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August25, 1999
PUC plansto intervenein NSP mergerMove gives opportunityto resolve someprice-related issuesBy KEVIN SWEENEY Journal Editor NEW ULM -- The New Ulm Public Utilities Commission voted Tuesday to intervene in the proposed merger between Northern States Power Co. and New Century Energy. The merger is being considered by the Federal Energy Regulation Commission, which is seeking comments PUC Director of Utilities Robert Stevenson said filing as an intervenor in the proposed merger would give New Ulm an opportunity to force NSP's consideration of issues that the PUC would like to resolve. Among those is the provision of timely energy price information. New Ulm buys power from NSP on occasions when peak demand exceeds generating capacity. Currently, the city has no way of knowing ahead of time what NSP is charging. The price can be high. Earlier in the meeting Stevenson reported to the commission that on two days at the end of July, during the July heat wave, the city's peak exceeded capacity by a couple of megawatt hours (MWH) of energy for an hour or two. NSP charged $3,000 to $4,000 per MWH. The local utility has no way of knowing ahead of time what the price is, or if some other electricity source is cheaper, said Stevenson said, because NSP won't tell. NSP claims it is a competition issue -- it doesn't want its competitors to know what it is charging. By intervening in the merger hearings, New Ulm would bring its concerns to the table. The only negative aspect, said Stevenson, is the potential cost. If that grows too high, New Ulm could also join with another group, the Minnesota Wheeling Association, which is planning a general notice of intervention in the matter. In other business, the commission heard a report on the potential expansion of its electrical service into areas to the south and east of New Ulm where city expansion is expected to occur. The area is currently served by Brown County REA. The report explains the process of negotiating with Brown County REA for taking over or possibly exchanging service territories with the REA. Some preliminary meetings with city staff and a representative of the Minnesota Municipal Utilities Association have been held, and the staff has drawn up a map of potential expansion. The next step would be getting the commission and the New Ulm City Council to pass resolutions of intent to expand in the area, then to begin negotiations with Brown County REA. Stevenson said that if an agreement is reached, the takeover of service would be gradual, occurring most likely in areas where the city expands or extends other utility services. The report is being sent on to the New Ulm City Council, and the PUC is requesting a joint meeting date with the council in later September. The commission also approved a $7,950 allocation for a feasibility study on district chilling. District chilling would do in the summer what the district steam program does in the winter. The city would build equipment to chill water, much of which would be used to cool a power generating turbines for the city to increase the turbine's generating capacity. But the city has some potential customers nearby in downtown New Ulm who might be interested in receiving chilled water service to cool their buildings in the summer. Stevenson said Citizens Bank is planning to revamp its heating and air conditioning system, and is willing to wait while the PUC comes up with some possible rates. The study will be performed by Kattner/FVB District Energy, Inc., which will determine the feasibility of getting into the district chilling business, including possible rates, and the payback time for the service.
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