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ELK RIVER MUNICIPAL UTILITIES <br /> <br />Item ~6 <br /> <br /> 322 King Avenue <br />Elk River, Minnesota 55330 <br />Phone (612) 441-2020 <br /> Fax (612) 441-8099 <br /> <br />Octot ;r28, 1998 <br /> <br />To: Elk River City Council & Elk River Municipal Utilities Commission <br /> Hank Duitsman, Mayor George Zabee <br /> Daryl Thompson John Dietz <br /> Larry Farber Jim Tralle <br /> Roger Holmgren <br /> <br />From: Bryan C. Adams <br /> <br />Subject: Proposed Gas Turbine Project <br /> <br /> A joint Elk River City Council/Elk River Municipal Utilities Commission meeting is scheduled <br />for Monday November 9, 1998 at approximately 7:00 p.m. at City Hall to discuss this proposed <br />project. Steve Shurts of UPA, Jim O'Meara of Briggs & Morgan, and David MacGillivray of <br />Springsted will be present at this meeting to present and answer questions on their portion of <br />this project. <br /> <br />Enclosed is the following information for your review: <br /> <br />1) UPA Letter of Intent for Peaking Facility dated August 17, 1998. <br />2) Proposed site plan for this peaking facility. <br />3) Letter from Minnegasco dated September 28, 1998. <br />4) Letter to Sherburne County Assessor dated July 30, 1998 with site map and his <br /> response dated July 31, 1998. <br />5) Letter dated October 7, 1998 from Springsted. <br />6) Letter dated October 8, 1998 from Briggs & Morgan. <br />7) Required Resolution drafted by Briggs & Morgan. <br /> <br /> A project of this nature makes extremely good sense, along with solving some of staffs' <br />concerns for the Elk River Municipal Utilities (ERMU), although the project cost continues to rise <br />and is approaching $20,000,000. Elk River Municipal Utilities owns the necessary land for this <br />project which is directly adjacent to our West Substation complex. The necessary Northern <br />Natural Gas transmission pipeline and UPA's 69 Kv electric transmission line are both directly <br />adjacent to this property, which is critical to a project of this type. <br /> <br /> As staff has stated earlier, there is little question that we will experience an electric <br />transmission/generation failure due to wholesale wheeling and/or lack of adequately sized <br />transmission/generation facilities. Appropriately sized electric generation on our system solves <br />~his issue. This proposed project gives ERMU the opportunity to resolve our 10 year rolling all <br />requirements power purchase contract with AEC/UPA. This proposed project will allow us to <br />make a small margin on the order of approximately $250,000/year, (shared savings from <br />Property Tax deletion). This will go a long way in helping to reduce our electric rates. <br /> <br /> <br />