6.1a ERMUSR 2-11-2020UTILITIES COMMISSION MEETING
TO:FROM:
ERMU Commission Troy Adams, P.E. –General Manager
MEETING DATE: AGENDA ITEM NUMBER:
February 11 2020 6.1a
SUBJECT:
Staff Update
ACTION REQUESTED:
None
DISCUSSION:
TheBoard of Directors of the Minnesota Municipal Power Agency (MMPA) met on
January 21, 2020 at Shakopee Public Utilities in Shakopee, Minnesota. I was able to
attend,but Commissioner Mary Stewartwas not.
The Board reviewed 2019 performance. Management’s presentation is attached.
The Board discussed the status of the renewable projects the Agency is pursuing.
Participation in MMPA’s residential Clean Energy Choice program increased over
December, with a market penetration that is at 3.3%.
In May 2006, the Utilities Commission authorized ERMU joining Midwest Municipal
Transmission Group (MMTG) to explore the potential to obtain ownership in the
regional transmission system. This non-partisan/not-for-profit organization was created
to provide service and assistance to the membership for matters relating to the
planning, construction, ownership/investment, operation and maintenance, and
administration and management of electric transmission and/or power generation
facilities. The action to join MMTG represented ERMU’s decision to investigate a change
in direction towards ownership instead of renting. Ownership in the transmission
system essentially works as a hedge to mitigate volatility in transmission costs. ERMU is
still a member of MMTG and through proactive participation with representation on the
MMTG board of directors, represents their investment and their customers.
This is a unique type of investment opportunity for a municipal utility. Because of a
municipal’s ability to finance with tax exempt bonds, our cost of money is less than
investor owned and cooperative utilities. With the Federal Energy Regulatory
Commission (FERC) approval of a hypothetical capital structure and a guaranteed rate of
return on investment, transmission ownership becomes an incredible advantage for
municipal utilities to position themselves with very competitive rates compared to the
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investor owned and cooperative utilities. On January30, 2015, ERMU received its first
payment forour share in the CAPX2020 Brookings transmission project. Through
December 2019, ERMU has recognized $259,131.23 in revenue.
I have been invited to participate in the monthly Elk River Area Chamber of Commerce
(ERACC) Government Relations Committee meetings which occur the first Monday of
the month. On February 5, the ERACC hosted a legislative preview meeting with
Sentator Mary Kiffmeyer, Representative Eric Lucero, and newly elected Representative
Paul Novotny. I was one of four planned speakers with a scripted question for our
elected officials. My question related to energy policy with considerations for economic
impact and electric reliability.
Mark Fuchs, Mike Tietz, and I attend the Annual Operations meeting with Connexus
Energy on February 3. During this meeting we reviewed the following: the recent service
territory transfer, operational events during the past year where our emergency
interconnection points were used, our Operational Guidelines document, and follow-up
items from our annual meeting in January 2019. The meeting was productive and
provides great value in establishing a positive working relationship with Connexus
Energy.
The MMUA Legislative Conference will be held March 31 – April 1, 2020, at the
DoubleTree Hotel located downtown St. Paul. As we budgeted for one commissioner to
attend, we’ll need to know who is interested in going this year. For more information,
please visit: https://www.mmua.org/event/legis-conf-2020.
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