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Renewable Energy Standard <br /> The RES was established in 2007 and requires our wholesale power provider to supply 25%of <br /> ERMU total energy sales from renewable energy resources by 2025. MMPA is in position to <br /> meet the required 25% renewable generation by 2025. On February 4th a bill was introduced <br /> (HF 700)that would require MMPA to provide 80%of all electric energy from renewable by <br /> 2035. At the time of the legislative rally this Bill was not introduced, but we spoke with each <br /> elected official to make sure they knew that mandates of this magnitude need to be studied <br /> before implemented. <br /> As a point of reference, the highest level of RES analyzed in Minnesota is 40%. At this time <br /> there is no information available to know if existing infrastructure (generation and <br /> transmission) can even be built to attain the proposed 80% RES. ERMU and other MMUA <br /> members are proposing to study the effects and feasibility of a larger RES prior to implementing <br /> legislation. <br /> Another interesting point about a mandated RES is that electric utilities become price takers.A <br /> mandate eliminates the benefits of negotiating more competitive rates from competing <br /> developers. We highlighted that MMPA is exceeding the RES and that energy is competitively <br /> priced because of the competition between renewable developers. Anecdotal discussions with <br /> power suppliers confirm that the first contracts entered into under the RES in 2007 are the <br /> more expensive resources in the generation portfolio. A take away from this discussion is that <br /> the electric utilities do not need mandates to achieve more renewable generation.The free <br /> market is working to provide renewable electricity at a competitive price. <br /> Regulatory Compact(Third Party Sales) <br /> Each year the concept of third party sales, deregulated utilities, or customer choice is proposed. <br /> This concept is circulating again this year in conjunction with the installation of large solar <br /> arrays installed on large commercial customer's rooftops.This new approach to bundling solar <br /> and third party sales is a creative way to circumvent the statutory authority given to cities to <br /> provide electric service back in 1901. <br /> ERMU has been discussing this topic for many years and our elected officials understand that <br /> customer choice for electric services may not reduce the costs. On average customers in <br /> deregulated states pay a price per kilowatt-hour that is above the national average. Our elected <br /> officials recognize that ERMU provides value and reliability to Elk River, Otsego, Dayton, and Big <br /> Lake Township. <br /> Informational Sessions <br /> In addition to meeting with our elected state legislators, staff had the opportunity to hear from <br /> experts on additional topics of great interest being introduced to the newly appointed <br /> Commissioner of the Minnesota Department of Commerce. <br /> Page 2 of 3 <br /> 102 <br />