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, FEBRUARY 25, 2008, AT 4:30 P.M.

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

Present: Commissioners Bloomquist, Lucarelli, Petroskey, Raukar, and Sipola.

Absent: None.

Also Present: Terry Leoni – General Manager; Bill Hafdahl–Director-Finance & Administration; Sue Lalli - Public Relations / Customer Service Supervisor; Dan Hestetune.

Mr. Leoni reviewed the information presented pertaining to: the Federal Regulator’s approval of the Minnesota Power Wholesale Rate Request; the comparison sheet of the Minnesota Power billings to DPU; and the Duluth Tribune article from February 16, 2008 on Minnesota Power’s growth in 2007. Sixteen Northern Minnesota Municipal Utilities served by Minnesota Power have met and put together a paper on their position on their Wholesale Rate Contracts with Minnesota Power and the coming rate increase. This Position Paper was delivered to Minnesota Power last week and requested that Minnesota Power meet with the Utilities and: explain why there will be a rate increase when Minnesota Power is showing a profit; explain the rate increase mechanism being applied to the rate increases; change the dates for all the Utilities having contracts to the same dates; provide the Right of First Refusal for Purchase of Power. The 16 Utilities have agreed to negotiate with Minnesota Power as a group and will be meeting again in about three weeks.

Moved by Petroskey and supported by Raukar that financial Resolution #5123 authorizing the payroll dated February 14, 2008 in the amount of $102,665.43, checks #45380 through #45401, and direct deposits #11662 through #11714; and bills dated February 11, 2008 through February 25, 2008 in the amount of $1,489,570.76, checks #78040 through #78122, and wire and electronic transfers in the amount of $851,515.65 be adopted and the minutes of the regular meeting held on February 11, 2008 be approved as presented. Motion carried.

LEA meeting minutes and the agenda for tonight’s meeting were presented along with January, February and March 2008 cash flow.

Mr. Leoni noted the Utility is waiting for a response from the VRMC to set a time for the next meeting on their rate contract. The Utility is also working with the VRMC on ways to reduce their demand costs.

Moved by Raukar and supported by Lucarelli to authorize the attendance of any Commissioners and members of Management to attend the MMUA Winter-Legislative Conference to be held in Bloomington, MN on March 12-14, 2008. Motion carried.

A list of the 2008 Steam Priorities was presented for Commission information. The list shows the steam issues scheduled at this time to be handled during 2008.

Mr. Hafdahl presented an update from the Minnesota Municipal Gas Agency on the Prepay Natural Gas Contract. The contract is still on hold due to adverse market conditions that have delayed the execution of the contract.

Moved by Lucarelli and supported by Petroskey to adjourn the meeting. There being no further business to come before the Commission, Commission President Bloomquist declared the meeting adjourned at 5:20 p.m.

ATTEST: APPROVED:

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Matt Raukar, Secretary Quentin Bloomquist, President