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6.1. ERMUSR 02-20-2007Elk .River Municipal Utilities 13069 Orono Parkway Elk River, MN 55330 February 5, 2007 To: Elk River Municipal Utilities Commission Jerry Takle Jim Tralle Jerry Gumphrey From: Bryan Adams Subject: Service Territory Acquisition phone: 763.441,2020 Fax: 763.441.8099 The 2007 budget contains a $260,000 line item to purchase service territory from Connexus. This year, area 17 is due to be purchased (see the attached map). This area contains the residence of our own Jim Tralle along with 114 other accounts. The $260,000 is an estimated amount and the actual cost will vary depending upon numerous factors with Connexus. The service territory agreement expires in February 2011. We plan to purchase area 18 in 2008 and area 22 in 2009 or 2010 depending upon finances. In order to acquire area 17 this year and area 18 next year, a new feeder from the North Substation will be required. The 2007 budget contains a $225,000 item to construct this feeder. Staff recommends authorization is given to acquire area 17 and construct the necessary feeder from the North Substation. In a related service territory issue, on January 29, 2007 the Clay County District Court issued a favorable decision for Moorhead Public Service in their condemnation proceedings with Red River Valley Co-op (see attached news release). Moorhead Public Service and Red River Valley Co-op are one of several service territory disputes currently in play in Minnestoa. ~~~~b~E`~~~ a, ~ ~ a ~~en~imm~;a~~~msn ~.inne ~yaan~m~ ~~®1V 1V ~~ lJ~ ~iVT 1L'. ~~~ ll °JL' ~iall '~J A~~~c~u~~aud f~ y~~y ~q~ _.._.. cp ,, ~ ~~~~ _. ~: c~y~) ~~Y ~~up ' ~at~,~19~,91 1~-~~e 1'? 1191 ~~~~~ . __ _._. __ 1 ~y~?9D rt?~1~~1)l ;l ~~, ~~ 1 ~~~~u~ ~ _ ~u~ _ ~?~~~~! ~l2®Y®sr,~ __ '«9 ~~~iQ~a- ITR©1zjp51;i> _. _.. ]~ ~ ~Q.~~~t 1fl12~1~®SisI3 ~I ~ _ _ _ __ a~~Q~i ~ lilt®1~®SEID ~~ _~~~m ~~~ 1~~cQ<rPmr~unca~ i ~ u' ~ r ~, ~' } V r `~' _~ ) 3 ':~~ "''~ ;, ~~~~'~1~~IE~~~` ~~ ,~ ~ ,-> „ :.~ } i ,~ ~' ~ ~ ~, 't ;~ ~ Y ,. ` 2 A 1 + ~ ~ ~ {. T I ~I H - (J _. R J ~ a ~`t. ~~ ~~ ; ; ,~ ~~~ E~~~ Signatu rc.. __.. _.._. __... C®NN~~iJB ~NE~dG$' ~ignaEure A16Q.C 2-1-200 ~f , ~~ ~ ~ MOORHEAD P U B L I C SERVICE MOORHEAD PUBLIC SERVICE 500 Center Avenue P.O. Box 779 Moorhead, MN 56561-0779 (218) 299-5400 • FAX (218) 299-5193 www.mpsutility.com FOR IMMEDIATE RELEASE January 30, 2007 DRAFT For more information, contact: Ken Norman, President, (218.233.2495) Bill Schwandt, General Manager, (2l 8.299.5404 or cell 701.238.6848) Dave Kahly, Electric Division Manager (218.299.5405) Court Commissioners Issue Award In Electric Service Territory Condemnation On January 29, 2007, the Clay County District Court appointed commissioners issued their report and award determining damages in the Moorhead Public Service (Moorhead) condemnation of certain electric service territory rights of Red River Valley Cooperative Power Association (Red River). Moorhead is pleased that the Commissioners rejected the Cooperative's proposed 33 mills per kilowatt-hour as unreasonable and a windfall. The cooperatives proposal would have resulted in an award of roughly $6.4 million. The Commissioners instead awarded 7.75 mills per kilowatt-hour, the amount of the parties' longer term settlement agreement, paid over a period of ten years as the city grows. "Although we respectfully disagree with some of the reasoning in terms of how to address future growth, Moorhead Public Service believes the ultimate result to be reasonable." said Moorhead Public Service Commission President Ken Norman. "In many court cases after the decision is made, opposing sides both walk away a bit unhappy with the results. I think that is the case here, we anticipated a smaller award and I'm sure the Cooperative expected more. I appears to be a reasonable settlement of the issue. The Moorhead Public Service Commission will be discussing this at our meeting this evening to determine what future actions we may take." Either side has an opportunity to appeal the Court appointed Commissioner's report and award to a Clay County District Court jury proceeding. -30-