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Elk River <br /> Municipal Utilities UTILITIES COMMISSION MEETING <br /> TO: FROM: <br /> Elk River Municipal Utilities Commission Mike O'Neill—Technical Services Superintendent <br /> John Dietz—Chair <br /> Al Nadeau—Vice Chair <br /> Daryl Thompson—Trustee <br /> MEETING DATE: AGENDA ITEM NUMBER: <br /> December 8,2015 4.1 <br /> SUBJECT: <br /> Environmental Pollution Agency Rules affecting ERMU's Diesel Generation Facility <br /> BACKGROUND: <br /> In preparation for the termination notice deadline of December 31St 2015, for the evergreen <br /> annual renewal of ERMU-GRE Capacity Agreement with Great River Energy(GRE) in regards <br /> to the Diesel Engine Power Plant,Elk River Municipal Utilities (ERMU)has been working with <br /> GRE to determine whether or not ERMU will continue to allow GRE to use the ERMU power <br /> plant in their MISO (Midcontinent Independent System Operator)market portfolio. <br /> DISCUSSION: <br /> The following information is submitted for your review: <br /> 1. In review of new Environmental Protection Agency(EPA)rules relating to reciprocating <br /> internal combustion engines(RICE) staff has determined that it is in the best interest of <br /> ERMU and its customers to terminate the ERMU-GRE Capacity Agreement. <br /> Termination notice given by December 31St 2015 will allow ERMU to avoid significant <br /> and costly emission upgrades for this generation facility. These upgrades are project to <br /> cost between $300,000 and$400,000. Giving termination notice means that GRE will <br /> remove the generation on May 315t 2016 from their MISO market portfolio and ERMU <br /> will then no longer receive compensation for this capacity. In 2015 this capacity revenue <br /> will be approximately$20,000. <br /> 2. In the future should it be in the best interest of ERMU and its customers to place the <br /> generation back into the MISO market, ERMU staff will then pursue a new contract with <br /> GRE or other power provider and bring that back to the commission for consideration. <br /> ACTION REQUESTED: <br /> Staff recommends the Commission approve termination notice of the ERMU-GRE Capacity <br /> Agreement. <br /> PI / EAEI 11 <br /> Page 1 of 1 NAGE <br /> Reliable Public <br /> Power Provider P o w e a e o T o S ERVE <br />