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Elk River -== <br />Municipal Utilities <br />13069 Orono Parkway • P.O. Box 430 <br />Elk River, MN 55330-0430 <br />May 27, 2009 <br />To: Elk River Municipal Utilities Commission <br />John Dietz <br />Jerry Gumphrey <br />Daryl Thompson <br />From: Troy Adams <br />Subject: Annual URGE Test <br />Phone: 763.441.2020 <br />Fax: 763.441.8099 <br />Elk River Municipal Utilities operates and maintains four diesel generation units at our power <br />plant. These units are contracted to Great River Energy through a Power Transaction Agreement <br />at the current price of $2.75/kw/month based upon the proven capacity from the annual URGE <br />test. The current contract expired October 31, 2005 but w1s extended on an "evergreen" basis. <br />This allows the contract to extend the termination date on a one year incremental basis unless <br />notice is given by either ERMU or GRE no later that April 1 S` of that year. The attached <br />spreadsheet reflects this year URGE test results. The URGE test results have steadily increased <br />the past few years due to more maintenance, better training, and familiarity with the plant. <br />Again your staff of Steve Ziemer, Michael Price, and Adam Freiberg did a great job performing <br />this URGE test. The capacity results from this test will result in $351,648 in annual payments <br />from Great River Energy. <br />This year's URGE test results reflect the real world capacity of this four engine facility. <br />Although each engine may fluctuate in its output, the aggregate output will change little or may <br />decrease over time. <br />