Energy Forum

Highlights from Energy Forum
Presented by: IDC and JOBS 2020
February 19th, 2004
Sawmill Inn, Grand Rapids

Panelists: Anthony Ward of Grand Rapids Public Utilities, Rick Lemonds of Lake Country Power and Dave McMillan of Minnesota Power

Keynote speaker: Tom Micheletti of Excelsior Energy

The twelfth in a series of JOBS 2020 forums was held February 19, 2004 on the topic of energy. The panel presenters represented a municipal utility, a cooperative and an investor owned utility. The purpose of the forum was to educate participants on the different types of electricity providers and the role each provider plays in serving their customers and community.

The presenters were asked to:

• Explain their organizational mission, how they were formed, and how their organization’s mission differs from the other types of electricity providers.  
  
• Describe how their rates are determined? Relate which regulatory entities govern or oversee their activity?  
  
• Describe their company’s three-year and long-term strategies for serving customers and growing business?
• Explain their company’s role for economic development in this region?
  
• Describe what their business needs, if anything, from the community in order to be successful?

The topic of energy supply has been on the minds of community leaders since the Rapids Power Plant issue was introduced. Having an affordable and clean source of energy is a critical component for any future expansion of Blandin Paper Company and for the growth of other businesses and industries in Northern Minnesota.

Grand Rapids Public Utilities: Anthony Ward, General Manager
Public Power’s purpose is to provide adequate, reliable, not-for-profit electricity at stable competitive rates with proper protection of the environment. The Grand Rapids Public Utilities Commission was established in 1949 and operates under state statute. Because GRPUC is publicly owned, rates are determined by operating expenses and capital needs. Projects to reduce and contain costs include automated meter reading, service extension policies, system control and data acquisition. Any investments in economic development must accrue the benefits to GRPUC customers.

Lake Country Power: Rick Lemonds, General Manager
Lake Country Power is a member-owned cooperative and controlled by an elected board. The board of directors determines the rates based on operating costs, fixed costs and wholesale power costs. Lake County Power has 7,712 miles of line in 10,872 square miles in an 8 county service area. The Grand Rapids headquarters office has 42 employees, pays $3.5 million in wages and benefits and spends $2.8 million in vendor and contractor services. Generation resources come from nine different suppliers. Additional economic development contributions include $3.5 million in investments made since 1992. Lake Country Power has a revolving loan fund, participates in the Minnesota Community Capital Fund and offers access to low-interest loans and grants.

Minnesota Power, Dave McMillan, Senior Vice President-Marketing and Public Affairs.
The mission of Minnesota Power, an Allete company, is the same as Grand Rapids Public Utilities and Lake County Power to provide affordable, reliable and environmentally conscious energy to its customers. As an invester-owned utility, Minnesota Power differs in that it must also earn a return on investment for its shareholders and allow for reinvestment in the company. Retail rates are regulated by the Minnesota Public Utilities and wholesale rates are overseen by the Federal Energy Regulatory Commission. Many factors are evaluated to determine revenue adequacy, rate design and proper returns. Minnesota Power’s energy supply policy is based on achieving a balance between economics, reliability, environmental impact and growth. The future of Minnesota’s economy depends on reliable, competitively priced energy in order to thrive and grow. Adequate transmission is essential.

Keynote address: Tom Micheletti, owner of Excelsior Energy
Excelsior Energy wants to develop the Mesaba Energy Project which would use a new technology to create power. Tom was raised in Hibbing, worked at Minnesota Power and Northern States Power and has a passion for the Iron Range. He believes the project would provide a clean source of electricity for the mining and forest products industries in Northern Minnesota. The Mesaba Energy Project is receiving federal support through the energy bill supported by U.S. Senator Norm Coleman. The new technology will use an integrated gasification combined cycle which is designed to burn coal. The coal is burned in an enclosed cylinder at extreme temperatures which creates a synthetic natural gas which is then burned to create electricity. The Mesaba Energy Project is planned to take place at the old LTV Mine site near Hoyt Lakes. The project has received a $1.5 million loan from Iron Range Resources. The project would fill Minnesota’s anticipated need for new generation and transmission capacity as well as create many jobs during the construction phase and hundreds of permanent jobs.