03-15-2016 ERMU MIN - Laserfiche WebLink

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possible vehicle types, partnership opportunities, and funding options that include tax credits and grants. The benefits of electric vehicles are numerous, but one of the biggest barriers in this market is range anxiety. The main factors to range anxiety are the type of vehicle being used and the network of acceptable charging stations. Tom Sagstetter went over the different types of vehicles and their charging requirements. He also gave some background on the vehicle charging equipment and the three different levels that are available. Daryl Thompson asked how the electric vehicles contribute to the road tax. Staff responded that at the present time they don't. There was further discussion. Troy Adams added that by supporting and marketing this green initiative we would also strategically capture load growth. There was further discussion. Staff will continue to keep the Commission informed on the research being conducted and the potential of electric vehicles and programs that may be provided to the City of Elk River and surrounding community. 5.4 MMPA Buy -In; Bond Refunding Options Theresa Slominski shared that when our purchase power contract was negotiated with MMPA to be our power provider in 2018, it was noted that ERMU would have to buy -in to the agency for its proportionate share of the infrastructure and assets in order to be a member and receive power. As interest rates are currently lower and will most likely be • higher in 2018, staff met with Springsted to discuss options for an early payment towards our buy -in. The discussions with Springsted centered around being able to take advantage of the current low interest rates, and the timing of the bonding so as not to jeopardize any bonding the City would be doing. • In recent conversations with David Niles from MMPA, it was determined that Elk River Municipal Utilities' buy -in today is estimated to be just under $14,000,000, and projected to be as high as $18,000,000 in 2018 when we actually become a power purchasing member. It's important to note that this is greater than originally projected in 2014 because of two factors: first, ERMU has grown in load and customer size faster than other members effectively increasing our load ratio; second, MMPA continues to have growing reserves. Since the City is not bonding this year, ERMU is considering a bond amount for the maximum of $10,000,000. In addition to any payment made this year, in 2018 there would need to be a "true -up" of the buy -in amount that would need to be made with cash or additional bonding. Theresa shared that they are working on setting up a meeting with Springsted for later this month to look at bond refunding options for our 2007A Electric Revenue Bonds. The commission had a few questions. Staff responded. John Dietz expressed some concern with what the public perception will be when the rate payers hear that it's going to cost $18,000,000 million dollars to join MMPA. It will be important to relay what this means for them and how they will benefit from it. Staff responded that there will be a significant cost savings for our purchased power once we are with MMPA; the projections now are approximately $2,000,000 per year. While this cost savings margin Page 5 Special meeting of the Elk River Municipal Utilities Commission March 15, 2016