06-29-2009 CCM SP JT - Laserfiche WebLink

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Special City Council and ERMU Commission June 29, 2009 Page 3 Commissioner Thompson stated concerns with Connexus truly wanting to negotiate with the city if the Big Stone II project is off the table after Jul~r 15. He stated the city leas this opportunity to participate in the Big Stone II project and should really take the time to consider it. Mr. Zehringer stated there are many unknowns in staying with Great River Energy. He stated they will be raising rates 25% over tlae next two years and have had Power Cost Adjustments every month over the last year with tlae exception of one. He noted the Big Stone I~ plant will burn coal much more efficiently than any existing coal plants and the city will need to get some of its power from coal, He stated the city needs to seriously consider the Big Stone zr option. Mr. Zehringer stated there is a position bar the power 5upplier5 that they don't want to sell to municipally owned utilities because supplies are getting tighter, He discussed options with other energy companies. Counciltnember Gu~nphrey noted Elk River Municipal Utilities rates maybe the same as Connexus next year, Councilmember westgaard questioned if the Council would rather be owners than renters in the future when there could be shortages in power supply. He felt there would be more options with owning rather than renting. He stated there wouldn't be much bargaining power with Connexus. He agreed with Commissioner Dietz that the Big Stone ~~ project seems like a good deal but he has concerns with the risks. Mr. Adams addressed inconsistencies in a handout that was sent out over an ~ntexnet biog. He stated Big Stone ~Z will be a new plant t11at will burn coal more efficiently than existing coal plants. He further noted that they a:r.•e also pursuing green alternatives such as wind power. He stated coal is an important base load and noted that GRE is Sa% coal. Mr. Adams stated alternative sources of power are available but can be expensive. He stated only 0.26% of city residents are volunteering to pay more for wind power versus the cheaper alternative of coal. Mayor I~linzing stated the city laas been very proactive at worl~ing on alternative energy options and listed some of the projects they have worked on as Energy City, Slae stated she is concerned about the use of coal as a power source and had concerns with pending legislation. She stated she also has concerns with alternative power sources such as nuclear and wind turbines. She stated tl~e Big Stone II project is risl~y due to all the issues remaining. She stated she isn't outright advocating that the Elk River Municipal Utilities be sold off but felt that all alternatives must be considered, Councilmember Moon questioned whether Connexus would truly be open to any negotiation once the July 15 letter of intent date has passed. He stated the city needs to be careful of its coal usage due to the Energy City designation. He stated he didn't believe the Big Stone II project was geared up to be flexible with alternative energy resources. He noted if Elk River Municipal Utilities were to remain in business, he would want them to continue to acquire additional territory, Councilmember Zer-was stated it's hard for him to support a I00 million project with the risks involved. He stated he is also concerned with Connexus willingness to negotiate with the city. Councilmember Gumphrey noted tl~e city has nine years to figure out other alternatives.