5.3. ERMUSR 11-13-2008~i
Elk River -~
Municipal Utilities
13069 Orono Parkway • P.O. Box 430
Elk River, MN 55330-0430
November 5, 2008
To: Elk River Municipal Utilities Commission
Jerry Takle
John Dietz
Jerry Gumphrey
From: Troy Adams
Subject: All Requirements Contract
Phone: 763.441.2020
Fax: 763.441.8099
In September of 2008, Connexus Energy executed the termination clause in their 10 year rolling
all requirements power contract with Elk River Municipal Utilities. Although this does not
require immediate attention, the topic does warrant discussion.
After ERMU received the termination notice, Staff had begun to research ERMU's options. At
that time, R. W. Beck had been contacted to assist in the process. A meeting had been scheduled
between R. W. Beck, CMMPA, and ERMU staff to discuss the logistics of participating in the
Big Stone 2 power plant project. Due to unrelated complications, this meeting had subsequently
been cancelled. There is still interest by CMMPA to meet with ERMU (see attached email).
Staff will reschedule this meeting for the near future.
On November 3`d, Staff met with John Gasal of Connexus Energy to review all current/existing
contracts with ERML? including the all requirements power contract. The meeting served as
review of the contracts as well as an explanation of their history and the relationship between
Connexus Energy and ERMU. A follow-up meeting with John Gasal and Mike Rajala of
Connexus has tentatively been scheduled to take place later this November.
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Ferguson, Peggy
From: Tessa Anderson [tessaa@cmmpa.org)
Sent: Monday, November 03, 2008 9:41 AM
To: Ferguson, Peggy
Subject: FW: Big Stone 2 Power Plant Participation
From: Steve Thompson
Sent: Friday, October 24, 2008 1:36 PM
To: 'jtakle@aol.com'
Subject: Big Stone 2 Power Palnt Participation
Jerry
My name is Steve Thompson from Central Minnesota Municipal Power Agency . We were scheduled to meet
with you and Bryan Adam yesterday October 23 to discuss an opportunity for Elk River to participate in the Big
Stone 2 base load coal power plant with us. We understand that GRE has given their 10 year notice to terminate
your power supply contract. We believe Big Stone 2 would be an good opportunity to replace part of your
capacity and energy needs supplied by GRE after your contract with them ends. We are still interested in
meeting with you to discuss the opportunity.
A base load power plant project takes 6 plus years from early development, through permitting, through
construction to in-service, so even though your GRE contract does not expire until 2018, now is the time to start
looking at and evaluating your options. And there are currently limited base load power supply opportunities
available at his time or in the forseeable future. In fact there was legislation passed last year in Minnesota that
put a moratorium on new coal plants in Minnesota. CMMPA actively lobbied against this legislation and was
successful at attaining an exemption on Big Stone 2.
The Big Stone 2 group has been actively pursuing its permits for the last 2-3 years and we are hopefully
approaching the final stages of attaining all the necessary permits. The plant is currently slated to be a 500 to
580 Mw plant and CMMPA has first rights to increase its level of participation in the project and therefore could
accommodate Elk River's needs. We expect to have our major permits by tan or Feb 2009, at which time we
would need to know if Elk River was interested in participating so we could appropriately size the plant, so we
could start plant design.
Would you still be interested in meeting soon to discuss. I understand that you currently have RW beck
performing some studies to start evaluating your options. We would highly recommend that you invite them to
attend the meeting. Because our need to know if Elk river is interested in participating is in the not too distant
future, time is somewhat of the essence, so the sooner we could meet the more time it would afford Elk River
to consider participation.
Please contact me at you earliest convenience if you are interested in exploring this opportunity more.
Steve Thompson, PE
Director of Operations
Central Minnesota Municipal Power Agency
507-526-2193
11/4/2008