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�i <br />Elk River --�- <br />Municipal Utilities UTILITIES COMMISSION MEETING <br />TO: <br />FROM: <br />ERMU Commission <br />Mark Hanson — General Manager <br />MEETING DATE: <br />AGENDA ITEM NUMBER: <br />February 14, 2023 <br />5.4 <br />SUBJECT: <br />Voltus Distributed Energy Agreement <br />ACTION REQUESTED: <br />Approve the Distributed Energy Resources Agreement between Elk River Municipal Utilities and <br />Voltus, Inc., subject to commission attorney approval. <br />BACKGROUND: <br />Elk River Municipal Utilities (ERMU) has a total generation capacity of 9.1 megawatts via four <br />diesel engines of various sizes: two engines power 550KW generators, a third powers a 3.0 MW <br />generator, and a fourth engine powers a 5.0 MW generator. In the past, when ERMU purchased <br />its wholesale power from Great River Energy (GRE), our generators were enrolled in a capacity <br />program through GRE that once generated annual revenues exceeding $300K. By 2016, <br />however, GRE had ended the program due to market changes. Our current wholesale power <br />provider, Minnesota Municipal Power Agency (MMPA), does not offer a similar program. <br />DISCUSSION: <br />Since leaving GRE in 2018, ERMU has been looking for a new revenue stream to offset the <br />operational and repair costs associated with maintaining the engines/generators. One of our <br />energy consultants recommended reaching out to Voltus, Inc. as a means of replicating the <br />distributed energy opportunity we had with GRE. We only needed to determine our desired <br />mega -watts (MW) for enrollment. Voltus offers $27,000 per MW for annual enrollment plus <br />$2,200 per MW/hr for actual run time. ERMU would be provided a six -hour notice to run the <br />diesel generation based on the Midwest Independent System Operator (MISO) market needs. <br />We have discussed this opportunity with both MMPA and Minnesota Municipal Utility <br />Association. The final determination was that this type of activity is permitted by the associated <br />contracts and is in alignment with municipal power utilities in Minnesota. Both agencies stated <br />they understood and supported our interest in pursuing the opportunity. We have also <br />discussed the agreement with commission attorney Jared Shepherd who had minimal concerns. <br />ATTACHMENTS: <br />• Voltus Distributed Energy Resources Agreement <br />Page 1 of 1 <br />95 <br />