4.1. ERMUSR 10-11-2011 - Laserfiche WebLink

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Mr. Troy Adams /September 27, 2011/ Page 3 provided valuable project experience related to power supply evaluations in this region. References can be supplied on these projects if desired. PSE has the necessary experience base, in power supply evaluations, strategic planning, and contract analysis to help Elk River Municipal Utilities with the current project. Our Project Tasks aze broken out into an "ala cart" approach, where for the most part they can be selected as individual items off the menu to allow the greatest flexibility in using outside resources. Analysis for a decision stazting in 2018 will be a balance of both strategic and analytic evaluations, knowing that there aze inherent uncertainties when making a long range projection. Over-emphasis on the analytic evaluation for a long term projection can provide a decision maker with a false sense of accuracy, and not take into account the strategic measures that aze also important when making a power supply evaluation. PSE has sought a balanced approach in this proposed scope of work. Project Tasks The following is a description of the project task azeas that can be provided by PSE. 1. PROVIDE INITIAL COMMENTS ON AVAILABLE CMMPA STUDY INFORMATION CPPA has been conducting a power supply evaluation and ERMU is facing a decision whether to continue participation, or move to consider other power supply alternatives. Reviewing information that is available to date will provide necessary background for PSE to "catch up" to your evaluation. PSE will review the study information and provide initial comments in order to be prepared for the outcome of the study findings. 2. PROVIDE LIST OF VIABLE ALTERNATE POWER SUPPLY ALTERNATIVES AND PROVIDE HIGH LEVEL SCREENING In order to provide a means of comparing other power supply alternafives with the CMMPA portfolio, PSE will screen the viability of a select number of entities that are likely to be capable of providing the power supply resources to meet ERMU needs. The screening of power supplier information will be conducted using readily available information and summarized in both presentation and report formats. The alternative power supply information will be compared to the CMMPA portfolio. An important element in the screening analysis will be setting up the strategic scoring system that will be used to evaluate all power supply alternatives available to ERMU. Elements of the scoring system aze expected to include the comparison of the ERMU demand and energy requirements to the power supply total resources, type of generation in the supplier portfolio, resource development risk, amount of energy expected from the energy mazket, type of organizational structure (Co-op, muni, Investor Owned etc.), governance structure, and cost projections. This scoring system will provide amulti-dimensional basis for comparing various offerings. PSE's approach is not to pour hundreds of hours into the numerical analysis of the offerings, but to seek comparable projections from the parties, and use the scoring system to provide a well rounded assessment to the ERMU Commission in making important