09-08-2015 ERMU MIN - Laserfiche WebLink

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5.3 Environmental Pollution Agency Rules affectin ERMU's Diesel Generation Facility Mike O'Neill explained that in the original Reciprocating Internal Combustion Engine Rules, also known as the RICE Rules, it stipulated that an entity could run their engines up to 100 hours for testing and maintenance. This exception was later deleted by a court's decision. Another Petition for Review was submitted and a stay of the earlier ruling was granted until a final decision could be reached. This stay of issuance of the mandate will be in place through May 1, 2016. A final decision should be forthcoming prior to the expiration of the stay. ERMU must decide whether to upgrade the exhaust systems on our generators to bring them into compliance, at a cost of approximately$400,000, or forgo placing them on the Midcontinent Independent System Operator(MISO)market with GRE and keep the engines to be used for emergency purposes only. The two other factors that come into play are our 201+6 contract with Great River Energy (GRE) and our 2018 contract with Minnesota Municipal Power Agency(MMPA). At this point we don't know what MMPA will want to do with these engines. Troy Adams and Mike O'Neill will be in discussions with MMPA to see what their interest is. In addition, Mike will be working with vendors to assess the need and cost of retrofitting and upgrading the exhaust systems for the two engines to bring them into compliance with the new EPA regulations. Staff will bring back some firmer dollar amounts for the retrofit project should the Commission choose to move forward with it. 5.4 Payment in Lieu of Taxes and other Donations to the City of Elk River On March 20, 2015, an electric service territory transfer agreement was executed between ERMU and Connexus. The terms of the agreement provide for loss of revenue (LOR) payments for 10 years. Now that the negotiations have been completed and terms finalized,the payment in lieu of taxes (PILOT) provisions should be revised to reflect an exemption for customers that are subject to LOR payment. As these LOR payments complete their 10 year term,the revenue associated with these customers would then become subject to a PILOT per the policy. Troy Adams presented the proposed PILOT and Other Donations to the City of Elk River policy that would reflect these changes. John Dietz pointed out that the way the proposed policy was worded may cause some confusion as it doesn't identify which electric service customers would be subject to the LOR. John suggested that modifications be made to the proposed policy,to include the clause"per the March 20, 2015 service territory agreement", and brought back to the Commission for consideration and approval. 5.5 Wa a and Benefits Committee Update—Health & Dental Insurance On September 8, 2015 the Wage and Benefits Committee (W&BC)met to review dental, Page 5 Regular meeting of the Elk River Municipal Utilities Commission September 8,2015