4.2. ERMUSR 07-12-2011 - Laserfiche WebLink

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S' Elk River~~ Municipal Utilities 1.3069 Orono Parkway • P.O. Boz 430 Elk River, MN 55330-0430 UTILITIES COMMISSION MEETING Phone: 763.441.2020 Eax: 763.441.8099 TO: FROM: Ells River Municipal Utilities Commission Troy Adams, P.E. -Utilities Director John Dietz -Chair Daryl Thompson -Vice Chair Al Nadeau -Trustee MEETING DATE: AGENDA ITEM NUMBER: Jul 12, 2011 4.2 SUBJECT: CAPX2020 Brookin s Project Update BACKGROUND: In May 2006, the Utilities Commission authorized joining Midwest Municipal Transmission Group (MMTG) to explore the potential to obtain ownership in the transmission system. In February 2007, ERMU entered into an agreement to participate through Central Minnesota Municipal Power Agency (CMMPA) in the CAPX2020 Brookings-Twin Cities Transmission Project. In March 2011, the Commission and Council both approved Resolutions authorizing the Utilities participating in the Brookings Project through CMMPA for an amount not to exceed $7,140,953 without further action. This maximum investment amount was based on CMMPA being awarded an increased project share from 2.2% to 5%. In May it was finalized that CMMPA would be awarded an increase project share from 2.2% to 3.6%. This results in ERMU shaze increasing from $1,993,134 to approximately $4,961,495. Delano Municipal Utilities (Delano), a participant in the CAPX2020 Brookings project through CMMPA, has requested to be released from the project contract. Six of the participants investing in this project through CMMPA, including ERMU, have expressed interest in acquiring Delano's share. For ERMU, acquiring a share of Delano's ownership would not cause ERMU to exceed the maximum investment amount of $7,140,953 approved by the Commission and Council. If the same allocation method used for the project investment share is applied to Delano's share, ERMU would acquire approximately $687,679 of Delano's available $1,581,822. This would bring ERMU's share to approximately $5,649,174, well under the maximum approved $7,140,953. The method for the allocation of Delano's share has not been decided by the six participants yet. In June 2011, the Utilities Commission approved execution of the Delano transfer agreement contingent upon ERMU legal counsel review. DISCUSSION: A consensus on acceptable terms for the transfer of Delano's shaze has been accepted by the six participants, Delano, and CMMPA. A transfer agreement based on these terms has been drafted