5.2. ERMUSR 08-09-2011 - Laserfiche WebLink

Home Browse Search

INTRODUCTION In 1916, Elk River Power and Light Company, a private power company, began providing electrical service to Elk River Consumers. Subsequently, the Village of Elk River purchased the company, and Elk River Municipal Utilities (ERMU) began serving Elk River in 1947. In 1947, in a new municipal power plant, ERMU installed two new identical Worthington S-DD-6 diesel engine electrical generating units, each rated 550 KW (Units 1 & 2). In 1961, ERMU installed, in the municipal power plant, Unit 3, which is a 3000 KW Cooper- Bessemer engine. In 1973, ERMU installed, in the municipal power plant, Unit 4, which is a 5000 KW Worthington engine-generator. ERMU is one of 129 public power utilities in Minnesota. Nationally, 2015 such utilities are in the U.S., with Minnesota having the third largest number of any state (Nebraska has 153 and Iowa has 136). From the time it was first formed, until the Arab oil embargo of 1973, ERMU generated its electrical requirements with diesel engines, using fuel oil and natural gas, and with hydroelectric capacity (which has since been removed). Fuel oil had stabilized at 10 cents per gallon for many prior years and natural gas was comparably priced. Nationally, electrical load growth had grown at 7% per year, which calculates to a compounded doubling every ten years. Electrical rates to consumers had stayed at low levels. In 1973, fuel oil prices increased from 10 cents per gallon to 80 cents per gallon and natural gas went up a comparable amount. It immediately became too expensive for municipals to generate their own power. Municipal electric utilities wondered whether they could continue in business, and public officials seriously considered selling their municipal electric utilities. At that time, some private potential buyers stated that the municipals would need to make big investments in coal-fired plants in order to stay in business. A few municipals did sell, but most did not. Almost all municipal electric utilities have installed an interconnection with an outside power