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, MARCH 24, 2008, AT 4:30 P.M.

Commission President Bloomquist called the meeting to order at 4:35 p.m.

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

Absent: Commissioner Raukar

Also Present: Terry Leoni – General Manager; Bill Hafdahl – Director-Finance & Administration; Connie Larson -- Director-HR/Safety; Councilor Dennis Lindberg.

Moved by Petroskey and supported by Lucarelli that financial Resolution #5125 authorizing the payroll dated March 13, 2008 in the amount of $96,147.98, checks #45424 through #45445, and direct deposits #11768 through #11819; and bills dated March 10, 2008 through March 24, 2008 in the amount of $1,656,772.67, checks #78699 through #78780, and wire and electronic transfers in the amount of $215,083.04 be adopted and the minutes of the regular meeting held on March 10, 2008 be approved as presented. Motion carried.

LEA meeting minutes and the agenda for this week’s meeting were presented. Mr. Leoni noted that Gary Kleffman was reappointed to the Hibbing Public Utilities Commission and will remain on the LEA board.

Mr. Leoni stated that he will be meeting with the Minnesota Pollution Control Agency Commissioner to negotiate the Stipulation Agreement and proposed fines relating to alleged violations. He will report back to the Commission at the next meeting.

Mr. Leoni presented a request for action regarding the hiring of a Laborer. He explained that there are fugitive dust issues and the cleaning of the wood handling system needs to be done 7 days a week. The position will be reimbursed by LEA. Moved by Sipola and supported by Lucarelli for discussion. Commissioner Lucarelli questioned the dust piled up high. Leoni stated that they would be borrowing Hibbing Public Utilities’ 40-foot lift to clean the high areas. He had discussed sharing a lift with Virginia Parks & Rec, but it wouldn’t work out. Lucarelli noted that he felt local people should be hired in entry-level jobs where specialized degrees aren’t required. It was noted that the candidate for this position is local. Motion carried.

Mr. Leoni noted that the Mayor is now involved in the rate negotiations with VRMC. Commissioner Sipola questioned whether the rates that VRMC was currently paying would continue indefinitely. Mr. Hafdahl stated that the VRMC committee was aware that an adjustment would be due once a new rate was agreed upon.

Commissioner Lucarelli questioned a customer’s letter of notification in the packet. He asked whether the customer has been contacted directly. Mr. Hafdahl stated that this person had been scheduled for AMR installation two winters ago and still has not responded. He has not followed up on that issue but is following up on the 3-month read issue.

Mr. Leoni notified the Commission that a letter, rate brochure, and steam brochure had been sent out to customers. One positive phone call had been received. It is planned to follow up in the July customer newsletter with information on energy costs and conservation. This lead to a discussion of the “Cap & Trade” legislation that is currently proposed. Mr. Leoni and Mr. Hafdahl stated that this could lead to a 4¢ per Kwh increase for all Minnesotans. They want to make customers and local legislators aware of the affects of this type of legislation. Mr. Hafdahl stated that this will also have a ripple affect on natural gas. Mr. Leoni noted that there already was an affect on coal costs due to transportation increases.

Mr. Leoni updated the Commission on steam system problems that had arisen that day. A surge in the DC battery backup system took out control systems and shut the boilers down. Employees got the systems and boilers working and are investigating the issue. Steam pressure was affected for several hours.

Councilor Lindberg questioned why Virginia Public Utilities doesn’t have dual fuel or off peak rates. Mr. Leoni explained that the ability to bill in these ways was now available with AMR but reminded the Commission that tiered rates had recently been eliminated. He said that the electrical load in Virginia is pretty steady and doesn’t see the spikes that other electric utilities do.

Commissioner Sipola asked what was happening with the General Manager search at Hibbing Public Utilities. Mr. Leoni explained that they had done a local search and received six applicants, with one being an internal candidate.

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 5:05 p.m.

ATTEST: APPROVED:

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Matt Raukar, Secretary Quentin Bloomquist, President