5.4. ERMUSR 10-14-2008 - Laserfiche WebLink

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3) Join a municipal power agency like MRES, SMMPA or MMPA. Availability of power and energy and at what price is unknown. Our long term contract will be used as equity to secure loans to construct the necessary generation and transmission facilities. 4) Joint purchase a power plant thru say CMMPA. Two projects now under consideration are Big Stone in South Dakota and the Excelsior project in northern Minnesota. These options require a substantial amount of upfront money. New base load power plants costs are in the $2,500 to $3,000/KW range. This option will also require us to secure transmission capacity. 5) Sell the municipal utility to another entity and allow another entity to provide service to Elk River. The upside is the community gets a big infusion of cash from the sale and the downside is you forego all future decisions for infrastructure needs, reliability, customer service, special programs and rates. These are the exact reason Elk River got into the electric utility business in 1945. 6) Buy off the MISCO market which exhibits large price fluxions with possibility of curtailment if access to generation and transmission become difficult. 7) Do nothing for a short time and allow the climate change activities and energy issues to settle on a consistent path. Either way, we are going to need some help feathering thru the options listed above as well as other options I may have missed. There are many consultants available to help us. Dave Berg with R.W. Beck is one that comes to mind because they already do our electric rate studies. He is in the process of preparing a proposal to help us define the options, preliminary costs, risk assessment and timetables. We will also need to define our values in regard to reliability, cost and amount of input we desire to have for rates, rate design and special programs.