5.8 ERMUSR 10-11-2005 i
16
Elk River
I Municipal Utilities
13069 Orono Parkway phone: 763.441.2020
Elk River,MN 55330 Fax 763 4418099
' October 4, 2005
' To: Elk River Municipal Utilities Commission
.ferry Takle
John Dietz
Jim Tralle
From: Bryan Adams
Subject: 4th Engine/Generator at Landfill
' As you are aware, we are pursuing the installation of the 4th engine/generator at the Elk
River Landfill. The cost of this addition is estimated to be $650,000.
N The air permit application has been submitted to the MPCA. Preliminary indications are
they desire further study which takes more time. Our consultants feel the outcome will
not change and a permit will be issued. The Elk River Landfill is also applying for a
' landfill expansion permit, and the MPCA is apparently having difficulty keeping these
two permit applications separate.
In the process of negotiation with Waste Management, it is apparent they desire more
payment for their gas to cover their increased cost. We subsequently ask Great River
Energy if the wholesale purchase power price will increase for the 4`h unit. They in
response, increased the payment for the 4`h engine which increases the revenue by
approximately $1,538,000 over the remaining 16 years of the purchase power contract.
The issue now at hand is how we distribute these extra funds back to the 3 parties of
Waste Management, Elk River Municipal Utilities and Sherburne County in an equitable
fashion. The attached financial pro-forms reflect projected revenue costs and
distribution. Description of these pro-forms is as follows:
' Line 12 Existing purchase price of energy
y
' Line 35 Proposed purchase price of energy
Line 37 Net difference in revenue to be distributed after appropriate expenses
have been increased due to addition of 4`h' unit.
' Line 41 Increase in revenue to Waste Management through
higher gas price total increase $595,589
I
Line 44 Bonus revenue to Sherburne totaling $364,000. This could be
considered interest on loan.
Line 46 Increase in revenue to Elk River Municipal utilities totaling $579,057
' Before staff enters into the final stage of negotiation with Waste Management and
Sherburne County, we need direction on the proposed distribution of excess funds.
•
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