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Oak Park Commons Development & Power Line Burial
C S M DEVELOPING REAL ESTATE FOR PEOPLE, BUSINESS & COMMUNITIES Mr. Eric Johnson City Administrator City of Oak Park Heights 14168 Oak Park Blvd. N Oak Park Heights, MN 55082 Re: Oak Park Commons Development — Power Line Burial Dear Administrator Johnson: I have received and reviewed your letter of December 20, 2007 relative to proposed burial of the power lines located along 60 Street in the City of Oak Park Heights. In light of the allegations and suggested actions set forth in your letter, I have reviewed the facts and circumstances surrounding the Oak Park Commons Development and the proposed power line burial with Scott Tubman of CSM, who has been intimately involved in this project from start to finish. I have also reviewed the matter with CSM's General Counsel. On that basis, we would respond to your letter as follows: • Contrary to the suggestion in the first paragraph of your letter, the subject of burial of the power lines was never addressed or discussed as a requirement of the project, either in the approved PUD for the Project or in the Developers Agreement for the Project. The discussions occurred only after the Project had been commenced and was nearing completion. I also understand that you met with XCEL, MnDot (within whose right of way the power lines are located), and Scott Tubman concerning the burial of the power lines, and that neither XCEL nor MnDot were interested in proceeding with the line burial. • Contrary to the suggestions contained in the second paragraph of your letter, City Ordinance 1008 does not apply to this Project, and the Development Agreement does not contain any requirement relative to the burial of the power line, either as a Plan A or Plan B Improvement. • As to the third paragraph of your letter, be advised that CSM will vigorously enforce its rights to proceed with further development within the Project consistent with the terms of the approved PUD and the Development Agreement, and that CSM will pursue appropriate action to the extent that the City wrongfully accesses or withholds funds from the Plan A Letter of Credit. In that connection, it should be noted that the Plan A Letter of Credit is for "on- site" improvements, which are essentially complete, thereby entitling CSM to a release or substantial reduction of the Letter of Credit. Further, it should be noted that in order to draw on the Letter of Credit, the City must certify to the Bank that CSM has failed to comply with the terms of the April 28 2006 Developer's Agreement "relative to the construction of the Plan A Improvements ". CSM has not failed to comply with those requirements, so the City is not in a position to provide that certification. Finally, CSM will be pursuing the release and /or substantial reduction of the Plan A and B Letters of Credit, consistent with our letter of August 29, 2007 wherein we requested such release and /or reduction. 500 Washington Avenue South, Suite 3000 Minneapolis, MN 55415 • PH: (612) 395.7000 FX: (612) 395.7001 • www.csmcorp.net 1 • As to the "two actions" proposed in the third paragraph of your letter, we respond as follows: 1. We do not intend nor do we have the right to proceed with the burial of XCEL's power lines located on property owned or controlled by MnDot; 2. We are unwilling to execute the Petition for Improvements included in your letter. As previously indicated to you, we would not object to the burial of the Tines, or to the assessment of a portion of the costs associated with the burial of the lines, provided that the assessment is consistent with applicable law (i.e., equitably spread across all benefited properties based upon the benefit received). Please feel free to contact me to discuss the foregoing, at your convenience. Alternatively, you may have the City Attorney contact Bill Franke, General Counsel for CSM. Finally, if you feel it would be helpful to meet to discuss the foregoing, we stand ready to do so. V r Yours, Very Truly o s, gr env Arne Cook Cc: Mark Vierling, City Attorney Jim Butler, Building Official City Council Members Robert Fiebig, Lowe's Companies City of Oak Park Heights 14168 Oak Park Blvd. N • Box 2007 • Oak Park Heights, MN 55082 • Phone (651) 439 -4439 • Fax (651) 439 -0574 December 20, 2007 Mr. Arne M Cook President of Commercial Properties, CSM Development / Equities 500 Washington Avenue South Suite 3000 Minneapolis, Minnesota 55415 RE: Oak Park Commons Development - Power Line Burial Dear Mr. Cook: As the Oak Park Commons project has developed over the past eighteen months, the City has had numerous communications with your firm as to the required burial of the distribution lines located in the 60 street frontage road and as were partially relocated to facilitate your development. To date, these lines have not been buried as required. The reconstruction of 60th street as undertaken by your development necessarily requires the relocation of the utilities and which must be compliant with local law, City Ord 1008. Failure to comply is a breach of the Plan A compliance requirements, and allows the City access current Letters of Credit if not remediated. At this time the City will be prohibiting further development of any remaining outlots within the Oak Park Commons Development and will be accessing all remaining funds from the PLAN A Letter of Credit - withholding such dollars until CSM Development /Equities (the Developer) performs one of the following two actions: 1. Bury these tines. (these lines extend generally from a point 300' east of the intersection of Nova Scotia Ave to Norwich Ave adjacent to Appleby's - see map enclosed) 2. Execute and return to the City the enclosed document, "100% Petition for Improvements ". This must be executed and returned to the City not later than January 8 2008. You will note that this Petition allocates financial responsibility to CSM only in the event local cost sharing is required as part of the STH 36 reconstruction. PIe• - are �'' /eview the enclosed documents and let me know if you have any • - st'•ns. ... • Ie • . ‘o h son Cit A. inistrator Pa!= 9of47 O Return to: 100% Petition for Improvements Eckberg, Lammers, Briggs, Wolff & Vierling, P.L.L.P. Attn: Mark J. Vierling 1809 Northwestern Avenue Stillwater, Minnesota 55082 (651) 439 -2878 100% PETITION FOR IMPROVEMENTS CSM Equities LLC., a Limited Liability Company, being the owner of all of the real property being legally described as: "Lots 4,5, & 6 , Block 1, of Oak Park Commons, according to the recorded plat thereof on file and of record in the office of the Registrar of Titles in and for Washington County, Minnesota and Tax Description for 0502920110042. Sect -05 Twp -029 Range -020 NE1 /4 -NE1 /4 BEING WEST 300FT OF EAST 1013FT OF NORTH 325FT OF SD NE1 /4 -NE1 /4 AS MEASURED AT RIGHT ANGLE TO EAST LINE & NORTH LINE SUBJECT TO EASEMENT OF RECORD " hereby petitions the City of Oak Park Heights, Minnesota, to undertake without a public hearing under Minnesota Statutes, Section 429.031, the following improvements affecting said lands as provided for in the authorizing Resolution of the City of Oak Park Heights approving Petitioner's development as follows: "Bury the overhead distribution lines along 60 Street North now located upon and affecting this property. The timing of that improvement shall be coordinated with the burying of distribution lines in front of Lowe's along 60 Street North. The Petitioner shall escrow sufficient funds, as and when specified by the City Engineer, to complete the improvement and/or agree that the City will complete the work and petition for the public improvement, waiving notice of public hearing and assessments, as required under Minnesota Statute 429." and to assess the entire cost thereof against the above described property. Petitioner hereby acknowledges by its signature hereto and on behalf of itself, its successors heirs and assigns, acknowledges that it waives any and all statutory notices otherwise required under Minn. Stat. 429.031 and waives and release it's right to notices of assessment hearing under Minn. Stat. 429.061 and waives and release it's right to appeal there from under Minn. Stat. 429.081. The City agrees that the installation of underground Electric Distribution lines will follow the established City Policy for the Trunk Highway 36/ St Croix River Crossing area which provides: "Underground Installation of Electrical Distribution Lines. Pursuant to City ordinance Chapter 1008 all electrical distribution lines located or to be located upon the site shall be installed and maintained underground. As to those areas of the City where existing distribution lines are within the Right or Way of TH 36 and impacted by the proposed reconstruction of Highway 36 as part of the future St. Croix River Crossing Project the City will allow the Developer to request delay in the installation of Distribution (as opposed to service) lines provided the Developer signs the City form for permitting future installation as part of that project and commits to the payment of any local share of the future installation costs (i.e being those portions not paid by MNDOT relative to the subject parcel), via special assessment over a 5 year period." CSM Equities LLC. By: Its: STATE OF MINNESOTA ) ) ss. COUNTY OF WASHINGTON) On this day of , 2007, before me a Notary Public within and for said County, personally appeared , the , of CSM Equities LLC. to me known to be the person described in and who executed the foregoing instrument on behalf of CSM Equities LLC. and acknowledged that he /she executed the same with authority from CSM Equities LLC. Notary Public (Notary Seal) • I hereby certify that I have examined the above petition and appropriate real estate records and find that said petition is in proper form. CITY OF OAK PARK HEIGHTS Eric Johnson City Administrator STATE OF MINNESOTA ) ) ss. COUNTY OF WASHINGTON ) On this day of , 2007, before me Eric Johnson, to me personally known, being by me duly sworn did say that he is the City Administrator of the City of Oak Park Heights, the municipal corporation named in the foregoing instrument; and that the seal affixed to said instrument is the corporate seal of said corporation, and that said instrument was signed and sealed on behalf of said municipal corporation by authority of its City Council and said Administrator acknowledging execution of same, to be the free act and deed of said municipal corporation. Notary Public This Instrument Drafted By: Mark J. Vierling ECKBERG, LAMMERS, BRIGGS, WOLFF & VIERLING, PLLP 1 809 Northwestern Avenue Stillwater, MN 55082 0 C S M CEL eti RATING 2 Yarn 52007 DEVELOPING REAL ESTATE A'OR PEOPLE. BUSINESS & COMMUNITIES May 16 2007 Mr. Eric Johnson City Administrator City of Oak Park Heights Y g 14168 Oak Park Blvd. N Oak Park Heights, MN 55082 RE: Overhead powerlines on 60 Street N. Dear Eric, In response to your letter of April 23 rd , 2007 regarding burial of Xcel overhead power lines on the properties owned by CSM Equities, LLC, I have the following comments. As you recall, last year we had a meeting with representatives from the City, Xcel Energy, MnDOT, and CSM. At that meeting Xcel refused to agree to your request that they bury the overhead power lines located within MnDOT ROW along 60 St. N. CSM understands the City's position on placing these facilities underground as part of Y P P g �' p the larger MnDOT Hwy 36 /Stillwater Crossing project. However, this is a matter between the City of Oak Park Heights, MnDOT, and Xcel Energy. CSM would not object to a future assessment of the CSM properties and other benefited properties as part of the larger project provided the assessment meets the specific requirements for assessments under Minnesota law. As a final note neither the PUD Agreement nor the Developer's Agreement address the burial of these overhead power lines as a condition of this development. Similarly there is no provision in either agreement allowing the City to retain Plan A or Plan B Improvement securities listed in the Developer's Agreement for such purposes. Please feel free to contact me with any further comments. Regards, CSM CORPORATION , CSM LODGING Scott Tubm n 500 Washington Avenue South, Suite 3000 Minneapolis, MN 554.15 Telephone: (612) 3957 Fax: (612) 395.7 www.csmcorp.net League of Minnesota Cities ri/Rag. 145 University Avenue West, St. Paul, MN 55103 -2044 (651) 281 -1200 • (800) 925 -1122 ta C ities Fax: (651) 281 -1299 • TDD: (651) 281 -1290 x alknas www.lmnc.org September 26, 2006 Eric Johnson City Administrator 14168 Oak Park Blvd. P.O. Box 2007 Oak Park Heights, MN 55082 -3007 Mr. Johnson, Pursuant to our most recent conversation I have searched the League's files regarding burying utility lines pursuant to city ordinance. I have enclosed various materials from our files regarding this matter, including: • LMC Informational Memo, 7 -13 -1984 (575A7) • Staff Report, including underground utilities of 7 -7 -1999 from City of Brooklyn Center • Ordinance — Resolution of 9 -8 -1999 from City of Brooklyn Center • CEAM Annual Conference, "Gas and Electric Franchise Fees..." 2 -1 -2004 • LMC Research Memo, "Model Gas /Electric Franchise..." In summary, a city has the right to require undergrouding of electric distribution facilities under Minn. Stat. § 216B.36, either by franchise or through police power ordinances. This means that the city may enact and enforce an ordinance requiring new distribution facilities or relocated distribution facilities to be undergrounded. NSP v. City of Oakdale, 558 N.W.2d 534 (Minn. App. 1999). Moreover, cities need not reimburse eclectic utility for the added cost to the utility of placing facilities underground. Id. Therefore, the cost is not a taxpayer expense, unless the City chooses to participate in the added cost. Ratepayers may be required by the PUC to pay for additional costs. Moreover, franchise ordinances generally would establish which party would bear the cost of relocating electric utilities within a street. It is my understanding that the City of Oak Park Heights currently has a franchise agreement/contract with Xcel Energy. I presume the franchise agreement makes specific mention of cost recovery in regards to relocation of existing lines. The franchise in conjunction with the Oakdale case certainly gives a city the right to regulate undergrounding utilities and diverting cost recovery from taxpayers to ratepayers. However, if the City does not want Xcel to place a surcharge on ratepayers, it appears the City would have to voluntarily involve itself in the payment of this relocation effort. If you have any further questions regarding this matter, please feel free to contact me directly at 651- 281 -1227 or toll -free 1- 800 - 925 -1122. AN EQUAL OPPORTUNITY /AFFIRMATIVE ACTION EMPLOYER S' ely, David Fisc - r Research Staff 651- 281 -1227 800 - 925 -1122 dfischer @lmnc.org This material is rovided or general informational ur oses and is not intended as legal advice. eal P .f g purposes S Please consult your city attorney for legal advice concerning your specific situation. cc: Mark Vierling enclosures 2 INFORMATION SERVICE of League of Minnesota Cities 480 Cedar Street, Saint Paul, Minnesota 55101 July 13, 1984 575A7 *575b4 *525j *245a "WHEN TELEPHONE POLES AND WIRES WITHIN A STREET RIGHT --OF -WAY MUST BE RELOCATED BECAUSE OF RELOCATION, WIDENING, OR OTHER MODIFICATION OF THE STREET, THE TELEPHONE COMPANY MUST LEAR THE COST OF RELOCATING ITS FACILITIES AND IT IS NOT ENTITLED TO REIMBURSEMENT FROM THE CITY." Typically, franchise ordinances would establish which party would bear the cost of relocating poles and wires within a street. However, in the case of telephones, cities' power to franchise has been preempted by the state. M.S. 237.16, subd. 1. However, cities retain their police power r over the location of such police. M.S. 237.16, subd. 1; M.S. 222.37, subd. 1. It is clearly established at common law that in the absence of franchise or statutory provisions to the contrary, a utility company using a street must moving its poles and lines when it is necessary. Norfolk bear the cost of g F elo ment and Housing Authority v. Chesapeake and Potomac Telephone Redev p Company, U.S. Sup. Ct. Nov. 1, 1983, 52 LW 4007; Minneapolis Gas Co. v. Zimmerman, 253 Minn. 164, 178, 91 N.W. 2d 642 (1958); McQuillan, §34.74a, and Op. Sept. 34.77; A.G. 0 . 98 -a -12, Se 28, 1967 (LMC- 525Q); A.G. Op. 98 -a -1Z, Jan. 16, 1963 (LMC 575A7); A.G. Op. 98 -a -12, Aug. 5, 1947 (LMC 575A7). the police power to require a utility to move its lines at While the city has P P exercised arbitrarily; such a the utility's expense, that power cannot nnot be exec Y P r requirement must have some relationship to the publics safety or convenience. Northwestern Telephone Exchange v. City of Minneapolis, 81 Minn. 140, 83 N.W. 527, 86 N.W. 69 (1900). Finally, it might be noted that in certain circumstances, the state has authorized payment a ent for relocation of utility lines made necessary by trunk highway work. M.S. 161.46. PT:glb 7/12/84 • City of Oak Park Heights 14168 Oak Park Blvd. N • Box 2007 • Oak Park Heights, MN 55082 • Phone (651) 439 -4439 • Fax (651) 439 -0574 September 6, 2006 John Gelderman Director of Development CSM Corporation 500 Washington Avenue South, Suite 3000 Minneapolis, MN 55415 and Robert Fiebig III, E.I. Site Development Mgr Lowe's Companies Midwest Regional Real Estate Office 1952 McDowell Road, Suite 101 Naperville, Illinois 60563 RE: Correction Notice — Overhead Powerlines Dear Mr. Gelderman and Mr. Fiebig, Althon • h I have recently sent you an email regarding this issue, this letter restates the need for corrections at your development in Oak Park Heights. Specifically: 1. The overhead electric service lines from the frontage road to the Xcel Substation have not yet been buried. This was to be completed by your contractors in the initial site clearances for the installation of Nova Scotia. These newly installed lines are also in violation of City Ordinance 1008 and must be buried. 2. There has been relocation southwardly of overhead utility lines as part of the 60 Street (frontage road) reconstruction. These lines must be buried as must all new service or utility mains. The newly installed lines are in violation of City Ordinance 1008. The City will be issuing a Stop Work Notice and you then have 30 days to correct these conditions. Please let me know ' ' u have any questions. Sincer= , Eri • Johnson 7/ Ci l Oor Cc: Jim Butler • mg a' icial Mark • - ding, • ' Attorney Juli = Dennis Postier, BRAA City Council Members Art Nielson, Xcel Energy 1008 AN ORDINANCE REGULATING THE PLACEMENT OF PUBLIC UTILITIES, ELECTRONIC, PHONE LINES, CABLE SERVICES AND RELATED UTILITIES UNDERGROUND. THE CITY COUNCIL FOR THE CITY OF OAK PARK HEIGHTS DOES HEREBY ORDAIN: 1008. 010. Purpose. The purpose of this section is to promote the health. safety and general welfare of the public and is intended to foster (i) safe travel over the right -of -way, (ii) non - travel related safety around homes and buildings where overhead feeds are connected and (iii) orderly development in the city. Location and relocation, installation and reinstallation of Facilities in the right -of -way must be made in accordance with this section. 1008.020. Definitions. The terms used in this section have the meanings given them. Commission. "Commission" means the Minnesota Public Utilities Commission. Facility. "Facility" means tangible asset in the public right -of -way required to provide utility service. The term does not include Facilities to the extent the location and relocation of such Facilities are preempted by Minnesota Statutes, Section 161.45, governing utility facility placement in state trunk highways. Facility does not mean electric transmission lines, as distinguished from electric distribution lines. Public right -of -way. "Public right -of -way" has the meaning given it in Minnesota Statutes, section 237.162, subdivision 3. Right -of -way user. "Right -of -way user" means (1) a telecommunications right -of -way user as defined by Minnesota Statutes, Section 237.162, subdivision 4; or (2) a person owning or controlling a facility, in the right -of -way, that is used or intended to be used for providing utility service, and who has a right under law, franchise or ordinance to use the public right-of-way. Utility service. "Utility service" means and includes: (1) service provided by a public utility as defined in Minnesota Statutes, Section 216B.02, subdivisions 4 and 6; (2) services of a telecommunications right -of -way user, including the transporting of voice or data information; (3) services provided by a cable communications system as defined in Minnesota Statutes, Section 238.02, subdivision 3; (4) natural gas or electric energy or telecommunications services provided by a local government unit; (5) services provided by a cooperative electric association organized under Minnesota Statutes, chapter 308A; and (6) water, sewer, steam, cooling or heating services. December 11, 2007 City Council Worksession Page 3 of 6 1008.030. Undergrounding of Facilities. Facilities placed in the public right -of -way must be located, relocated and maintained underground pursuant to the terms and conditions of this section and in accordance with applicable construction standards. This section is intended to be enforced consistently with state and federal law regulating right -of -way users, specifically including but not ‘ limited to Minnesota Statutes, Sections 161.45, 237.162, 237.163, 300.03, 222.37, 238.084 and 2168.36 and the Telecommunications Act of 1996, Title 47, USC Section 253. \ 1008.040.1.]ndergrounding of New Facilities. A ew Facility or a permanence nsion of Facilities must be installed and maintained underground when supplied to: (a) a new i • buildings, signs, streetlights or other structures; (b) a new b • • ' • v and; or , —, (c) a new • vel industrial park containing new commercial or industrial buildin_ . -- 1 All owners, developers, persons submitting plats to the city for approval as well as any I utility company serving said developments are responsible for complying with the terms and provisions of this ordinance and prior to final approval of any plat, subdivision or development plan shall submit to the city a written statement from the appropriate utility company (ies) showing that all necessary arrangements with said companies for underground service and installation have been made. To the extent practical all underground work shall be completed prior to street surfacing. 1008.050. Undergrounding of Permanent Replacement, Relocated or Reconstructed Facilities. II A permanent replacement, relocation or reconstruction of a Facility of more than 300 e feet must be located, and maintained underground, with due regard for seasonal working .\ c o conditions. For purposes of this section, reconstruction means any substantial repair of or any improvement to existing Facilities. Undergrounding is required whether a `' �\, ,c,•(' � replacement, relocation or reconstruction is initiated by the right-of-way user owning or \ operating the Facilities, or by the city in connection with (1) the present or future use by the city or other local government unit of the right -of -way for a public project, (2) the public health or safety, or (3) the safety and convenience of travel over the right -of -way. 1008.060. Retirement of Overhead Facilities. The city council may determine whether it is in the public interest that all Facilities within the city, or within certain districts designated by the city, be permanently placed and maintained underground by a date certain or target date, independently of undergrounding required pursuant to sections 1008.040 and 1008.050 of this Code. The decision to underground must be preceded by a public hearing, after published notice and written notice to the utilities affected. (Two weeks published: 30 days written.) December 11, 2007 City Council Worksession Page 4 of 6 At the hearing the council must consider item (1)- (4) in section 1008.080 of this Code and make findings. Undergrounding may not take place until city council has, after hearing and notice, adopted a plan containing items (1) - (6) of section 1008.090 of this Code. 1008.070. Public Hearings. A hearing shall be open to the public and may be continued from time to time. At each hearing any person interested must be given an opportunity to be heard. The subject of the public hearings shall be the issue of whether Facilities in the right -of -way in the city, or located within a certain district, shall all be located underground by a date certain. Hearings are not necessary for the undergrounding required under sections 1008.040 and 1008.050 of the City Code. 1008.080. Public Hearing Issues. The issues to be addressed at the public hearings include but are not limited to: (1) The costs and benefits to the public of requiring the undergrounding of all Facilities in the right -of -way. (2) The feasibility and cost of undergrounding all Facilities by a date certain as determined by the city and the affected utilities. (3) The tariff requirements, procedure and rate design for recovery or intended recovery of incremental costs for undergrounding by the utilities from ratepayers within the city. (4) Alternative financing options available if the city deems it in the public interest to require undergrounding by a date certain and deems it appropriate to participate in the cost otherwise borne by the ratepayers. Upon completion of the hearing or hearings, the city council must make written findings on whether it is in the public interest to establish a plan under which all Facilities will be underground, either citywide or within districts designated by the city. 1008.090. Undergrounding Plan. If the council finds that it is in the public interest to underground all or substantially all Facilities in the public right of way, the council must establish a plan for such undergrounding. The plan for undergrounding must include at least the following elements: (1) Timetable for the undergrounding. (2) Designation of districts for the undergrounding unless, undergrounding plan is citywide December 11, 2007 City Council Worksession Page 5 of 6 (3) Exceptions to the undergrounding requirement and procedure for establishing such exceptions. (4) Procedures for the undergrounding process, including but not limited to coordination with city projects and provisions to ensure compliance with nondiscrimination requirements under the law. (5) A financing plan for funding of the incremental costs if the city determines that it will finance some of the undergrounding costs, and a determination and verification of the claimed additional costs to underground incurred by the utility. (6) Penalties or other remedies for failure to comply with the undergrounding. December 11, 2007 City Council Worksession Page 6 of 6 SCOPING ESTIMATE Xcel Energy provides a "Scoping Estimate" for the convenience of the entity ordering or requesting the project. This approximation is our initial assessment of the costs associated with an ordered or requested project. The Scoping Estimate is generally based on our previous experience with comparable projects and uses historical cost data. This estimate, therefore, is only a "ballpark" estimate of the costs associated with this project. The actual costs may be higher or lower. We use the Scoping Estimate to determine whether the installation requested may constitute a "special facility." This estimate normally precedes our more refined Engineering Estimate. CHARACTERIZATION OF PROPOSED PROJECT Requestor Name: City of Oak Park Heights Address: 14168 Oak Park Blvd. P.O. Box 2007 Oak Park Heights, MN 55082 Project Information. Description of the type of project requested, its proposed location, its cost and the reason for the request: At the request of the City we have determined the following: This project involves the replacement of an existing dual circuit overhead electric distribution system with an equivalent new underground distribution system. The location of this project is an area from Norrell Avenue east to approximately Oakgreen Avenue North on the south side of the 60 Street frontage road The estimated cost is $1,250,000.00 Project Assumptions. Include any additional conditions or assumptions regarding the project description that may impact cost. Identify tasks that are Xcel Energy's responsibility and tasks that are the Requestor's responsibility. Xcel Energy will provide all the materials necessary to install the new underground system and remove the existing overhead distribution. The existing poles in the area described above would be removed but a minimum of four (4) new terminal poles would be installed as part of the underground project. Any additional right -of -way or private easements necessary for the placement of surface mounted switchgear will be the responsibility of the City. Date: June 7, 2007 Xcel Energy Contributors: Deb Fedor & Art Nielsen Signature: _, 41011,1100' Jo . Wertish — Manager, Community Service r N City of Oak Park Heights 14168 Oak Park Blvd. N • Box 2007 • Oak Park Heights, MN 55082 • Phone (651) 439 -4439 • Fax (651) 439 -0574 April 23 2007 John o Gelderman Director of Development CSM Corporation 500 Washington Avenue South, Suite 3000 Minneapolis, MN 55415 and Robert Fiebig III, E.I. Site Development Mgr Lowe's Companies Midwest Regional Real Estate Office 1952 McDowell Road, Suite 101 Naperville, Illinois 60563 RE: Overhead Powerlines - STH 36Frontage Road - 60 Street Gentlemen, On September 21 2006, I had provided to your offices a RELEASE of the STOP WORK ORDER that released you, for a period of 8 months, from the requirement of the burial of the overhead distribution lines that abuts your properties (see attached map) to the north. As you know this is a requirement imposed as a condition on this development. To date, these distribution lines have not been buried and therefore the City is now going to re- institute additional measures to cause these lines to become buried. Accordingly, the City will withhold all outstanding balances until such lines become buried by you or your agents. An alternative option for you at this time and which would avoid these conditions would be to agree to a future special assessment when the City decides to implement such distribution line burial and/or be required to facilitate such action as a result of, or in conjunction with, a MnDOT or Xcel Energy project. When and if, these conditions would ever arise is presently undetermined. By signing the enclosed document, "100% Petition for Improvements" the City will have the authorization to assess these four properties at such future time. Once I have received back the enclosed document properly executed and returned from your offices I can then delete this item from any remaining punch lists. Ple.: 1: / e know if you have any questions. • o son Administrator Cc: Mark Vierling, City Attorney Jim Butler, Building Official Julie Hultman/ Planning File City Council Members V) L4 i ,4 t �w a) in >, (4 ; CO 5 0 ; •L oo CO Q s .4 ''" .1 6M Z 1 Z + _J _1 W 0 � • W Q ..c Q Q O U as ° w • • �W .,7 (3 W M o ;= y a p a .r a N . :: . �i � � = ch : " '1 t , —i III - • ,.�. ,, S$ alb,,` r rs . i•� I f { r1 '. t 3I —r'f I .. f ,) -t _ �` .. -. -, • A I h A ; � W . ,, ffll�� Il _ } 1 W U ` 1 t • X ,1j f 7711//x�;; _ ,.. LL 1 )- H. L. s� La * - t- . __: , 1., k : , I :, , ... tk....0, -4 . ..., ......;: ''+' • 1 f a I' .> 2 I C , fs t + Ay f S j v t . t 1 , 0 • • U } r { • . , r .., ' ''''''-::1 EP f I I r v' '' ' j e� a •- i • - *..\ it ) ., „. r. ' • 4 4 i ,•• -, * - I ' —•:': . , '-', , - cl , -.; _ 1 I f z g f V I c r l .., p. ,; �' s Return to: 100% Petition for Improvements Eckberg, Lammers, Briggs, Wolff & Vierling, P.L.L.P. Attn: Mark J. Vierling 1809 Northwestern Avenue Stillwater, Minnesota 55082 (651) 439 -2878 100% PETITION FOR IMPROVEMENTS CSM Equities LLC. a of the real property being legally descr as: Limited Liability Company, being the owner of all "Lots 4, 5, &6,Block l , of O a e� of oom ns, according to the recorded la Minnesota g trar of Titles in p t thereof on file and of record and for Washington County, and Tax Description for 0502920110042 Sect -OS Twp_029 R NORTH 32FT 9 nge -020 NE1 /4 -NE1 /4 BEING NE1 /4- WEST 300FT OF EAST 1013FT OF LINE 84 NORTH LINE SUBJECT TO EASE MEASURED RIGHT ANGLE TO EAST EASEMENT O OF RECORD " City y petitions e herb hereby Minnesota he of Oak Park Hei is totes, Section 429.031 � Minnesota, to undertake provided for the Statutes, Se , the following i meflt without a public hearing a s development authorizing Resolution of the City Oak mPrOVements affecting said lands as p fnt as follows: ty of ak Park Heights approving petitioner's Bury the overhead distribution lines along 60 Street this rhea eet No bury burying of distribution 1 s along timing of that improvement shall n be coord at located ed upon and/or Petitione g shall row sufficient 60t Street North as the with the complete shall 11 finds, as and when s may be by th e C b improvement and/or a specified by the City Engineer, City. Th for the public improvement agree that the City will complete idee t to required under Minnesota Statute 429 notice of plete the work and petition public hearing and assessments, as the and assess e entire cost thereof against the above asse e its si acknowledges that s it sig any and all statutory notice tture hereto a described property, Petitioner he i r s n and hereby and on behalf of itself, its successors heirs and Stat. 429.031 and waives s othe rwise required 429.061 and release it's right and waives and release it's ght to notices of assessment he under Minn. Stat. right to appeal there from under axing under Minn. Stat. Minn. Stat. 429.081. CSM Equities LLC. By: Its: STATE OF MINNESOTA ) ) COUNTY OF WASHINGTON) ss. On this day of , 2007, before me a No said County, personally appeared Lary Public within CSM Equities LLC. to me known � the and for instrument on behalf of E wn to be the peon described in and who executed the foregoing quities LLC, and acknowledged that he /she executed the same with au from CSM Equities LLC. (Notary Seal) Notary Public I hereby certify that I have ex find that said petition is in proper f rrn a above petition and appropriate real estate records and CITY OF OAK PARK HEIGHTS Eric Johnson City Administrator STATE OF MINNESOTA COUNTY OF WASHINGTON ) ss. On this day of 2007, before Heights the b by me duly sworn sa known, being municipal did y that he is me Eric Johnson to me personally said ' Pal corporation named in the City A dministrator of the H e instrument is the corporate orpor Seal in th e foregoi City of O on behalf f said corporation, said and that the Park Administrator sd municipal corporation and seal affixed to st b acknowledging said a ' g gyration b that said s Cit n C was signed and corporation. execution of s Y authority of its City tee, to be the free act and deed Council and sa id � °f said municipal Notary This Instrument Drafted By: Mark J. Vierling ECKBERG, LAMMERS B WOLFF & VIERLTG EGGS, 1809 Northwestern , PLLP Stillwater Avenue MMN 55082 I k, y . s' .„,,,,..s. City of Oak Park Heights 14168 Oak Park Blvd. N • Box 2007 • Oak Park Heights, MN 55082 • Phone (651) 439 -4439 • Fax (651) 439 -0574 September 21, 2006 John Gelderman Director of Development CSM Corporation 500 Washington Avenue South, Suite 3000 Minneapolis, MN 55415 and Robert Fiebig III, E.1. Site Development Mgr Lowe's Companies Midwest Regional Real Estate Office 1952 McDowell Road, Suite 101 Naperville, Illinois 60563 RE: Correction Notice — Overhead Powerlines Gentlemen, With this letter the City of Oak Park Heights does release the STOP WORK ORDER as issued on 9/6/06 relative to the requirement that a portion of the distribution lines in the south STH 36 frontage road be placed underground. However, please understand that the City is not releasing the requirement and should these lines not become buried within the next 8 months (at no cost to the City or local ratepayers), or if an alternative solution has not been approved by the City, the City explicitly reserves the right to impose the requirement and implement any and all means to secure compliance. Pl - .e et i A w if you have any questions. cere i ' ic.� ..n City :' . , inistrator Cc. Mark Vierling, City Attorney John Wertish, Xcel Energy Nick Thompson, MNDOT Jim Butler, Building Official Julie Hultman/ Planning File City Council Members Legislature Horne 1 Links to the World I Help 1 Aciv Minnesota •' '' Office of the Revisor of Statutes • House Senate 1 Joint Departments and Commissions ; Bill Search and Status , Statutes. Laws. and Rules Minnesota Statutes 2005, 161.45 Copyright 2005 by the Office of Revisor of Statutes, State of Minnesota. Minnesota Statutes 2005, Table of Chapters Table of contents for Chapter 161 161.45 Utility on highway right -of -way; relocation. Subdivision 1. Rules. Electric transmission, telephone, or telegraph lines; pole lines; community antenna television lines; railways; ditches; sewers; water, heat, or gas mains; gas and other pipelines; flumes; or other structures which, under the laws of this state or the ordinance of any city, may be constructed, placed, or maintained across or along any trunk highway, or the roadway thereof, by any person, persons, corporation, or any subdivision of the state, may be so maintained or hereafter constructed only in accordance with such rules as may be prescribed by the commissioner who shall have power to prescribe and enforce reasonable rules with reference to the placing and maintaining along, across, or in any such trunk highway of any of the utilities hereinbefore set forth. Nothing herein shall restrict the actions of public authorities in extraordinary emergencies nor restrict the power and authority of the commissioner of commerce as provided for in other provisions of law. Provided, however, that in the event any local subdivision of government has enacted ordinances relating to the method of installation or requiring underground installation of such community antenna television lines, the permit granted by the commissioner of transportation shall require compliance with such local ordinance. Subd. 2. Relocation of utility. Whenever the relocation of any utility facility is necessitated by the construction of a project on trunk highway routes other than those described in section 161.46, subdivision 2, the relocation work may be made a part of the state highway construction contract or let as a separate contract as provided by law if the owner or operator of the facility requests the commissioner to act as its agent for the purpose of relocating the facilities and if the commissioner determines that such action is in the best interests of the state. Payment by the utility owner or operator to the state shall be in accordance with applicable statutes and the rules for utilities on trunk highways. Subd. 3. Utility interests when real property conveyed. In proceedings to vacate, transfer, turn back, or otherwise convey an interest in real property owned or controlled by the department, when the property is owned in fee by the state, the co mmissione r interest may s pecify that Prior in does not affect a the conveyance of the department's t in Property or use permit of the pr g utility easement in issued by the department. granted to a mey convey interests impartment. In addition, the commissioner under subje to the right real property, including Oaseset, subject ight of a utility to enter g an right-of-way otherwise maintain, repair, replace, reconstruct upon Where the por the r attend to . improve, way preexisting easement remove, or does dres not prohibit a over the real property, utility had no not entity political subdivision government this subdivision p v g d to he utilit m negotiating or contracti t or regard agency, property, but the yes other interest in the easement or g with a utility utility shall the property and the Continue to hold the utility agrees the writing to relinquish its interests. HIST: 1959 c 500 art 1973 c 123 art 2 s 45; 1967 c 231 1973 s 70; 5 s 7; 1973 c 568 s 19; c 166 s 7; s 2; 1971 1997 c 231 art 1976 c 25 s 67; 16 s 5; 1 Sp2001 c 4 art 1985 c 6 s 22 1I5 0 k( lam MEMORANDUM iq d9 DATE: July 7, 1999 TO: Michael J. McCauley, City Manager FROM: Diane Spector, Director of Public Works SUBJECT: Staff Report RE: Brooklyn Boulevard Street and Enhancements Projects.. °..t.,n r //(y�� J � �- �/ 4 � 5'.. " �,� N` ( f Id <: .'fi to 9 "_..� (j am :°11' I ;a s* t C.4. t i 64 A r~ , 71z "1 // This memo provides an update on the status of the Brooklyn Boulevard Street and Enhancement Projects. Street Consulting engineers OSM Inc have submitted plans to Mn/DOT State Aid for initial review. This review process should take about one to two months. When that initial review is complete, OSM will modify the plans to reflect State Aid's comments, and the final version of the plans will be submitted to the City for review and approval by the City Council. It is likely this will be August or September. At the same time, Hennepin County will begin drafting the Construction Agreement which will detail cost sharing, construction requirements, and maintenance responsibilities. The final version of this agreement would be presented to the Council in early Fall, although basic provisions will be available at the time the Council considers the final plans. Minor adjustments have been made to the plans since the Council last saw them, for technical reasons, and in a few cases to minimize right of way takings. Hennepin County has sent out initial right of way acquisition letters. Appraisals are under way because this is a project with federal funding, temporary construction and slope easements will be required from most if not all of the properties along the street. Enhancements Considerable discussions have taken place between staff, consulting engineers BRW and Cain Ouse, Mn/DOT State Aid, and NSP regarding the proposed street lighting. In addition, considerable discussion has taken place on how to administer the various parts of the enhancements project, now that it has technically been rolled into the roadway project for sunsetting purposes. We have come to an agreement with State Aid that the enhancements portion of the project will be completed in three packages, or phases. The first package or phase consists of all the work between Noble /71st and the north City limits. This includes replacement of the sidewalk, We thanlz the Cit which supplied this material through the Friends of the Librar Program. ................ landscaping, and installation of street lights as well as the city entry would also include the entry monument at the south city lim s, d he 1 dp ng sca ing o in t vicinity of TH 100. Finally, this package would include the supply of the street work in the roadway segment (but not the installation.) This work would be completed in 2000. for the . The second package or phase would be the enhancements associated with the roadway includes the colored concrete edgers to the trail, the colored concrete upgrades radiuses, etc. It also includes the installation dway project. purchased e a a p a t of package 1. This work would be included in the contra t he third for the roadway work. T as a package would be the installation of landscaping following the roadway k of would occur in 2001 or 2002. Y project. This work The reason for adding the street light supply to package 1 is that the Met that IS TEA projects that meet certain requirements are that has announced requirements include: a cost estimate in which due to cost increases or design c ang g he local agency's share is now more than 20 percent of the total; completion of necessary right acquisition by August 1, 1999; and final approval of plans by December 31, 1999. We can meet g hanges the local these requirements with package 1 and be eligible to increase our Y g °f way enhancements, perhaps by as much as $500,000. However, while e the ra for the first and third requirements, there is no way that all right of way can Y project meets the 1999. y an be secured by August 1, Three easements need to be acquired for package 1: the expansion of one five to eight feet, and easements for the two entry monuments. All the rening work can remaining be completed on existing easements. These new easements have been identified owners contacted. It is expected that these easements will be acquired by August and property Y l. Costs and Funding Sources Roadway and enhancements costs are still being fine tuned, but we have a very The roadway costs are well within the range of what we have identified Y as fundi.ng god sou urc in the . CIP for the last several years. Until appraisals are complete, right of way not be known for certain, but appear to be within the range of what we have been expecting. under way with the car dealerships on the east side south of 69th to put together a redevelop o are project which would be in the best interests of all parties. ment The estimated cost of the enhancement project has risen substantially since the init application. The CIP has carried a $1 million project ($500,000 ISTEA, $500,000 Ci ISTEA s )for past few years; the latest estimate is $1.5 million. The ornamental street lighting cost are for the substantially grater than originally estimated, and quantities have also increased. Hennepin County does not typically provide street lights on county roads (except at traffic does insist that if the city chooses to install street lights, that they be in accordance signals with ), but lighting standards. This requires about 50 percent more lights than we had originally ant certaa t g napated. We will submit all the necessary documentation to Mn/DO We OT approves, t all it a T to obtain additional cost to the ppears we ng our will be eligible for about an additional $500,000 funding. If reducing have to e $ some thad programmed all along. e improvements. g If a lesser amount is approved, PP , then we will An improvement part of the enhancements package is the undergrounding of the overhead electrical utilities. The cost estimate for this is about $800,0 the City of Oakdale established the right of cities to require 00 A recent court case involving der without requiring the city itself to pay q power lines to be g from undergro underground construction, p y directly for the additional costs resulting from the ratepayers. We recommend electric utility does have the right to seek recovery o tion that the City Council consider directing staff o ex alo e t p and determine what, if any, ordinance amendments would be of this. this necessary to take add re vantage A table summarizing costs and funding sources is attached. SUMMARY OF ESTIMATED COSTS FOR BROOKLYN BOULEVARD IMPROVE Project Cost Item Estim.Tota1 City Cost Share City ISTEA County Mn/DOT Source Share Share Share 1 • Engineering $12 g & Prof Sery $230,000 $44,390 Enhancements $150,000 $22,500 LSA $185,610 $70,000 7,500 $0 Right of Wa $70,000 LSA $p $10,000 $10,000 LSA 3. Basic Roadwa $0 $0 y Constructio $5,346,200 $492,200 $1,600,000 (mcl 10% contingency) a. Brooklyn Boulevard & ra 000 $2,589,200 $664,800 b. Brooklyn $211,100 $211,100 $5135,100 $281,100 LSA/MSA $1,600, $2,589,200 Water $664,800 Sanitary $203,500 Water Util $0 $0 $0 Storm drainage $7,200 San Util $400 SDU 4. ROW Acquisition $2,000,000 $1,000,000 LSA /TIF 5. Beautification $1,000,000 $0 $2,300,000 $1,300,000 $500,000 $0 $Q Underground Power Enhancements $800,000 $800,000 LSA $1,500 000 50 $500,000 LSA $500,000 $0 $0 GRAND TOTAL $0 $0 less ISTEA/STP Ends $9,s76,200 $2° 100,000 TOTAL COST, NET ISTEA $7,776,200 $2,836,590 $2,100,000 $3,774,810 $664,800 7/8/99 K ennedy 470 Pillsbury Center 200 South Sixth Street Minneapolis MN 55402 ■• • Grave (612 337 -9300 telephone (612) 33 7 -9310 fax http : / / �' K ' wk ennedy- graven. C H g R T E R E • CHARLES L. LEFEVERE Direct Dial Attorney 7` June 18, 1999 email: clefevere@ltenned Y graven.co Mr. Mike McCauley City Manager City of Brooklyn Center 6301 Shingle Creek Parkway Brooklyn Center MN 55430 RE: Underground Construction of Utilities Dear Mike: - You Yo have asked for info el have e as and other ut lift of n light City's te a authority to require u der Oakdale c (a coauco py on y of of which is attached). Jim Stro cislon in the which established the mmen of my City of o f O al e le a se t y office represented the City of Oakdale e in which es the he gh of the City to require power lines to be rebuilt that case requiructioh. City itself to pay directly for the additional costs resultin under round A memorandum from Jim on the subject is also attached. g from underground The City has several options if it wishes to increase the number of cases in which other utilities, are constructed other when City underground. For exam le power lines, or reconstruction of power Iines the City could require underground such p t City could require relocation as road reconstruction, required the relocation or makes substantial o makes Sub lines atim ov r den and replacements would and id having to when the utility c to a reconstruction an would take advantage of the l funds to relocate newly dedicated underground, P ject); or the City could require the shad lines already b presumably on some reasonable scheduuland all metableead pines to be ' To make an informed decision about how to proceed number of items. It may be proceed, the City will need information about a The bery of items. Bete y helpful to meet with NSP representatives to discuss these i T lines they determine, for example, 1) where overhead lines exist in the City y are; 2) how much it would cost to issues. onderground construction costs place such lines underground; and what kind udergro Center; might be reflected in costs to c 3 ) how the and 4) what power lines are scheduled for reconstruction r e cons either utility projects or City tuners in ty projects, relocation due to CLL-164693 BR291 -4 Mr. Mike McCauley June 18, 1999 Page 2 of 2 If you have any further questions, please give me a call. Very truly Yours, Charles L. LeFevere CLL:lh Enclosures cc: Ms. Diane Spector (with enclosures) CLL-164693 BR291 -4 jAM ` M STROMM N Direct Diai (12) 337 -9233 email: men ettluia v M EMORANDUM TO: Charlie LeFevere FROM: Jim Strommen DATE: June 18, 1999 RE: Rights of the City to Require Utility Facility Undergrounding You have asked for information on the current law undergroundi ate' governing the rights of municipalities to telecommunications qujre U g of facilities owned or operated b company. Rig by an electric utility or a recently clarified in NSP v. Cit of Oakdale, N.W 2d 534 pertain to (Minn. centl principles can be applied to telecommunication city-electric 34 M nnn Ct. A Ct . A The App. 1999) relationships were s companies, including cable television. Following are the essential holdings of that case and statutory law. RIGHT TO RE DIRE UNDERGROUNDING 1. Electric Utilities. The Citv of Oakdale case defzni ' right to require the aides. The tively established that a Cit h g of electric distribution Y as the Minn. Stat. § 216B.36 eiither(by fr or throe voltage transmission) facilities under ordinances. This means that the city may enact and enforce distribution facilities or relocated distribution facilities to be gh Police power ordinance at issue also provided for under roan an ordinance requiring new utility t permit for itself sought a e g dmg e unde electric distributiobutio ndac. The Oakdale i i repair n facilities when the a li y request could trigger the pai or reconstruction of its own existing overhead lines. paired recons. city s right to require undergrounding of the lines to be re Such or Not addressed in Ci of Oakdale but logically within the city's rights under the opinion, is an ordinance calling for a gradual elimination of overhead distribution necessarily nvolve a plan utlon facilities. n hs s rely inv ol cos t P n carved out on a district by district basis or some other This a . Be , ultimately to City customers (see below) such an undertakin Because involve public hearings and input from the effected utilities. g should JMS- ]53048 KG400 -1 Richfield City Council June 18, 1999 Page 2 2. Telecommunications /Cable Carriers. between a city and an electric utility. The City of Oakdale governing case involved t a dispute has an equal right require telecommunication rights pinion, however, and existing The city's g t under ro in the right- of-way strongly real s right t re g anding of a telecommunications carrier's suggest verhe d ft a city reaffirmed quire undergroundin arrier's overhead facility. lrmed in this area by the state legislature in on its police . Stat. n power, Right-of-Way which has been overhead facilities the Ste 237.163• in undergroundin Further, the City recently enacted Right-of-way Act of with 237.163 subd. 4. r Y may be required to treat g requirements. .1l3tiubd. with h Minn. Stat. § 237.163 subd. 6(c); UTILITY RECOVERY OF COST FOR UNDE 1. Electric Utilities. RGROUNDING practice between citi The City of Oakdale case confirmed law electric utility for and electric utilities at least since 1975. that had not been the the added cost to the utility That is, cities need not reimburse � °f Placing facilities undergrounding. Existing provide that the city and approved by the Public Utilities Commission tariffs drafted by the electric utilities proceeds with y must pay for the incremental cost for u ndergroundin ,o the request. Cities have uniformly fission all This tariff provision h the request was s rmly complied with g ften before the utility power that in Eck down in City of O this language, unto O in so exercising akdale. A fundamental element of Oakdale. that request. in Accordingly, s exe g the g agency is not required to reimburse the police that r q es. has the City need not reimburse NSP despite the cost incurred the it. through a utility � the right, however, the seek recovery object of g petition to the Public Utilities Y of the extra cost from trod by it. T nlities Commission. the ratepay 2. Telecommunications /Cable C telec ommunications c Carriers. Except for cable companies, telec ommunications or c ation with the are not franchised and have historically not had h und the sues municipal authorities seeking to the same t teleco holding of Citv of Oakdale case g under stiff mmunications c ase would apply g y to c T he Principles carriers. PP generally to cost recovery by the MEANS OF COST RECOVERY 1. Electric Utilities. NSP the undergroundin and other electric utilities have cost recover the undo must be from built ratepayers, their not tariffs. The City of Oakdale case es recovery mechanisms for reek recovery taxpayers. The process by tablished that such ry of incremental underground costs would be via the t established by the Which an electric utility would under established y petition to the PUC.. If, e.g., NSP incurred a 0 in r a incremental design g ending in a particular city, it would $200,000 incremental cost for carrying charge, from the ratepayers through a surcharge. ° recover the $ plus a possible recover from the from ratepayers P ble recover r that the the would favor such a recovery NSP has indicated its intent to residing within the city requesting the undergroundin . Further, it is comments on this issue. very mechanism, based on g past decisions and The options available to the city that is subject to this request would be to of the cost should available spread out all over the entire r argue rate base. Many gee that some or all y costs of regulation specific IMS- 162322 RC160 -1 Richfield City Council June 18, 1999 Page 3 to a particular locality are spread throughout the entire rate process, however, and not on a surcharge by surcharge bass base. This is done in the ratemii established, after the rate base has g been that in gu Further, it is fair argument tany from the u r gu ment th n y given location it is not simply benefit less than one hundred g but rather the general population. P y the ci residents who percent of the undergrounding cost e charged back again ratepayers has merit. The city subject to such a surcharge re , an argument that opportunity to participate in the PUC proceeding evaluating request would be given the arguments it deems appropriate . ng such request and make whatever 2. Telecommunications/Cable C riers. I am not as familiar with the may be unde b Carriers. may b rounding is more y te of a standard in tele communications amers to recover cost of undergroundin g that are typically recovered through °mmunications than it is for electric utilities, Be Wiese a telec ommunications c g the general rate base. I am not aware of any telco carrier or cable company has sought recovery for undergroun ' requesting municipality or ratepayers in the city. Y instance where ding from the CONCLUSION U ndergrounding is a police power right over utilities transmission) facilities and probably telecommunications facilities. electric distribution (as opposed to acilities. t PUC to City chooses to participate in the added cost. The cost is not a pay for additional costs. Ratepayers may payer expense, unless the the hqu PUC to the for additional Recovery may be limited to ratepayers residing required by g, depending on the rate design adopted by the PUC. g in the cities JMS- 162322 RC160 -1 1 A / Ord, ),44-‘c-e- j ME MORANDU M DATE: September 8, 1999 9' — e — TO: Michael J. McCauley, City Manager FROM: Diane Spector, 0 -�''' P , Director of Public Works "� SUBJECT: Resolution Directin Boulevard g NSP to Underground Overhead Utilities on Brooklyn , 65th Avenue to North City Limits, and CR 10, TH 100 Boulevard Yn to Brooklyn meetings, y Counc C v At preious city At pre ious it of overhead electric an item of discussion was an alternative utilities 10 in mind. Typically , with specific projects on BrooklyneBou funding for the ypically on an improvement project where electric utilities ornamental street lights are installed Boulevard and CR is paid ornamental s e (betterment" in utility speak), the cost of these improvements d, or City up front. The cost of placing overhead utility lines Boulevard by P vements Bo lev State Aid ted b t $700,000- 800,000. al underground on Brooklyn ou ad is estimated underground is much less, about $10-15,000. e' The cost of placing overhead OadOOry been reserved in ice wires on CR 10 been affirmed It has recently beefied rm b distribution recently f firm o by the Minnesota Court of A power distribution on fact the publicgr aln welfare, or repayment from the City if the City Appeals that NSP can be required glared to place ave beon assigned to a specific safety. On the Brooklyn Boulevard d a police Brooklyn Boulevard P underground corridor, to minimize the number of and reduce potential traffic impacts from repair and maintenance utilities overhead utilities. On CR 10, Poles on reduces potential . On impacts 10, u from eunadrn overhead nas and signals also e g the anc e of the overhead services to street u ghts and sig P and maintenance utilities. Instead of recovering its cost through direct payment from recover this cost through a surcharge on the customers m the City, recover this s c cost through surcharge is 1 NSP can ora petition the PUC to $ per month for up to 36 m nths, or if City. that is insu cost, an amount which is sufficient to recover the cost In general, for residential insufficient to recover the In previous discussions, the Council expressed within 36 months. p th surcha as they P ssed concern about residents who may Brooklyn y have trouble now paying their bill. a have trouble Y Center 372 households (out of a r B ooklyn in paying 372 electric bills, such of as app approximately 11,175 residential o accounts) sought m information is available about those customers, for example, ug Payment plans or financial assistance: No further financial assistance, how many were seniors, etc. mple how many were payment plans vs. If the Council wishes to reseed corridor, utilities is P with the "surcharge" option, a resolution designating and directing NSP to underground its overhead con gra the utility provided for Council We than) tJe t�is City whieli su material t)zro pplied I�riencls of the .Library u P gam. Member its adoption: introduced the following resolution and moved RESOLUTION NO. RESOLUTION DIRECTING NSP TO BROOKLYNBOULEV CITY LIMITS, AND UNDERGROUND OVERHEAD UTILITIES ON ARD, 65TH AVENUE TO NORTH CI BOULEVARD VARD CR 10, TH 100 TO WHEREAS, in 2000 and 2001 , roadway Boulevard from 65th provide for Boulevard from h safety; Avenue to the North Y and enhancement rth Cit L' improvements on City mots, widening Brooklyn Boulevard to overhead facilities; and WHEREAS, the roadway improvement project requires q s that NSP relocate its boulevard and sidewalk/trail WHEREAS, to improve public safety ground utility area of the east side of the roadway s corridor in the a has been established; and WHEREAS, on CR 10 between TH 100 and Brookl yn Boulevard there exists a number of overhead lines servicing street lights and signals; and afficc o CR 10 a �pment of the Brookdale Shopping Center is expected to increase the volume of t underground. WHEREAS; to improve public safety these overhead services should be relocated Brooklyn Center, Minnesottat aO BE IT RESOLVED by the City Council of the City of 1. NSP is hereby requested and directed to relocate its verhead on Brooklyn Boulevard from 65th Avenue to the North City Limits faoithe new w below ground utility corridor. units to the 2. NSP is hereby requested and directed to relocate ove 10 from TH 100 to Brooklyn Boulevard undergroundrhead facilities on CR 3 • The City does not agree to P a NSP recover its costs Y the project costs up front, but desires that through a rate surcharge. We tlian�x theCity which supp�ie t mater through the Friend of the Lib rary program • Resolution No. Date Mayor ATTEST: City Clerk The motion for the adoption of the foregoing resolution was duly seconded by member and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted. F Joruary Z 44 ' c29,57. f nnu I Oone/ � ce PeSen tee Hea o GAS AND ELECTRIC FRANCHISE FEES; 'or how we learn to stop worrying / Zoo el ying and love the "fee." James M. Strommen A. INTRODUCTION Exercising a city's right to require franchise fees from gas and electric utilities has become topic of increased interest in light of recent city budget cuts. Gas and electric franchise fees present a means to raise considerable revenue. They have been sparingly employed until recently in part because of resident and business resistance to such fees as a new "tax." Franchise fees are fully authorized by law. MINN. STAT. §§ 216B.36; 300.03. This update discusses the risks and benefits of implementing franchise fees on electric or gas utilities. It also touches on new alternative me of where certain costs are no longer automatically s of public "glut -of «�ay improvement paid for with taxpayers dollars. Improvements can be funded with city ratepayer dollars. B. LEGAL AUTHORITY TO REQUIRE FRANCHISE FEES Minnesota law allows cities to "require" franchise agreements from the gas and electric service providers in the city. MINN. STAT. §§ 216B.36; 300.03. Even a municipal utility may be required to have the consent of the city to serve customers and use the public right of wa y ("ROW"). MINN. STAt. §§ 216B.36 and 412.321; 412.361; Village of Blaine v Independent School Dist. No. 12, 121 N.W.2d 183 (Minn. 1963). The franchise ordinance is the required or customary vehicle for the franchise fee or payment in lieu of taxes that a city may require from the gas or electric utility, be it investor -owned (e.g., Xcel Energy), a cooperative (e.g., Dakota Electric) or a municipal utility (e.g., North St. Paul). 1• Is It a Fee Or a Tax? A franchise fee is described as "compensation" to the city for its consent to issue a franchise to the utility and its use of city ROW to serve utility customers. MINN. STAT. § 300.03. The "compensation" need not be tied to a city cost (police power limitation). It is an expressly delegated right to "raise revenues" over and above any associated city cost. MINN. STAT. § 216B.36. Many courts have regarded a utility fee as a tax, but its common law contract roots support the conclusion that it is a negotiated fee. The issue is open in Minnesota, though the more recent Section 216B.36 uses language more associated with tax than the traditional contract fee. For those who are curious about the unusual title, there is a loose parallel between the well - established city council hesitancy to impose franchise fees and the subject of the 1962 dark comedy, "Dr. Strangelove or How I Learned to Stop Worrying and Love the Bomb." In the end, the government leaders embraced that which they had opposed or feared. Fanchise fees frequently meet with public resistance and result in o pposition from those with the power to use them, city councils. Such fees are a viable option to financially -strap ed cities, however, and have been increasingly "embraced" recently. p 2 This discussion does not include cable franchise fees. Cable franchise fees are similar to gas and fees, yet raise different public policy issues and are governed by MINN. STAT. § 238.08. g electric III -1 Kennedy & Graven 200 South Sixth Street, Suite 470 Minneapolis, MN 55402 Unless the franchise establishes only one, the city should reserve its right to charge any one of these three, or a combination of them. a) Percentage of gross revenue ( "PGR "). This is the traditional design but not favored by utilities and not ideal for cities either. PGR franchise fee design exists in many gas and electric franchises adopted in the late 1970s and 1980s. It allows the city to require that the utility collect a percentage of its gross revenues derived from operations in the city. The fee increases with increased revenues and is simple to apply. When rates spike upward, however (such as the winter of 2000 gas prices), consumers are subject higher energy prices and higher franchise fees. The city may then be perceived as receiving a "windfall." Gross revenues may also drop dramatically in a deregulated environment where large customers purchase energy from a source other than the franchised utilitti, causng a drop in t;e franchise utility's revenues. This is more likely to happen in the gas service industry, which is deregulated for large users (non - residential). The deregulation risk of dropping revenues can be avoided with the fee modification rights retained in the franchise. PGR is also disfavored by large users because total fees can be significant. b) Meter or customer account fee. This fee attaches a fixed monthly amount to meter(s) installed at customer premises. Utilities now favor the meter or customer account fee over PGR or the usage -based fees. Residential customers typically have one meter. Businesses may have multiple meters. The advantage to this fee is the predictable, fixed amount to the customer and predictable revenue to the city. It also captures growth in the community because new customers require new meters. The disadvantage of a meter fee is its lack of a conservation component and its regressive nature. The meter fee of a lower income minimal -use residential customer is the same as that of a high- consuming residential energy user. The business meter fees are also more arbitrary because they are fixed and unrelated to usage (though this is also regarded as fair by some residents and businesses). The meter fee, however, is easy to understand and not subject to decrease if the franchised utility stops supplying the gas. c) Usage fee. This uses a pre - determined rate for a fee based on the usage of the customer. It is similar to a percentage of gross revenue, but the btu (gas) or kwh (electric) amount is fixed rather than variable with the changing rates found in gas and electric charges. (See, e.g., App. B). It varies with the amount of usage only because the rate per btu or kwh is fixed (unlike our gas and electric rates). The less energy the customer uses, the lower the fee. Use is not dependent on the franchised utility providing the energy to the customer (a disadvantage of the PGR). This is the least commonly used The limits of franchise designs have never been tested in Minnesota. Another option could be an up -front fee as consideration for the right. This is not used in Minnesota and would be challenged. III - Kennedy & Graven 200 South Sixth Street, Suite 470 Minneapolis, MN 55402 permits lose a "general rate" revenue that is not charged back to its customers. Cities that make insignificant cost recovery from permit fees lose only a small amount in exchange for the agreement to collect franchise fees. 5. Sunset Provision. Utilities have been recently asking for a sunset provision. They do not want to see the franchise become "embedded." Many city councils are including provisions in the ordinance requiring review of the fee periodically. Experience suggests that the most controversial time for a franchise fee is at the beginning. Utilities realize this also. 6. Fee Caps. Some utilities are a negotiating harder to limit in the franchise the amount of revenue a city is allowed to raise during the term of the franchise. There is no legal limit to the fee amount, other than a "reasonable" fee. Some utilities are seeking a cap of three (3) percent, when, in the past m4nt contract (franchise) right to impose up to five (5) percent. have had �� E. PUBLIC INFORMATION PROCESS Like the franchise itself, the franchise fee takes the form of an ordinance. This introduces the public process necessary under charter and statutory cities. The following procedures have been used recently by cities intending to adopt or just consider (test the waters) a fee. 1. Formal public hearing(s). Nothing in the franchise or franchise fee law requires public discussion beyond that required by law for the passage of an ordinance. If hearing requirements are minimal for ordinances, additional written information will be necessary to avoid the perception of "slipping through" a controversial ordinance. 2. Informal public informational forums. The other approach would be to schedule multiple public forums to discuss the franchise fee. This can have the negative effect of inviting opposition to the fee. The benefit is to ensure full public disclosure. 3. Community memos or newsletters. This is effective in providing information tha is controlled by the city and eliminating claims of failure to disclose. that 4. City website. A city website has the similar benefit, but may not be as accessible to residents. 5. Newspaper articles. This method places the information provided in the hands of the newspaper writer. Through these means, the city will explain its intentions and the effect of a fee on residential and business customers. The city will often describe the uses for the funds, though these are general revenue funds that may be used for any purpose. III -5 . Kennedy & Graven 200 South Sixth Street, Suite 470 Minneapolis, MN 55402 F. ALTERNATIVE INFRASTRUCTURE FUNDING SOURCE ( OTHER THAN CITY BUDGETS). 1. Police Power Requirement of "Special" Utility Facilities" in Public Improvement Projects. In 1999, the Minnesota Court of Appeals held in Northern States Power v. Cit of Oakdale, 588 N.W.2d 534 (Minn. Ct. App. 1999) that cities may re wire an electric utility to place its distribution Iines in the right -of -way underground (rather than the "standard" overhead). This right is based in city police power to manage the right -of -way and promote the health, safety and welfare of its citizens. In addition. such a requirement does not result in a taxpayer expense to pa: the exta: cost of underzrounciin2 chooses, need not pay for the extra cost and the tility would 1 seek recovery ' 1' fro ratepayers. m its The most direct and established example of this new law and practice is with Xcel Energy electric facilities. A PUC- approved tariff process sets forth a surcharge formula for Xcel to recover the extra cost of underground facilities from ratepayers in the city g the "special" facility. 3 requiring This city police power under the City of Oakdale decision should be applicable to all utilities. The result is the potential to save city budgets substantial costs. Navigating this right creates new issues for cities. In the past, cities have typically paid the additional costs for "special facilities" when requested by the utility. The following are some issues to consider when a city directs a utility to underground its lines or provide some other special facility. 1. Do not enter into any of the utility's standard agreements without review by the city attorney. 2 . Have the utility define what it is seeking reimbursement for. 3. Have the utility establish its right to recover payment for any special facility. Most relocations are standard costs that are not billed to the city and are already part of general rates. I.e.. should the "special" facility be a "standard" facility and be installed at no cost to city ratepayers? 4. Verify the utility costs sought to be recovered. They must be only incremental costs over and above what would be a standard cost. G. CONCLUSION Gas and electric franchise fees remain an untapped source of substantial revenue for cities in Minnesota. Imposing them for the first time can bring opposition. However, the well - publicized budget deficits anticipated by cities and a fair notice and hearing process may reduce the objections to a fee. III -7 Kennedy & Graven 200 South Sixth Street, Suite 470 Minneapolis, MN 55402 City of . - Natural Gas Revenue Calculations Data: Latest 12 months of usage (thru Sept. 2002) Customers Revenue Weather Revenue Volume (Not Weather) Adjustment (meter) (In Therms) (Adjusted) Weather (a) 1 � Fador Adjusted (b) (c) ( (e) Residential 7617 7,171,030 $4,312,611 Com - A 191 120,067 12.14% $4,836,181 Com - A-6 1 $87,263 12.14% $97,857 Com/Ind -C 401 ,487 $246,794 12.14% $276,755 129 1,473,948 $838,367 967,438 12.14% $940,145 SVDF - A 29 967 TOTAL 8121 10,133,970 81,013 12.14% $427,268 $5,868,048 12.14% $6,578,186 Revenue Annual Weather Franchise fee Annual fee Monthly fee Adjusted (Factor = 3 %) Per customer Per customer (a) (t) (g) (h) = (0) Residential $4,836,161 $145,085 $19 $1. (t) = (h/ 59 $1. Com - A $97,857 COm/1nd -8 $276,755 $Z936 $8,303 $54 54 $1.28 Com $ /Ind -C $940,145 $28,204 18.22 2 SVDF - A $427,268 $12,818 $442 $18.83 46 2 TOTAL $6,578,186 $197,3 $$6.03 $2.03 Potential Meter fee calculations Customers Monthly fee Total monthly Annual (meter) Per customer Fee to City Fee to City (h) (I) Residential 7817 $1.50 Com - A 191 $11,426 $137,106 Com/ A $1.50 $287 $3,438 155 $5.00 $775 Com/Ind -C 129 $20.00 59,960 SVDF - A 29 0 530,960 TOTAL $40.00 $1,160 $13,920 8121 $16,227 $194,724 APPENDIX A • EXHIBIT A • • XCEL ENERGY ELECTRIC FRANCHISE • • . FEE SCHEDULE Class Fee Per kWh • Residential $0.0023 Sm C & I — Non -Dem $0.0023 Sm C & I — Demand $0.0016 Large C & I $0.0009 Public Street Ltg • $0.0023 Muni Pumping —N/D $0.0023 • MuniPuthping — Dem $0.0016 • • • • • • • • APPENDIX B • League of Minnesota Cities Cities promoting ezce / /ence Moctel Gas and Electrjc Fran Ordinance chise Cooperative between Suburban Rate Authority and the League of Minnesota Cities Revised 10/1/00 • BACKGROUND The following model franchise ordinances are the result of a cooperative effort between James Strommen of the Kennedy & Graven Law Firm, attorney for the Suburban Rate Authority ( "SRA "), and Thomas Grundhoefer, General Counsel of the League of Minnesota Cities. The ordinances modify previous models published in March 1996. The SRA is a joint powers organization consisting of 36 Twin City suburban municipalities. The SRA has actively intervened in electric, gas and telecommunications matters before the Minnesota Public Utilities Commission (MPUC). Prior to the Commission's creation in 1974, the SRA acted as a regulatory body governing gas and electric utilities on behalf of member municipalities. The purpose of the two franchise ordinances is to provide uniform provisions that incorporate the broad municipal statutory franchise rights that exist under Minnesota Statutes Chapters 216B and 300. The franchises also incorporate many of the MPUC's right -of -way management rules adopted in April 1999. (To take full advantage of the rules and to fully implement the right -of- way management authority granted to cities by Minnesota Statute Sections 237.161 - .163, a city should consider adopting a comprehensive right -of -way management ordinance by exercising its option under Section 237.163 subd. 2(b).) In Minnesota, franchises are negotiated and take the form of a contract set forth in an ordinance. Yet cities have the right to require franchises and to include certain terms, e, g., franchise fees. There is no case law guidance on what specific franchise terms may be required by the city. Accordingly, a franchise can incorporate all reasonable terms within the limits of a city's statutory franchise and police power authority. These rights are extensive and can be found in Minnesota Statutes, Sections 216B.36, 300.03, 222.37, 237.162 and 236.163 and in case law. NOTES The city's legal right to include a particular franchise provision and the practical realities facing a city when the utility refuses to agree, are two quite different matters however. For example, though a city may have the right to insist on a franchise fee, potentially as high as 8% of the utility's gross revenues, it is unlikely that the utility would readily agree to such a percentage even though the utility passes the fee through to its customers within the city. Utilities are very concerned in today's increasingly deregulated environment that franchise fees will harm their competitive position relative to perceived competitors. This fee pass - through also becomes an issue to the residential and business customers who truly pay it. Thus, cities must be careful to gauge the level of local acceptance or resistance to the exercise of their full franchise rights under the law. As a result of the realities of the franchise negotiation and community acceptance process, a "take it or leave it" franchise ordinance that includes the imposition of franchise fees and strict right -of -way management provisions may be difficult to enact without compromise. These models are based on actual ordinances that have been reviewed by gas and electric companies. Because these models are more city - oriented than many currently existing franchises, and because of increasing competition between and among energy providers, utilities have objected to many of the provisions contained in these models. As a result, there is likely to be vigorous negotiation on at least the following provisions: 1) franchise fees; in form, amount and class of service /large customer distinctions; 2) fee obligation on competitors; 3) rights regarding city- requested location and relocation of facilities; and 4) the scope of the utility's indemnity of the city. It should be noted that many of the revisions to the March, 1996 Model were made in order to incorporate MPUC's right -of -way rules on such matters as street restoration, relocation for utilities, construction performance bonds, mapping information, street vacation, removal of abandoned facilities, and indemnification. The MPUC right -of -way rules were largely a product of negotiations between local government units and members of the utility including a number of gas and electric providers. Each city must evaluate the importance of the provisions contained in these models as such provisions may affect the city's particular needs. One franchise cannot fit all because of the many variations of city - utility relationships, including factors such as: urban, suburban or rural settings; developing v. redeveloping cities; single v. multiple utilities serving the city; residential- commercial customer mix; larger employer v. diversified economic base; the presence of a municipal utility or contemplated utility; and revenue needs of the city. The authors should be contact if there are any questions about a clause or section. You can call Tom Grundhoefer at (651) 281 -1266 or James Strommen at (612) 337 -9233. Model Ordinance LMC /SRA Gas Franchise Ordinance ORDINANCE NO. CITY OF COUNTY, MINNESOTA AN ORDINANCE GRANTING A CORPORATION, ITS SUCCESSORS AND ASSIGNS, A NONEXCLUSIVE FRANCHISE TO CONSTRUCT, OPERATE, REPAIR AND MAINTAIN FACILITIES AND EQUIPMENT FOR THE TRANSPORTATION, DISTRIBUTION, MANUFACTURE AND SALE OF GAS ENERGY FOR PUBLIC AND PRIVATE USE AND TO USE THE PUBLIC GROUND OF THE CITY OF MINNESOTA, FOR SUCH PURPOSE; AND, PRESCRIBING CERTAIN TERMS AND CONDITIONS THEREOF. THE CITY COUNCIL OF THE CITY OF MINNESOTA, ORDAINS: COUNTY, SECTION 1. DEFINITIONS. For purposes of this Ordinance, the following capitalized terms listed in alphabetical order shall have the following meanings: City. The City of County of , State of Minnesota. City Utility System. Facilities used for providing public utility service owned or operated by City or agency thereof, including sewer, storm sewer, water service, street lighting and traffic signals, but excluding facilities for providing heating, lighting, or other forms of energy. Commission. The Minnesota Public Utilities Commission, or any successor agency or agencies, including an agency of the federal government, which preempts all or part of the authority to regulate gas retail rates now vested in the Minnesota Public Utilities Commission. Company. its successors and assigns including all successors or assigns that own or operate any part or parts of the Gas Facilities subject to this franchise. Gas Facilities. Gas transmission and distribution pipes, lines, ducts, fixtures, and all necessary equipment and appurtenances owned or operated by the Company for the purpose of providing gas energy for public or private use. Notice. A writing served by any party or parties on any other party or parties. Notice to Notice to the City Company shall be mailed to Any shall be mailed to party may change its respective address for the purpose of this Ordinance by written notice to the other parties. Public Way. Any street, alley or other public right -of -way within the City. Public Ground. Land owned or otherwise controlled by the City for park, open space or similar public purpose, which is held for use in common by the public. SECTION 2. ADOPTION OF FRANCHISE. 2.1 Grant of Franchise. City hereby grants Company, for a period of — years from the date this Ordinance is passed and approved by the City, the right to import, manufacture, the City as its distribute and sell gas for public and private use within �e� or these Com may boundaries now exist or as they may be extende d construct, operate, repair and maintain Gas Facilities in, on, over, under and across the Public Ways and Public Grounds, subject to the provisions of this Ordinance. Company may do all reasonable things necessary or customary to accomplish these purposes, subject however, to such reasonable regulations as may be imposed by the City pursuant to ordinance or permit requirements and to the further provisions of this franchise agreement. 2.2 Effective Date; Written Acceptance. This franchise shall be in force and effect from and after its passage of this Ordinance and publication as required by law and its acceptance by Company. If Company does not file a written acceptance with the City within 60 days after the date the City Council adopts this Ordinance, or otherwise informs the City, at any time, that the Company does not accept this franchise, the City Council by resolution may revoke this franchise or seek its enforcement in a court of competent jurisdiction. 2.3. Service and Gas Rates. The service be provided and the srates to be charged by Company for gas service in City are subject to the 2.4. Publication Expense. Company shall pay the expense of publication of this Ordinance. asserts that the other party is in default in the 2.5. Dispute Resolution. If either party shall noti the other party of the performance of any obligation hereunder, the complaining party fY default and the desired remedy. The notification shall be written. Representatives of the parties must promptly meet and attempt in good faith to negotiate a resolution of the dispute. If the dispute is not resolved within 30 days of the written notice, the parties may jointly select a mediator to facilitate further discussion. The parties will equally as d ays after first If a mediator is not used or if the parties are un able to resolve the dispute within 30 meeting with the selected mediator, either party interpret and enforce this franchise or for such other lief as may e ma Y s commence e action in District Court to Y Permitted by Iaw or equity. 2.6. Continuation of Franchise. If the Ci the terms of a new franchise by ty and the Company this franchise expires, this franchise will Y will time remain in effect until a new franchise is agreed upon, or until 90 days after the City or Notice to the other party of its intention to allow the franchise to ex the Company franchise continue for more than one year after expiration of expire However, in no event shall Pant serves written Section 2.1. the --- 'Yeas' term set forth in SECTION 3. LOCATION, OTHER REGULATIONS. 3.1. Location of Facilities. Gas Facilities shall be located so as not to interfere with the safe and so as not interfere J ere w normal operation onn convenience of ordinary constructed, o, and Public Wys sly travel alo and over Pbl Way on Public Ground as determined by Y City Utility System. Gas Facilities may be located repair, maintenance, location and relocation of Gas n Fac 'tieonstiuction, reconstruction, operation, regulations of the City consistent with authority shall be subject to other reasonable Public Grounds under state law, to the extent not granted the w a s manage a Public Ways and pecific term of this franchise. 3.2. Street OneninQs. Company shall not open or disturb the surface of any Public Way Y Purpose without first having obtained a permit from the City, if required by a separate ordinance, for which the City may impose a reas imposed on Company shall not be more burdensome onable fee. Permit conditions similar facilities or work. Com pany may, than those imposed on other utilities for or Public Ground however, open and disturb the surface of any Public Way without a permit if (i) an emergency exists requiring the immediate repair Facilities and (ii) Company P y gives telephone, email or similar notice to the Ci before Gas commencement of the emergency repair, if reasonably possible. Within two commencing the repair, Com an tY before P y shall apply permits pay any req for any required a bysine days after uired fees. 3.3. Reston_ After unde the Company R tor ati the Public d rtaking any work requiring the openi of any Public Wa applicable City Way in accordance with Minnesota Rules, a condition Cy ordin formerly ordinances consistent Company law P 781 o d to and pany shall restore the Public Ground to as months thereafter, 'and shall maintain the surface in good condition for six All work shall be completed as promptly as weather permits, and if not promptly perform and complete the work, remove all dirt, material, and put the Public Ground in f Company the said condition, the City hall have, equipment to Company to cure and the passage of a reasonable period of time following exceed five days, the right ,after demand to ght to make the restoration of the Public Ground at the expense of Company. t not to Company shall pay to the City shall in addition toy the cost of such work done for or performed by is r e e y 3.3. a The Company y other remedy available to the City for noncompliaance this P y shall also post a construction performance bond consistent with the provisions of Minnesota Rules parts 7 8 19.3000 and 7819.0100, subpart p 6. an must take reasonable measures to 3.4. Avoid Dama a t o Gas Facilities. The Company The Company must take prevent p the Gas Facilities from causing damage to persons or property• e that could be inflicted on the reasonable measures to protect the Gas Facilities from damage protective measures when or the elements. The Company must take p of such wor Facilities er orms work property, the City performs work near the Gas Facilities, if g iven reasonable notice by the City prior to its commencement. an reasonable 3.5. Notice of Im rove ments to Streets The City will give Company improvements to Public Ways where the City has reason to believe that the improvement. The notice will contain: (i) the nature written Notice of a plans for imp improvements are nature be Gas Facilities may affect or be affected by p Ways upon which the improvements, (ii) the Public WaY p and character of the imp made, (iii) the time when the City will start the work, and (v) if ( ) the extent of the improvements, (iv) a is involved, the order in which the work is to proceed. The notice wil more given on -Public p W Y of time, considering seasonal working conditions, in be given to Company a sufficient length ermit Company to make any advance of the actual commencement of the work to ms necessary• alterations or repairs to its Gas Facilities the Company complete and in tion. The Company must promptly provide comp 3.6 Ma g Informaof its Gas Facilities in accordance with the requirements of accurate mapping information for any Minnesota Rules Parts 7819.4000 and 7819.4100. SECTION 4. RELOCATIONS. l with Minnesota Rules, 4.1. Relocation in Publi Ways. The Company shall comply art 7819.310 and applicable C ity ordinances consistent with law. p at Company's expense 4,2, Relocation in Pu blic Grounds. City may require Company on a finding by City that the Gas ainnent to the existing or proposed public F to acilities or remove its Gas Facilities ome a substant imps up cep proposed p b li c useiot the Public become d. will applicable city ordinances use of the Public Ground. Relocation shall comply with app law. of any 4.3. Proects wit Federal Funding Relocation, removal, or rearrangement City of a Facilities made necessary because of the extension into or through Company Gas project shall be governed by the provisions of Minnesota Statutes Section federally -aided high wa Y p roj 161.46. SECTION 5. INDEMNIFICATION . Company shall indemnify and hold the City harmless from any 5.1. Indem nity of City and all liability, on account of injury to or damage e to property occasioned by the the Gas p construction, maintenance, repair, inspection, the issuance of p negligence except for losses or claims arising out of or shall not ermits, or the op shall of y er indemnified for Facilities located in the Public Ways and Public Grounds. The City be losses or claims occasioned through its own g g alleging the City's negligence as to the issuance of permits for, of, or i work. Company's plans or 5.2. Defense of Ci . In the event a suit is brought against the City under circumstances where this agreement to indemnify applies, Company at its sole cost and expense shall defend the City in such suit if written notice thereof is promptly given to Company wi Company is not prejudiced by lack of such notice. If Company n a Period wherein pany is required to indemnify and defend, it will thereafter have control of such litigation, but Company may the consent of the City, which consent shall not be unreasonably wi of sed. such litigation ec o not, as to third parties, a waiver of any defense or immure withheld. This section Company, in defending any action on behalf of the City, � otherwise available to the City. The every defense or immunity that the City could assert ins own behalf tl This hr franchise ag se agrr eem anion t assert shall not be interpreted to constitute a waiver by the City of an ent limitations on liability under Minnesota Statutes, Chapter 66, y of its defenses of irrun unity or SECTION 6. VACATION OF PUBLIC WAYS. The City shall give Company at least two weeks prior written notice a Public Way. The City and the Company once of a proposed vacation applicable ordinances consistent with law pany shall comply with Minnesota Rules, 7819.3200 and SECTION 7. CHANGE IN FORM OF GOVERNMENT. Any change in the form of government of the City shall not affect the v of Ordinance. Any governmental unit succeeding the City shall, without the consent of Comp Cy omp p this succeed to all of the rights and obligations of the City provided in this Ordinance. this SECTION 8. FRANCHISE FEE. 8.1 • Form. During the term of the franchise hereby being imposed or that the City has a right to impose, the Ci ty may charge the Company a e franchise fee. The fee may be (i) a percentage y granted, and addition to permit operations within the City, or (ii) a flat fee per customer basedcon ed by the Company customers within the City or on (s other similar basi s, or (iii) a fee based on units P Y for its customers to any class it retail on some on customers within the corporate metered service of energy to retail the franchise fee, the percentage of revenue rate, or or thel based flat rate b e Ci may differ for each customer class or combine the m �'• The method of ) metered service assessing the fee. The City shall seek to use a formula that provides a stab amount of fees, without placing the Company O — (iii) above in claims that the City required fee formula is discrimina P y at a competitive disadvantage. le and predictable If the Company competitive disadvantage, the Company tO ry °r otherwise places the Company at a shall fee amount to the City and reimburse the City's reasonable hat will produce a fees and costs in reviewing bag annd d implementing the formula. The City franchise obligation to adopt the Company-proposed will attempt to accommodate the Company P ut is P proposed franchise fee formula and each review wi not delay the implementation of the City- impoo sed fee. P 8.2. Se arate Ordinance. The franchise fee shall be imposed by separate ordinance duly adopted by at le 30) the City Council, which ordinance shall not be adopted �a the Co thirty days after written notice enclosing such proposed ordinance has been 1 become effective ten (10) days after written notice enclosing such adopted ordinance The fee shad has been served upon the Company by certified mail. imposing the fee shall not be effective 8.3. Con ditio n of Fee. The separate ordinance �P g unless it lawfully imposes a fee of the same or substantially similar as to ouch on t h e the Company by an on the sale of gas energy within the City y Y other gas energy supplier, provided Ci has the authority or contractual right to require a franchise fee or similar fee supplier, the ty through a previously agreed upon franchise. payable not less than quarterly during 8,4, Collection of Fee. The franchise fee ent be to be made. The franchise fee formula complete billing months of the period for which pay the change shall meet the same notice requir may be changed from time to time, however, Such fee shall not exceed any and the fee may not be changed more often than annually. that the Company may g Y payment to the City. Such fee is subject le all charge to its customers prior to pay eto sub q se uent reductions to account for uncollectibles and cu t me C � ar aso b times Compc any. The Company agrees to make available determination lrminationsofcthe franchise fee payments. all records necessary to audit the Company Continuation of Franchise Fee. If this franchise expires and the City and the 8.5. se, the franchise fee, if any being imposed Company are unable to agree upon terms of a ne l fx' emain� effect until a new franchise is agreed by the City at the time this franchise expires, �w upon. SECTION 9. ABANDONED FACILITIES. 1 with City ordinances, Minnesota Statutes, Section 216D.01 The Company shall comply be amended from time to time. The et . se and Minnesota Rules Part 7819.3300, as they may with the Company shall maintain records describing the exact location of all abandon co p retired Facilities within the City, produce such records at the City' s request ents of Section 216D.04 with respect to all Facilities, including abandoned and location regturem retired Facilities. SECTION 10. PROVISION OF ORDIN ANCE. 10.1. Seve section, pro ili Every vision, or part of this Ordinance is declared separate from every other section, provision, or p �; an d if any section, provision, or part be held invalid, it shall not affect any other section, provision, or p art Where a provision of any other City ordinance conflicts with the provisions of this Ordinance, the provisions of this Ordinance shall prevail. 10.2. Limitation on between the Cit A licabili . This Ordinance constitutes a franchise agreement Y and Company as the onl way inure to the benefit of any y parties and no provision of this franchise shall in any way person as a third y third person (including the public at large) so as to constit Y h or oth give party beneficiary of the agreemen o r of ute any any cause of action in an any on or more of the terms SECTION 11. Y Person not a party hereto. AMENDMENT PROCEDURE. this Either party to franchise amended. This a be agreement may amended at any Y at any time propose that the a amende the provisions Ordinance the y time by the City agreement be upon the filing provisions of Company's amendment, which amendatory o finan a subsequent ordinance Pany's written consent thereto with ordinance shall become after effective date of the amendatory ordinance. City Clerk within 60 days after the Passed and approved: Mayor of the City of , Minnesota Attest: City Clerk, Minnesota Model Ordinance LMC /SRA Electric Franchise Ordinance City of • County, Minnesota ELECTRIC ORDINANCE ORDINANCE NO. CITY OF AN COUNTY, MINNESOTA ORDINANCE GRANTING TO NONEXCLUSIVE FRANCHISE ITS SUCCESSORS A CO RPORATION, TO CONSTRUCT AND ASSIGNS, A DISTRIBUTION THE CITY pF � OPERATE, REPAIR AND POLES, LINES, SYSTEM AND TRANSMISSI L INESNNESOTA, AN ELECTRIC POLES, I ENERGY TO T AND APPURTENANCES, FOR THE FURNISHING EL PUBLIC WAYS HE CITY, ITS INHABITANTS THE FURNISHING USE AND PUBLIC GROUNDS OF THE CITY FOR SUCH'P D TO USE THE CITY COUNCIL OF THE CITY OF PURPOSES. MINNESOTA, ORDAINS: COUNTY, SECTION 1. DEFINITIONS. For purposes of this Ordinance, the following capitalized to shall have the following meanings: rms listed in alphabetical order City. The City of County of ,State of Minnesota. City Utility System. Facilities used for providin by City agency thereof, including sewer, storms g public utili service o signals, but excluding facilities for providing heating, er, water service, street li htin or operated g, fighting, or other forms of energyg and traffic Commission. The Minnesota public Utilities Commission, agencies, including n. a in of the federal government, a to encies, including retail agency rates now vested in e is or any successor of authority or g rnment, which preempts all or part io the authority n the Minnesota public Utilities Commission. Comp assigns including all successors or assignees that own or onnesota co Facilities subject to this franchise, rporation, its successors and operate any part or parts of the Electric Elect Electric transmission and distribution towers, poles, lines, guys, anchors, cond fixtures, and necessary e for appurtenances owned or operated by Company for the d u . Facilities. purpose of providing electric energy public or private use. ed b any party or parties on any other party or parties. Notice to Notice. A writing sery Y Company shall be mailed to written notice to Notice to the City shall be mailed to purpose of this Ordinance by Any p a y may change its respective address for the pub the other parties. Any street, alley or other public right -of -way within the City. Public Way Y Public for park, open space or 'c Ground. Land owned or otherwise controlled by the City similar public purpose, which is held for use in common by the public. OPTION SECTION 2. ADOPTION OF FRANCHISE. for a period of ___Years from hereby grants Company, sh electric 2.1. Grant of Franch City the right to transmit and fug passed and approved by the City, an d through the and furnish s the City the da this Ordinance id p ower for public and private use within o s, of the City energy o ur light, heat and p be extended in the future. For these pure maintain Electric Facilities in, on, over, under and across the m as ay its boundaries now exist or as they may an may do all m ay construca, operate, Grounds, provisions of Y subject to the p f this Ordinance. Comp purposes, subject however, to such Public Ways and Public Grounds, subj t accomplish these pub owever, t such reasonable things ions necessary or be imposed the City pursuant to ordinance or permit reasonable regulations as may be imposed by and to the further provisions of this franchise agreement. itte Acce Lance. This franchise shall be and force acceptance 2.2. Effective a o f this � 'r publication as required by days after the b om and after the passage does this Ordinance and p evoke this does no file a written acceptance with the City olut within may a date Company. Council CompanY the City Council by date the City Council adopts this Ordinance, jurisdiction. franchise or seek its enforcement in a comp charged by Company for electric service provided and the r to be c The area 2 3 Service, Rates and Area. The service to provisions of are subject to the jurisdiction m aaniy may provide electric service is subject to the p within the City in which Comp Y Minnesota Statutes, Section 216B. 37 - .40• expense of publication of this 2 Publication Expense. CompanY shall pay the Ordinance. is default in the party asserts that the other party of the laming party shall notify the other party 2.5. Dispute R hereunder, e the complaining ify th of the parties performance e any obligation ed . The no default and the desired remedy. The notification shall be written. Representatives must promptly meet and attempt in good faith to negotiate a resolution is not resolved within Hurt n of the dispute. If the dispute mediator resolved ed wit facilitate y (30) days of the date of written Notice, the parties may further discussion. The mediator. If a mediator i s not used or if the parties will e Y jointly expenses of this select a q ly share the fees e hens after first meeting Parties are unable to resolve the dispute wi Court to interpret mein and with the elected mediator, either thin Di days Ply may commence an action in District equity. franchise or for such other relief as may be permitted by law or 2.6. Continuation of Franchise If the City new franchise by the time ty and the Company until a new franchise ew is agreed upon, or until franchise days after pant are a a i n in a the terms of a n effect this franchise expires, this franchise will remain in effect Notice to the other party of its intention to allow the franchise the City or the Company N is franchise other for more than one year Dann no serves written expire. However, in no event shall Section 2.1. Y after expiration of the year teen en set forth in SECTION 3. LOCATION, OTHER REGULATIONS. • 3.1. Location of Facilities. Electric Facilities maintained so as not to int with the safety shall be located, constr and Public Ways and so as not to disrupt or interfere with convenience of ordinary System. Ways and so Facilities s n ma azY travel along and over System. construction, reconstruction, a operation, on Public normal operation s dee of any City Utility Electric 's construction, shall be subject to Grounds as determined b p anon, re air by the City. Comp repair, location and o relocation with of authority granted the City other reasonable regulations of the City ty to manage its Public Wa and Public Grounds state l aw, t who extent not inconsistent with a specific term of this franchise agreemen under state law, to the t. 3.2. Street O mina or Public Ground for any s. Company shall not open or disturb the surface of any Public Y purpose without first having obtained a permit from the City, if re uWay by a separate ordinance for which the City by imposed r Company sho not which ty ma y impose a reasonable fee. q red b similar facilities or work. Company more burdensome than Permit condition Pant' may, however, open and disturb the s of other utilities for Public Ground without a e or Pub permit if (i) an emergency exists requiring the any Public repair Way of Electric Facilities and (u ) Company gives telephone notice to the City before, ireasonably as ly commencement of the emergency repair. Within two business days r c ommencing the if reasonably repair, Company shall apply for any required permits and pay an Y c P any required fees. 3.3. Restoration. After undertaking the Company shall restore the public Way in accord y or wiring the opening of an applicable City ordinances consistent with law. Minnesota Rules Y Public Way, condition as formerly existed Company shall restore Public Ground to as 1100 and and shall () months maintain the surface in good condition for six 6 good a thereafter. All work sh be completed as promptly as wet promptly perform and complete the work, remove all dirt, �bbish ermits, and if Com the Pub Ground in the said condition, the City � equipment and ma erial shall put the passage of a reasonable period of time foil �s have, after demand to Com cure right to make the restoration of the Public Ground at the exec Company. Y and' but not to exceed s and expense of 'the Company shall pay the cost of such work done for or performed by the City. This remedy shall be in to the City for noncompliance with this Section 3.3. other remedy available to the City his Section o f the addition to any performance bond consistent with provisions Company shall also post a construction p Minnesota Rules parts 7819.3000 and 7819.0100, subpart 6. an shall make space available on its poles or towers 3fir Shared Use of Poles. Company ele hone util or with ' e or other City facilities whenever such use will not interfere fire, water utility, police for City Company, by another electric utility, by a p shall by the use of such poles or towers by communication an In addition, the City an cable television company or other form ° because of such use by C1tY• y added cost incurred by Comp Y pay for any The e to persons or property. The Company 3.5. Avoid Da Company must take reasonable Gas a t i Electric F ling damage p at p e ty. The inflicted on measures r as o na bl the Gas Facilities from causing must take protective could be i measures easonable measures to protect the Gas Facilities Comp damage ul that must take or the elements. of sueh the Facilities by persons, property, given reasonable notice by the City when the City performs work near the Gas Facilities, if g work prior to its commencement. reasonable written Notice of plans for improvements to Public Ways Notice of Im rove to Streets The City must give Company 3.6. s where the City has reason to believe that he or be affected by the improvement. The notice must conk i) are Electric Facilities may affect s upon which the improvements improvements, (ii) the Public WaY p will start the merle and to be ( nature and character extent the imp rovements, (iv) the time when the City if made, than the exte l i o imp conditions, e t e • Wa is involved, the order in which the work is to proceed. The notice must st more than one Public Way of time, considering seasonal working additions, in must be given to Company a sufficient length permit Company to make any advance of the actual commencement of the work tp deems necessary• alterations or repairs to its Electric Facilities the Company provide mapping 3.7. Ma in In The Company must promptly under ground Electric Facilities in accordance with Minnesota Rules parts information for any of it �' 7819.4000 and 7819.4100. SECTION 4. FACILITIES RELOCATION. comply with Minnesota Rules, s. The Company shall p Y 4.1. Relocation in Publ an s consistent with law. part 7819.310 and applicable City or require Company at Company's expense to may q by City that the 4.2. Relocation in Public Grounds. City on a finding Y �' airrpent a th existing or proposed E relocate it or remove its Electric Fa l i become a substtantial imp up can ordinances ies from Public Ground Electric Facilities of have become or d. l with apple public use of the Public Ground. Such relocation shall comply consistent with law. 4.3. Pro'ects with Federal F undin Rel ' Electric Facilities made necess ation, removal, or ream ary because of the extension into or through Ci an er& J y_ a any governed by the provisions of Minnesota Statutes Section 161.46 highway project shall be SECTION 5. TREE TRIMMING. Unless otherwise provided in any under sepae ordnance, Com pany may permit or other reasonable regulation required b Grounds ar Ci ay trim all trees and s q by the City construction, operation, to the extent Company find hrubs in the Public s necessary to avoid interference wi Y s and Public provided that C th shall hold the City harmless from any liability arising therefro sunder, SECTION 6. INDEMNIFICATION, m. 6.1. Indemni of Ci and all liability, • Company shall indemnify and hold the City harmless from any ty, on account of injury to persons or damage maintenance, repair, ins ection image to property Electric ion, m ss located in the Public Ways issuance of the occasioned by th lade Permits, or the operation of the indemnified for losses or claims occasioned through its ownlnegligence The Ci Cngen City shall not be arising out of or alleging the City's except for losses or claims Company's plans or work. t y negligence as to the issuance of permits for, or ins echo P n of, 6.2. Defense of Ci In the event a suit is brought against where this agreement to indemnify applies, Com th City expense shall all defend the City in such suit if Company at its sole cost and expense shall defend the written notice thereof is promptly given to Company thin a period wherein Company is not prejudiced by lack of such notice. If Company it will thereafter have control of such litigation, but Company the consent of the City, mpa is may n o t s t l indemnify and n o t third t y which consent shall not be ompany may not e such ec on is parties, a waiver of any unreasonably withheld. This section is not, Company, hi defandin y defense or immunity otherwise available to the City g any action on behalf of the City shall be entitled to assert i an' and every defense or immunity that the City shall not defense e interpreted or i m to constitute a waiver b Sert in its own behalf. agreement action shall not be liability y the City defenses franchise immunity or ty under Minnesota Statutes, Chapter 466. of any of its defenses of immunity or SECTION 7. VACATION OF PUBLIC WAYS. The City shall give Company a Public Way. Th pany at least two weeks prior written notice of a proposed vacation applicable ordinances con stent with the lawpany shall comply with Minnesota Rules, 7819.3 200 and SECTION 8. ABANDONED FACILITIES. 1 with City ordinances, Minnesota Statutes, Section 216D.01 The Company shall comply be amended from time to time. The ells: and Minnesota Rules Part 7819.3300, as they may Company shall maintain re and comply with the location cords describing the exact location of all tabandoned and retire Facilities within produce such records at the City's request q requirements City, p ' ents of Section 216D.04 with respect to all Facilities, including abandoned and loion requir retired Facilities. SECTION 9. CHANGE IN FORM OF GOVERNMENT Any change in the form of g overnment of the City shall not affect the validity of this the City shall, without the consent of Company, Ordinance. Any g ovemmental unit succeeding rights and obligations of the City provided in this Ordinance. succeed to o • all of he righ SECTION 10. FgA NCHISE FEE. ermit the term of the franchise hereby granted, and in addition to p the City may charge the Company a 10.1. Form. During impose, the Company for its has a right to fees being imposed The fee that the i ) ay ercentage of gro s revenues received et red Company to rota franchise fee. The th e may be ( (ii) a flat fee per customer based on m operations within the City, or (') m a fee based on units of energy The formule for customers within the City reor tail on some r s w he corporate limits of the City. d demand delivered to any class of retail customers within incorporate both commodity an a franchise fee based on units of energy delivered may imposing the franchise fee, the percentage of revenue rate, or the flat rate based The method e imp g differ for each customer class or combine thhamethods des stab e based on metered service ing the fee. The City shall seek to use a formula provides m above in assessing an at a competitive disadvantage. If in (i) - (iii) without placing the Company or otherwise places the predictable amount that fees, claims that the City- required fee formula is discriminatory C o Company advantage, the Company shall provide a formula that will produce Company at a competitive disadvantage 's reasonable fees and costs an but is under is substantially similar fee amount to the City d reimburse the Comp Y view will no a su will attempt in reviewing the formula. t the Company-proposed franchise fee formula and such re franchise obligation to adopt osed fee. not delay the implementation of the City -imp imposed by separate ordinance 10.2. Se crate Ordinance. The franchise shall not adopted until at least thirty ( adopted by the City Council, which ordinance on the duly adop such proposed ordinance has been served up such Company. days after written notice enclosing 10 days after written notice enclosing a do p ted The fee shall become effective ten ( an by certified mail. ordinance has been served upon the Company Y separate ordinance imp osing the fee shall not be effective 10.3. Condition unless Fee. The sop provided amount that, unless it lawfully imposes a fee of the same or substantially p similar amour on against the Company within the City by any other electric energy pp on the sale of electric energy as to such supplier, the City has the authority to require a franchise fee. k durin 10.4. Collection of Fee. The franchise fee shall be during complete oil g may g months of the period for which payment payable not less than quarterly y be changed from time to time; however, the n to be made. The franchise requirements and the fee anchise fee exceed any may not be changed more often than g all meet the same notice Y arriount that the Company may legally charge to its customerslp Such fee shall not City. Such fee is subject to subsequent reductions to ac refunds incurred by the Com count for uncol ectibles and customer th City at reasonable times Company. T Company agrees to make available for inspection b er franchise fee payments. to audit the Co Y the PanY's determination of the 10.5. Continuation of Franchise Fee. Company are unable to agree upo ter of a new franchise, franchise expires and se expires, the City and the the franchise fee, if any being imposed by the City at the time this franchi upon. P ,will remain in effect until a new franchise is agreed SECTION 11. PROVISIONS OF ORDINANCE. 11.1 • Severabili . separate from every Every section, provision, or ry other section, provision, or P of this Ordinance is declared be held invalid, it shall not affect any part; and if an the held is y other section any section, vid ho e part shall City unable to enforce its franchise he fee provisions for to amend the franchise agreement to impose fee p a franchise part; th C will b e that d to the any pursuant u the City will be allowed any other City ordinance conflicts with hthe fee psons o f isaOrd provisions of this Ordinance shall prevail. Where a this Ordinance, the 11.2. Limitation on between the Cit A licabili . This Ordinance constitutes a franchise Y and Compa a the onl achise agreement way benefit of any Y parties and no Provision of this franchise shall in an w a y inure to the b person as a erred y third person (including the public at large) any such person rs otherwise give rise to of the agreement or of g e so as to constitute the t erms any g any one or more of the t any cause of action in any person not a party hereto. SECTION 12. A1V1ENDIVIENT PROCEDURE, Either party to this franchise agreement ma y at any time propose that the agreement be amended. This Ordinance ordinance This O may be amended at any time by the City passing a subsequent declaring the provisions of the become effective upon the filing of Company mendment, which City council adoption of the Prdy's Witten consent there o with t e City Clerk shall amendatory ordinance. k after Passed and approved: Mayor of the City of Minnesota Attest: City Clerk, Minnesota September 21, 2006 — For discussion purposes only (Current MOU text) a) Under grounding of impacted power lines — impacted overhead power lines will be relocated above ground, unless the city has an ordinance which requires that they be placed underground or if the city requests the utility to place them underground in which case the city's rate payers may be charged a surcharge to cover the increased cost. g (Issues and facts) Under grounding of impacted power lines — • There are overhead power lines along 60 Street (south frontage road) that will need to be relocated due to the project. • The city wants the impacted lines to be place underground. • The city has an ordinance that requires that new and relocated utilities be placed underground. • Minnesota statutes require that utilities on state R/W must be relocated at the utilities expense. • Xcel is governed by Minnesota Public Utility Commission rules — those rules would provide for Xcel to relocate the lines "kind for kind" or in this case overhead for overhead. • The city can require that the line be placed underground in accordance with the city ordinance but the city's ratepayers will be charged a surcharge to cover the increased cost to place the lines underground. �s City of Oak Park Heights 14168 Oak Park Blvd. N • Box 2007 • Oak Park Heights, MN 55082 • Phone (651) 439 -4439 • Fax (651) 439 -0574 September 6, 2006 John Gelderman Director of Development CSM Corporation 500 Washington Avenue South, Suite 3000 Minneapolis, MN 55415 and Robert Fiebig III, E.I. Site Development Mgr Lowe's Companies Midwest Regional Real Estate Office 1952 McDowell Road, Suite 101 Naperville, Illinois 60563 RE: Correction Notice — Overhead Powerlines Dear Mr. Gelderman and Mr. Fiebig, Although I have recently sent you an email regarding this issue, this letter restates the need for corrections at your development in Oak Park Heights. Specifically: 1. The overhead electric service lines from the frontage road to the Xcel Substation have not yet been buried. This was to be completed by your contractors in the initial site clearances for the installation of Nova Scotia. These newly installed lines are also in violation of City Ordinance 1008 and must be buried. 2. There has been relocation southwardly of overhead utility lines as part of the 60 Street (frontage road) reconstruction. These lines must be buried as must all new service or utility mains. The newly installed lines are in violation of City Ordinance 1008. The City will be issuing a Stop Work Notice and you then have 30 days to correct these conditions. Please let me know if you have any questions. Sincerely, Eric Johnson City Administrator Cc: Jim Butler, Building Official Mark Vierling, City Attorney Julie Hultman Dennis Postler, BRAA City Council Members Art Nielson, Xcel Energy 7 ire cc; ' ". . lourn 13 o 4 s - 00 3 . 5 ' S • 1 iii 1 • ac Z c e v e ,N ) O 111/ "6 . 111141 I . U � U , c.) ° ° tt ' ' :''' o� a �'� o M . a 0 raw, I a) `� , Z >, C 0 gi E-1 ■ ..f. • C as z co I .1 4% _ o Q Il I , , Pm! <I 101: , . A ?: W4 0 4 rg / fill c %., A 0 1 ! 4 c o 1 iii U 3 as .rt cis C &64 - cEi 2 CD CD o c a 75 al Z 1 . 4 o—• a. . • rii ( o a °� 0 cs ° oa• c,.., p :4_4, I co co Z 0 3 2 co a a m Cn Z U) W�` ° ° -Y 41a a C CD a - O °, - - CC < Z Q3 3 Y * y - 1008 AN ORDINANCE REGULATING THE PLACEMENT OF PUBLIC UTILITIES, ELECTRONIC, PHONE LINES, CABLE SERVICES AND RELATED UTILITIES UNDERGROUND. THE CITY COUNCIL FOR THE CITY OF OAK PARK HEIGHTS DOES HEREBY ORDAIN: 1008. 010. Purpose. The purpose of this section is to promote the health. safety and general welfare of the public and is intended to foster (i) safe travel over the right -of -way, (ii) non - travel related safety around homes and buildings where overhead feeds are connected and (iii) orderly development in the city. Location and relocation, installation and reinstallation of Facilities in the right -of -way must be made in accordance with this section. 1008.020. Definitions. The terms used in this section have the meanings given them. Commission. "Commission" means the Minnesota Public Utilities Commission. Facility. "Facility" means tangible asset in the public right -of -way required to provide utility service. The term does not include Facilities to the extent the location and relocation of such Facilities are preempted by Minnesota Statutes, Section 161.45, governing utility facility placement in state trunk highways. Facility does not mean electric transmission lines, as distinguished from electric distribution lines. Public right -of -way. "Public right -of -way" has the meaning given it in Minnesota Statutes, section 237.162, subdivision 3. Right -of -way user. "Right -of -way user" means (1) a telecommunications right -of -way user as defined by Minnesota Statutes, Section 237.162, subdivision 4; or (2) a person owning or controlling a facility, in the right -of -way, that is used or intended to be used for providing utility service, and who has a right under law, franchise or ordinance to use the public right -of -way. Utility service. "Utility service" means and includes: (1) service provided by a public utility as defined in Minnesota Statutes, Section 216B.02, subdivisions 4 and 6; (2) services of a telecommunications right -of -way user, including the transporting of voice or data information; (3) services provided by a cable communications system as defined in Minnesota Statutes, Section 238.02, subdivision 3; (4) natural gas or electric energy or telecommunications services provided by a local government unit; (5) services provided by a cooperative electric association organized under Minnesota Statutes, chapter 308A; and (6) water, sewer, steam, cooling or heating services. and make findings. Under grounding and notice, adopted a plan containing not take place until city council Code. Y 8has items (1) - (6) of section 10 08.090 of then 1008.070. Public Hearin s. A hearing shall be o hearing any Pen to the public and may Y person interested must be y be continued from the hearing hearings interested to given an opportunity m time . time. bj t o city, or public the issue of whether Facilities to be heard. within a certain The subject of certain, located not district, shall all be the right-of-way 1 008. necessary located gat -of- -way in the 1008.040 and in are of o the ce y for the underground b undergrounding required by a date 1008.080 City Code, q under sections Public Hearin Issues. The issues to be addressed at the public hearings include but are not limited to: (1) costs the e The costs and d benefits to the all The c s i public of re gat -of- -way_ quiring the undergrounding of Facilities ( The feasibility and of cost under as determined by the cost grounding all Facilities b city and the affected utilities. by a date certain ( The tariff re intended recover ements, procedure Y of incre and rate design for recovery or utilities from rate mental costs for Payers within the city. un dergroundin g (4) Alternative financing options interest to fi P available if the city i nProptiate to quire undergrounding by deems i in the a date participate in the cost otherwise borne b certain and public deems it whether it is in the hearing or herein s Y the ratepayers. Upon completion of the underground public interest e g ' the city council must either citywide interest establish a plan under make written findings be on within districts designated Which all F gnated by the city. 1 008.090 Facilities will be Under roundin Plan. lithe council finds that it is in the public int erest to underground all or s Ift e ties in the tjes in tpublic right of way, the council m undergrounding. The plan for undergrounding ust es a substantially all elem ents: plan f such must include at least the following (1) Timetable for the unde rgrounding. (2) Designation of districts for the plan is citywide un dergroundin g unless, undergrounding (3) Exceptions to establis g such exceptions. the undergrounding requirement and procedure for • (4) Procedures for the undergrounding process, including but not limited to coordination with city projects and provisions to ensure compliance with nondiscrimination requirements under the law. (5) A financing plan for funding of the incremental costs if the city determines that it will finance some of the undergrounding costs, and a determination and verification of the claimed additional costs to underground incurred by the utility. (6) Penalties or other remedies for failure to comply with the undergrounding. 1 4 BEFORE THE MINNESOTA PUBLIC UTILITIES COMMISSION Chair Gregory Scott Commissioner Edward A. Garvey Commissioner Marshall Johnson Commissioner LeRoy Koppendrayer Commissioner Phyllis A. Reha In the Matter of Xcel's Petition for Approval of ISSUE DATE: September 21, 2001 a City Requested Facilities Surcharge Rider DOCKET NO. E-002/M-99 ORDER APPROVING XCEL'S CITY REQUESTED FACILITIES SURCHARGE RIDER EQU R NG COMPLIANCE REQU F LING PROCEDURAL HISTORY On June 7, 1999, Northern States Power Company - Electric Utility, now d/b /a as Xcel Energy, petition for approval of a change to its Electric Rate Book to (NSP or Xcel or the Company) filed a establish a City Requested Facilities Surcharge Rider (CRF �aRidesr) ant on of its Electric Rate Book. This pr po was to create the mechanism Rules and Rego s special electric able ttire.The This proposal was to create a mechanism by which mandate Company would be able to recover Book. p p , ele City of Oakdale a city, its costs from made in response a Minnesota Co urt e of Appeals decision in �.�- filing was m (Oakdale Decision).' On July 2, 1999, the Cities of Sunfish Lake and South St. Paul requested that this filing be referred to the Office of Administrative Hearings for a contested case proc g artment of 5, 1999. Th e De p Comments were filed by the City of Sunfish Lake on August City 9 South St. Paul, and the Power Commerce (DOC), the Suburban Rate Authority (SRA) 1999. On August 24, 1999 the Energy Lines Task Force (PLTF) filed comments on August Cents Coalition ECC ) n filed comments. On August 26, 1999, reply comments were filed by the DOC, SRA, League of Minnesota Cities (LMC) and Xcel. On February 8, 2000, Xcel filed a partial offer of settlement. The settlement well LMC and e DOCRA and Xcel and was a resolution of several concerns raised by SRA as we although only the SRA and Xcel were involved in settlement negotiations. There were two issues that remained in dispute. 588 N.W 2a 534 (Mi . Ct. A. 1999). 1 On March 6, 2000, the PLTF and the DOC filed comments on the remaining disputed PLTF also filed comments in opposition to the settlement offer and recommended order a contested case hearing. p issues. The ded that the On April 13, 2000, the Commission met to consider this matter. At the request of the M Council and the Cities of St. Paul and Minneapolis, the Commission delayed any decisi on to allow further discussion and established a time line for further comments. Y Metropolitan On May 12 and 26, 2000, Xcel submitted status reports. In the May26, 2000 Xcel not to seek reimbursement of light rail transit costs through its proposed CRFS filing an sm reed On June 7, 2000, the PLTF, the Metropolitan Council, the SRA and the Cities of St.Pa and Minneapolis submitted comments. On June 14, 2000, Xcel, the SRA and the DOC subm comments. rtted reply Between October 17 and 23, 2000, comments were filed by PLTF, City of Sunfish County of Chisago. Lake and the On November 14, 2000 Xcel filed an Amended Petition. This filing proposed changes to Xcel petition and proposed Electric Rate Book revisions originally filed on June 7, 1999 as well partial offer of settlement submitted by Xcel and the SRA on February g c the lly, Xcel proposed that the CRFS Rider be used only to recover the costs of distribution ti as being underground where requested or ordered b a city � � 2000. Specifically, elects not to prepay the costs. Y ty, acting under its police powers, facilities city On December 26, 2000, the PLTF filed initial comments on the amended petition. On Jan the DOC, the SRA, the Metropolitan Council, and the Cities of St. Paul. Minneapolis, and filed initial comments on the amended petition. Lindstrom January 5 , 2001, P d On February 16, 2001, the County of Chisago, the Metropolitan Council, the SRA and the City of Minneapolis filed reply comments. ,the DOC, Xcel On June 4, 2001, Xcel filed a notice of agreement with the DOC indicatin th DOC recommendations, with a few minor exceptions. g at it had accepted the On June 22, 2001, Xcel filed a Notice of Changes to its June 4, 2001 Notice of Agreement. changes addressed certain housekeeping issues and as a result of discussions with the of Transportation (DOT) Xcel removed the term " g ent. The tariff. governing body' from certain sections ohment On June 25, 2001, the SRA, Metropolitan Council, DOC, PLTF, DOT and the Cities and Minneapolis filed comments on the Notice of Agreement. of St. Paul The matter came before the Commission on August 2, 2001. 2 FINDINGS AND CONCLUSIONS I. Background Xcel's tariff governs the process by which the Company will recover the costs of special facilities requested by customers and municipalities when those costs exceed the costs of standard facilities. Prior to the Oakdale Decision, when a customer requested or a city mandated a special installation, Xcel's tariff required a financial "contribution in aid of construction" to offset the incremental cost of the conversion. If a private individual or a city requested a special installation, Xcel required that the individual or the city requesting the special installation prepay the incremental costs of such an installation. In 1999, however, the Minnesota Court of Appeals, in the Oakdale Decison (addressing Oakdale's ordinance, pursuant to its police powers, that distribution facilities be undergrounded): 1) upheld the ordinance passed by the City of Oakdale, 2) held that the existing tariff was unenforceable to the extent it required compensation for the City's valid exercise of its police power and 3) said that Xcel may request that the Commission allocate the costs of undergrounding to the appropriate group of ratepayers. It was in response to the Oakdale Decision that the Company made its initial filing on June 7, 1999. The Company has since revised the filing several times in response to parties' comments. This Order will address the proposal in its final form, which was filed on November 14, 2000 and revised for the last time on June 22, 2001. The main issue arising from Xcel's proposal is who should pay for Xcel's incremental costs when a city orders Xcel to underground distribution facilities: residents of the city that so ordered or all of Xcel's ratepayers, potentially, through rate adjustments. II. Summary of Xcel's Request Xcel's current proposal would establish an automatic recovery mechanism for the incremental costs associated with a city's request, under its police powers, for undergrounding of distribution facilities when the city declined to pay the incremental costs. In this situation, the proposed tariff would allow Xcel to automatically surcharge its customers in the city making the request. The current proposal is much narrower in its applicability than the initial petition. In the current proposal the CRFS Rider would be used only to recover the costs of distribution facilities being undergrounded where requested or ordered by a city where the city elects not to prepay the costs. This is a change from the initial proposal in that the CRFS Rider would only apply to distribution facilities, not transmission facilities, and would apply only to undergrounding distribution facilities when a city was operating under its police power and declined to pay the incremental costs. Xcel's recovery in this specific situation would not require Xcel to come before the Commission for approval but would allow Xcel to automatically surcharge its customers in the city making the request. For other special facilities, and under other circumstances, Xcel would have to get Commission approval in order to recover the incremental costs through an electric rate surcharge. 3 • Xcel's proposal provides that a city w ould receive notice of the incremental costs associated CRFS mechanism. For other projects, the could ele ct t g project and could then elect re a filin P P y orarece recovery notice the With a g with the Commission to recover special facility costs by surcharge through municipality would receive noti to t e municipality. The municipality could then o cost recove Y rcharge from the customers in the ryproposal. oppose or recommend modifications to the Comp The proposal is based on the philosophy that the request, but the customer, group of customers, developer or municipality m install special facilities upon requesting the extra costs should bear those costs to avoid cost shifting to other rate III. Comments of the Parties Payers. A. Suburban Rate Authority and the Cities of Ric The Suburban Rate Authority and the Cities of Richfield Richfield and Oakdale not oppose the adoption of a tariff on the limited issue of surcharges not facilities as Opp s ue Oakdale for underground stated they did affirmatively special facilities. They argued however, that the tariff should require round distribution f other than undnrgre riding distribution a rge on anyprojet require Xcel to lines that the c city accepts sur pursuant a city's police RA/Cities argued that Xcel's tariff should contain an geable. city to object proposed surcharge for the under ci to o bn ct or amount used claimed by ofdi distribution lines Ines as well allow a y Xcel as the incremental cost, to the �specialsf s Well as to the d The appeal process proposed by SRA/Cities states: 2 facilities 3 • Where undergroundin of a City, and payment for excess Facilities as a Special not by Excess and payment will be excess expenditure from the Co pedal Faci is ordered th City through a rate surcharge will be set red from Section made or arrange by b the City, ty, the Facilities Surcharge Company's customers located in the g Rider, subject to the following c F and the City Requested a. rig conditions: The Company shall provide written notice to the City 1 • the estimated total excess expenditures containing the following: undergroundingproject and an estimate of quire resulting e d rc grated City ii. notice to the City g barge; that the City has the notice to file with the Commission ans objection tY (60) d from its proposed of surcharge under Minnesota Statutes, Section 2 16B.17 or o ° posed l The notice shall contain a brief statement of fact tariff or legal authority on which the Com and other applicable P Y rs located in the Ci eery bases its right to a sureharge the rate a e h ', z Modifying Section 5 .3.E.3 of D )(eel's proposed Electri late Book Changes. 4 b. Within the sixty notice the the day period noticed by the Com notice to t he Com pany of its intention to pant, the City a Expenditures, or otherwise enter into nl ortion or none of the estimated agreement ty Comp a n written regarding payment of an with the Company wrung within the six any Expenditures. If the City does not respond in t y ( days, it is deemed to have elected not to a have waived its right Company's right to surchar p yany portion of the Excess Expenditures and will hav Such failure, however, is not a waiver of the City's right Excess to object to the ge ratepayers in the City for the Excess Ex Excess Expenditures surcharged to ratepayers in he City, pend�tures. exercised pursuant enditur s section surcharged to ratepayers t o payer got to io j cti n m y be ty, which objection may be applicable law. c. The City may bring its objection to the p surcharg filing a statement of objection with the Commissi on and sthe by y within sixty (60) days. on and sery ving g e the e Company w for y An objection proceeding shall not halt or delay the project except good cause shown. Notice and i mplementation of the surcharge stayed until the Commissio or a court of competent jurisdictio or judgement. ge shall be nis suesafinalord er d. Nothing in this tariff is intended to establish or limi t the rights of a Compan customer that is a member of the class of customers surcharged o r proposed to be surcharged from pursuing its rights under applicable law. e. Customers in the applicable City will be notified of (i) the i mplementation of a City Requested Facilities Surcharge either through a bill me during the month preceding the month the surcharge is com change in a preexisting message or a bill insert approved by g surcharge. The Notification described in n n d (i (ii) any be y the Department. The Company s (i) and i sd City proposed sixty ( d the psed notice to customers no less than six ) the ropo in which the customers rote p a hall provide the Department and C ity C ays prior the first day of SRA /Cities also recommended that "Standard Company nds to notify customers of the urcharged3 was pn and as a result the definition of y acility" be defined. They argued that the definition Comuy "Special Facility" left too much discretion to the • The SRA/Cities recommended that the title " Underground Facilities Surcharge" accurate name for this recommended r e accurate the cost as either surcharge ch in that city. t it identifies the g t was a more causing facilities as t this o artff could h result that of cost but does ia ted with the not identify the entity They argued that the costs associated and that surcharged , not the city, was tariff n y ult from unde special facility choosing to surcharge customers within aju jurisdiction or facilities ri g tths ty rather than incurring a general expense. jurisdiction order ng the 3 June 25, 2001 3 on V CO m menu SRA of the S /lcel�s proposed 25, 20 tariff. and Cities of Richfield and Oakdale, pages 2 and 5 • B. Metropolitan Council re The Met Council argued that the tariff was confusing an be rejected. Specifically, the Met Council found that t deft no guidance as to what actually M Met constitutes special the d uncertain in its facilities application and should or the proposed uidance tariff gives Xcel the sole aw sp to d nation of special f t Coun offered dale that p al facilities. Further, the Y determine what is a s Met Council argued that ' dinThe Met Council was concerned how the new tariff would special facility. works projects, including c petition was in conflict g with ight rail the Commission si d he project. It argued that the proposed to the Council's general transit or any other projec that Xcel was at to circumvent a public Right through rougRmi scellane s. The miscellaneous tart was ff changes. applicable law through miou taringes. The r Council also Co argued that the amended petition was i power Council Co took the a pos tion that the me Oakdale Court supported in conflict with the Oakdale its l The powers without being required to s time a utility that a city Court t indi its that police pay compensation. It argued that the Court indicated that t was for mere convenience orecor aesthetic reasons from om undergroundin wa if it Council on a these For th reasons, the cil argued, any decision to impose Ftr thre s n the oun cal r gue d, be ba upon a f city requesting than un a surcharge upon the residents of a allowing Xcel to unilaterally impose ctual record made by the Commission, pose a surcharge upon the residents. Further, the Met Council indicated that it had an immediate used to surcharge city residents for under concern that the surcharge would con grounding of electric lines associated with be light rail C. Chisago County Chisago County was concerned that the tariff distribution facilities but could be used to recover costs f proposed foby r Xcel would not only apply argued that while it a or undnrgabonding cote ytari to facilities. Chisago really talking about two tariffs in the tariff lan ua r a costs of distribution about t tariffs in but t appears that Xcel is talking about d a r to b f f f c ies. F g ' One is the CRFS recovery tariff, it is he other is a revised Rider to be used to recover or this reason Chisago general tariff that be f used to to the costs oftr transmission facilities should be deleted from the tariff. ago recommended that references to D. City of Minneapolis The City of Minneapolis stated its agreement with the comme of the joint comme of the Suburban Rate Authori City of m . Paul• ty and the Cities o Metropolitan f R chfie d nd Oakdale, a nd d the th he Minn. Rues Part 7819.0050- 7819.5100. 6 The City summarized its position on this tariff as follows: costs of the power system should not be billed to the transportation P anon system; the authority of cities and other governmental units to manage their _ change or renew methods of transportation on those rights-of-way should not be impaired; customers located in particular cities should not be selectively orders when those orders are consistent with the authority Public Utilities he those orders rules and specifically by ta g for uelity relo units by given Rules lees 781 .310 a d 7819.3200; by y Minnesota Rules 781 9.3100 and any undergrounding tariff that singles out a customer for customer lives in a particular political unit should only be extra upon establishment ra charges because the permitted that there is a benefit to the customer because the y are i s In addition the City argues that the concepts of "non st n that particular political unit defined, that the notice provisions are not adequate an d that a rate which has no connection but which singles out certain power Gusto andaid facilities" are not reasonably to onably benefit singles reasonable and is discriminatory. mers based only upon political boundaries is not E. The City of St. Paul The City argued that the petition improperly includes limitations on St. Paul's authority � infringes on the City's right to exercise its police owe that are inconsistent with Commission rules that govern municipal authority over rights -of- -way and The powers. T City supported Cities of Oakdale and Richfield. e ts supported positions presented by the Suburban Rate Authority "spec argued that the le a n is deficient due to it s to define a `� Further, and the ar t fa t appeal process set forth by the S facility" and that the tariff title "City standard facility" Further, it i a l f cil tyRequested Facilities Surcharge" i and l ead in a g is misleading and F. Cities of South St. Paul, Sunfish Lake and Le The cities of South St. Paul and Sunfish Lake requested League of Minnesota Cities Administrative Hearings for contested case that this matter be sent to the Of Amended dman Administrativ filing Hearings Xcel. League Proceedings. This request was made Office of The Leag filed its comments prior to the Prior to the The it agreed with the concerns prior objections No raised b that it g its the to the ass e Ns a iled 14, the e S amendment b by the SRA, g by Xcel. It indicated local g issues raised by It o r sod as the Commission governments' exercise of their police y dle Oakdale Decision so as not to interfere with P Power authority. G. City of Lindstrom The City of of Lindstrom indicated that its position is that the cost of p transmission e C y lines and/or distribution lines, should be borne from said i mprovement. The City's those sti facility, dibe rectly It power plants, regarding ty's comments asked the Commission to consider cits b situation g a transmission line upgrade being proposed by Xcel. its 7 • H. Power Line Task Force The Power Line Task Force has been and continues to be interested in hi lines. Its comments indicated concern that even though Xcel has narrowed the of distribution facilities only, the proposed tariff, higher voltage transmission subdivision to bear the costs of moving or burying transmission lines riffi as es irres written, requires the political e focus to address the irrespective pective of the The PLTF filed a petition with over 250 signatures requesting that this matter be sent to the Office of Administrative Hearings for a contested case proceeding. I• Energy Cents Coalition The Energy Cents Coalition opposed ECC argued SRA and the cities of Richfield and Oakdale. t a rate d supported SRA relate ci ties o to Richfield numd and d people Oakdale. a r that am to based on energy usage the would that better rate de sigp would put a di a residence proportionate best a given nd structure. n enre It usage ratepayers. 1" e burden on low and fixed income J. Department of Commerce The DOC argued that Xcel's proposal should be accepted with certain recommendations will be addressed below. The DOC stated that its recommendation were ratepayers, who reside outside a city that orders that distribute which bear the risk of paying for such costs in a subsequent rate case; to mitigate the effects of the Se. ere designed to avoid CRFS Rider on ratepayers residing in such cities. on be undergrounded, to The DOC, after reviewing Xcel's proposal, concluded that cities have a right t police powers; however, the ratepayers residing outside the city's to bear the costs, in a subsequent rate case, of the city's actions. It is more to exemise their to bear that those who cause seq subsequent costs rate should a y for is moietre apap should not be propriate, the DOC risk P r them. The DOC, in response to the parties that argued that Xcel's proposal was not in the Oakdale Decision, argued that the decision does not conclude that Xcel has the costs associated with a city's decision. Rather, the decision states that compliance with the Commission allocate the additional costs of undergroundin to the appropriate no right to recover ratepayers.' For this reason the proposed tariff does not conflict cel may "request that g e gecup of ct with the Oakdale decision. The DOC also argued that the proposal does not conflict with the Commission' Rules. Xcel's tariff indicates that it will move its facilities to the extent necessary interference with construction pursuant to an order or request of the s Right of Wa does not prevent the governing body from exercising its rights and is consistent to avoid way rules. Further, the DOC argued that the exercising indicate its that the governing body. This right-of- the right -of- -way user is not required to pay the right -of- -way user directly sstent with the right -of- by not preclude the right-of-way s nt required ed r from the right-of-way the costs r ec l requiring the from ratepayers the re sts s under but b action the rules rule le s do not preclude jurisdiction. 5 NSP Gt of Oakdale, 588 N.W2d 543 T,� (1�L•nn. Ct App. 1999). 8 The DOC agreed with the other parties that Xcel needs to define special facilities more specifically. To meet that end, the DOC recommended that Xcel make a compliance filing with the Commission to include: a description of the procedures Xcel will use (including any forms that will be used) to determine whether a facility or installation is standard or special; an explanation of how Xcel will calculate the cost differences between standard and special facilities; tariff language that incorporates these methods of determining the differences between standard and special facilities. This language should describe the procedures Xcel will use to determine whether a facility is standard or special. The DOC made numerous recommendations that were accepted by Xcel in its November 14, 2000 CRFS Rider and its Notice of Agreement of June 4, 2001 and its June 22, 2001 Changes to its Notice of Agreement. Additional recommendations by the DOC included: Xcel, in keeping with its commitment of May 26, 2000, should be prohibited from seeking p g Y p automatic surcharge recovery of light -rail transit cost through the City Requested Facilities Surcharge Rider; there should be no contested case proceeding on the merits of the surcharge; The Commission should not open a separate docket to determine statewide standard distribution and/or transmission installations; the comments of the City of Sunfish Lake, the County of Chisago, and the City of Lindstrom are beyond the scope of the instant filing IV. Commission Action The Commission will approve Xcel's amended petition of November 14, 2000 with the Notice of Changes to the Agreement of June 22, 2001. The Commission recognizes that a city has a right to order Xcel to underground distribution facilities when acting within its police power and that Xcel has a right to seek recovery of its incremental costs associated with any such orders. It is reasonable, equitable, and consistent with past practice for Xcel to recover these costs from the ratepayers whose municipalities required them, instead of from the general body of ratepayers. Xcel's proposal, which provides for a surcharge to the residents of a city that so orders, if the city declines to pay the incremental costs, is very limited in scope. The tariff allows an automatic surcharge to city residents only where a city orders undergrounding of distribution facilities. Xcel would be required to file a separate petition with the Commission to seek reimbursement of other types of special facilities. The Commission agrees with the DOC that the proposed tariff, as amended, is consistent with the Oakdale Decision and does not infringe on a city's police power authority. The Oakdale Decision g ty P p concludes that a city has the authority to act in its police powers and require undergrounding of • 9 distribution facilities. However, the decision does not conclude that the costs associated with such orders by a city. the may associated that the such orders by a cats T e Oakdale Xcel has no right is that ". recover The Oakdale Decision specifically states appropriate group of ratepayers."' additional costs of undergrounding to the The Commission also agrees with the DOC and other parties that the definition of "special facilities" needs to be clarified To do so, the Commission will require compliance filing describing the procedures Xcel will use to determine standard or special, explaining its calculations of cost differences q ire Xcel to submit a facilities and submitting tariff language that incorporates these nces between standard or special whether an installation is i Further, the Commission recognizes the need for a clear and tems. that allows parties to bring to the in objections to a surc Commission will order ng t to incorporate m tariff the its t nd pr appeal proecise notice and appeal procedure i June iion comments Xcel S pages h under s e set forth in the this tariff. The this Order. RA/Cities on ages 2 and 3, and as set forth in Section IIIA of Since Xcel's proposal has been modified from its original ro facilities, the Commission will not, at this time, address the issues surrounding For this reason, the Commission finds that the comment the posal to cover only n distribution transmission For r this r o and the City m L i n d strom, tha t h e to comments t lines, of Sunfish tra Lake, t C lines. s of the City of Sunfish Lake, the County filing. nes are beyond the scope of this The Commission recognizes the concern expressed by some commentators of the proposed tariff could conflict with the Commission's Right will address this a s i f if and when it arises in specific the sific ion's. i o f y that some applications Commission and all parties that when it not pec to use cases. g of Way Rules. The Commission Commission facilities to d Further, the Company has assured the permit light rail transit construction. The Commission � ag ees that costs of an inappropriate use of the rider and will order that it not be used in the light rail context. d be this The PLTF, and the Cities of Sunfish Lake and South St. Paul, in their this matter be referred to the Office of Administrative Hearings for matter herein, referred the proposal under consideration Administrative is narrowly si early filings, requested that questions h of material fact proposal under issues policy within t g contested case proceedings. not the proposed tarter the parti have the o Y drawn and the issues raised are not time any p referral for contested case procedures will he purview of Commission. Commission. Under opportunity to bring disputes to the Commission. At that ro osal Commission will not order a contested case proceeding e on the if appropriate. ppropriatesurc surcharge reasons merits of the surcharge Finally, the Commission is not persuaded that it is reasonable or ne cessary at this time to open a separate docket to determine statewide standard distribution and/or transmission installations. 6 Ibid at 543. 10 OAR 1 • Approve the June 22, 2001, Notice of Changes to Agreement with the DOC November 14, 2000 City- Requested Facilities Surcharge Rider with the following and the modifications: • Xcel, in keeping with its commitment of May 26, 2000, is prohibited from seeking automatic surcharge recovery of light -rail transit costs through the City Requested Surcharge Rider; • proposals to open a separate docket to determine statewide standard distribution and/or transmission installations are hereby denied; • Xcel shall submit the followin from the date of this Order: g information, as a compliance filing within 60 days • a description of the procedures Xcel will use (including any forms that will be used) to determine whether a facility or installation is standard or special; • an explanation of how Xcel will calculate the cost differences between • standard and special facilities; p tariff language that incorporates these methods of determining the differences between standard and special facilities. This language should describe the procedures Xcel will use to determine whether a facility is standard or special. • Xcel shall establish within the tariff an appeal filing process, as set forth on pages 2 -3 in of this Order. y the Suburban Rate Authority and set forth in Section III A 2. Xcel shall file, within 30 days from the date of this Order, modificatio general rules and regulations on special facilities. ns to its existing 3. The authority to vary time lines and establish comment Executive Secretary, periods is hereby delegated to the 4. This Order shall become effective immediately. BY ORDER OF THE COMMISSION Burl W. Haar Executive Secretary (S E A L) This document can be made available in alternative formats i.e. ,large print or audio tape) by (TTY calling (651) 297 -4596 (voice), (651) 297 -1200 (TTY), or 1 -800- 627 -3529 ( Y relay service). 11 FindLaw for Legal Professionals - Case Law, Feder... Page 1 of 32 Fin FindLaw I For Legal Professionals I For Corporate C ounsel 1 For Law Students For Legal Professionals Register/login to My FindLaw My current location: Minneapolis, MN I Change Location Home I Practice d es I News it CLE I Market Center Rese rch a Lawyer Federal Law I State Law 1 Case Summaries Search 1 U.S. Code 1 Newsletters LOMBARDI Ex ASSOC 1 A Premises Liability and Securi f NESENTEC} EY' FindLaw> State VISA Resources> Minnesota> Primary Materials> Minnesota Court Opinions STATE OF MINNESOTA IN COURT OF APPEALS C3 -98 -867 Northern States Power Company, Appellant, vs. City of Oakdale, Respondent. Filed February 2, 1998 Affirmed as modified Holtan, Judge' Concurring in part, dissenting in part, Halbrooks, Judge Washington County District Court File No. C3974628 George O. Ludcke, Kelly & Berens, P.A., 3720 IDS Center, 80 South Eighth Street, Minneapolis, MN 55402; and Harold J. Bagley, Senior Attorney, m FindLaw for Legal Professionals - Case Law, Feder... Page 2 of 32 Law Department, Northern States Power Company, 414 Nicollet Mall, Fifth Floor, Minneapolis, MN 55401 (for appellant) James M. Strommen, Daniel J. Greensweig, Kennedy & Graven, Chtd., 470 Pillsbury Center, 200 South Sixth Street, Minneapolis, MN 5402 (for respondent) Michael A. Hatch, Attorney General, Megan J. Hertzler, Dennis D. Ahlers, Assistant Attorneys General, 700 NCL Tower, 445 Minnesota Street, St. Paul, MN 55101 (for amicus curiae Minnesota Public Utilities Commission) Christopher D. Anderson, Minnesota Power, Inc., 30 West Superior Street, Duluth, MN 55802 (for amicus curiae Minnesota Power, Inc.) Harold LeVander, Jr., Maun & Simon, PLC, 2300 World Trade Center, 30 East Seventh Street, St. Paul, MN 55101 -4904 (for amicus curiae Rural Electric Association) Carla J. Heyl, League of Minnesota Cities, 145 University Avenue West, St. Paul, MN 55103 -2044 (for amicus curiae League of Minnesota Cities) Considered and decided by Halbrooks, Presiding Judge, Anderson, Judge, and Holtan, Judge. SYLLABUS 1. The manner in which NSP's rate tariffs at issue were filed with the Minnesota Public Utilities Commission was not procedurally inadequate and therefore did not m FindLaw for Legal Professionals - Case Law, Feder... Page 3 of 32 prevent the tariffs from attaining the status of general state law. 2. An ordinance adopted by a municipality requiring that new electric distribution lines be placed underground is authorized by Minn. Stat. § 216B.36 (1998), and is reasonably related to the municipality's interest in protecting the public safety. 3. The municipality's ordinance at issue is neither preempted by nor in conflict with state law. OPINION HOLTAN , Judge Northern States Power Company (NSP) appeals from the district court's grant of summary judgment in favor of the City of Oakdale (the city) in a case involving an ordinance requiring underground electric distribution lines. We affirm. FACTS In the spring of 1997, Imation Corporation requested that NSP provide additional service to its facility located in the City of Oakdale. NSP subsequently informed the city of its intent to construct new overhead electric distribution lines along state highways 5 and 120. NSP's General Rules and Regulations (tariff) § 5.1A provides that "[t]he Company reserves the right to designate the type of facilities to be installed either overhead or underground." The city requested that the lines be installed underground. NSP's tariff § 5.3A provides in relevant part: m FindLaw for Legal Professionals - Case Law, Feder... Page 4 of 32 When requested by the customer, group of customers, developer, or municipality to provide types of service that result in an expenditure in excess of the Company designated service installation as provided under Section 5.1, STANDARD INSTALLATION, the requesting * * * municipality will be responsible for such excess expenditure. NSP agreed to construct the new lines underground if the city would agree to pay the additional costs associated with undergrounding. NSP estimated that undergrounding would cost an additional $338,000, over and above the $190,000 cost of overhead construction. In July 1997, the city passed an ordinance requiring that any installation of electric distribution systems of less than 15,000 volts be placed underground. Oakdale, Minn. Code of Ordinances §§ 23- 40 and 23 -41 (July 1997). NSP was then granted a permit from MnDOT authorizing completion of the project using overhead lines. NSP informed the city that it was not required to obtain a permit from the city because MnDOT had exclusive authority over state trunk highway right -of -ways under Minn. Stat. § 161.45 (1998). NSP offered to amend its franchise with the city so that the additional costs of undergrounding could be paid through a franchise fee collected m FindLaw for Legal Professionals - Case Law, Feder... Page 5 of 32 from NSP ratepayers in the city. The city declined the offer. NSP began construction of the overhead lines. On the first day of construction, the Oakdale Police Department notified the NSP crew that the construction was in violation of the ordinance, and crew members would be arrested if they did not cease construction. NSP then brought this action seeking a declaratory judgment that the ordinance was invalid and seeking to enjoin enforcement of the ordinance. The city subsequently agreed to allow NSP to go forward with the overhead construction. The city later amended the ordinance to exclude state trunk highways from the undergrounding requirement. Oakdale, Minn. Code of Ordinances § 23 -41 (October 1997). The city then brought a motion to dismiss NSP's complaint for mootness. NSP brought a cross motion for summary judgment on the validity of the ordinance. NSP included with its motion an affidavit detailing future projects in the city that would be affected by the ordinance. One of the projects was scheduled to begin in January 1998, and included 1.2 miles of power line within the city. Following a hearing, the district court denied the city's motion to dismiss for mootness, denied NSP's motion for summary judgment, and granted summary judgment on the merits in favor of the city. The court concluded that NSP's commission - approved tariffs did not attain the status of general state law, that the ordinance was not preempted by or in conflict with the Minnesota Public Utilities Act m FindLaw for Legal Professionals - Case Law, Feder... Page 6 of 32 (MPUA), Minn. Stat. ch. 216B (1998), and that the ordinance was a valid exercise of the city's power. The court denied injunctive relief accordingly, and the remaining portions of NSP's complaint were dismissed with NSP's assent. NSP appeals the district court's grant of summary judgment. It alleges that the district court erred in concluding that NSP's tariffs, filed with the Minnesota Public Utilities Commission (the commission), did not assume the status of general state law. It further alleges that the court erred by concluding that the city's ordinance was valid and not in conflict with or preempted by the MPUA and its approved tariffs. ISSUES I. Did the district court err in determining that the filed tariffs did not assume the status of general state law? II. Did the district court err in determining that the ordinance was valid, and not preempted by or in conflict with state law? ANALYSIS On appeal from summary judgment, a reviewing court determines whether any genuine issues of material fact exist and whether the district court erred in applying the law. Wartnick v. Moss & Barnett , 490 N.W.2d 108, 112 (Minn. 1992). In making its determinations, "the court must view the evidence in the light most favorable to the nonmoving party." State by Beaulieu v. City of Mounds View , 518 N.W.2d 567, 571 (Minn. 1994). No deference m FindLaw for Legal Professionals - Case Law, Feder... Page 7 of 32 need be given to the district court's application of the law. Frost - Benco Elec. Ass'n v. Minnesota Pub. Utils. Comm'n , 358 N.W.2d 639, 642 (Minn. 1984). Statutory interpretation presents a question of law that an appellate court reviews de novo. Hibbing Educ. Ass'n v. Public Employment Relations Bd ., 369 N.W.2d 527, 529 (Minn. 1985). I. NSP argues that the district court erred when it determined that the commission - approved tariffs failed to attain the status of general state law due to procedural deficiencies. We agree. The commission has been granted legislative authority to regulate public utilities and determine whether their rates are reasonable. See Minn. Stat. ch. 216B (1998). Ratemaking is a quasi - legislative function. Peoples Natural Gas Co. v. Minnesota Pub. Utils. Comm'n , 369 N.W.2d 530, 533 (Minn. 1985). Utilities are required to file schedules with the commission "showing all rates, tolls, tariffs and charges which it has established * * *." Minn. Stat. § 216B.05, subd. 1 (1998). Filings made with the commission by utilities "continue in force until amended by the public utility or until changed by the commission * * *." Minn. Stat. § 216B.09, subd. 3 (1998). The commission's decisions "command the same regard and are subject to the same tests as enactments of the legislature." Minneapolis St. Ry. Co. v. City of Minneapolis , 251 Minn. 43, 71, 86 N.W.2d 657, 676 (1957) (citation omitted). m FindLaw for Legal Professionals - Case Law, Feder... Page 8 of 32 The district court concluded that: NSP Rules 5.1 and 5.3 never assumed the status of general state law because they were not adopted pursuant to any agency rulemaking proceeding. Their purpose was limited to advising the MPUC of the manner in which this utility would treat all of its customers. To file these "rules" without benefit of the protections of notice and opportunity for hearing and then claim they have the force and effect of general state law is vastly overstating the purpose and intent of these tariffs. NSP v. Oakdale , No. C3 -97 -4628, Mem. Op. at 14 (Feb. 18, 1998). This court has previously held a filed tariff to be "an inherent part of the lawful rate charged to consumers * * *." Computer Tool & Eng'g, Inc. v. Northern States Power Co. , 453 N.W.2d 569, 573 (Minn. App. 1990) (holding NSP tariff § 1.4 valid and enforceable), review denied (Minn. May 23, 1990). The Computer Tool court concluded that the tariff had been "recognized as a reasonable limitation of liability by the agency exclusively empowered by the legislature to make this determination," based upon the tariffs survival through several contested rate changes. Id. The same analysis applies here. The tariffs at issue here were originally m FindLaw for Legal Professionals - Case Law, Feder... Page 9 of 32 filed with the commission in 1984. Since that time they have been reviewed and approved through a series of commission ratemaking proceedings, most recently in 1992. See MUPC Docket No. E- 002 /GR- 92 -1185 (1992). As approved by the commission, the tariffs at issue are not invalid as the product of a procedural defect. The city asserts that even if the tariffs are not procedurally invalid, tariff section 5.1 represents an improper delegation of authority from the commission to NSP. The city cites Northern Pac. Ry. Co. v. State of MN ex rel. Duluth , 208 U.S. 583, 597, 28 S. Ct. 341, 345- 46 (1908), for the proposition that the commission could not delegate the authority to determine placement of utility lines to NSP, a private interest. However, Northern Pac. Ry. merely states that attempts to contract away police powers through utility franchises are void as against public policy. Id. The case does not deal with decisions by a regulatory agency. When the [commission] acts in a legislative capacity as in rate increase allocations, balancing both cost and noncost factors and making choices among public policy alternatives, its decision will be upheld unless shown to be in excess of statutory authority or resulting in unjust, unreasonable, or discriminatory rates by clear and convincing evidence. m FindLaw for Legal Professionals - Case Law, Fed... Page 10 of 32 In re Request of Interstate Power Co. , 559 N.W.2d 130, 133 (Minn. App. 1997) (quoting Hibbing Taconite Co. v. Minnesota Pub. Serv. Comm'n , 302 N.W.2d 5, 9 (Minn. 1980)). Here, the commission could have reasonably concluded that NSP would be in the best position to determine what type of installation would be most feasible and cost - effective in order to provide adequate, efficient, and reasonable service at reasonable rates. Minn. Stat. § 216B.16, subd. 6 (1998). Given the deference to be accorded the commission decision, its delegation of authority to NSP was not unreasonable. II. NSP asserts that the city did not have legal authority to enact the ordinance in question. NSP further argues that the ordinance is in conflict with and preempted by the MPUA and commission - approved tariffs. We disagree. "[M]unicipalities have no inherent powers and possess only such powers as are expressly conferred by statute * * *" or necessarily implied therefrom. Northern States Power Co. v. City of Granite Falls , 463 N.W.2d 541, 543 (Minn. App. 1990), review denied (Minn. Jan. 14 & 24, 1991); see also Minneapolis St. Ry. Co. v. City of Minneapolis , 229 Minn. 502, 507, 40 N.W.2d 353, 357 (1949) (examining powers possessed by city). Minn. Stat. § 216B.36 (1998) governs municipal regulatory and taxing powers with respect to public utilities and provides in m FindLaw for Legal Professionals - Case Law, Fed... Page 11 of 32 relevant part: Any public utility furnishing the utility services enumerated in section 216B.02 or occupying streets, highways, or other public property within a municipality may be required to obtain a license, permit, right or franchise in accordance with the terms, conditions, and limitations of regulatory acts of the municipality, including the placing of distribution lines and facilities underground. * * * All existing licenses, permits, franchises and other rights acquired by any public utility or municipality prior to April 11, 1974, including the payment of existing franchise fees, shall not be impaired or affected in any respect by the passage of this chapter, except with respect to matters of rate and service regulation * * *. Minn. Stat. § 222.37 (1998) also deals with municipal regulation of utility line placement and provides in part: Any * * * power company * * * may use public roads for the purpose of constructing, using, operating, and m FindLaw for Legal Professionals - Case Law, Fed... Page 12 of 32 maintaining lines * * * for their business, but such lines shall be so located as in no way to interfere with the safety and convenience of ordinary travel along or over the same; and, in the construction and maintenance of such line, * * * the company shall be subject to all reasonable regulations imposed by the governing body of any county, town or city in which such public road may be. NSP contends that the language in Minn. Stat. § 216B.36 about placing distribution lines underground refers only to a municipality's ability to grant a franchise, essentially a contract, requiring undergrounding. See City of S. St. Paul v. Northern States Power Co. , 189 Minn. 26, 29, 248 N.W. 288, 290 (1933) (interpreting an ambiguous term in a franchise under contract law). Historically, cities have regulated utilities both by agreement and through exercise of police power. See Minneapolis St. Ry. Co. v. City of Minneapolis , 189 F. 445, 452 (D. Minn. 1911) (holding that franchise does not limit the city's ability to "regulate and control the manner of carrying on the business of the road, the laying of the tracks, the use of the streets, and the keeping of the equipment "); Minneapolis St. Ry. Co. v. City of Minneapolis , 229 Minn. at 512 -513, 40 N.W.2d at 360 -61 (holding that the power to license, a police power, is separate and not impaired by the franchise, but is subject to the judicially enforceable standard of m FindLaw for Legal Professionals - Case Law, Fed... Page 13 of 32 reasonableness); Borough of Belle Plaine v. Northern Power Co. , 142 Minn. 361, 364, 172 N.W. 217, 219 (1919) (holding that municipal regulation of utility may be either unilateral or bilateral); see also City of Roswell v. Mountain States TeL & Tel. Co. , 78 F.2d 379, 384 (10th Cir. 1935) (distinguishing franchises from the exercise of police power over use of streets and alleys which is generally accomplished through ordinances and resolutions). Thus, the first question to be addressed is whether Minn. Stat. § 216B.36 confers the authority to require undergrounding as a police power or merely a franchise power. The authority of a municipality to require underground placement of utility lines has long been considered a police power. See, e.g., Northwestern TeL Exch. Co. v. City of Minneapolis , 81 Minn. 140, 149 -50, 83 N.W. 527, 531 (1900). The Northwestern Tel. court stated that it is not to be doubted that the city council has the plenary power to extend the subsurface district wherever, in the exercise of a fair discretion, it decides that public interests require it to be done. Id. In addition, Minn. Stat. § 222.37 specifically subjects utilities to a municipality's reasonable regulation with respect to placement of lines in the right -of- way. Furthermore, the plain language of Minn. Stat. § 216B.36 provides that a utility "may be required to obtain a license, permit, m FindLaw for Legal Professionals - Case Law, Fed... Page 14 of 32 right or franchise * * *." See Minneapolis St. Ry. , 229 Minn. at 512 -13, 40 N.W.2d at 360 (construing the power to license as a police power that could not be abdicated through a franchise). If the legislature had intended to limit a municipality's regulation of utilities to that which could be accomplished by franchise, the additional terms license, permit and right would have been unnecessary and meaningless. However, when construing a statute we endeavor to give all provisions meaning. Minn. Stat. § 645.16 (1998). We therefore conclude that Minn. Stat. § 216B.36 confers upon municipalities the power to require electric distribution line undergrounding either through a franchise or through reasonable exercise of its police powers. We further note that several jurisdictions have recognized local power to regulate utility line placement despite statewide regulation through a PUC. See U.S. West Communications, Inc. v. City of Longmont , 948 P.2d 509, 520 (Colo. 1997) (upholding municipal ordinance requiring utility to relocate its lines underground); City and County of Denver v. Mountain States Tel. & Tel. Co. , 754 P.2d 1172, 1176 (Colo. 1988) (requiring utility to relocate its lines due to the construction of new sewer lines); City of Genesco v. Illinois N. Utils. Co. , 378 Ill. 506, 510, 39 N.E.2d 26, 30 (Ill. 1941) (requiring utility with expired franchise to remove its inoperational power lines); Detroit Edison Co. v. Southeastern Michigan Transp. Auth. , 410 N.W.2d 295, 297 (Mich. Ct. App. 1987) (requiring utility to relocate its facilities within the projected route of "people mover" upon order of the transportation authority); m FindLaw for Legal Professionals - Case Law, Fed... Page 15 of 32 Northwest Natural Gas v. City of Portland , 711 P.2d 119, 121 (Or. 1985) (requiring utility to relocate its lines to accommodate construction of a light rail transit system); Vermont Gas Sys., Inc. v. City of Burlington , 571 A.2d 45, 49 (Vt. 1989) (requiring gas utility to relocate its lines due to the construction of new storm and sewer lines); City of Edmonds v. General Tel. Co. , 584 P.2d 458, 461 (Wash. Ct. App. 1978) (upholding municipal regulation requiring utility to place its lines underground at its own expense); but see Union Elec. Co. v. City of Crestwood , 499 S.W.2d 480, 483 (Mo. 1973) (holding that municipal ordinance requiring undergrounding exceeded its authority and was invalid; regulatory power had been vested in the Public Service Commission); Public Serv. Co. v. Town of Hampton , 411 A.2d 164, 166 (N.H. 1980) (municipal power over transmission lines preempted by statute placing those powers in regulatory agency) (emphasis added); In re Public Serv. Elec. & Gas Co. , 173 A.2d 233, 239 (N.J. 1961) (holding that ordinance requiring undergrounding of electric transmission lines was invalid as outside the scope of municipal power) (emphasis added); Cleveland Elec. Illum. Co. v. City of Painesville , 226 N.E.2d 145, 148 (Ohio Ct. App. 1967) (holding construction of public utility facilities cannot be prohibited or unreasonably regulated by municipality where such facilities are constructed in accord with safety standards and meet the standards of the hot wires statute); Duquesne Light Co. v. Upper St. Clair Township , 377 Pa. 323, 399, 105 A.2d 287, 290 (1954) (holding utility was not m FindLaw for Legal Professionals - Case Law, Fed... Page 16 of 32 subject to township regulation regarding location and construction of transmission lines) (emphasis added); Vandehei Developers v. Public Serv. Comm'n , 790 P.2d 1282, 1288 (Wyo. 1990) (holding Public Service Commission order controlled over conflicting order of county board; county did not have power to regulate utilities). NSP argues that we should focus on the provision of Minn. Stat. § 216B.36 that provides: All existing licenses, permits, franchises and other rights acquired by any public utility or municipality prior to April 11, 1974, including the payment of existing franchise fees, shall not be impaired or affected in any respect by the passage of this chapter, except with respect to matters of rate and service regulation * * * that are vested in the jurisdiction of the commission by this chapter. * * * [1] (Emphasis added.) However, [w]hen a general provision in a law is in conflict with a special provision in the same or another law, the two shall be construed, if possible, so that effect may be given to both. If the conflict between the two provisions be irreconcilable, the special provision shall m FindLaw for Legal Professionals - Case Law, Fed... Page 17 of 32 prevail and shall be construed as an exception to the general provision * * * Minn. Stat. § 645.26, subd. 1 (1998); see also Itasca County Bd. Of Comm'rs v. Olson , 372 N.W.2d 804, 807 (Minn. App. 1985) (where possible, a court must give effect to all related statutory provisions). Here the legislature specifically granted municipalities the power to require utility distribution line undergrounding. Moreover, the provision relied upon by NSP clearly only applies to "existing licenses, permits, franchises and other rights * * * acquired prior to April 11, 1974." Minn. Stat. § 216B.36. By the plain language of the statute, the legislature reserved the authority of municipalities to require distribution line undergrounding. Finally, NSP argues that if Minn. Stat. § 216B.36 grants police powers, then it would be granting a police power to collect fees through licenses and permits- - effectively an excise tax. If so, the provision regarding the collection of an excise tax near the end of the statute would be meaningless. Further, it would conflict with the general principle that a city's police powers do not include the power to raise revenue. See Country Joe, Inc. v. City of Eagan , 560 N.W.2d 681, 686 -87 (Minn. 1997) (holding that when a city's real motive is to generate revenue, rather than recouping the administrative costs of regulation, the fee is an illegal tax). NSP's argument here assumes that m FindLaw for Legal Professionals - Case Law, Fed... Page 18 of 32 the statute cannot be read to reserve both franchise power and some police powers. The portion of the statute involving collection of fees states: Under the license, permit, right, or franchise, the utility may be obligated by any municipality to pay to the municipality fees to raise revenue or defray increased municipal costs accruing as a result of utility operations, or both. Minn. Stat. § 216B.36. Clearly, the statute can be read to allow for a revenue- generating fee from a franchise and a separate fee for a permit to defray administrative costs. See Minn. Stat. § 645.17(1) (1998) (stating that statutes are to be interpreted with the presumption that the legislature does not intend a result that is unreasonable). Having determined that Minn. Stat. § 216B.36 provides the city with the statutory authority to require utility line undergrounding, our inquiry as to the validity of the ordinance is not yet complete. NSP contends that the ordinance is not reasonably related to a legitimate objective. We disagree. A municipal ordinance is presumed constitutional; the burden is on the party attacking the ordinance's validity to prove an ordinance is unreasonable or that the requisite public interest is not involved, and consequently that the ordinance does not come within the police power of the city. City of St. Paul v. Dalsin , 245 Minn. 325, 329, 71 m FindLaw for Legal Professionals - Case Law, Fed... Page 19 of 32 N.W.2d 855, 858 (1955). To prove an ordinance is unreasonable, a complaining party must show that it "has no substantial relationship to the public health, safety, morals or general welfare." State v. Hyland , 431 N.W.2d 868, 872 (Minn. App. 1988) (quoting County of Freeborn v. Claussen , 295 Minn. 96, 100, 203 N.W.2d 323, 326 (1972)). "[I]f the reasonableness of an ordinance is debatable, the courts will not interfere with the legislative discretion." Id. (quoting State v. Modern Box Makers, Inc. , 217 Minn. 41, 47, 13 N.W.2d 731, 734 (1944)). The ordinance at issue requires undergrounding for any permanent extension or replacement of distribution lines of 15,000 volts or less. Oakdale, Minn. Code of Ordinances § 23 -41 (July 1997). The stated purpose for the ordinance is to promote and preserve the general welfare, assure the orderly development of the city, and provide for the safety and convenience of its inhabitants * * *. Oakdale, Minn. Code of Ordinances § 23 -40 (October 1997). The city asserts that its police power allows it to regulate in the interest of public convenience or general prosperity, including aesthetic considerations. See County of Pine v. State Dept of Natural Resources , 280 N.W.2d 625, 629 (Minn. 1979) (holding the Kettle River Wild and Scenic m FindLaw for Legal Professionals - Case Law, Fed... Page 20 of 32 Rivers Ordinance was a valid exercise of police power where it had as its basis aesthetic considerations as well as other traditional zoning objectives, including public safety and limiting pollution); Naegele Outdoor Adver. Co. v. Village of Minnetonka , 281 Minn. 492, 499, 162 N.W.2d 206, 212 (1968) (holding that the fact that the billboard regulation at issue reflected a desire to achieve aesthetic ends does not invalidate an otherwise valid ordinance); Naegele Outdoor Adver., Inc. v. City of Durham , 844 F.2d 172, 174 (4th Cir. 1988) (holding that aesthetic considerations are a valid basis for exercise of the police power over zoning regulation of billboards). While these cases do reflect the position that aesthetic considerations will not invalidate an otherwise valid ordinance, none stand for the proposition that a city may regulate a public utility solely for purposes of convenience and aesthetic value. We decline the invitation to extend the law with respect to municipal regulation of public utilities, and instead apply the more traditional public interest tests of public health, safety, and general welfare. See Northwestern Tel. Exch. , 81 Minn. at 147, 83 N.W. at 530; Holt v. City of Sauk Rapids , 559 N.W.2d 444, 445 (Minn. App. 1997), review denied (Minn. Apr. 24, 1997); Hyland , 431 N.W.2d at 872. Here the city has clearly included public safety and general welfare as interests the ordinance is intended to protect. We do not believe it can be reasonably disputed that overhead electric lines present a significant hazard to the public, especially in this climate. Utility poles in close m FindLaw for Legal Professionals - Case Law, Fed... Page 21 of 32 proximity to the streets increase the likelihood of injuries resulting from traffic accidents. In addition, street obstructions occasioning improvements while repairing, replacing or relocating utility poles increase the risk of accidents. See City of Edmonds , 584 P.2d at 461. Furthermore, downed lines as the result of ice or wind storms not only present a hazard on the ground, but also impact the safety and welfare of people in their homes due to loss of power in the winter months. Based on these considerations, we conclude that requiring electric distribution lines to be placed underground reasonably relates to the city's legitimate interest in public safety and the general welfare of its citizenry. Having determined that the city had the authority to require undergrounding under Minn. Stat. § 216B.36, and reasonably exercised that authority, we must next examine how the ordinance impacts NSP's commission- approved tariffs. Since we have determined that the legislature has explicitly granted municipal authority to require distribution line undergrounding, we do not reach the issue of preemption. See Mangold Midwest Co. v. Village of Richfield , 274 Minn. 347, 356, 143 N.W.2d 813, 819 (1966) (defining preemption as the concept of "occupation of the field "). Similarly, when the legislature specifically grants authority to municipalities, the exercise of that authority cannot logically be seen to conflict with state law. See Northern States Power Co. v. City of Granite Falls , 463 N.W.2d at 544 -45 m FindLaw for Legal Professionals - Case Law, Fed... Page 22 of 32 (stating there is generally no conflict where the ordinance is merely additional and complimentary to or in aid and furtherance of the statute). Clearly the ordinance and the tariffs conflict. But both the city and NSP claim authority in the MPUA. "The legislature does not intend a result that is absurd, impossible of execution, or unreasonable." Minn. Stat. § 645.17(1) (1998). It would be absurd to interpret the MPUA as granting conflicting authority. Therefore, the extent to which there is conflict is also the extent to which the statutory authority has been exceeded by one of the parties. We have already determined that the legislature's specific grant of authority to municipalities to require utility line undergrounding must prevail over the general grant of authority to the commission to regulate services. See Minn. Stat. 645.26, subd. 1. Therefore, to the extent that tariff section 5.1A conflicts with the city's ordinance, the tariff must yield. Similarly, tariff section 5.3A is unenforceable to the extent that it would require compensation for the city's valid exercise of its authority to regulate utility line undergrounding under the statute. This comports with the long -held view that a city may regulate a utility without compensation in valid exercise of its police power. See Detroit Edison , 410 N.W.2d at 297; Vermont Gas , 571 A.2d at 46; City of Longmont , 948 P.2d at 521; Northwest Natural Gas , 711 P.2d at 121; Appalachian Power Co. v. City of Huntington , 210 m FindLaw f or Leg al Professionals - Case Law, Fed... Page 23 of 32 S.E.2d 471, 472 (W. Va. 1974); State ex rel. Rich v. Idaho Power Co. , 346 P.2d 596, 598 a New York City Tunnel Auth. v. Consolidated Edison Co. of New York , 68 N.E.2d 445, 447 (N.Y. 1946); City of Edmonds , 584 P2d at 459. The Minnesota Supreme Court has also recognized that legitimate exercise of the police power may prohibit the injurious use of property without compensation. Lachtman v. Houghton , 134 Minn. 226, 237, 158 N.W. 1017, 1021 -22 (1916). Furthermore, NSP's argument that this uncompensated regulation would perpetrate an fails for unconstitutional taking two reasons. First, " [i]f the regulation is drawn to prevent harm to the public, broadly defined, and seems able to achieve this goal, then a taking has not occurred." Zeman v. City of Minneapolis , 552N.W•2d 548, 554 (Minn. 1996) (citing Keystone Bituminous Coal Assn v. DeBenedictis , 480 U.S. 470, 488 -93, 107 S. Ct. 1232, 1243 -46, (1987)). Second, NSP has a remedy at the public utilities commission. NSP may request that the commission allocate the additional costs of rou er o f unding to the appropriate group ratepayers. NSP further contends that ue a municipality may not require placement of electric lines without compensation creates because such a requirement a conflict with NSP's statutory duty not to discriminate as set forth in8). Minn. Stat. §§ 216B.06 -.07 NSP argues that, by conferring a special benefit on its citizens, placement of power NSP underground, without paying m FindLaw for Legal Professionals - Case Law, Fed... Page 24 of 32 for this improvement, the city requires NSP to collect the costs of those improvements from ratepayers across the state. Thus, all ratepayers outside the City of Oakdale are paying a discriminatory rate. While we need not decide whether the city's ordinance will result in unreasonable rate discrimination under Minn. Stat. §§ 216B.03 and .07 (1998), we do note that NSP has a statutory remedy that allows NSP to address discriminatory rate concerns, if any, without interfering with the city's duly- enacted ordinance. NSP may request the commission allocate additional costs of complying with the ordinance to the ratepayers benefiting from the service. See Minn. Stat. § 216B.16. This approach is specifically outlined in tariff section 5.3E, which provides in relevant part: Where special facilities are requested or required by a municipality and payment is not made by the municipality, the excess expenditures will be the responsibility of [NSP's] customers residing within the municipality and will be recovered from those customers through a rate surcharge or other method approved by the Commission. NSP argues that it should not be required to obtain surcharge approval each time a municipality requires a special installation. NSP m FindLaw for Legal Professionals - Case Law, Fed... Page 25 of 32 cites no authority for this position. The duty to avoid rate discrimination is NSP's duty. See Minn. Stat. §§ 2 16B.06 -.07. The commission has approved tariff section 5.3E and NSP is bound by it. DECISION The district court erred when it determined that NSP's rate tariffs at issue did not attain the status of general state law due to procedural deficiencies. However, the district court correctly determined the ordinance in question was authorized by statute. The ordinance is reasonably related to its stated objective of protecting public safety and is neither preempted by nor in conflict with state law. Affirmed as modified. HALBROOKS , Judge (concurring in part, dissenting in part) While I agree with the majority that NSP's rate tariff sections 5.1 and 5.3 have the force of state law, I conclude that Oakdale's ordinance is too broad to be either reasonably related to a legitimate municipal objective or authorized by Minn. Stat. § 216B.36. Therefore, I respectfully dissent. Oakdale's ordinance is extraordinarily broad. It does not discriminate based on location of power lines or their proximity to public traffic. The ordinance imposes the requirement of underground installation for all electric distribution lines of 15,000 volts or less without regard to any safety or public welfare concerns in m FindLaw for Legal Professionals - Case Law, Fed... Page 26 of 32 a given installation. Further, Oakdale made no findings that underground installation of electric lines would serve the stated public interests. See U.S. West Communications v. City of Longmont , 948 P.2d 509, 521 -22 (Colo. 1997) (listing factors relevant to its determination of the reasonableness of municipal ordinance requiring relocation of utility lines underground). Although it may be true that overhead electric lines present a hazard in some places, the record before us is not developed on this issue. In fact, NSP has argued that underground lines are significantly more difficult to repair, especially in the winter months when the ground is frozen. In spite of the fact that the ordinance cites public safety and general welfare as its objectives, see Oakdale, Minn. Code of Ordinances § 23 -40 (1997), it is not tailored to meet those objectives. Even assuming overhead electric lines present the hazards mentioned by the majority, this ordinance is overly broad. Under Oakdale's ordinance, a distribution line to a commercial building, traveling across private property and not in any way near a public road or activity, must be installed underground. This bears no relationship to public health, safety and general welfare. The ordinance goes beyond what is necessary to protect the public. See Village of Blaine v. Independent Sch. Dist. No. 12 , 272 Minn. 343, 353, 138 N.W.2d 32, 39 (1965) (holding that utilities are subject to municipalities' reasonable exercise of police power to protect the consumer and the public). Indeed, it seems to me the only conceivable purpose for a regulation this broad m FindLaw for Legal Professionals - Case Law, Fed... Page 27 of 32 is aesthetic, and I agree with the majority that municipalities have no authority to regulate utilities for aesthetic ends. Even assuming overhead lines are generally hazardous, this ordinance exceeds Oakdale's statutory authority. See Northern States Power Co. v. City of Granite Falls , 463 N.W.2d 541, 543 (Minn. App. 1990) (holding municipalities have only the powers granted them by statute), review denied (Minn. Jan. 14, 1991). To interpret the municipal power to require utility line undergrounding as broadly as the city does requires us to ignore the commission's statutory authority to regulate utilities. See Minn. Stat. ch. 216B (1996 & Supp. 1997); see also Computer Tool & Eng g, Inc. v. Northern States Power Co. , 453 N.W.2d 569, 572 (Minn. App 1990), review denied (Minn. May 23, 1990). Agency powers must be construed in light of the purpose for which they were granted. State ex rel. Waste Management Board v. Bruesehoff, 343 N.W.2d 292, 295 (Minn. App. 1984). The commission is charged with the responsibility of balancing the public need for adequate, efficient and reasonable service against the utility's need to meet the cost of providing the service and earn a fair profit. Minn. Stat. § 2168.16, subd. 6 (1996); Computer Tool , 453 N.W.2d at 573. The stated purpose of the chapter is to provide adequate and reliable services at reasonable rates, consistent with the financial and economic requirements m FindLaw for Legal Professionals - Case Law, Fed... Page 28 of 32 of public utilities and their need to construct facilities to provide such services * * Minn. Stat. § 216B.01 (1996). To interpret Minn. Stat. § 216B.36 as granting a broad new power to require undergrounding conflicts with the chapter's general purpose of localizing regulatory powers in the commission. Minn. Stat. § 216B.01 (1996); see also Minn. Stat. § 645.16 (1996) (asserting that legislative intent may be determined by the occasion and necessity for the law, and the object to be attained); Minn. Stat. § 216B.66 (1996) (declaring that the MPUA is complete in itself, and that other statutes are inapplicable to the regulation of public utilities by the commission). When a general provision of law conflicts with a specific provision, the two should be construed, if possible, to give effect to both. Minn. Stat. § 645.26, subd. 1 (1996). In order to give all provisions of the statute meaning, section 216B.36 must be interpreted to only reserve pre - existing police powers of the municipality to require underground placement of utility lines as part of its authority to regulate the streets and public property. See Minn. Stat. § 222.37 (1996). The exercise of those powers is limited to that which is reasonably related to the public interests of public health, safety and general welfare. See State v. Hyland , 431 N.W.2d 868, 872 (Minn. App. 1988). Since the ordinance here exceeds that authority, it should be declared invalid and its enforcement enjoined. The foreign authorities m FindLaw for Legal Professionals - Case Law, Fed... Page 29 of 32 cited by the majority are not persuasive to the contrary. Instances where courts have upheld local regulation of utility line placement have been limited to regulation incidental to major public works projects. See Detroit Edison Co. v. Southeastern Michigan Transp. Auth. , 410 N.W.2d 295, 296 -97 (Mich. Ct. App. 1987); Vermont Gas Sys., Inc. v. City of Burlington , 571 A.2d 45, 46 (Vt. 1989); City & County of Denver v. Mountain States Tel. & Tel. Co. , 754 P.2d 1172, 1176 (Colo. 1988); Northwest Natural Gas v. City of Portland , 711 P.2d 119, 121 (Or. 1985); Appalachian Power Co. v. City of Huntington , 210 S.E.2d 471, 472 (W. Va. 1974); City o f Philadelphia v. Pennsylvania Pub. Utils. Comm'n , 296 A.2d 804, 808 -09 (Pa. 1972); New York City Tunnel Auth. v. Consolidated Edison Co. , 68 N.E.2d 445, 447- 48 (N.Y. 1946); City of Edmonds v. General Tel. Co., Inc. , 584 P.2d 458, 459 (Wash. Ct. App. 1978). Were Oakdale's ordinance related to a public works project, undertaken in the interest of public health and welfare, the issue before us would be significantly different. See New Orleans Gaslight Co. v. Drainage Comm'n , 197 U.S. 453, 460 -61, 25 S. Ct. 471, 473 (1905) (holding imposition on gas company of the costs of relocating gas pipes to accommodate construction of municipal drainage system was an exercise of the police power essential to the health of the community). Furthermore, the recent Colorado Supreme Court decision, City of Longmont , is both factually and legally distinguishable from the m FindLaw for Legal Professionals - Case Law, Fed... Page 30 of 32 instant case. First, that case involved an ordinance requiring undergrounding of utility lines in conjunction with a public works project undertaken by the city - owned electric utility, undergrounding its own utility lines. City of Longmont , 948 P.2d at 513. Second, the ordinance only required undergrounding for those lines that shared utility poles with the city -owned lines. Id. Third, the city made specific findings as to how the undergrounding would further the health, safety, and welfare of city residents. Id. at 521. Fourth, the city agreed to excavate and back -fill the trench necessary for undergrounding. Id. Finally, the Colorado legislature had passed a statute expressly providing municipal regulation over the location of utility poles. Id. at 519; see also Colo. Rev. Stat. § 31 -15- 702 (1997). Although there is no precedent for municipal regulation of utility line placement as broad as Oakdale assumes, many courts have invalidated local ordinances requiring utility line undergrounding. See Cleveland Elec. Ilium. Co. v. City of Painesville , 226 N.E.2d 145, 149 (Ohio Ct. App. 1967); Vandehei Developers v. Public Serv. Comm'n , 790 P.2d 1282, 1285 -87 (Wyo. 1990); Public Serv. Co. v. Town of Hampton , 411 A.2d 164, 166 (N.H. 1980); Union Elec. Co. v. City of Crestwood , 499 S.W.2d 480, 483 -84 (Mo. 1973); In re Public Serv. Elec. & Gas Co. , 173 A.2d 233, 239 (N.J. 1961). Oakdale's ordinance does not reasonably relate to a legitimate municipal objective. The ordinance also exceeds Oakdale's statutory m FindLaw for Legal Professionals - Case Law, Fed... Page 31 of 32 authority. Therefore, I would reverse the trial court's judgment. Footnotes * Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. art. VI, § 10. [1 ] Rate is defined asevery compensation, charge, fare, toll, tariff, rental and classification, or any of them, demanded, observed, charged, or collected by any public utility for any service and any rules, practices, or contracts affecting any such compensation, charge, fare, toll, rental, tariff, or classification.Minn. Stat. § 2 16B.02, subd. 5 (1998). Service is defined asnatural, manufactured or mixed gas and electricity; the installation, removal, or repair of equipment or facilities for delivering or measuring such gas and electricity.Minn. Stat. § 2 16B.02, subd. 6 (1998). Sponsored Links O nlineParalegal Services: Proxilaw takes care of your document preparation and filing chores. Incorporation, living trusts, LLCs, divorce & more. US. Legal Forms, Inc.: * *Over 36,000 Legal Forms ** Stop Reinventing the Wheel each time you draft a legal document. Save Time and Money! Visit USIegalforms.com Today! 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Legaiconnection: Need an attorney? Our free service connects you to lawyers who can help you with your case. Lawyer Marketing: web sites, attorney written custom content, visibility on FindLaw.com, search engine optimization. FindLaw Market Center: - Free directory of expert witnesses, legal technology products, process servers, legal investigators, mediators, couriers, paralegals, and court reporters. Ads by Google Fax and MailWSDL FlyDoc WSDL /SOAP interface adds fax and mail to your app. www.flydoc.com FINDLAW Help 1 Site Map 1 Contact Us 1 Media Kit/About Us 1 FindLaw Local) Disclaimer Privacy Policy Copyright ©1994 -2006 FindLaw, a Thomson business m 161.45 Utility on highway right -of -way; relocation. Subdivision 1. Rules. Electric transmission, telephone, or telegraph lines; pole lines; community antenna lines; railways; ditches; sewers; water, heat, or gas mains; gas and other pipelines; flumes; other structures which, under the laws of this state or the ordinance of any city, may be or constructed, placed, or maintained across or along any trunk highway, or the roadway thereof, by any person, persons, corporation, or any subdivision of the state, may be so maintained or hereafter constructed only in accordance with such rules as may be prescribed by the commissioner who shall have power to prescribe and enforce reasonable rules with reference to the placing and maintaining along, across, or in any such trunk highway of any of the utilities hereinbefore set forth. Nothing herein shall restrict the actions of public authorities in extraordinary emergencies nor restrict the power and authority of the commissioner of commerce as rovided for in other rovisions of law. rove e , owever, that in the event any oca rsubdivision of government has enacted or manes relating to the method of installation or requiring underground installation of such co granted by the commissioner of transportatio shall quire compliance ith such local ordinance. %� j ice: • ,o'1N G am( - ri ( c , 04 ' �, _ f �V (GQ fvc Rv Icy T121 - j woo t( _P t: -P47 if L 4 nSp Northern States Power Company Minneapolis, Minnesota 55401 MINNESOTA ELECTRIC RATE BOOK - MPUC NO. 2 GENERAL RULES AND REGULATIONS (Continued) Section No. 6 Original Sheet No. 22 Relocated from MPUC No. 1 Sheet No. 6 -12 SECTION 5 STANDARD INSTALLATION AND EXTENSION RULES 5.1 STANDARD INSTALLATION A. Service at Secondary and Primary Voltage Secondary voltage service is defined as single or three phase alternating current from 208 volts up to but not including 2,400 volts. Primary distribution voltage service is defined as three phase alternating current from 2,400 volts up to but not including 69,000 volts. The Company will provide permanent service at the standard voltage and phase available in the area to the service location designated by the Company. The Company reserves the right to designate the type of facilities to be installed either overhead or underground. If requested by the Company, the customer shall execute an agreement or service form pertaining to the installation, operation, and maintenance of the facilities. Payments required under Section 5, STANDARD INSTALLATION AND EXTENSION RULES, will be made on a non - refundable basis and may be required in advance of construction unless other arrangements are agreed to in writing by the Company. The facilities installed by the Company shall be the property of the Company, and any payment by customer will not entitle him to any ownership interest or rights therein. Unless otherwise stipulated in the applicable agreement or service form and prior to any installation by the Company, the customer is required to provide the necessary right -of -way for the installation of the Company's facilities and to have the property developed so that the Company's facilities will be installed in a permanent location and can be installed without any delays caused by the customer. For purposes under Section 5, STANDARD INSTALLATION AND EXTENSION RULES, the Company's costs are all direct and indirect expenses, including material, labor, overheads, and applicable taxes, incurred by the Company due to such an installation as determined by allocations under the Company's usual accounting methods. The Company will install, own, and maintain on an individual project basis the distribution facilities necessary to provide permanent service. The customer will be required to pay, in addition to the applicable rate, a one -time charge of the following amounts, if applicable, to the Company. (See Electric Service Extension worksheet) (Continued on Sheet No. 6 -23) Date Filed: 06 -30 -97 By: James M. Ashley Effective Date: 02 -03 -98 General Manager, Marketing and Sales Docket No. E,G002 /M -97 -985 Order Date: 02 -03 -98 E:\RATES \CURREMIMN_ELECUNE 6_22.DOC W I Northern States Power Company Minneapolis, Minnesota 55401 MINNESOTA ELECTRIC RATE BOOK - MPUC NO. 2 GENERAL RULES AND REGULATIONS (Continued) Section No. 6 Original Sheet No. 23 Relocated from MPUC No. 1 Sheet No. 6 -12 & 6 -12.1 5.1 STANDARD INSTALLATION (Continued) A. Service at Seconda and Prima Volta a (Continued) 1. Excess Footage a. Residential. dential. Company will extend, on private property, to a Company designated service location, a distribution lateral a maximum distance of 100 feet, a service lateral a maximum distance of 100 feet, or a combination of distribution and service lateral a maximum distance of 100 feet. When the necessary extension to a Company designated service location exceeds these limits, the customer will be charged for the additional extension according to the Excess Footage Charge set forth below. Customer will also be charged the Excess Footage Charge for each circuit foot Company extends the installation beyond Company's designated service location to another service location requested by the customer. b. Non - Residential. Company will extend, on private property, to a Company designated service location, a distribution lateral, the total cost of which must not exceed a sum equal to three times the customers anticipated annual revenues. When the cost of the necessary extension exceeds this limit, the customer will be charged for the additional extension according to the Excess Footage Charge set forth below. Customer will also be charged the Excess Footage Charge for each circuit foot Company extends the installation beyond Company's designated service location to another service location requested by customer. Excess Footag e Services $4.55 per circuit foot Excess single phase primary or secondary extension $5.45 per circuit foot Excess three phase primary or secondary extension $7.80 per circuit foot (Continued on Sheet No. 6 -24) Date Filed: 06 -30 -97 By: James M. Ashley Effective Date: 02 -03 -98 General Manager, Marketing and Sales Docket No. E,G002/M -97 -985 Order Date: 02 -03 -98 E: \RATESICURRENTIMN_ELECIME_6_23. DOC 11W Northern States Power Company Minneapolis, Minnesota 55401 MINNESOTA ELECTRIC RATE BOOK - MPUC NO. 2 GENERAL RULES AND REGULATIONS (Continued) Section No. 6 Original Sheet No. 24 Relocated from MPUC No. 1 Sheet No. 6 -12.1 5.1 STANDARD INSTALLATION (Continued) A. Service at Seconds and Prima Volta a (Continued) 2. Winter Construction. When underground facilities are installed between October 1 and April 15, inclusive, because of failure of customer to meet all requirements of the Company by September 30, or because the customer's property, or the streets leading thereto, are not ready to receive the underground facilities by such date, such work will be subject to a Winter Construction Charge set forth hereafter when winter conditions of ground frost and /or snow exist, for the entire length of underground facilities installed. Winter Construction Char e Service extension Primary or secondary distribution extension $ 100 plus $2.00 per trench foot $100 plus $3.00 per trench foot 3. Excess Installation Costs. The customer is required to pay the excess installation cost incurred by the Company not justified by anticipated annual revenue, because of: a. surface or subsurface conditions that impede the installation of distribution facilities, b. delays caused by customer, or c. paving of streets, alleys, or other areas prior to the installation of underground facilities. Such payment, if any, will be determined by subtracting from the total installed cost: a. any charges paid under (1), (2) and (4), and b. the revenue factor equal to three times the anticipated annual revenue. 4. Excess Capita/ Expenditures. The customer will pay to Company any portion of the installing facilities that are not justified by the anticipated annual revenue. Such payment, if any, s willl f be in the amount determined by subtracting from the total estimated installation costs: a. any charges paid or to be paid under (1) and (2) above, and b. the revenue factor equal to three times the anticipated annual revenue. (See Electric Service Extension worksheet) (Continued on Sheet No. 6 -25) Date Filed: 06 -30 -97 By: James M. Ashley Effective Date: 02 -03 -98 Docket No. E General Manager, Marketing and Sales , G002/M -97 -985 Order Date: 02 -03 -98 E:IRATESICURRENTIMN_ELECIME 6_24.DOC Northern States Power Company Minneapolis, Minnesota 55401 MINNESOTA ELECTRIC RATE BOOK - MPUC NO. 2 GENERAL RULES AND REGULATIONS (Continued) Section No. 6 Original Sheet No. 25 Relocated from MPUC No. 1 Sheet No. 6 -12.1 & 6 -13 5.1 STANDARD INSTALLATION (Continued) B. Service at Transmission Volta e Transmission voltage service is defined as three phase alternating current at 69,000 volts or higher. The availability of transmission voltage will be determined by the Company when requested by the customer. The service voltage available will vary depending on the voltage in the vicinity of the customers service location. A customer electing to take transmission service for any portion a transmission service customer and any additional Company investments at the customer's location whether secondary, primary, or transmission voltage will be considered as Special Facilities. Transmission voltage service will be provided under the following conditions: 1. Such service does not adversely affect the reliability of the rest of the system or cast an undue expense on other ratepayers. 2. The customer will be metered at the lowest utilization voltage. Meter readings will be adjusted to compensate for transformer losses so as to be the equivalent of metering at the service delivery voltage. 3. The customer will be responsible for converting his equipment to a higher voltage in the future if the Company must do so to carry higher Toads over existing lines. 4. If in order to serve the customer, part of a transmission line extension must be built on property other than that owned by the customer, the whole line serving the customer will be built, owned, maintained, and operated by the Company. The customer will be responsible for reimbursing the Company for all expenses due to the acquisition of rights -of -way and permits on lines that the Company constructs. If the line extension is entirely on the customer's property, the customer may build, own, maintain, and operate it or request the Company to do so at the expense of the customer. 5. The customer must allow the Company access to all Company owned equipment for maintenance or emergencies. The customers maintenance records for protective equipment must also be available to the Company for inspection. 6. The Company will not use condemnation procedures to acquire rights -of -way to provide transmission service if the customer can be served adequately and economically at primary voltage. (Continued on Sheet No. 6 -26) Date Filed: 06 -30 -97 By: James M. Ashley Effective Date: 02 -03 -98 General Manager, Marketing and Sales Docket No. E,G0021M -97 -985 Order Date: 02 -03 -98 E:IRATES \CURRENTIMN ELECIME_6 25.DOC RSp Northern States Power Company Minneapolis, Minnesota 55401 MINNESOTA ELECTRIC RATE BOOK - MPUC NO. 2 GENERAL RULES AND REGULATIONS (Continued) Section No. 6 Original Sheet No. 26 Relocated from MPUC No. 1 Sheet No. 6 -13 & 6 -13.1 5.1 STANDARD INSTALLATION (Continued) B. Service at Transmission Voltage (Continued) The requesting customer will be responsible for reimbursing the Company for all costs associated with required new or relocated transmission lines or extensions, changes to the distribution system and substation modifications. If the customer requests the Company to remove existing facilities, the customer will be charged the replacement cost less depreciation, less salvage, plus removal expense. If facilities are specifically installed for more than one customer requesting transmission service, the cost will be shared by the customers requesting this service. The customer shall execute an Electric Service Agreement specifying the appropriate charges. Payment shall be made in the form of a monthly facility charge. An optional one -time charge is available upon customer request. 5.2 GENERAL EXTENSION Subject to its Section 5, STANDARD INSTALLATION AND EXTENSION RULES, the Company will extend, enlarge, or change its distribution or other facilities for supplying electric service when the anticipated revenue from the sale of additional service to result therefrom is such as to justify the expenditure. When the expenditure is not so justified, the extension, enlargement, or change of facilities will be made only if the customer, at the Company's option: A. Pays to the Company the portion of the capital expenditure not justified by the anticipated annual revenue (with or without provision for refund of all or part of such payment), B. Agrees to pay a special monthly charge, C. Agrees to pay annually a specified minimum charge, or D. Agrees to a combination of the above methods. In determining whether the expenditure is so justified, the Company will take into consideration the total cost of serving the applicant and will apply the general principle that the rendering of service to the applicant will not cast an undue burden on other customers. The Company's Section 5, STANDARD INSTALLATION AND EXTENSION RULES, imposes charges on customers for certain installation costs. (Continued on Sheet No. 6 -27) Date Filed: 06 -30 -97 By: James M. Ashley Effective Date: 02 -03 -98 General Manager, Marketing and Sales Docket No. E,G002/M -97 -985 Order Date: 02 -03 -98 E.\RATESICURRENTJ N_ELECUNE_6 26.DOC 1 16p Northern States Power Company Minneapolis, Minnesota 55401 MINNESOTA ELECTRIC RATE BOOK - MPUC NO. 2 GENERAL RULES AND REGULATIONS (Continued) Section No. 6 1 Revised Sheet No. 27 5.2 GENERAL EXTENSION (Continued) Refundable payments will be in the amount determined by subtracting from the total estimated installation the anticipated revenue adjusted by the revenue factor, as set forth in Section 5.1, STANDARD INSTALLATION. For each additional customer served directly from the original contracted extension within five years from the date of its completion, the person who made the advance payment will receive refunds based on the revenue to be received from the additional customer served from the extension and the costs required to serve such customer. The total of such refunds will in no event exceed the total advance payment. Refunds will be made only for line extensions on private property to a single customer served directly from the original contracted facilities. 5.3 SPECIAL FACILITIES A. Definitions For the purposes of Section 5.3 and the City Requested Facilities Surcharge Rider, the following definitions apply: 1. "Distribution Facilities" are defined as all primary and secondary voltage wires, poles, insulators, transformers, fixtures, cables, trenches, ductlines, and other associated accessories and equipment, including substation equipment, rated 35kV class and below, whose express function and purpose is for the distribution of electrical power from the Company's distribution substation directly to residential, commercial, and /or industrial customers. Distribution Facilities exclude all facilities used primarily for the purpose of transferring electricity from a generator to a substation and /or from one substation to another substation. As such, Distribution Facilities serve only customers on the primary and secondary rates of the Company. 2. "Transmission Facilities" are defined as all poles, towers, wires, insulators, transformers, fixtures, cables, and other associated structures, accessories and equipment, including substation equipment, rated 25kV class and above, whose express function and purpose is the transmission of electricity from a generator to a substation or substations, and from one substation to another. 3. "Municipality" is defined as any one of the following entities: a county, a city, a township or other unit of local government. 4. "City" is defined as either a statutory city or a home rule charter city consistent with Minn. Stat. Sections 410.015 and 216B.02, Subd. 9. (Continued on Sheet No. 6 -27.1) Date Filed: 06 -11 -02 By: Kent T. Larson Effective Date: 11 -06 -02 State Vice President — Minnesota & Dakotas Docket No. E002/M -99 -799 Order Date: 11 -06 -02 F:\RA\RateslCurrent Mn elec\Me 6 27 r0l.doc hSp Northern States Power Company Minneapolis, Minnesota 55401 MINNESOTA ELECTRIC RATE BOOK - MPUC NO. 2 GENERAL RULES AND REGULATIONS (Continued) Section No. 6 Original Sheet No. 27.1 5.3 SPECIAL FACILITIES (Continued) A. Definitions (Continued) 5. "Standard Facilities" are those facilities whose design or location constitute the reasonable and prudent, least -cost altemative that is consistent with the existing electric system configuration, will meet the needs of the Company's customers and will maintain system reliability and performance under the circumstances. In determining the design or location of a "Standard Facility ", the Company shall use good utility practices and evaluate all of the circumstances surrounding the proposal, including (i) public and employee safety in the installation, operation and maintenance of the facility, (ii) compliance with the National Electrical Safety Code, other applicable engineering standards and electric utility norms and standards, (iii) electric system reliability requirements, (iv) the presence, age, condition and configuration of existing facilities in the affected area, (v) the presence and size of existing right -of -way in the affected area, (vi) existing topology, soil, spacing, and any environmental limitations in the specific area, (vii) existing and reasonably projected development in the affected area, (viii) installation, maintenance, useful life and replacement cost factors, and (ix) other relevant factors under the particular circumstances. 6. "Special Facilities" are non - standard facilities or the non - standard design or location of facilities as provided in Section 5.3(B). 7. "Excess Expenditure" is defined as the total reasonable incremental cost for construction of Special Facilities, including: the value of the un- depreciated life of existing facilities being removed and removal costs Tess salvage; the fully allocated incremental labor costs for design, surveying, engineering, construction, administration, operations or any other activity associated with said project; the incremental easement or other land costs incurred by the Company; the incremental costs of immediately required changes to associated electric facilities, including backup facilities, to ensure reliability, structural integrity and operational integrity of electric system; the incremental taxes associated with requested or ordered Special Facilities; the incremental cost represented by accelerated replacement cost if the Special Facility has a materially shorter life expectancy than the standard installation; the incremental material cost for all items associated with said construction, Tess salvage value of removed facilities, and any other prudent costs incurred by Company directly related to the applicable Special Facilities. N (Continued on Sheet No. 6 -27.2) Date Filed: 06 -11 -02 By: Kent T. Larson Effective Date: 11 -06 -02 State Vice President — Minnesota & Dakotas Docket No. E002/M -99 -799 Order Date: 11 -06 -02 F:1RA1Rates%Current\Mn_ele0Me_6 27 -1. Northern States Power Company Minneapolis, Minnesota 55401 MINNESOTA ELECTRIC RATE BOOK - MPUC NO. 2 GENERAL. RULES AND REGULATIONS (Continued) Section No. 6 Original Sheet No. 27.2 5.3 SPECIAL FACILITIES (Continued) B. General Rule 1. When the Company is requested by a customer, group of customers, developer, or Municipality to T provide types of service that result in an expenditure in excess of the Company designated standard service installation as provided under Section 5.1, STANDARD INSTALLATION, or designated standard Distribution Facilities or Transmission Facilities under Section 5.3 (A)(5) the requesting customer, group of customers, developer, or Municipality will be responsible for such Excess Expenditure, unless otherwise required by law. Common examples of Special Facilities include duplicate service facilities, special switching equipment, special service voltage, three phase service where single phase service is adequate, excess capacity, capacity for intermittent equipment, trailer park distribution systems, underground installations to wood poles, conversion from overhead to underground service, specific area undergrounding, other special undergrounding, location and relocation or replacement of existing Company facilities. T 2. When requested under Section 5.3 (B)(1) the Company will evaluate the circumstances and determine the Standard Facility(ies) that would be appropriate to the particular situation. From this evaluation, the Company will determine the facilities design /configuration for the proposed project that meets the definition of a Standard Facility. This design /configuration shall constitute the Standard Facility for purposes of determining the Excess Expenditure associated with any requested or ordered Special Facility, including a Special Facility subject to a City Requested Facilities Surcharge or other rate surcharge. 3. Subject to the requirements of applicable law, and subject to the Company's previously scheduled or emergency work, the Company will initially install Special Facilities or will replace, modify or relocate to a Company- approved location or route its existing Distribution Facilities or Transmission Facilities (a) upon the request of a customer, a group of customers, developer, or upon request or lawful order of a Municipality if the Company determines the requested or ordered Special Facilities will not adversely affect the reliability, structural integrity, ability to efficiently expand capacity or operational integrity of the Company's Distribution Facilities or Transmission Facilities; and (b) the requesting or ordering customer, group of customers, developer, or Municipality arranges for payment of the Excess Expenditures under Section 5.3(E)(1) or 5.3(E)(2), or a requesting or ordering City elects that the Excess Expenditures for undergrounding of Distribution Facilities be recovered by surcharge under Section 5.3(E)(3). N (Continued on Sheet No. 6 -28) Date Filed: 06 -11 -02 By: Kent T. Larson State Vice President — Minnesota & Dakotas Effective Date: 11 -06 02 Docket No. E002/M -99 -799 Order Date: 11 -06 -02 FARA 6 27.2.doe nSp Northern States Power Company Minneapolis, Minnesota 55401 MINNESOTA ELECTRIC RATE BOOK - MPUC NO. 2 GENERAL RULES AND REGULATIONS (Continued) Section No. 6 1 Revised Sheet No. 28 5.3 SPECIAL FACILITIES (Continued) C. Special Facilities In Public Right Of Way 1. Whenever a Municipality as a goveming body of public right -of -way orders or requests the Company to N replace, modify or relocate its existing Distribution Facilities or Transmission Facilities located by permit in said public right -of -way to the extent necessary to avoid interference with construction on said public right -of -way, such facilities will be replaced, modified or relocated at Company expense, provided the construction is the Standard Facility(ies) installation designated by the Company. 2. If the Municipality requests or orders a facility other than the standard facility(ies) determined under 5.3(C)(1), the Company will provide the Municipality notification of the Excess Expenditure compared to the Standard Facility. If the Municipality requests or orders a type of construction with cost in excess of the Company designated standard construction, recovery of such Excess Expenditures will be subject to Section 5.3(E). 3. Except in emergencies, the Company has no obligation to commence initial construction of new Special Facilities, or to commence construction for replacement, modification, reconstruction or relocation of existing facilities, until the Company receives a permit, or other written authorization, from { the Municipality (or its designee) having jurisdiction over use of the applicable public right -of -way, authorizing the construction at a Company- approved reasonable location within the public right -of -way or at a location established by lawful order of the Municipality. 4. The Company reserves the right to require an order from a Municipality if the Company determines the requested Special Facilities constitute an improvement primarily for the benefit of a landowner or other group and only an incidental benefit to public use of the right -of -way. The Company also reserves the right to challenge the lawfulness of a Municipality's order. N D. Underground Facilities Requirements The following provisions apply when replacing overhead facilities with underground facilities: 1. The customer, at customer's expense, must engage an electrician to adapt the customer's electrical facilities to accept service from Company underground facilities. 2. The Company will allow reasonable time for the customer to make the necessary alterations to their facilities, before removal of the existing overhead facilities. The customer, group of customers, developer or Municipality must provide Company reasonable notice of the undergrounding request so Company may efficiently plan and install such facilities. • (Continued on Sheet No. 6 -29) Date Filed: 06 -11 -02 By: Kent T. Larson State Vice President — Minnesota & Dakotas Effective Date: 11-06-02 Docket No. E002/M -99 -799 Order Date: 11 -06 -02 F:SRAIRates1Current1Mn elecWe 6 28 r0l.doc I NS? Northem States Power Company Minneapolis, Minnesota 55401 MINNESOTA ELECTRIC RATE BOOK - MPUC NO. 2 GENERAL RULES AND REGULATIONS (Continued) Section No. 6 1" Revised Sheet No. 29 5.3 SPECIAL FACILITIES (Continued) D. Underground Facilities Requirements (Continued) 3. Perpetual easements will be granted Company at no cost to the Company whenever any portion of the underground distribution system is located on private land. Said private easements also will allow the Company access for inspection, maintenance, and repair of Company facilities. 4. The Company must receive, by franchise or permit, full access to its facilities installed underground for the purpose of inspection, maintenance, and repair of such facilities, such right of access to include the right to open public ways. 5. The Municipality will give sufficient notice and will allow the Company sufficient time to place its T facilities beneath public ways while the same are tom up for resurfacing. The Municipality shall provide Company with access to the torn up public ways during such period so that Company will have unobstructed use of sufficiently large sections of the public ways to allow installation of the T underground facilities in an economic manner. 6. Secondary voltage service supplied from an underground distribution lateral installation will require that the customer install, own, and maintain necessary conduits and secondary service conductors or bus duct to a point designated by Company within or adjacent to the secondary compartment of the transformer or vault. Company will make final connection of customer's secondary service conductors or bus duct to Company's facilities. 7. Secondary voltage service supplied from underground secondary service conductors require that the customer install, own, or maintain necessary conduits on private property to a point designated by the Company at or near the property line. The secondary service conductors usually will be installed by the T customer in the customer's conduit, however, in some installations it may be preferred to have Company provide a continuous installation from the Company facilities through the customer conduit to the customer's service equipment. In these installations the customer must pay the total installed cost T of the Company's cable installed on private property. The Company will make the final connection of customer's secondary service connectors to Company's facilities. T 8. The customer, group of customers, developer or Municipality will be subject to any charges imposed as a result of the conditions set forth in Section 5.1, STANDARD INSTALLATION and charges for Special Facilities as provided in this Section 5.3. (Continued on Sheet No 6 -29.1) Date Filed: 06 -11 -02 By: Kent T. Larson Effective Date: 11 -06 -02 State Vice President — Minnesota & Dakotas Docket No. E002/M -99 -799 Order Date: 11 -06 -02 F:\RA\Rates \C urrentWtn_elec\Me_6_29_r01. doc IW Northern States Power Company Minneapolis, Minnesota 55401 MINNESOTA ELECTRIC RATE BOOK - MPUC NO. 2 GENERAL RULES AND REGULATIONS (Continued) Section No. 6 Original Sheet No. 29.1 5.3 SPECIAL FACILITIES (Continued) E. Special Facilities Pay ments 1. Where the requesting or ordering party is required to prepay or agrees to prepay or arrange payment N for Special Facilities, the requesting or ordering party shall execute an agreement or service form pertaining to the installation, operation and maintenance, and payment of the Special Facilities. Payments required will be made on a non - refundable basis and may be required in advance of construction unless other arrangements are agreed to in writing by the Company. The facilities installed N by the Company shall be the property of the Company. Any payment by a requesting or ordering party shall not change the Company's ownership interest or rights. Payment for Special Facilities may be required by either, or a combination, of the following methods as T prescribed by the Company: a single charge for the costs incurred or to be incurred by the Company due to such a special installation or a monthly charge being one - twelfth of Company's annual fixed costs necessary to provide such a special installation. The monthly charge will be discontinued if the special facilities are removed or if the requester eventually qualifies for the originally requested Special Facilities. 2. Where Special Facilities are requested or ordered by a Municipality which is not a City, or in circumstances other than those addressed in Section 5.3(E)(3), and payment is not made or arranged by the Municipality, the Company may seek approval of the Commission to allow the Excess Expenditures to be the responsibility of the Company's customers residing within the Municipality and may seek approval by the Commission pursuant to Minn. Stat. Chap. 216B to allow recovery of such expenditures from those customers through a rate surcharge or other method. T Company will provide notice to an affected Municipality of any miscellaneous rate filing by Company under Minn. Stat. Sect. 216B.16, Subd. 1, to establish a Special Facilities surcharge applicable to customers in such Municipality. Customers in the applicable Municipality will be notified of (a) the implementation of the Special Facilities surcharge through either a bill message or bill insert during the month of implementation of such surcharge, and (b) any change in the surcharge. N Continued on Sheet No. 6 -29.2) Date Filed: 06 -11 -02 By: Kent T. Larson Effective Date: 11 -06 -02 State Vice President — Minnesota & Dakotas Docket No. E002/M -99 -799 Order Date: 11 -06 -02 F elecWle 6 29 -t.doc INS? Northern States Power Company Minneapolis, Minnesota 55401 MINNESOTA ELECTRIC RATE BOOK - MPUC NO. 2 GENERAL RULES AND ERGULATIONS (Continued) Section No. 6 Original Sheet No. 29.2 SPECIAL FACILITIES (Continued) E. Special Facilities Payments (Continued) 3. Where undergrounding of Distribution Facilities as a Special Facility is ordered by a City, and payment for excess expenditure is not made or arranged by the City, the Excess Expenditures will be recovered from the Company's customers located in the City through a rate surcharge set forth in Section 5.3 (F) and the City Requested Facilities Surcharge Rider subject to the following conditions: a. The Company shall provide written notice to the City containing the following: i. the estimated total excess expenditures required for the designated City undergrounding project and an estimate of the resulting surcharge; ii. notice to the City Clerk that the City has sixty (60) days from its receipt of the notice to file with the Commission an objection to the proposed surcharge under Minnesota Statutes 216B.17 or other applicable law. The notice shall contain a brief statement of facts and tariff or other legal authority on which the Company bases its right to surcharge the ratepayers located in the City. b. Within the sixty (60) day period noticed by the Company, the City may give written notice to the Company of its intention to pay all, a portion or none of the estimated Excess Expenditures, or otherwise enter into an agreement with the Company regarding payment of any Excess Expenditures. If the City does not respond in writing within the sixty (60) days, it is deemed to have elected not to pay any portion of the Excess Expenditures and will have waived its right to object to the Company's right to surcharge ratepayers in the City for the Excess Expenditures. Such failure, however, is not a waiver of the City's right to object to the Company's Excess Expenditures surcharged to ratepayers in the City, which objection may be exercised pursuant to other applicable law. c. A rate surcharge set forth in Section 5.3(F) and the City Requested Facilities Surcharge Rider may be used to recover the excess Expenditures of Distribution Facilities when such projects are initiated and controlled by a city even if the city does not act within its police powers to require the undergrounding project to be completed and the City and Company mutually agree in writing to using such a surcharge. N (Continued on Sheet No. 6 -29.3) Date Filed: 06 -11 -02 By: Kent T. Larson Effective Date: 11 -06 -02 State Vice President — Minnesota & Dakotas Docket No. E002/M -99 -799 Order Date: 11-06-02 F: RA \Rates \CurrentWn elecWle_6 29 -2.doc • 11 1 Wr7 Northern States Power Company Minneapolis, Minnesota 55401 MINNESOTA ELECTRIC RATE BOOK - MPUC NO. 2 GENERAL RULES AND REGULATIONS (Continued) Section No. 6 Original Sheet No. 29.3 SPECIAL FACILITIES (Continued) E. Special Faciliti P ay ments (Continued) d. The City may bring its objection to the proposed surcharge to the Commission by filing a statement of objection with the Commission and serving the Company within sixty (60) days. An objection proceeding shall not halt or delay the project, except for good cause shown. Notice and implementation of the surcharge shall be stayed until the Commission or a court of competent jurisdiction issues a final order or judgment. e. Nothing in this tariff is intended to establish or limit the rights of a Company customer that is a member of the class of customers surcharged or proposed to be surcharged from pursuing its rights under applicable law. f. Customers in the applicable City will be notified of: (i) the implementation of a City Requested Facilities Surcharge either through a bill message or a bill insert during the month preceding the month the surcharge is commenced; and (ii) any change in a preexisting surcharge. The Company shall provide the Department and City the proposed notice to customers no Tess than sixty (60) days prior to the first day of the month in which the Company intends to notify customers of the surcharge. N (Continued on Sheet No. 6 -29.4) Date Filed: 06 -11 -02 By: Kent T. Larson State Vice President — Minnesota & Dakotas Effective Date: 11 -06 -02 Docket No. E002/M -99 -799 Order Date: 11 -06 -02 FARA1Rates \CurrentWIn_eleaVle_6_29 -3.doc f3 Northern States Power Company Minneapolis, Minnesota 55401 MINNESOTA ELECTRIC RATE BOOK - MPUC NO. 2 GENERAL RULES AND REGULATIONS (Continued) Section No. 6 Original Sheet No. 29.4 SPECIAL FACILITIES (Continued) F. Costs of S•ecial Facilities Recovered b Cit Re•uested Facilities Surchar.e 1. The Excess Expenditure required for any Special Facility undergrounding of Distribution Facilities requested or ordered by a City shall be subject to surcharge in accordance with the provisions of this section and the City Requested Facilities Surcharge (CRFS) Rider, if the City does not prepay or otherwise arrange payment. The surcharge shall commence on such date as determined by the Company, but no earlier than the first full billing month following at least 60 days notice to the applicable City of the planned implementation date of a surcharge. 2. City Project Tracker Account. The Company will establish a City Project Tracker Account for the applicable City in order to track project cost recovery through customer collections. The initial balance in the Tracker Account will be the Company- determined Excess Expenditure for the applicable Special Facilities. Excess Expenditures for subsequent, additional City requested or ordered Special Facilities may be added to the Tracker Account balance at any time to the extent additional Excess Expenditures are incurred by Company. The Tracker Account balance shall be determined as follows: a. The total Excess Expenditure ("EE ") for each City Special Facility undergrounding project to be recovered through a CRFS surcharge. The EE will be adjusted to reflect actual Company costs and any direct payments made by the City for the designated construction project; b. Plus the Carrying Charge ("CC ") on the unrecovered or over - recovered monthly balance in the Tracker Account based on the overall rate of return from the Company's most recent electric general rate case decision; and c. Less the Recovered Project Costs ("RPC ") equal to the actual monthly amounts billed to customers in the applicable city through the CRFS Rider, subject to subsequent reductions to account for uncollectibles, refunds and correction of erroneous billings. (Continued on Sheet No. 6 -29.5) ( Date Filed: 06_11_02 By: Kent T. Larson State Vice President — Effective Date: 11 -06 -02 Docket No. E -99 -799 Minnesota & Dakotas Order Date: 11 -06 -02 F:IRA\RateslCurrentlMn eleclMe 6 29 -4.doc f5 Northern States Power Company Minneapolis, Minnesota 55401 MINNESOTA ELECTRIC RATE BOOK - MPUC NO. 2 GENERAL RULES AND REGULATIONS (Continued) Section No. 6 Original Sheet No. 29.5 SPECIAL FACILITIES (Continued) F. Costs of Special Facilities Recovered b Cit Re•uested Facilities Surchar.e (Continued) 3. The Company may delay implementation of a surcharge for a City Project Tracker Account until the minimum surcharge amount provided in the CRFS Rider is reached. Any under or over recovery of the Tracker Account balance in the last month of the final Recovery Period will be expensed. The Company will limit over - recoveries to no more than $0.05 per customer at the time the Tracker Account is terminated. 4. Record Access and Reporting Requirements. The Company's records associated with a City's Tracker Account shall be available for inspection by such City at reasonable times. If requested by a City, the Company shall provide a report on the status and balance of the City Project Tracker Account as follows: a. whenever Excess Expenditures for requested or ordered Distribution Facilities undergrounding are added to the Tracker Account for a designated or new City project, b. on or before the last business day of the month following the final month of the Recovery Period, ( or c. annually if the Recovery Period is greater than 12 months. 5. The surcharge for a particular Special Facility Distribution Facilities undergrounding project may be of a different design than set forth in the City Requested Facilities Surcharge Rider if approved in advance by Commission order in response to a rate filing by the Company under Minn. Stat. Section 216B.16, or in response to a complaint filed by the applicable City under Minn. Stat. Section 216B.17. N Date Filed: 06 -11 -02 BY: Kent T. Larson State Vice President — Minnesota & Dakotas Effective Date: 11 06 -02 Docket No. E002/M -99 -799 Order Date: 11 -06 -02 FARA \Rates \CurrentJMn elec1Me 6 29 -5.doc