5.4 ERMUSR 02-14-2023�i
Elk River --�-
Municipal Utilities UTILITIES COMMISSION MEETING
TO:
FROM:
ERMU Commission
Mark Hanson — General Manager
MEETING DATE:
AGENDA ITEM NUMBER:
February 14, 2023
5.4
SUBJECT:
Voltus Distributed Energy Agreement
ACTION REQUESTED:
Approve the Distributed Energy Resources Agreement between Elk River Municipal Utilities and
Voltus, Inc., subject to commission attorney approval.
BACKGROUND:
Elk River Municipal Utilities (ERMU) has a total generation capacity of 9.1 megawatts via four
diesel engines of various sizes: two engines power 550KW generators, a third powers a 3.0 MW
generator, and a fourth engine powers a 5.0 MW generator. In the past, when ERMU purchased
its wholesale power from Great River Energy (GRE), our generators were enrolled in a capacity
program through GRE that once generated annual revenues exceeding $300K. By 2016,
however, GRE had ended the program due to market changes. Our current wholesale power
provider, Minnesota Municipal Power Agency (MMPA), does not offer a similar program.
DISCUSSION:
Since leaving GRE in 2018, ERMU has been looking for a new revenue stream to offset the
operational and repair costs associated with maintaining the engines/generators. One of our
energy consultants recommended reaching out to Voltus, Inc. as a means of replicating the
distributed energy opportunity we had with GRE. We only needed to determine our desired
mega -watts (MW) for enrollment. Voltus offers $27,000 per MW for annual enrollment plus
$2,200 per MW/hr for actual run time. ERMU would be provided a six -hour notice to run the
diesel generation based on the Midwest Independent System Operator (MISO) market needs.
We have discussed this opportunity with both MMPA and Minnesota Municipal Utility
Association. The final determination was that this type of activity is permitted by the associated
contracts and is in alignment with municipal power utilities in Minnesota. Both agencies stated
they understood and supported our interest in pursuing the opportunity. We have also
discussed the agreement with commission attorney Jared Shepherd who had minimal concerns.
ATTACHMENTS:
• Voltus Distributed Energy Resources Agreement
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