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5• <br />Elk River.; <br />Municipal Utilities <br />13069 Orono Parkway • P.O. Box 430 <br />Elk River, MN 55330-0430 <br />UTILITIES COMMISSION MEETING <br />Phone: 763.441.2020 <br />Fax: 763.441.8099 <br />TO: FROM: <br />Elk River Municipal Utilities Commission Troy Adams, P.E. -Utilities Director <br />John Dietz -Chair <br />Daryl Thompson -Vice Chair <br />Al Nadeau -Trustee <br />MEETING DATE: AGENDA ITEM NUMBER: <br />Au ust 9, 2011 5,2 <br />SUBJECT: <br />Study of NESHAP-RICE regulations and their im act on the ERMU Power Plant <br />BACKGROUND: <br />Under the current administration, the Environmental Protection Agency (EPA) has imposed <br />National Emissions Standazds for Hazazdous Air Pollutants for Reciprocating Internal <br />Combustion Engines (NESHAP-RICE) which will impact Elk River Municipal Utilities and the <br />operation of our diesel Power Plant. These new regulations would require ERMU to install <br />emission upgrades by 5/3/2013 to our 4 diesel engines to continue to operate under our current <br />contract with Great River Energy (GRE). <br />DISCUSSION: <br />These regulations are designed to reduce pollutants related to the generation of electricity from <br />reciprocating internal combustion engines. Because of the broad approach to regulating these <br />pollutants, the impact of these rules affects utilities differently. The ERMU Power Plant is for all <br />practical purposes an "emergency backup" facility for GRE. The engines are maintained and <br />exercised but only run a few hours a yeaz. Because of their limited run time, these engines do <br />not contribute significant pollution. There is an exemption in the rules for emergency facilities, <br />but ERMU would not qualify for this exemption as long as we are receiving compensation. The <br />revenue associated with our contract has nothing to do with pollution and should not be within <br />the jurisdiction of the EPA to regulate. <br />There has been much outcry from Midwest utilities dealing with similar concerns of these rules. <br />Subsequently, these rules aze currently being reconsidered by the EPA. The Congress may also <br />be eliminating funding for the EPA. The Iowa Association of Municipal Utilities (IAMU), <br />Minnesota Municipal Utilities Association (MMUA), American Public Power Association <br />(APPA), and Central Municipal Power Agency (CMMPA) have provided support for utilities for <br />the EPA to impose "reasonable" regulations for electric generation from reciprocating internal <br />combustion engines. Senator Amy Klobuchar has also recently submitted written concerns to the <br />