A REGULAR MEETING OF THE PUBLIC UTILITIES COMMISSION OF THE CITY OF VIRGINIA, MINNESOTA, WAS HELD AT THE OFFICE OF THE DEPARTMENT OF PUBLIC UTILITIES ON MONDAY, JANUARY 14, 2008, AT 4:30 P.M.

Commission President Sipola called the meeting to order at 4:30 p.m.

Present: Commissioners Bloomquist, Park, Petroskey, Sipola.

Absent: Commissioner Raukar.

Also Present: Terry Leoni – General Manager; Bill Hafdahl–Director-Finance & Administration;

Sue Lalli-Public Relations / Customer Service Supervisor; Councilor Dennis Lindberg.

Mr. Leoni reviewed information on the December 31, 2007 Minnesota Power FERC Filing information to wholesale customers received from Minnesota Power. This filing can affect the Department’s Wholesale Power Agreement and allow Minnesota Power to increase rates to Virginia under the Agreement. Mr. Leoni reported a meeting will be held with four other Municipal Utilities to go over these changes and see how they can be minimized, if at all.

Mr. Hafdahl reviewed the information contained in the MCMU / MMGA Prepay Update dated January 4, 2008. Currently the Agency is waiting for the market to recover and improve so that it is beneficial to enter into a contract.

The December 12, 2007 letter to Ms. J. Cimperman on steam service to her home was reviewed and filed.

Councilor Lindberg noted it appears the steam pressure to 12^th Street South is much lower than usual. Mr. Leoni will have the Director of Operations Distribution - Steam and Water, contact Councilor Lindberg to review the steam pressure in this area.

Moved by Bloomquist and supported by Petroskey that financial Resolution #5120 authorizing the payroll dated December 20, 2007 in the amount of $103,265.32, checks #45258 through #45280, and direct deposits #11450 through #11502 and the payroll dated January 3, 2008 in the amount of $105,999.01, checks #45281 through #45303 and direct deposits #11503 through #11555 and payroll dated January 10, 2008 in the amount of $12,822.03 checks #45304 through #45335; and bills dated December 11, 2007 through January 14, 2008 in the amount of $1,668,093.08, checks #77664 through #77875, and wire and electronic transfers in the amount of $1,190,581.69 be adopted; and the minutes of the regular meeting held on December 10, 2007 be approved as presented/amended. Motion carried.

The Agenda for the January 15, 2008 LEA meeting was reviewed along with the Minutes from the November 20, 2007 and December 19, 2007 meetings. Mr. Leoni explained that one LEA Board member has requested LEA look into hiring a general manager; this is an exploratory venture only. The schedule of LEA meetings to be held in 2008 was presented.

The December 2007 Monthly Injury Summary Report was reviewed.

Mr. Leoni reviewed the information presented on the Cooling Tower(s) Project, budgeted under capital expenditures for 2008. The project figures are coming in at $1,000,000 and $600,000 has been budgeted. Mr. Leoni recommends that we wait until April-May of the year to see if this project is still required (based on a cooperative effort with Mittal Steel) to keep in compliance with environmental regulations for water temperatures in Silver Lake. After discussion, the project was put on hold until that time.

Moved by Bloomquist and supported by Petroskey to authorize the Director of Operations – Gas and Electric and the Director of Finance & Administration to attend the MMUA seminar on DOE Final Rule – Transformer Efficiency in St Cloud, Mn. on February 7, 2008 - total estimated cost of $311.89. Motion carried.

Carried forward

City of Virginia

Department of Public Utilities

Minutes from January 14, 2008 Commission Meeting

Page 2

Brought forward

Moved by Bloomquist and supported by Petroskey to authorize two members of the Service Crew to attending the Center Point Energy Pipeline Corrosion Control Seminar on February 12-13, 2008 in Prior Lake, Mn., at a total estimated cost of $658.48. Motion carried.

Moved by Bloomquist and supported by Petroskey to authorize Management to write off the balance of $909.39 on utility account No. 50637751 for service to 530 11^th Street South, Virginia, Mn., as the Bankruptcy Court has delivered a Discharge of Debt for this amount. Motion carried.

Mr. Leoni and Management are still examining the water and steam loss figures last reported. All meters have been checked for accuracy; the City’s Sewer Crews are watching for any changes; the Director of Finance will be checking steam usage for separate areas of the City; an additional meter will be put on the 9^th Avenue steam line at the end of the heating season to see if there is an issue on that line; the figures on the steam Sales and Production Reports back through 1997 will be reviewed to see when the figures began to change.

There being no further business to come before the Commission, Commission President Sipola declared the meeting adjourned at 5:40 p.m.

ATTEST: APPROVED:

_______________________ ______________________

Jackie Park, Vice President Don Sipola, President