CCP 02-11-2002 - Laserfiche WebLink

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.1 ~ tit . -. February 6, 2002 Page 2 requested by NSP but did indicate that NSP could address any concerns which it had in regard to the allocation of construction costs for an underground project to the Public Utilities Commission. In January of 1999, NSP requested the Public Utilities Commission to approve a City Requested Facilities Surcharge Rider (CRFS Rider) as part of the NSP rate structure. The CRFS Rider would be used to recover the extra cost of constructing electrical distribution lines underground. The extra cost would be collected by increasing use charges to customers in those cases where the underground construction was requested by a city and the city chose not to pay for the incremental cost from general funds. After an extensive review period (January 7, 1999 to September 21,2001) and upon receipt of comments from various parties including the Suburban Rate Authority and the League of Minnesota Cities, the Public Utilities Commission concluded that, although a city may require a public utility to underground electrical distribution lines, the public utility could recover the extra cost from the city with its consent or by imposing surcharges on customers without the city's consent. On December 17, 2001 the City of Arden Hills approved the recodification of its City Code. The new code includes a Section 1010.13 which is entitled "Underground Installation of Distribution Lines" (2001 Regulations). The 2001 Regulations obviously supercede the 1971 Regulations. The 2001 Regulations continue to require, as a general rule, that electrical distribution lines be constructed underground. It does not specifically address cost allocation. However, there are provisions in the City's platting regulations which would require developers to absorb these costs in connection with the construction of new residential or commercial projects. The 2001 Regulations contain a process that can be followed by the City in order to determine if it will require existing overhead distribution lines to be constructed underground. The process involves a public hearing which is designed to consider a number of factors including the manner in which the costs of this type of project wouid be allocated. The 2001 Regulations recognize that theCity must take into consideration the rate structures that have been approved by the Public Utilities Commission. Since the League of Minnesota Cities participated in the Public Utilities Commission review process which preceded the approval of the CRFS Rider, and since the League of Minnesota Cities also prepared the 2001 Regulations, I have concluded that the City's current regulations are designed to balance the authority of the City to require the undergrounding of electrical