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Letter: SCEC president clarifies controversy

To the Editor:

In last week's edition of the News, Gail Winship reported on some of the issues surrounding the debate as to whether St. Croix Electric Cooperative (SCEC) should provide electric service to the new high school, or service should be provided by New Richmond Utilities (NRU).

I want to add a little more clarity to this topic.

All Wisconsin electric utilities are subject to provisions in state statute Section 196.465 Avoidance of Duplication in Electric Facilities. The statute sets forth conditions when an electric supplier has the exclusive right to serve a customer and also conditions when the ultimate customer has choice of who their electric supplier will be. The statute has its flaws, but overall it has served the state's residents well in preventing the unnecessary duplication of utility assets paid for by utility rate payers.

In the letter Ken Cernohous, president of the NRU, sent to School District Superintendent Morrie Veilleux in June, he linked SCEC serving the new high school with the significant limitation on NRU's future growth potential on the south end of town.

This isn't true and one only needs to drive east of town on County K to see the evidence. Several years ago NRU built nearly one-third of a mile of new power line to extend service to the Whispering Prairie Development. The NRU line went directly past three existing SCEC customers in the township on its way to the development. SCEC isn't a serious threat to NRU's future growth and the City knows it.

In late April, I was contacted by Dennis Horner, New Richmond's city administrator/utilities manager. We both acknowledged we were submitting proposals to serve the new school with each believing we had the exclusive right to serve the facility.

SCEC has served an electric irrigation system on the high school property since 1977. I proposed to Mr. Horner since we were both not-for-profit, locally owned and operated utilities, for the good of the taxpayers in the school district we should both agree to let the school district select their electric supplier and solve this issue among the parties involved.

At an early May meeting of the NRU Commission my proposal was presented and rejected.

The City suggested bringing the matter before the Public Service Commission of Wisconsin as soon as possible for a determination. Before the SCEC Board could meet to consider their options, the School Board on May 19 selected SCEC as the utility supplier and verbally initiated a request for electric service. Once the School District took action to select SCEC for service, the character of the debate with NRU changed.

Because SCEC has access to federal loans to finance a portion of the construction and replacement of its electric facilities, we are bound by an Area Coverage requirement. This requirement prevents SCEC from selectively picking and choosing the customers it wants to extend service to. If a customer applies for electric service we are bound to extend service for the customer, unless and until we are legally prevented from doing so per Section 196.495.

At the time the School District submitted its application for service to SCEC we became obligated to extend electric service to the new high school. We were pleased to have been selected as the electric supplier and will provide the district with significant financial savings in energy costs. Before the end of August SCEC will have installed nearly all of the permanent electric service for the new school so construction can proceed.

Contractors and vendors for the new high school are being selected based on the results of a competitive bidding process. NRU's proposal was evaluated against SCEC's and SCEC was selected as the best financial option for the district.

In the past, NRU has been aggressive and successful in being selected as the electric utility provider in growth areas around the City when competing for new residential and commercial loads with SCEC. The Wal-Mart, Fox Run and Woodland Creek developments and Kwik-Trip are on this list.

Now it's time for the city to stop pointing fingers, casting doubt on the participants and the process and raising issues merely as a smoke screen. The taxpayers in the School District deserve to have the decision made by the School Board implemented without the city jeopardizing in any way the savings resulting from SCEC as the electric provider to the high school.

Mark Pendergast


St. Croix Electric Cooperative