ERMUSR MISC MEMO 09-09-2008 - Laserfiche WebLink

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./j Elk River -~ Municipal Utilities 13069 Orono Parkway • P.O. Box 430 Elk River, MN 55330-0430 September 4, 2008 To: Elk River Municipal Utilities Commission Jerry Takle John Dietz Jerry Gumphrey From: Bryan Adams Subject: Miscellaneous Issues Phone: 763.441.2020 Fax: 763.441.8099 Enclosed is the packet for the Tuesday, September 9, 2008 commission meeting at 4:30 p.m. Note the time change. Electric usages are up 6.8% above last year due to the data centers while water usages are down 2.9% from last year. Enclosed is the following information for your review. Attached is a copy of a letter from one of our customers expressing his dismay for our water rate structure. On December 20, 1990 Connexus Energy (then Anoka Electric Company) and Elk River Municipal Utilities entered into an all requirements contract were Elk River Municipal Utilities purchase all of our power and energy requirements from Great River Energy thru Connexus. The term of this agreement is until either parry terminates this agreement effective 120 months (10 years) after receipt of notice. Connexus has informally informed us they plan to terminate this agreement. Due to high cost of power in the MISO wholesale market coupled with the difficulty of constructing needed generation and transmission lines, Great River Energy can make more money selling into the wholesale market than selling to us. In an effort to keep electric costs low to their member co-ops and delay building additional generation for as long as possible this makes economic sense to Great River Energy but puts the burden of securing generation and transmission on us. Also, because Great. River Energy's upper management no longer lives and works in Elk River, this community tie is gone and the interest in Elk River is diminished. Your staff is just beginning to explore possible options.