5.1. ERMUSR 03-10-2009Elk River
Municipal Utilities
13069 Orono Parkway • P.O. Box 430
Elk River, MN 55330.0430
March 6, 2009
To: Elk River Municipal Utilities Commission
John Dietz
Jerry Gumphrey
Daryl Thompson
From: Vance Zehringer
Subject: Miscellaneous
Phone: 763.441.2020
Fax: 763.441.8099
Sales of electricity for February 2009 are up 12% over a like period last year. Sales of water for
February 2009 are down 8.5% over a like period last year, but sales year-to-date are up 2.9%.
Discussions with potential power suppliers has not progressed appreciably over the last two
weeks pending further input from our present power supplier, Connexus Energy. The
Confidentiality Agreement has been changed to eliminate reference to the City of Elk River and
has been signed and forwarded to Connexus Energy. A meeting has been scheduled on March 9,
and if anything of any substance results, that information will be presented in the closed meeting.
We did generate a non-binding Letter Of Interest with Central Minnesota Municipal Utilities
Agency (CMMPA) to keep us in the loop for a share of the Big Stone II Project in case we decide
that is in our best interest. A copy of that non-binding Letter Of Interest is attached. CMMPA
continues to be interested in partnering with us in becoming our full requirements power supplier
once our contract with Connexus Energy expires. Contacts with Minnesota Municipal Power
Agency (MMPA) have failed to produce anything meaningful — they are not interested in adding
additional members at this time. As mentioned at the Feb Commission Meeting, Wright
Hennepin Cooperative Electric Association (WHCEA) has decided not to make us an offer
because Basin Power Cooperative has made a decision not to sell power to any municipals. They
have been removed from the list of potential power suppliers. Finding a suitable wholesale power
supplier may be more difficult than originally perceived!
Staff was directed to secure bids for inspecting the integrity of the Jackson Street Water Tower.
To date, KLM Engineering and SEH Engineering have expressed interest is performing same for
us. The KLM bid has been received, but we are awaiting a bid from SEH. Both bids will be
presented for your consideration at the April commission meeting. Some pertinent information
was included in the cover letter accompanying the KLM bid. That cover letter is attached.
The Contract for a communication antenna on the Gary Street water tower is in the final stages,
and we hope to be able to provide the finished product for action at the March 10 Utilities
Commission Meeting.
An Annual Report to the Elk River City Council was presented at their March 2 meeting. A copy
of same is attached for your perusal.
J
Elk Rayer
Municipal Utilities
13069 Orono Parkway • P.O. Box 430
Elk River, MN 55330.0430
March 5, 2009
To: Bob Schulte, CEO
Central Minnesota Municipal Power Agency
459 South Grove Street
Blue Earth, MN 56013
Subj: Expression Of Interest In Big Stone II Project
Phone: 763.441.2020
Fax: 763.441.8099
This letter shall serve as an expression of interest by Elk River Municipal Utilities
(ERMU) for participation in the Big Stone II Project at a level of approximately 30
megawatts. We understand that this expression of interest is non-binding, but is meant to
start a process if mutual due diligence, data gathering, and information exchange between
ERMU and Central Minnesota Municipal Power Agency (CMMPA), and the Big Stone II
Project. It does not represent a commitment by ERMU, CMMPA, the Big Stone II
Project, or any other party to actually participate in the Big Stone II Project, or that
participation would be offered to ERMU.
Since'ely,
Vance Ze
Vance
ger
General Manager, ERMU
Copy: Troy Adams, ERMU
ZehrP nger, Vance
-rom: Shawn Mulhern [smulhern@klmengineering.comj
Sent: Thursday, March 05, 2009 12:46 PM
To: Zehringer, Vance
Cc: Laurie Sylte
Subject: Proposal for Jackson Street Water Tower Inspection
Attachments: Elk River, MN MU 100,000 Rivited Tower.doc
Vance,
Please review the attached proposal.
As discussed the rough estimate for a demolition would be in the range of $25,000450,000.
A discussion with my partner Jack Kollmer regarding the disposal of scrap metal with lead paint is still not regulated. In
the future we do expect to see this will change into a law. The cost of this would be very difficult for KLM to estimate.
Again the removal could be done at ground level with Blastox or Pre-tox. The owner will still be on the record for this
material from cradle to grave. If it does get scrapped out there is a transfer of ownership.
After KLM has evaluated the tower we will be able to give you a better idea as to the cost effectiveness of taking it down
or keeping it and repainting.
In our enclosures I have include the MPCA rule for lead paint removal.
Please call me with any questions.
Shawn A. Mulhern
Marketing Manager
KLM Engineering, Inc.
651-773-5111 Phone
651-773-5222 Fax
612-817-9899 Cell
smulhem@klmengineering.com
www.klmen ineerin com
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Mission Statement
To Provide Reliable,
Cost -Effective
Electric and Water
Services In A Safe
and Environmentally
Responsible Manner!
Vital Stats -General
12"' Largest Municipal
9,540 Electric Customers
8,462 Residential
904 Commercial
174 Industrial
(226 Million kWh Sold)
Water Customers
3,964 Residential
544 Commercial
(702 Million Gal Sold)
L (:
Vital Stats - Administration
Theresa 5lominski, Uttice
Manager
Billing & Collections For:
9,540 Electric
4,508 Water
4,450 Sewer = 25,051
5,900 Garbage
653 Security
Customer Service
Budgeting & Accounting
Procurement & Inventory
HR (shared with City)
Stats - Engineering
Troy Adams — Engineering
Manager
System Design & Engineering
Maintain 653 Security Sys
Maintain 10,800 Meters & L C
3,400 Locates (no claims in 08)
Maintain 8 Substations
Electric & Water Mapping
Transformer Loading Analysis
Document & Analyze Data
1,100 Meters to Radio Read
Vital Stats - Electrical
Mark Fuchs, Line
Superintendent
Construction & Maintenance:
Install Substation Feeders
Install Distribution Lines
Connects & Disconnects
258 New Services In 2008
Repair Damaged Facilities
Rebuild Acquired Territory
Maintain 305 Miles of Lines
Maintain 10 MW Power Plant
Vital Stats - Water
David Berg, Water
Superintendent
95 New Water Services
Maintain:
8 Wells & Pumping Stations
6 Water Treatment Plants
4 Water Towers
70 Miles of Water Mains
1,160 Water Hydrants
4,500 Water Meters
Assure Facilities Are Secure
Assure Highest Water Quality
Security Program
653 Security Accounts
76 Medical Alert
Lowest Mo Monitoring
ERMU = $18.75
Wright -Henn = $22.95
Brinks = $31.99
ADT = S32.99
Best System Out There!
Conservation Programs
Spending Requirement =1.5%
$338,000 Customer Rebates -
($182,000 From GRE)
Rebates Paid On:
CFLs = 2,450 + Recycling
Energy Star Appliance = 247
SEER 14 or Higher ACs = 51
AC Tune -Ups = 133
AC Trees= 125
Photovoltaic System = 1
Commercial = 7
90 Cycled ACs added in 2008
400,000 kWh Wind Power Sales
EIS
Paver
Alternative Generation
Landfill Gas Generator
26.2 Million kWh in 08
12% Of ER Needs
Performance Factor = 99%
Capacity Factor = 94%
Wind Generator
829 Thousand kWh in 08
.37% Of ER Needs
Capacity Factor = 14%
ERMU Diesel Plant
10 MW On Standby
Ran 50 Hours In 2008
Power Supply Update
Present Contract Expires
Oct 2018
Discussions With:
Connexus Energy
CMMPA and Big Stone II
WHEC and Basin Power
MMPA and
Future Discussion With:
Minnesota Power
Xcel Energy
SMMPA
and Others
Major Electrical Project
•2008
Cty Rd 39 Distribution Line
Brentwood Rebuild
Deerfield Rebuild (territory acquisition)
New Feeder Across 169
Major Work At Substation 19
Dist Upgrade Ridgewood East
•2009
Cty Rd 1 Feeder
Waterfront East Feeder
Sub Work At Diesel Plant
Rebuild Distribution On 193 Ave
Rebuild Distribution On 1911i2 Ave
Meter Conversions To Radio Read
E14 1
Kien
Data Processing Center?
-New 15 Megawatt Load
-Near Courthouse
•Testament To ERMU's
Reliability, Integrity, and
Ingenuity
.Major Substation and
Feeder Work
-We're On Their Short List!
Major Water Projects
.200s _.
New Main @ Hwy 10
Replaced 4th Street Main
New Main Loop on Carson
Added Well 9 To System
•2009
New Raw Main - Well 7 To 9
New Main On 1931d Ave
New Main On Cry Rd 13
Complete Main On Cty Rd 40
Meter Conversion to Radio Read
Competitive Rates
-.Residential (1000 kWh/mo)
ERMU = $1,312
Connexus Energy = $1,366
WHCEA = $1,311
Xcel = $1,262
-Commercial (5,000 kWh/mo)
ERMU = $5,792
Connexus Energy = $6,470
WHCEA = $6,159
Xcel = $5,892
•Industrial (90,000 kWh/mo)
ERMU = $102,045
Connexus Energy = $93,540
EI
River
EI
Rear
Municipal Ownership Means -
Superior Reliability
Local jobs
Local Control & Rate Setting
Local Customer Service
Lower Rates
Rapid Outage Response
Payments/Service To City, _
$952,000
EI
River