5.7. ERMUSR 03-13-2013 - Laserfiche WebLink

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Nam in nmandg • Minnesota Municipal Utilities Association Minnesota municipal WAPA customers Ada Granite Falls Melrose Sleepy Eye Adrian Halstad Moorhead Springfield Alexandria Hawley Mountain Lake Staples Barnesville Henning Newfolden Stephen Benson Jackson New Ulm Thief River Falls Breckenridge Kandiyohi Nielsville Tyler Detroit Lakes Lake Park Olivia Wadena East Grand Forks Lakefield Ortonville Warren Elbow Lake Litchfield Redwood Falls Westbrook Fairmont Luverne St. James Willmar Fairfax Madison Sauk Centre Windom Fosston Marshall Shelly Worthington One of these proposals cuts to the heart of the fed- Another problematic proposal involves an ongoing eral government's foundational role as a steady, debate over building PMA transmission lines for affordable source of nonprofit power to nonprofit non-traditional purposes. A proposal to provide wholesale customers, including municipal utilities. additional funds for both WAPA and Bonneville Some policymakers, including both chairmen of the Power Administration was included in the stimulus President's Deficit Reduction Commission, have bill of 2009 to build new transmission facilities, pri- recommended switching to "market-based" rates for manly to connect non-hydropower resources to the federal power as a way to help deal with America's budget woes. grid. The Senate proposal, dubbed the Transmis- sion Infrastructure Program (TIP), was debated in Currently, and in accordance with federal law, the House in 2011 but no further action was taken. PMA "cost-based" rates are set at the levels needed to recover the costs of the initial federal Secretary Chu Proposal investment (plus interest) in the hydropower and In a March 16, 2012 memo DOE Secretary Steven transmission facilities. The PMAs annually review Chu set out a number of proposals that would their rates to ensure full cost recovery. None of create new roles for WAPA, to include designing the costs are borne by taxpayers. If a deficit is rate structures to promote electric vehicles, projected, rates are adjusted to eliminate any providing incentives for renewable energy, deficit. Power rates also help to cover the costs of expanding transmission for third parties, and other activities authorized by these multipurpose serving as test beds for research. dams such as navigation, flood control, water supply, environmental programs, and recreation. These proposals were met with a storm of protest PMA power is generally low-cost in relation to from WAPA customers when they were discussed other sources of electricity because hydropower in a series of"listening sessions" in 2012. On No- is a renewable resource and most dams were vember 19, DOE issued a Federal Register Notice constructed long ago, when material and labor costs featuring draft recommendations specific to WAPA were much lower than today. continued on next page 2013 Federal Position Statements/7