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/j <br />Elk River -~-~ <br />Municip al Utilitie s <br />13069 Orono Parkway <br />Elk River, MN 55330 <br />January 3, 2005 <br />To: Elk River Municipal Utilities Commission <br />Jerry Takle <br />,1im Tralle <br />John Dietz <br />From: Bryan Adams <br />Subject: Electric Utility Issues <br />phone: 763.441.2020 <br />Fax: 763.441.8099 <br />Enclosed are two articles that deserve your attention. The first is CapX 2020 Interim <br />Report, drafted by Great River Energy, Minnesota Power, Missouri River Energy <br />Services, Otter Tail Power Company, and Xcel Energy. This report addresses the <br />generation and transmission need and costs for the State of Minnesota to get us to the <br />year 2020. <br />The other article is APPA's paper titled, "Restructuring at the Crossroads.'' The regional <br />transmission organization (RTO) that have been established have spiraling costs, <br />unaccountable governance structures and using questionable market mechanisms. Our <br />RTO is Midwest Independent System Operation (MISO), which is a break off of Mid- <br />Continent Area Power Pool (MAPP). Great River Energy, who takes care of our <br />transmission needs, .just joined MISO. MISO tariff structure is due to be implemented <br />March I, 2005. Cost of the RTO is increased with no associated increase in benefit, just <br />another layer of bureaucracy. MISO's marginal pricing scheme is very complicated with <br />much room for gaming. <br />