07-17-2012 ERMU MIN - Laserfiche WebLink

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Page 3 Regular meeting of the Elk River Municipal Utilities Commission July 17, 2012 5.2 Diesel Power Plant Capacity Credit Agreement Included in the ERMU current interconnection agreement with United Power Association (UPA), now Great River Energy (GRE), is a power transaction agreement to purchase the generating capacity from the ERMU Diesel Power Plant. This power transaction agreement has been modified since the original agreement, with the most recent one on October 31, 2003. These revisions established the agreement to be on an "evergreen" basis with an October 31't termination date and an April I'`, termination notice date. The agreement established the capacity credit at $2.75/kW per month. Typically our agreement with GRE results in capacity credit payments of approximately $350,000 annually. On March 28`h, ERMU received notice that GRE wanted to re-evaluate the current agreements fixed capacity credit. Because of the April 1" termination notice deadline, a 60 day extension to the deadline was agreed upon by both parties. The extension will allow ERMU and GRE to re-negotiate the terms of the agreement within the 60 day extension without either party losing their ability to provide notice of termination for next year. A 60 day extension in the termination date was also agreed upon that will guarantee payments through the calendar year regardless of the results of the agreement negotiation. Due to continuing and progressive discussions, on May 30`h both parties agreed to an additional 60 days extension. This additional extension changes the notice of termination date to August 1, 2012. GRE is drafting a revised capacity credit agreement for review and consideration. Discussion followed. 5.3 American Public Power Association 2012 National Conference Update Al Nadeau, Troy Adams, and Theresa Slominski recently attended the American Public Power Association (APPA) 2012 National Conference and Pre-Conference Seminars. This APPA event is public power's largest annual gathering. "The APPA National Conference helps utility leaders and policymakers connect with industry leaders, partners, and peers while learning about the complex issued facing public power utilities. The program features leading political, economic, business, and public policy thinkers addressing the critical issues shaping our industry's future." ERMU is known for excellent, safe, and reliable utility services along with being financially strong and in a great position for future growth. Policies have been adopted and practices implemented to protect the customers and community now and into the future. Troy Adams reviewed the top five topics from the APPA National Conference which were Communication, Strategic Planning, Utilities Commission Governance Policy, Financial Oversight and Budgeting, and Employee Recruitment, Retention, and Development. Troy Adams said communication to customers is very important. He played an informational video regarding electric power that he would like to put on the cable channel. Discussion followed. Consensus was for the informational video to be played on the cable