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Elk River <br /> Municipal Utilities UTILITIES COMMISSION MEETING <br /> TO: FROM: <br /> Elk River Municipal Utilities Commission Tom Sagstetter—Conservation and Key Accounts <br /> John Dietz—Chair Manager <br /> Al Nadeau—Vice Chair <br /> Daryl Thompson—Trustee <br /> MEETING DATE: AGENDA ITEM NUMBER: <br /> March 13, 2017 4.1 <br /> SUBJECT: <br /> Load Management Program Moratorium <br /> BACKGROUND: <br /> In February the Commission approved a moratorium on all the load management programs <br /> except electric vehicle charging. Staff has been working to determine the feasibility of <br /> maintaining the existing programs amid changing market conditions in metering, communication <br /> networks, and wholesale power markets. <br /> DISCUSSION: <br /> The communication network that ERMU is currently utilizing for load management programs <br /> will be obsolete and no longer available to initiate load control. In addition, the wholesale power <br /> markets (MISO)have transformed over time eliminating the economic value of load <br /> management programs that allowed ERMU to decrease demand and shift load to the off peak <br /> hours when energy was at a lower cost. <br /> The lower capacity costs and decreasing rate differential between on peak and off peak hours do <br /> not support the replacement costs of upgrading and maintaining load management programs that <br /> require direct load control. <br /> Currently ERMU has 1,780 customers participating in a direct load control program (Dual Fuel, <br /> Electric Thermal Water Heat Storage, Electric Thermal Space Heat Storage, and Cycled Air <br /> Conditioning). To convert the existing customers to new technology that could be utilized to <br /> initiate load control would cost an estimated $400,000. The estimated recurring annual costs and <br /> rate subsidization for these four programs would be $155,000. The cost to decommission the <br /> existing load management programs, including field staff labor and informational mailings to <br /> customers, builders, and electricians is estimated to be $100,000. <br /> Based on the estimated costs with continuing to support the load control programs and the <br /> current wholesale power market, staff is recommending that the existing load management <br /> programs; Dual Fuel, Electric Thermal Water Heat Storage, Electric Thermal Space Heat <br /> Storage, and Cycled Air Conditioning will be terminated effective September 30, 2018. In the <br /> rOVIEREI 111 <br /> Page 1 of 2 NATUR <br /> IN. <br /> Reliable Public <br /> Power Provider POWERED T O SERVE <br /> 77 <br />