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Page 2 <br />Special Meeting of the Elk River Municipal Utilities Commission <br />July $, 2009 <br />Bruce Gomm spoke of the carbon tax that might be applied in the future. You will still be <br />assessed this no matter where you purchase power. However, the new plant is designed to omit <br />less carbon and existing plants will have to be retrofitted. <br />Jerry Gumphrey asked if the Commissioners ever considered selling WMU. Bruce Gomm <br />answered long ago but not recently. <br />Peter Beck asked if there was anything in the contract that would prevent the City of Elk <br />River form selling ERMU. Bob Shulte replied that as long as the owner or proprietor continues to <br />make the payments there shouldn't be a problem but will look into it for further clarification. <br />John Dietz read a statement regarding the possibility of having to pay up to an additional 35% <br />if a party left the power sales agreement. Bob Schulte responded that was correct but that is there <br />mainly for the bonding requirements to ensure the project stays on track. Other participants would <br />then be invited in. <br />Lori Johnson is checking into the bonding issues. There are concerns regarding the City of <br />Elk River's future bond rating and how that would affect future bonds needed for other projects. <br />Jerry Gumphrey questioned who would be responsible to pay the construction overruns. Bob <br />Schulte responded the contractors would sign contracts to ensure there would be no overruns. <br />Troy Adams reviewed the cost projections, the true-up time flame, the possibility of this <br />failing, and the ramifications to the utilities and its customers. <br />Daryl Thompson voiced his opinion of the Big Stone II project saying the future will hold more <br />difficulties in purchasing power and there could be more rolling blackouts. He feels this is a great <br />opportunity for ERMU to keep competitive rates and if nothing is done the rates will go up. The <br />value of ERMU will increase. By turning our backs on this would not be good for ERMU and it <br />would put them at the mercy of others. Daryl Thompson stated he is in favor of this project. He <br />also added that if ERMU could not remain competitive he'd support selling the utilities. <br />Jerry Gumphrey said he felt he should support this project because of all the job opportunities it <br />will provide but he is still skeptical. There are still concerns and issues with pernuts. Jerry went <br />on to say that when the ERMU was established as a small municipal they were to buy from <br />whoever had the cheapest rate and not be a power supplier. As for the funding needed for this <br />project, all the projected costs keep rising. Also, if this project did fail it would greatly affect the <br />City of Elk River's bonding rate. Jerry also noted he would support selling the utilities if they <br />could not remain competitive. <br />John Dietz commented that he has nothing against coal plants, this would be an efficient coal <br />plant, and the power we are currently buying is produced from coal. There are several <br />uncertainties in this project, nothing is guaranteed. A lot of things can happen in nine years. <br />Connexus and now SMMPA are interested in supplying ERMU future power. Big Stone II is a <br />big risk and does not feel right taking this risk at the customer's expense. John concurred with <br />