6.1. ERMUSR 04-10-2012 - Laserfiche WebLink

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~ ENERGY& POWER to secure better pricing;' says Thompson. CMMPA successfully renego[ia[ed i[s supply contract [hrough 2012 with a supplier to secure 30-percent lower wholesale electricity rates, saving the members and ultimately its retail customers $12 million for the remainder of the contra[[. In the past, a significant portion of the energy CMMPA procured for its members was subject to marke[ fluctuations. Strategically, this made economic sense when regional generation surpluses existed and wholesale energy costs were cheap. As a result through the agency's most recent planning and procurement efforts, it has reduced its risk exposure to market volatility with both short- and long-term fixed price contracts. CMMPAs ws[s have been decreasing over that past five years and the agency's rates are now very compe[itive to the ocher neighboring public power municipals, agencies, cooperatives and investor- owned utilities. The agency is now focused on securing energy For its members beyond 2016. Last yeaz CMMPA formed a coalition with another power agenry, other municipals and small investor-owned utilities [o conduct apower-supply planning study for the coalition pazticipants to look at its aggregate long- term resource needs. The coalition then went out for The stale of Minnesota also requires all utilities in the state to supply 12 percent of the state's retail load with energy created by renewable resources by 2012, and 25 percent by the year 2025. "We are proud to say that the CMMPA members will collectively supply over 20 percent of [heir energy from renewables in 2012. And this doesn't take into consideration the 15 percent of energy that is coming from federal hydroelectric projects;' says "Thompson. CMMPA is continually looking into emerging technologies in order to determine how the agency will benefit the portfolios of its members. For the past several yeazs CMMPA was involved with determining the feasibility of a wmpressed air storage project in Iowa and has recently been researching the viability of energy storage through lazge batteries the size of semi-[milers. an aggregated Request For Proposals to find resources to serve the future power supply needs of each of the individual participants. Collectively, the coalition is looking for up to 350 MWs of base load, intermediate and peaking resources, including both long-term purchases and project ownership opportunities, to supply its aggregated needs for the next five- to 20-year timeframe. Though the future of the energy industry is far from certain, Thompson and the CMMPA team see no reason not to prepare For the future. ""There are a lot of uncertain issues that will determine the future of the energy industry from natural gas prices, future EPA regulations, carbon emission regulations and the extreme shortage of transmission capacity, but we remain hopeful that regulamrs will get is rights and keep the impact on retail customers in mind:' Balancing Both the Short- and Long-term Of course, responsible power agencies have to plan for the future using lessons learned through previous experiences. "The agency was quick [o react to a slump in demand following the economic downturn. "We did see our total demand fall, and it has since rebounded in terms of mtal energy sales. The silver lining for us was that the decline in demand actually enabled us "We spend about as much time assessing risk as assessing cost," says Thompson. For CMMPA Thorough planning and due diligence has always been an essential pazt of the agency's success. CMMPA is here co serve its municipal utility members and keep costs as low as possible, enabling Central Minnesota Municipal Power Agenry to provide safe, reliable and low cost service to its customers. 66 ~ USBusinessExecutive WINTER ZO12