06-15-2009 ERMU MIN SPECIAL - Laserfiche WebLink

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Special City Council and ERMU Commission Page 3 June 15,2009 Mayor Klinzing stated rates and the availability of electricity is the most important consideration for residents. She stated the Council has not had an opportunity to look at all options for ERMU power and should analyze all options further. The meeting was recessed at 6:50 p.m. The joint meeting reconvened at 8:25 p.m. Ms.Johnson asked for the issues Council would like staff to address. Councilmember Gumphrey questioned the timeframe the debt would be spread over and asked what would happen if ERMU needed additional megawatts in the future. Mr.Beck stated the payoff on the bonds would be dependent upon what they are selling for. Mr.Steve Thompson stated CMMPA would act as an advisor and a resource planner for the city in regards to additional power needs.He stated CMMPA makes recommendations to each city and each city votes on whether they want to be in a project.He stated CMMPA is always reviewing future load growth,needs,and alternative power resources.He noted the city retains its autonomy. Councilmember Gumphrey expressed concern with investing the city's money into this project. He questioned if all co-owner investors were in place at this time. Mr.Schulte stated no.He noted 5 were in place and there were still two potential co-owners. He stated all co-owners would be in place before Elk River had to commit. Mr. Beck stated the city would be committed if it sent the letter of intent and the vote on September 11 was a"go-vote."Mr.Beck further noted the city wouldn't have to become an owner but could become a member at a later date. (A member would be more like a renter buying power from the plant.This would be similar to the city's current agreement with Connexus.) Councilmember Motin expressed concerns with having only one option with the Big Stone II project.He asked what would happen if the plant goes down.He stated there would be other alternatives for power with Connexus. A representative noted that power companies do shaft swap agreements whereby they share energy off each other in order to mitigate these"loss of power"concerns.It was also noted that insurance could be purchased but this wouldn't assist the city in a major power loss immediately. Councilmember Motin questioned if rates would be comparable with Connexus.He questioned if the city would be better off selling ERMU and still get the same rate current customers receive. Mr. Zehringer stated this would be unlikely because the other cooperatives would have to agree to the sell-off. Commission Dietz stated costs would go up for Connexus and city residents added to the system would be paying for the increase at that time;Connexus users currently on the system would not cover those additional costs.