5.4 ERMUSR 10-09-2018 - Laserfiche WebLink

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Elk River Municipal Utilities UTILITIES COMMISSION MEETING TO: FROM: ERMU Commission Tom Sagstetter—Conservation and Key Accounts Manager MEETING DATE: AGENDA ITEM NUMBER: October 9, 2018 5.4 SUBJECT: Landfill Gas to Electric Generation Facility ACTION REQUESTED: No Action Requested BACKGROUND: As part of the ongoing evaluation of the Elk River Landfill Gas Plant(LFGP) generating facility, ERMU met with Waste Management on October 5 to discuss the operation of the plant after the current purchased power agreement, gas purchase agreement, and operation and maintenance contracts expire October 31, 2022. The future operation of the facility post existing contracts is a significant factor because ERMU needs to spend considerable capital on replacement engines in late 2018 or early 2019, and again in October 2020,that will still be in service well after the contracts end on October 31, 2022. The lifetime of the equipment being replaced is estimated to be 60,000 hours (almost 7 years). DISCUSSION: Staff is evaluating different scenarios of operating the facility. These scenarios range from completely closing the facility December 31, 2018,to running it through the end of the contracts on October 31, 2022. For each scenario, other than closing the facility in 2018,the decisions on future operations significantly impact the decisions to spend considerable funds on engine replacements. Staff is working with Waste Management to determine if ERMU will have access to landfill gas to continue operation of the generation facility after the existing contracts expire. There are also options where Waste Management could purchase the existing facilities, including the building and generation facilities that still need to be explored. If the site is completely shut down,ERMU would be responsible for site remediation costs. The various scenarios evaluated to date reflect a positive position both financially, and from a community value for the partnership through the end of the contracts between Sherburne County, Waste Management, and ERMU. There are still many questions that need to be answered about the future. Moving forward staff will work to address some major questions that will impact the viability of the facility through 2022 and beyond. The questions that will be addressed in the action plan are: 1) Will ERMU have access to the LFG to operate the existing facility beyond October 31, 2022 Page 1 of 2 63