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VALUE OF ERMU MUNICIPAL GENERATION <br />Elk River Municipal Utilities (ERMU) has four diesel engine electrical generating units at <br />its municipal power plant. These are all subject to the new emissions regulations. <br />These diesels have been very valuable to ERMU over the years. <br />From 1947 until the late 1970's, the diesels and hydroelectric capacity generated much <br />of the electrical requirements of ERMU's electrical consumers. After the diesels became <br />standby units, they continued to have value by being available during an outage on the <br />interconnection, and by allowing lower cost wholesale power to be purchased. <br />ERMU obtains essentially all of its electrical energy from the landfill gas-to-electric plant, <br />and wholesale power from Great River Energy (GRE). In recent years, GRE asked ERMU <br />to run the diesels on only one occasion. ERMU tests all four engines once a month, <br />running Units 1 and 2 for 15 minutes each, and Units 3 and 4 for 90 minutes each. An <br />annual URGE test is conducted on all four units to determine the diesel capacity for <br />which GRE pays ERMU. On May 25, 2010, the four Units had a total URGE-tested rating <br />of 10,680 KW. This rating included the following: <br />Unit 1 648 KW <br />Unit 2 640 KW <br />Unit 3 3536 KW <br />Unit 4 5856 KW <br />Total 30, 680 KW <br />During the URGE test, the four engines each ran for an hour. GRE paid for the cost of <br />labor, as well as, for fuel oil, maintenance and overhead. GRE paid $3,268.88, for <br />running the URGE tests, and GRE paid $2.75/KW/month for the tested capacity. GRE <br />paid (10,680 KW)($2.75/KW/month)(12 months) _ $352,440 for the capacity, plus <br />7 <br />