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Elk River <br /> Municipal Utilities UTILITIES COMMISSION MEETING <br /> TO: FROM: <br /> ERMU Commission Troy Adams, P.E.—General Manager <br /> MEETING DATE: AGENDA ITEM NUMBER: <br /> October 9, 2018 1.5 <br /> SUBJECT: <br /> Transition to Minnesota Municipal Power Agency <br /> ACTION REQUESTED: <br /> No Action Requested <br /> BACKGROUND: <br /> ERMU entered into an"All Requirements"wholesale power agreement with Anoka Electric <br /> Cooperative, now Connexus Energy, on December 20, 1990. Although the contract was with <br /> Connexus, the power came from United Power Association (UPA), now Great River Energy <br /> (GRE). Great River Energy is a generation and transmission cooperative owned by Connexus <br /> and 27 other electric distribution cooperatives. <br /> On September 8, 2008, ERMU received formal notice of termination to that 1990 wholesale <br /> power agreement from Connexus. The termination provisions of the contract required 120-month <br /> notice establishing the actual termination date as September 30, 2018. ERMU began an analysis <br /> of potential wholesale power providers. <br /> DISCUSSION: <br /> In 2013 ERMU concluded a five year long analysis on future power supply and in May made the <br /> decision to join other similar Minnesota cities by joining the Minnesota Municipal Power Agency <br /> (MMPA).MMPA had a reputation for conservative financial position, low wholesale electric rates, <br /> and progressive strategic planning. <br /> On October 1,2018,ERMU began receiving power from MMPA. Operationally,the transition to <br /> MMPA was seamless and without interruption of power to the community.The biggest impacts to the <br /> community result from a change in position,renter to owner.Additionally,MMPA's diverse <br /> generation fleet is clean,young,and entirely void of coal which helps to mitigate ERMU's cost risks <br /> associated with potential carbon regulation.The costs to buy into the power agency are completely <br /> offset by more competitive wholesale power rates;there will be no initial rate shock resulting from the <br /> transition with a very favorable future.And,ERMU now has representation on the MMPA board of <br /> directors with opportunity to strategically plan our future;and ERMU has a vote among a group of 12 <br /> similar cities.For the first time in generations,the community now has a voice in their wholesale <br /> power future. <br /> ATTACHMENTS: <br /> • Minnesota Municipal Agency Begins Supplying Power to Elk River—October 1,2018 <br /> Page 1 of 1 <br /> 1 <br />