6.1a ERMUSR 08-14-2018 - Laserfiche WebLink

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A representative from MMPA will be presenting to the Elk River Rotary on July 12 regarding the Clean Energy Choice program. Staff has met with representatives of MMPA regarding the implementation of this program. • On August 6 I participated in a Moody's bond rating call with Theresa Slominski, Lori Ziemer—City of Elk River Finance Director, and Terri Heaton— Springsted. The call is in preparation to bond sales for the second part of ERMU's MMPA buy-in. A few notes of importance from the call: o This is not a new expense, but rather a replacement for an existing expense. Therefore it doesn't result in an increase to rates. And the bigger ERMU gets through growth, the bigger the savings between Great River Energy (GRE) and MMPA. o The bonds are not general obligation; they are electric revenue bonds which do not impact the city or their ability to issue debt. o There's a"net revenues available for debt service" test that requires 1.25 time coverage. ERMU greatly exceeds that requirement with 5.12 times coverage. o Being designated as an American Public Power Association (APPA) Reliable Public Power Provider (RP3) utility was noted as being extremely positive from Moody's. They know APPA and the RP3 program well. o ERMU's growth and the City of Elk River's growth were noted as positives. o MMPA's recent rating upgrade from Fitch and from Moody's was noted. Moody's is going to have their MMPA analyst sit on the committee for ERMU's rating review; this is a good thing for us. Moody's will do their review the week of August 13 and provide their report the week of August 20. • Over the past month I have spent significant time working on Wage & Benefit Committee preparation and hiring. • I attended the Minnesota Municipal Utilities Association (MMUA) board meeting at their new office in St.Paul to review the draft 2018/2019 budget and the report from the cost of service initiative. • The MMUA Summer Conference is August 20-22 in Alexandria, MN. I will be presenting with John Miner on governance policy. I will officially roll off the MMUA board after the business meeting at the end of this conference. • The MMUA Technical & Operations Conference will be December 4-6 in St. Cloud. I will be presenting on a panel about employee retention and wages. • On July 6 ERMU, MMPA and GRE held another wholesale power migration conference call. Most items regarding the transition are resolved in either concept or implementation. A few remaining issues include the electric service GRE utilized from ERMU Substation 14 Bank 3 and issues/considerations regarding the fate of the GRE Energy Station generation facility and related facilities. There is a Joint Pricing Zone (JPZ) agreement which needed to be modified to reflect ERMU's transition to MMPA. This JPZ provides for transmission Midcontinent Page 2 of 3 66