac- 950-kilowatt machines placed companies (which supplied all - -
Curers have located their mainte- into service in March 2003 A the turbines referenced in this ar- ' _
Hance facilities in the hub of wind generator bearing went out on a tide), the newly-merged compa- -
countrythe Buffalo Ridge in machine installed in 2003 l ast ny sought to charge MRES i -
southwestern Minnesota This is year, one of the generators failed $9,500 per year for an annual - • -
the best wind resource for tur- 1 here have also been blade prob- maintenance fee, a $3,000 in- 1, .- - ,
bines, and hundreds have been lems, apparently due to a poor crease MRES entered into a _ -
built in the area, providing an manufacturing process. maintenance agreement with a i~
economy of scale for wind tur- "That's been kind of disap- different company -' -r. - - -- •
bine manufacturers, developers, pointing," Hayes said Now, "we can't get parts in a
and owners alike •I here have also been blade timely Cashion," Peters said lie i`" -- " .'
t
However, in Moorhead's case, problems on newer 1,650-kilo doesn't know if switchingthe i•* - - . r:. •
both their older and newer Cur- watt machines The blades con-• maintenance contract from the t`r::.. '- - -- - - , ;K • - ,., -
bines have experienced electron- tam a dampening fluid, which for manufacturer has slowed parts �'_ '; r
�= , '` =,•-fir. '`s-
ic problems with computer error some reason is highly corrosive availability, but does know .7„:417:77:,:-.'-,„:,,--;'..- -:,:-:--- . +., °i,• ';',r2-3
codes that shut down the fur Several blades " :7)'. '7'.. '''-"' =` `- 'p'' ` •^.":,,:.1',',:1::_'.--,.,,. ..µ ,f •
have been dam- MRES is consideringbuildingits , a,,,,,V,, :t- - _--4- . '` ,,y, ` .y ,1.) ,;
bines, mechanical problems with aged through leaks One leak also own expensive partsins entory
- --C-:-:114.,,T " a '"f� A �` .4r* ` 4.,t
-•i 441,ce 1 -' x`Gid W'''
."..•z rte, .4'. - "i
gearbox and oil pump failures resulted in a damaged rotor Peters said the wind industry ,=,y :,; s. ,s„ag f� u'. ,:' ;�. �' X_ti h
which have required major caps These problems have been touts an availability of 98 per `=«x/'4:7:, ='•' a ' '�`- .4r #='="--'- --i- `ei `' _- '�" _',"'
Cal investments, and maintenance fixed under warranty, but war- cent, when the wind is blowing at - ..i "1 e-•i 'Y_"" ' 'f:-'z-,,-,;.,-,77-;;;;, - = '`-
delays due to their distance from ranties only run so long Hayes the proper speeds Sorne of the , • - - •
the major wind farms in the state would also like to see another MRES turbines hase been avail- =
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This all impacts Moorhead source for spare parts able only 90 percent of time dui- r- a
re`
Public Service's wind turbine "The people that have bought ing some months and one tur- - :�}�•,,=" * ••,.•.'. :' ,---_`
H
mailability While the manufac- these machines are working the time's availability was actually - , . .
turer guaranteed and met an hugs out," Hayes said "It's a real much lower
availability factor of 95 percent trial " "That's not good," he said Wind towers are often commissioned with great fanfare But manu-
during the warranty period, post- Jeff Peters, marketing director So, why not buy turbines from facturers are doing less well when it comes to maintaining their ma-
warranty this availability has fall- at Missouri River Energy Ser- a different manufagm .1. N. 1.0 N. acturer') Mimic- chines once they are put into service
_ ... .,. ... it... ...
ipal utilities have bought turbines to increase, the ultimate cost to
' from recognized industry leaders, consumers will go up substantial-
at least those who submit bids for ly. Such a scenario will not only
these small projects Some corn- hurt the wind industry, but dam-
' panies don't even consider bid- age utility credibility with cus-
ding on small municipal projects comers. •
A better question is, "Will the• The wind industry does not
' utility industry be required to seem to be responsive to the
provide renewable energy no maintenance needs of communi-
matter the cost?"The energy cost ty-based wind initiatives It may
of wind-generated electricity is be time for municipal utilities to
based on initial capital costs plus explore hiring their own commu-
reasonable operation and mainte- nity-based wind technicians and
nance expenses If operation and building spare parts inventories.
' maintenance expenses continue
FERC's new wind interconnection rule poses
reliability risks, charge APPA, NRECA, NERC
A final rule on interconnection saying some provisions of the
of wind energy "imposes unrea- final rule "present an unaccept-
sonable risks on the reliability of able risk to the reliability of the
regional transmission systems bulk electric system."
and unduly discriminates in favor While some accommodations
' of wind investors and project op- to wind generators are justified,
erators," APPA and the National FERC "must not grant wind gen-
Rural Electric Cooperative Asso- erators more sw eeping preferen-
' ciation said. In asking the Feder- tial treatment unwarranted by the
al Energy Regulatory Commis- technical limitations of wind
sion to reconsider its approval of generation," APPA and NRECA
the final rule, the two associa- said. "Doing so might benefit the
tions said the agency departed wind industry in the short term,
from the "carefully crafted and but at potential high costs to reli-
balanced approach of the [pro- ability, consumers, wholesale
' posed rule] without reasoned markets, and the long-term inter-
basis or adequate record sup- ests of the wind industry itself"
port." APPA and NRECA cited six spe-
ll The North American Electric cific provisions in the final rule
Reliability Council also asked that should be changed.
the commission to reconsider,
•
IIIIII• MN NM MN Mil MN MI NM M IN M E I MN OM - - ir
._40__
si ,• 'e
Frequently Asked QuestionsIIIIIIIIIWil ESOTA MUNICIPAL
hfuNN—UTILITIES ASSOCATION
How long will it take for the Finance Program to
close our loan?
Applications will be processed as-needed •....., "—
•
depending on the individual project timing MUNICIPAL
fp."
Am I responsible if any pool participant defaults ---
on their debt? ""' "i "" •
0..", Finance
No Each borrower is treated separately and is
in no way responsible for the debt service of .�'—...._ * i ~
another borrower. Somme. ' ���
Program
Can you finance all types of projects? .'µ" 4. ..,.}. ,
Water,wastewater,gas,electric and related A Simple, Cost-Effective
utility costs can be funded by the program. ��•�
-"1. ''''N Way to Borrow Money
What is the minimum and maximum loan size? i ., Q""
The minimum loan amount is$100k and there
is no maximum loan amount
• T. _ /''
What are your current rates? "e j"s""•,.-' ISASMIPi-
.--
Participants
�
Participants can borrow at a fixed or a variable : " . .. r ''i
illbS
rate.
Can localities with strong credit benefit from this
program? (763) 551-1230
MINNESOTA MUNICIPAL
Absolutely All participants can see savings UTILITIES ASSOCATION
Each borrower's credit is rated individually.
3025 Harbor Lane North
What are the terms of the loans you offer? Suite 400
We can accept projects and equipment with Plymouth MN 55447-5142 HN1NIDA(
,terms that range from a very short term up to a Phone 763-551-1230
30 year term Fax 763-551-0459
E-mail ahedlof@mmua orgr ,we
EN 111111 MI INN NS MN NU Ell INN ir EN um um gm En um mg EN um
MMUA Finance Program Features How Do I Receive
Additional Information?
The MMUA Finance Program was The MMUA Finance Program helps munici- • If you might consider the MMUA
developed to provide low-cost, sim- pal utility project financing become more
ple and flexible financing for Minne- affordable and simple by having a number Finance Program, or you would
sota municipal utilities. Funding from of attractive features, including: just like to learn more about the
• this program is available for electric,
gas, water, and wastewater utility program, please send an email to
projects. Bonds are issued by the • Flexible loan amounts ahedlofmmua.org to receive an
Midwest Consortium of Municipal
Utilities, a nonprofit organization cre- • Flexible terms of up to 30 interest survey.
ated by MMUA members. The bond years
proceeds fund the financing program, 4 ' •
or complete the enclosed form and
from which individual members can • No prepaymentr''
return it to MMUA via mail or fax.
make loans • v . =,
r,,. penalty r,
or leases. 8,:-..;:6'e` ^,. ., r .
•� • � r''__ • You can also contact Anthony
-.X �':- ''"`� • Fixed or variable .-.
rates Hedlof, the program coordinator,
- directly at (763) 746-0715.
• =V.-- ., • Simple applica-
�,r tion ' `, t
ilk' . ,
How is your next project •
Low transaction costs v ,,. ,
being financed? 14 ..
The MMUA • No risk to the city from the % .r-
Financing Program takes advantage .., I 1
of economies of scale offered default of another borrower x .
through pooled financing.
• Borrowing through loan or
This reduces an individual cities' How can we benefit your
• transaction costs by sharing bond lease community?
issuance costs and achieving the • Tax-exempt MINNESOTA MUNICIPAL UTILITIES
lowest cost of borrowing through ASSOCATION
favorable pricing. • Funds available NOW! 3025 Harbor Lane North
- Current issue will be a $50 Suite 400
• The borrower saves the time and Plymouth MN 55447-5142
effort of going through a stand- million draw-down bond
Phone 763-551-1230
alone bond issue.
Fax 763-551-0459
E-mail ahedlof@mmua org
N 111111A011111N E M M M IIIII
I IIIII I = I I IIIIII I dill M
-Table.4; Annual E tiro tas;otth0 F'c� tilatfotflpy:inpot ;,Kged�l�l ices`0111i490*i"ta ,l_'=fst i.Al hal*Na 3 :
, . � ,. :p! 1�.. 11 �A i`II:1`<ZOOb i�:Juf 1 2004
Population estimates April 1, 2000
Geographic Area July 1, 2004 July 1, 2003 July 1, 2002 July 1, 2001 July 1, 2000 Estimates Census
base
Edgerton city Minnesota 994 1,001 1,008 1,022 1,027 1,033 1,033
Edina city Minnesota 46,081 46,455 46,927 47,140 47,373 47,425 47,425
Effie city Minnesota 89 89 90 9091 91 91
Eitzen city Minnesota 242 235 233 231 229 229 229
Elba city Minnesota 215 220 215 216 215 214 214
Elbow Lake city Minnesota 1,230 1,256 1,266 1,269 1,274 1,278 1,275
Elgin city Minnesota 915 872 857 849 831 826 826
Elizabeth city Minnesota 176 177 174 173 172 172 172
Elko city Minnesota 525 517 509 495 481 477 472
Elk River city Minnesota 20 224 19,033 18,296 17,377 16,672 16 456 16,447
Elkton city Minnesota 156 157 155 158 151 149 149
Ellendale city Minnesota 594 592 592 593 591 590 590
Ellsworth city Minnesota 523 527 530 536 539 540 540
Elmdale city Minnesota 104 105 106 106 107 107 107
Elmore city Minnesota 704 711 720 724 733 735 735
Elrosa city Minnesota 174 178 181 181 180 180 166
Ely city Minnesota 3,678 3,718 3,756 3,777 3,812 3,818 3,724
Elysian city Minnesota 559 542 520 506 491 486 486
Emily city Minnesota 944 904 889 868 852 847 847
Emmons city, Minnesota 421 424 426 432 432 432 432
Note:The April 1,2000 Population Estimates Base reflects modifications to the Census 2000 population as documented in the Count Question Resolution program,updates from the Boundary and
Annexation Survey,and geographic program revisions. An"(X)"in the Census 2000 field indicates a locality that was formed or incorporated after Census 2000 or was erroneously omitted from Census
2000. Additional information on these localities can be found in the Geographic Change Notes(see"Boundary Changes"under the Geographic Topics section of the Estimates page). Dash(-)represents
zero or rounds to zero.
Suggested Citation:
Table 4:Annual Estimates of the Population for Incorporated Places in Minnesota, Listed Alphabetically:April 1,2000 to July 1,2004(SUB-EST2004-04-27)
Source: Population Division,U.S.Census Bureau
Release Date:June 30,2005