07-13-1999 ERMU MIN - Laserfiche WebLink

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ELK RIVER MUNICIPAL UTILITIES 322 King Avenue Elk River,Minnesota 55330 Phone(612)441-2020 Fax(612)441-8099 The Honorable Senator Paul Wellstone 136 Hart Senate Office Building Washington D.C.20510 Dear Senator Paul Wellstone: I am writing to encourage you to co-sponsor S.386,the bipartisan Bond Fairness and Protection Act. This legislation is important to us in Elk River.The passage of this act is critical if the proposal restructuring of the electric industry is to take place. As the General Manager for Elk River Municipal Utilities,I am responsible for providing reliable service to approximately 14,000 customers. I take great pride in the fact that we are a community-run,not- for-profit provider of electricity where our consumers enjoy low rates and have a say in how our utility operates. Elk River currently does not have any tax exempt electric bonds,but other communities have decided over the last few years to issue tax-exempt bonds to improve their service to their consumers. We are very concerned now that our state is restructuring the electric industry and that a conflict exists between the federal tax laws governing the use of our tax-exempt bonds and the changing marketplace. I am writing to express our support for a fair and reasonable solution to these problems posed by the federal "private use"restrictions on public power bonds. The Gorton-Kerrey bill, S.386,was introduced in the 106`h Congress by Senators Slade Gorton(R- WA), Robert Kerrey(D-NE),and a bipartisan group of senators to resolve the"private use" issue. It provides us with options for obtaining the necessary level of relief needed to participate in competitive electricity markets without jeopardizing the tax-exempt status of outstanding bonds or raising rates.This bill is a compromise because in return for protecting outstanding bonds,we agree to make concessions on the future use of these bonds. Some of our opponents,however,want to amend this bill to tax public power revenues. Please oppose new taxes on us,which only serve to increase electricity costs. We are units of state and local government and operate on a not-for-profit basis—this bill protects our local decision making authority. Our 14,000 customers are counting on your support for this issue. Please write back and let me know if you plan to support this bill. And, I would be happy to meet with members of your staff to further discuss the issue. We appreciate your help on this matter. Best Regards, Bryan C.Adams, PE General Manager