New transmission agreement expected to save city millions
A new agreement between Alexandria Light and Power (ALP) and its electricity provider, Missouri River Energy Services (MRES), is good news.
It's expected to save the city of Alexandria about $218,000 in 2011 and $3.49 million over the next 10 years.
The savings are the result of a new transmission service agreement that will refinance and restructure outstanding debt under the current agreement that Alexandria and other cities in the Northern Cities Group have with MRES and the Western Minnesota Municipal Power Agency.
ALP's board of public works recommended the new agreement and it was approved by the Alexandria City Council at its September 27 meeting.
Interest rates are at historically low levels now and refinancing the debt and spreading the cost among more cities that are involved in the new agreement will result in "significant cost savings," ALP General Manager Al Crowser told the council.
The existing agreement involves about 12 cities while the new one will include 55, Crowser said.
The new agreement is expected to take effect this December.