Brainerd BPU to pre‑sell excess capacity and authorize negotiation of amended purchase‑power terms

The Brainerd Public Utilities Commission on Jan. 27 approved staff recommendations to monetize excess supply capacity before a public auction and to authorize negotiation of an amended purchase‑power agreement to reduce long‑term price risk.

Staff and an AE representative reviewed market volatility and trade options, saying pre‑selling some excess capacity to municipal counterparties or AE customers can yield a guaranteed price and keep trades within municipal networks. Staff estimated pre‑sale proceeds of approximately $149,000 under conservative assumptions and recommended negotiating to obtain $155,000 if possible. The commission approved staff’s pre‑sale approach and asked staff to negotiate toward $155,000.

Separately, staff presented an amendment proposal from AE that would blend a higher tenth‑year cost into the 10‑year hedge and thereby reduce end‑period volatility. Staff reported an amendment price presented at $51.60/MWh and a morning market update of $51.90/MWh; staff asked authority to negotiate an amendment not to exceed $52.50/MWh. Commissioners authorized Director Paul Sandy to negotiate the amended purchase‑power contract up to that cap.

Staff said the amendment increases near‑term purchase power expense compared with prior assumptions (roughly $287,000 additional projected purchase‑power cost for 2026 under certain load assumptions) but reduces the risk of large price spikes in year ten under a 10‑year view. Commissioners described the approach as a conservative hedge against market volatility and approved the negotiation authority by voice vote.