Approved 4/28/08

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, APRIL 14, 2008, AT 4:30 P.M.

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

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

Absent: Commissioner Lucarelli

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

Commissioner Petroskey questioned a finance charge for Airgas and the payment to Frontier Precision. Mr. Hafdahl explained that finance charges occur sometimes depending on the billing cycle. Mr. Leoni stated that the Frontier Precision billing was for the new GPS software. Moved by Raukar and supported by Petroskey that financial Resolution #5126 authorizing the payroll dated 3/27/08 in the amount of $103,652.45, checks #45446 through #45468, and direct deposits #11821 through #11873 and the payroll dated 4/10/08 in the amount of $99,408.85, checks #45469 through #45490, and direct deposits #11874 through #11927; and bills dated 3/24/08 through 4/14/08 in the amount of $855,521.43, checks #78781 through #78901, and wire and electronic transfers in the amount of $932,271.95 be adopted and the minutes of the regular meeting held on March 24, 2008 be approved as presented. Motion carried.

The March Monthly Injury Report was presented with no discussion.

Mr. Leoni stated that he met with the Minnesota Pollution Control Agency Commissioner on March 25^th. The Commissioner upheld part of the fines and penalty but is considering a reduction of $5,000. Mr. Leoni expects to hear the final disposition soon. He will bring it to the Commission at the next meeting. He reminded the Commission that Foster Wheeler will be reimbursing Virginia Public Utilities for the fines.

Mr. Leoni presented a travel request for two employees to attend the Caselle conference in October. He noted that the request is normally presented a month before the conference. This year it is being presented early in order to receive reduced airfare and hotel prices. Moved by Raukar and supported by Petroskey to approve the travel request. Motion carried.

Mr. Leoni reported that he has a new contract with Minnesota Power (MP) but it is not ready for signature yet. Several municipalities are still negotiating with MP regarding the rate increase. He noted that the March invoice had a $26,000 increase in the demand charge. This increase is not being passed on to rate payers at this time, but it may have to be next year. He also noted that the “Cap & Trade” legislation is still being discussed in the Legislature.

Commissioner Sipola questioned why they had not received monthly financial reports yet this year. Mr. Hafdahl stated that the January financials would be in the next commission packet. Reporting was behind due to audit requirements and grant work. Mr. Leoni stated that Laurentian Energy Authority has been earmarked for a $1,000,000 grant from the Department of Energy to study biomass growing. Material dredged from Lake Superior will be spread at a mining site and renewable fuel (most likely grasses) will be planted. Mr. Hafdahl has been working on the financial portion of the grant application. The grant should be announced in June.

Commissioner Sipola commended Mr. Leoni on the article in the April customer newsletter on the biomass project. He suggested that it be submitted to the local newspaper as a guest column. Mr. Leoni said that the July customer newsletter will have a follow-up to that article and asked to hold off submitting anything to the newspaper until after July.

Carried Forward

City of Virginia

Public Utilities Commission Page 2

Minutes of April 14, 2008 Meeting

Brought Forward

Councilor Lindberg stated that he had heard something about burning garbage and wondered if that could be used as a fuel at Virginia Public Utilities. Mr. Leoni explained that St. Louis County was investigating burning recyclables, not RDF (refuse-derived fuel). They were looking to use recycled cardboard and other paper products to make pellets to burn at the Cleveland Cliffs Renewafuel site.

Mr. Leoni reported that he had toured the new Taconite Ridge windmill site. The ten windmills cost about $6,000,000 each and are expected to produce 2.5 megs of electricity each when operational. They are only expected to be 30-34% efficient.

Moved by Raukar 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 4:45 p.m.

ATTEST: APPROVED:

____________________________ ____________________________

Matt Raukar, Secretary Quentin Bloomquist, President