5.4 ERMUSR 12-13-2005 Elk River
I Municipal Utilities
13069 Orono Parkway phone: 763.441.2020
Elk River,MN 55330 Fax 763.941 8099
December 1. 2005
' Tu: Llk River Municipal 1 utilities Commission
Jerry Takle
John Dietz
Jim Trane
From: Bryan Adams
Subject' 1.1 G Purchase Power Coniract
Attached is GRE proposed Amended and Restated Power Purchase Agreement. This
agreement revises upwardly the price GRE will pay us to incorporate the 4°
engine generator at this facility. This increase is approximately $1,538.000 over the life
of this agreement. Attached is my memo dated 10/4/05 addressing this fund increase and
how it will be allocated.
`staff recommends authorization is given to execute this document. Item 10.0.1 is
requiring this facility to obtain certification from FERC as a QF facility. This is a
' burdensome and complicating factor but can be overcome.
1
Elk River ----
Municipal Utilities
13069 Orono Parkway phone: 763.441.2020
Elk River,MN 55330 Fax.763 441.8099
October 4. 2005
' To: Elk River Municipal Utilities Commission
Jerry Takle
John Dietz
' Jim Tralle
From: Bryan Adams
Subject: 4 ' Engine/Generator at Landfill
' As \on are aware. we are pursuing the installation ol'the 4° engine generator at the Elk
River Landfill. The cost of this addition is estimated to be $650.000.
0
,rhe air permit application has been submitted to the MPC A. Preliminary indications are
the\ desire further study \\hich takes more time. Our consultants feel the outcome will
not change and a permit will be issued. '[he 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 40 unit. .1'hey in
' response, increased the payment for the 4`h engine which increases the revenue by
approximately $1.538,000 over the remaining 16 sears 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. 'fhe attached financial pro-forms reflect projected revenue costs and
distribution. Description of these pro-forms is as follo\\5.
Line 12 IL<isting purchase price of energy
Line 35 Proposed purchase price or energy
' Linc 37 Net difference in revenue to he distributed alter appropriate expenses
have been increased clue to addition of 41h unit.
line 41 Increase in revenue to Waste Management through
higher gas price total increase $595,589
Line 44 Bonus revenue to Sherburne totaling $364,000 '[his 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 W{iste Management and
' Sherburne County. we need direction on the proposed distribution of excess funds.
1
•
1
0
1
' Page l of1140
Bryan Adams
' From:
To: "Padden, Greg GRE/ER" <GPadden@GREnergy.com>
"Adams, Bryan GRE/ER" <bryada@nsatel.net>
Cc: "Connett, Gary GRE/ER" <GCONNETT@GREnergy.com>; "Brekke, Jon GRE/ER"
<jbrekke@GREnergy.com>
' Sent: Monday, October 31, 2005 4.09 PM
Attach: ERMU Landfill Power Purchase Amended and Restated_103105.doc
Subject: Power Purchase Amendment- Elk River Municipal and GRE
Bryan,
I hope all is well with you. Attached is a draft of the contract amendment that we discussed. I
originally tried drafting the agreement as just an amendment but the number of changes I needed to
make made it very cumbersome to read. As such, I have instead drafted it as an Amended and
' Restated Agreement. However, I did try to structure the agreement so it was in the same
format/layout as the previously executed agreement. I would be happy to explain any of the changes
that you may have questions about.
' Please review this draft and let me know your initial thoughts this week, if possible. I am also
working on the steps needed to obtain board approval at the GRE Board meeting this month.
' I look forward to hearing from you ou soon.
IISincerely,
' Greg Padden
Pricing & Contracts Administrator
Great River Energy
I763-241-3767 (V)
763-241-6252 (F)
1
11/7/2005
Document Removed pursuant to Minnesota Statute 138.17 - Subd. 1c4