1.5 ERMUSR 10-09-2018 Elk River
Municipal Utilities UTILITIES COMMISSION MEETING
TO: FROM:
ERMU Commission Troy Adams, P.E.—General Manager
MEETING DATE: AGENDA ITEM NUMBER:
October 9, 2018 1.5
SUBJECT:
Transition to Minnesota Municipal Power Agency
ACTION REQUESTED:
No Action Requested
BACKGROUND:
ERMU entered into an"All Requirements"wholesale power agreement with Anoka Electric
Cooperative, now Connexus Energy, on December 20, 1990. Although the contract was with
Connexus, the power came from United Power Association (UPA), now Great River Energy
(GRE). Great River Energy is a generation and transmission cooperative owned by Connexus
and 27 other electric distribution cooperatives.
On September 8, 2008, ERMU received formal notice of termination to that 1990 wholesale
power agreement from Connexus. The termination provisions of the contract required 120-month
notice establishing the actual termination date as September 30, 2018. ERMU began an analysis
of potential wholesale power providers.
DISCUSSION:
In 2013 ERMU concluded a five year long analysis on future power supply and in May made the
decision to join other similar Minnesota cities by joining the Minnesota Municipal Power Agency
(MMPA).MMPA had a reputation for conservative financial position, low wholesale electric rates,
and progressive strategic planning.
On October 1,2018,ERMU began receiving power from MMPA. Operationally,the transition to
MMPA was seamless and without interruption of power to the community.The biggest impacts to the
community result from a change in position,renter to owner.Additionally,MMPA's diverse
generation fleet is clean,young,and entirely void of coal which helps to mitigate ERMU's cost risks
associated with potential carbon regulation.The costs to buy into the power agency are completely
offset by more competitive wholesale power rates;there will be no initial rate shock resulting from the
transition with a very favorable future.And,ERMU now has representation on the MMPA board of
directors with opportunity to strategically plan our future;and ERMU has a vote among a group of 12
similar cities.For the first time in generations,the community now has a voice in their wholesale
power future.
ATTACHMENTS:
• Minnesota Municipal Agency Begins Supplying Power to Elk River—October 1,2018
Page 1 of 1
1
IMME3/4 220 South Sixth Street Suite 1300 Minneapolis, MN 55402
tel. 612.349.6868 fax. 612.349.6108 www.mmpa.org
Minnesota Municipal Power Agency
Minnesota Municipal Power Agency Begins Supplying Power
to Elk River
Elk River Municipal Utilities receiving power from MMPA beginning Oct. 1
Elk River, MN— October 1, 2018--- Elk River Municipal Utilities (ERMU) is now receiving
its electric power from the Minnesota Municipal Power Agency (MMPA), an organization
comprised of 12 member municipal utilities.
"We've been looking forward to this day for years," said ERMU's General Manager, Troy
Adams. "We're excited to join a great group of like-minded municipals, who share a similar
vision of public power and pride in the power of their hometowns," he said.
ERMU spent years looking at potential power supply partners. Major factors in the
utility's decision included MMPA's long history of competitive rates, the fact that each MMPA
member has a seat on the MMPA board of directors, and MMPA's balanced and efficient power
supply portfolio. Elk River became the Agency's twelfth member in 2013. Its power supply
agreement with MMPA runs through 2050.
"I'm confident in Elk River's power supply future and excited about taking power from
MMPA," Adams said.
Derick Dahlen, president and CEO of MMPA's management partner Avant Energy said,
"As a progressive and growing community, Elk River is a great fit for MMPA. Their membership
is an affirmation of the Agency's ability to provide competitive rates and value to its member
communities."
Avant is responsible for MMPA's daily management, strategic planning, power supply
planning, daily energy market operations, power plant development and operations, finance and
accounting.
ERMU benefits from MMPA's diversified power supply portfolio of owned and purchased
generation, containing both conventional and renewable resources. The Agency's long-term
approach to power supply planning allows the Agency to maintain flexibility in the rapidly-
changing electric utility industry.
In addition to power supply, the Elk River community benefits from additional offerings
provided by MMPA, including its educational programing. Since joining the organization, nearly
2,000 Elk River community fourth-graders have participated in MMPA's Energy Education
Program, where students learn about energy generation and conservation.
2
ERMU serves more than 11,900 customers within its service territory, including Elk River
and parts of Dayton, Big Lake Township, and Otsego.
In addition to Elk River, MMPA provides wholesale electricity to eleven other member
communities, which in turn deliver and sell power to their residential and business customers.
The Agency's other members are municipal utilities in Anoka, Arlington, Brownton, Buffalo,
Chaska, East Grand Forks, Le Sueur, North St. Paul, Olivia, Shakopee and Winthrop.
More information about MMPA is available at www.mmpa.orq. Members include municipal utilities in
Anoka, Arlington, Brownton, Buffalo, Chaska, East Grand Forks, Elk River, Le Sueur, North St. Paul,
Olivia, Shakopee and Winthrop. MMPA's management partner is Avant Energy, a Minneapolis-based
energy management company and an innovative supplier of energy project development, management,
trading, consulting and utility operations services. See more at www.avantenergy.corn.
Contact: Bob Rumpza, Rumpza Consulting, 612-309-3971, bob(c�rumpzaconsultinq.com
3