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Elk River ...-7.-_-__ <br /> III <br /> Municipal Utilities UTILITIES COMMISSION MEETING <br /> TO: FROM: <br /> Elk River Municipal Utilities Commission Troy Adams, P.E. —General Manager <br /> John Dietz—Chair <br /> Daryl Thompson—Vice Chair <br /> Al Nadeau—Trustee <br /> MEETING DATE: AGENDA ITEM NUMBER: <br /> August 13, 2012 2.4 <br /> SUBJECT: <br /> Diesel Power Plant Capacity Credit Agreement <br /> BACKGROUND: <br /> Included in our current interconnection agreement with United Power Association (UPA), now <br /> Great River Energy(GRE), is a power transaction agreement to purchase the generating capacity <br /> from ERMU's Diesel Power Plant. This power transaction agreement has been modified since <br /> the original agreement, most recently in 2003. The revisions to the agreement occurred on <br /> October 31, 2003. These revisions established the agreement to be on an"evergreen" basis with <br /> an October 31 termination date and an April 1 termination notice date. The agreement <br /> established the capacity credit at $2.75/kW month. Typically our agreement with GRE results in <br /> capacity credit payments of approximately $350,000 annually. On March 28, ERMU received <br /> notice that GRE wanted to reevaluate the current agreement's fixed capacity credit. <br /> DISCUSSION: <br /> Due to continuing and progressive discussions with GRE, both parties agreed to and executed an <br /> additional extension establishing a new termination date of November 1, 2012. <br /> ACTION REQUESTED: <br /> Staff recommends the Commission receive the executed Capacity Credit Agreement Notice of <br /> Termination Extension letter. <br /> ATTACHMENTS: <br /> • Capacity Credit Agreement Notice of Termination Extension Letter <br /> RKai 11 <br /> Page 1 of 1 NATURE <br /> Reliable Public- 1 <br /> Power Provider POWERED T o SERVE <br />