6.2. ERMUSR 07-11-2006 - Laserfiche WebLink

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advantage of our position and provide him with as much assistance as we can to move the ball on captive rail legislation. The one quirk we need to be aware of is that talk of captive rail in this region often leads to a discussion of the DM&E rail project. Most MMUA member cities along the DM&E route don't seem to be taking a strong position one way or another, but in Rochester both the Mayo Clinic and the city government have taken strong positions against the DM&E unless it agrees to some mitigation. This puts Rochester Public Utilities in a tough position and makes it virtually impossible for RPU to accept an association position that supports the DM&E. To make matters a bit more complicated, our two US Senators have been having a public spat over who is doing more to help Mayo fight the DM&E. It seems to me that we should keep our eyes on the big picture and concentrate on the need for relief for shippers on the BNSF and other existing railroads. How active should MMUA be on the captive rail issue? Should we consider joining CURE, the captive rail lobbying group? Should we do some targeted Washington visits on the issue? Service Territory The Minnesota electric utility service territory law has been on the books for 32 years. Initially, transfers of territory from co-ops to municipals following annexation were straightforward and noncontroversial. In the late 80s and early 90s co-ops began pursuing ever greater compensation awards, and we have been fighting about it ever since. Several years ago the co-ops began a new strategy that has been working well for them. They have apparently concluded that they don't have the votes to freeze service territories legislatively, so they are trying to do it de facto by ratcheting compensation awards up into the stratosphere. They selected a couple of cases, Buffalo and Grand Rapids, in which the prevailing compensation formula could be argued to produce very high payments. They basically forced these cases to hearing by refusing to negotiate. In each case the hearing officers issued an opinion favorable to the municipal, and in each case the MPUC abandoned the hearing officer decision and basically gave the co-op everything it was asking for. Both cases have been appealed to the Court of Appeals. The court just issued a decision affirming the MPUC in the Buffalo case. Buffalo is appealing that decision to the Supreme Court, where we remain hopeful that the court will take a fresh look at the situation and see things our way. The Grand Rapids case has been on hold pending the Buffalo decision, and it will now proceed to briefing and oral argument. In light of the Buffalo decision, I don't think anyone is expecting much from the Court of Appeals in the Grand Rapids case. 5