1.5. ERMUSR 10-08-2019 - Laserfiche WebLink

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Elk River Municipal Utilities UTILITIES COMMISSION MEETING TO: FROM: ERMU Commission Troy Adams, P.E. —General Manager MEETING DATE: AGENDA ITEM NUMBER: October 8, 2019 1.5 SUBJECT: Recognition of Electric Service Territory Transfer Completion ACTION REQUESTED: None BACKGROUND: Per Minnesota Statues §§ 216B.44 and 2166.47, Minnesota municipal utilities have the statutory right to acquire electric service territory within their corporate boundaries via proceedings before the Minnesota Public Utilities Commission or by commencing an eminent domain proceeding in District Court. With both processes, the statute directs that in making the determination of compensation, the following four factors shall be considered: the original cost of the property less depreciation (net book value of plant), loss of revenue to the utility formerly serving the area (LOR), expenses resulting from integration of facilities (reintegration), and other appropriate factors (other).The municipal utility also has the right to negotiate the terms for an electric service territory transfer directly. In 1991, ERMU and Anoka Electric Cooperative (AEC, now Connexus Energy) executed a 20-year orderly electric service territory transfer agreement. This agreement was negotiated directly while considering the four factors identified in statue. The total footprint of this agreement is indicated on the attached map 2015 ERMU Electric Service Territory. This agreement was negotiated and implemented on good terms with AEC and was completed on schedule in 2011. On March 20, 2015, ERMU and Connexus Energy executed an electric service territory agreement which established terms for an orderly transfer of approximately 2,000 Connexus members and 12 square miles of electric service territory within the city corporate limits to ERMU.The orderly transfers were structured to be completed within five years of the date of the first transfer in September 2015. The negotiations took three years and were, again, conducted directly while considering the four factors identified in statue. The total footprint of this agreement is also indicated on the attached map 2015 ERMU Electric Service Territory, and the subdivision of the total footprint is indicated on the attached map 2015 Elk River Municipal Utilities& Connexus Energy Electric Service Territory Transfer Agreement Overview. Page 1 of 3 2