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HomeMy WebLinkAbout3.a. Overview of Shakopee Public Utilities C MINUTES OF THE SHAKOPEE PUBLIC UTILITIES COMMISSION (Joint Meeting with the City Council) Mayor John J. Schmitt called the joint meeting of the Shakopee Public Utilities Commission and the City Council to order at the Shakopee Public Utilities meeting room at 7:00 P.M., June 6, 2011. MEMBERS PRESENT: Commissioners Mars, Helkamp, Joos and Yost. Also present Mayor John J. Schmitt, Councilors Steven Clay, Pamela Punt, Patrick Heitzman, City Administrator Mark McNeill and Utilities Manager Crooks. Commissioner McGowan and Councilor Matt Lehman were absent. Planning and Engineering Director Adams provided an overview of the Electric Distribution system. Discussion included potential future growth areas and how SPUC would be able to provide service, if it was in the SPUC service territory. Public Works Director Bruce Loney presented information on the existing Street Lighting Policy between the City and SPUC. It was agreed the two Staffs would work together to update the policy to provide language for new types of poles and lamping. Community Development Director R. Michael Leek gave an update on economic development issues in Shakopee. The Economic Development Advisory Committee would like to have SPUC involved, as energy and water issues are important to future development. Discussion involved a effort between the City and the MN School of Business to encourage businesses to consider Shakopee as a place to conduct business. Mr. Adams provided an overview on the municipal water system serving Shakopee. Difficulties serving the 2 -HES zone were discussed. City Administrator McNeill and Utilities Manager Crooks discussed jointly working together in providing extended service hours for our customers. It was stated significant hurdles must be addressed if a joint venture could be achieved. Both Staffs will continue exploring beneficial options. Mr. McNeill and Mr. Crooks provided an overview of the many instances where SPUC and the City of Shakopee work together in cost sharing activities and provide services to each other. Discussion centered on the advantages of working together and to consider future opportunities to cost share with teaming to reduce costs. Mr. Adams provided a historical overview of the evolution of SPUC monetary contribution to the City. SPUC Resolution #672 —Authorizing Certain Payments from the Shakopee Public Utilities Commission to the City of Shakopee was reviewed with discussion on the methods currently used to calculate the transfer. A ten year analysis of the contribution was presented and discussed by Mr. Crooks. Mr. McNeill discussed the possibility of Shakopee exercising its franchise authority and implementing a franchise fee for other utilities providing service to the city. Future needs were discussed with SPUC and the City, but no issues were brought up by either board. Motion by Clay, seconded by Heitzman to adjourn to tomorrow evening's City Council meeting. Motion carried. Motion by Mars to reconvene to the regular meeting of the Commission. Motion carried. OFFICIAL PROCEEDINGS OF THE CITY COUNCIL ADJ. REGULAR SESSION SHAKOPEE, MINNESOTA JUNE 6, 2011 Mayor Schmitt called the meeting to order at 7:00 p.m. with Council members, Pat Heitzivan, Steve Clay, and Pamela Punt present; absent was Matt Lehman. Also present: Mark McNeill, City Administrator; R. Michael Leek, Community Development Director; Bruce Loney, Public Works Director/ City Engineer; Julie Linnihan, Finance Director; and Judith S. Cox, City Clerk. Also in attendance were members of the Shakopee Public Utilities Commission (SPUC) — Terry Joos, Joe Helkamp, Bill Mars, and Mark Jost; absent was Bryan McGowan. Also present: John Crooks, Utilities Manager and Joe Adams, Planning and Engineering Director. Mayor Schmitt asked if there were any additions or deletions to the agenda. No one had any changes. Clay/Punt moved to approve the agenda. Motion carried 4 -0. John Crooks, Utilities Manager, presented the group with the history and overviews of the Shakopee Public Utilities Commission (SPUC). He also provided a 100 year anniversary book of SPUC. Joe Adams, Planning and Engineering Director, provided a map of SPUC's electrical service areas in and outside the City limits. He said SPUC provides electrical service to 16,000 customers. 14,000 of those customers are residential users. Bruce Loney, Shakopee Public Works Director /City Engineer, presented the group with the current Street Light Policy from 1998 and stated that at some point the policy should be revised. Mr. Loney also discussed the Special Street Lighting (SLD) agreement with SPUC. Mr. Loney also stated that this policy is also in need of revisions. One example is the types of street light poles. Mr. Loney said the City prefers an anodized aluminum pole. Mr. Adams also agreed with Mr. Loney and stated that if the City and SPUC are in agreement of using the anodized aluminum poles, he would like permission to order poles for the current Hwy. 101 project. There was consensus of both bodies to purchase 10 anodized aluminum poles. Michael Leek, Community Development Director for the City of Shakopee, presented the group with Discussion of Shakopee Economic Development Efforts. Mr. Leek provided background information of the Economic Development Ad Hoc Committee. He said the Committee was created to make recommendations regarding the strategies the City should consider positioning itself for positive economic development. He talked about the Ad Hoc Committee's recommendations to the City Council which included reinstating the Economic Development Advisory Committee (EDAC). Mr. Leek also discussed the current efforts of the EDAC. Mr. Adams presented the group with a water service area map for the City of Shakopee. He discussed current active wells, water usage, water users, connection funds, and trunk water funds. Official Proceedings of the June 6, 2011 Shakopee City Council Page -2- John Crooks, Utilities Manager, talked about SPUC's desire to extend customer service hours at other City facilities and that they are exploring different ideas of how that might work. Mark McNeill, City Administrator, presented the group with ideas of how the City and SPUC could share services. He provided a list of services that the two currently share and advised the group to provide any other ideas to himself or John Crooks. Mr. McNeill then presented information on SPUC's contribution of funds to the city. Mr. Crooks stated that since the contribution was formed 60 years ago, the contribution from SPUC to the city has always taken place and that Resolution No. 672 is the current contribution formula. Mr. Adams provided history of how the formula for funds was deteunined and how it has been revised over time. He said that the current model attempts to achieve the same dollar figure as was established earlier; that adjustments were always made to achieve the same dollar level. At this time the group was encouraged to discuss future needs. Cncl. Punt discussed innovations in energy resources. Mr. Crooks discussed the current work with Smart Grid Technology. Clay/Heitzman moved to adjourn. Motion carried 4 -0. The meeting ended at 9:08 p.m. , C9C LJ dith S. Cox City Clerk Kim Weckman Recording Secretary a companion guide to the video .i The Power of Community J Minnesota has 125 $ i municipal electric ' utilities and 31 - ' s '' municipal natural -- - t• fi , ; ■ gas utilities. They , serve approximate- 4 i f, � N. By far the largest municipal ly 360,750 electric _ electric utility is Rochester, and 80,000 natural ' ; b E I which serves more than 48,000 gas customers. .4-,-,,:__-___. _,- , e� customers. Moorhead, Austin, :., Anoka, Owatonna and Shako- pee are the only other municipal electric utilities with more than These utilities often provide water 10,000 customers. v service, as well as wastewater and other. services. Most municipal electric utilities serve smaller cities in Greater 0 `, Municipal utilities are located Minnesota: X throughout the state. Of the 87 coun- -T-- - ty seat cities in Minnesota, 50 operate • 95 percent have fewer than � 1 _ - • J � i municipal electric and/or natural gas 10,000 customers; ' , .f 1.- y _ utilities. • 82 percent have fewer than 5,000 customers; Local control • The average municipal electric Open, accessible, governance _ et: - utility has 2,919 customers. The is one reason municipals are median has 1,248 customers. also known as `public power' ' + ' utilities. •The small- _ es municipal / i Utilities are created through a ,-i% - electric is 1 - ___ ma vote in a local refer- tiny Whalan, -✓ =_ endum. Regulation largely populat 55 . �_1 �• lation is lar el li �-` , through the city council, a _ _ Ns _ local utilities commission or Combined, ...,, board. however, Min " € '' nesota munic- •e - Municipal utilities are non -profit organizations. Rates are set to cover ipal electric costs. Municipal utilities also provide various community benefits, utilities serve including transfers to the general fund, free or reduced cost services more than 360,000 customers. to the city, and support for These utilities serve 14 percent community projects. of the state's customers and also sell 14 percent of the electricity A municipal utility is a consumed. major local business and " ' community asset, both;';, financially and through ° n• 4 `' " �������� the employment of skilled. MI 21 people. Service You Can Count On Service is a hallmark of municipal utilities. ilst "---� >* "�' . t, a, Municipal utilities ' ° provide very reliable f", f = service. Highly- trained y' lisiko , - . local crews, professional • management, necessary � ? equipment and a state wide network enables More than a munici utilities to ��. provide excellent service " corporate slogan and quickly respond to The trend in the electric utility natural disasters. industry these days is con- solidation. Utility mergers are Part of our job as a utility is to think widespread. As these compa- E� about "what if." Our job is to make nies get bigger, they tend to sure that we're there to serve our get farther and farther away ' customers ... no matter what if. from their customers. ,�, 4 When disaster does strike, we can "Ye'. on local crews and nearby mu- Being locally -owned and oper't r r' - nicipals to help us. ated organizations, municipal ` �� utility policymakers and staff not only have a career interest Local utility crews, materials and - INA in their community's success, equipment mean communities served they have a personal stake in by municipal utilities often bounce . , _ , the city in which they have back quickly from storms and disas- A,.. - N chosen to raise their families ters. When damage is beyond the lo- 3 and build life - long " cal ability of the local utility to repair , relationships. "_.. quickly, municipal utilities come -.iir j together to restore service. _ Because of this, the utility's interest in the well -being of its community and devotion \, ._ ' Where our power comes from toward maintaining a high - „,��� • ° °'i Municipals do not generate all of their quality of life is more than • . ''; u 1 # own power locally. Some generate a por- ” ' ___ corporate slogan —its the , 1. tion of their local needs, usually part .. .,- Y as p foundation of our business 1; , , 1. �� Wi of a combined heat - and -power system or :�•. philosophy. �*._I at times of peak demand. Municipal utilities are part of the inter- ,. � � k connected electric grid. Municipal utilities purchase power at whole - A if 1 sale, either from a municipal joint action agency that they are a mem- f----7 ber of, from an investor -owned ' 1s,o� utility, an electric cooperative a �- f ederal power administration or ;" ' through some other contractual "`' • v. , arrangement. 0 - � .. �, i■ 1 Municipal utilities also own larger a C Ill 0 1 I 1 plants or partner with other types =� ' ` of utilities for an ownership share = 1 in large, baseload power plants. There are approximately 50 local municipal electrical gen- I. i erating plants, generally used , in times of emergency and as a h '1 i edge against high wholesale "�, '. prices. Local crews operate_- I these plants. Along with the / local benefits, these distributed power plants strengthen the ,,, state's electric infrastructure. , Community Involvement and More than on track Environmental Care with renewable energy Municipal utilities currently i Municipal utility staff and policymakers supply 12 percent or more of t are part of the community, whether it be as electric sales through renew - #„01.4.• • VI - a resident, member of a club or chamber of able resources and are on track commerce. Our customers know us and we to meet the Minnesota renew- ' r s - a know them. Because munic utilities are able electric energy supply ?0- relatively small, it is easier to determine target of 25 percent of sales by community goals and enlist community the year 2025. Nationally, a support to help meet those goals. number of Minnesota municipal utilities are among renewable We want to see our communities energy leaders in a number of learn and grow with us. Munici- �� y ' 1t _ categories. pal utilities actively educate and r a ‘ 4 :: work with customers on conserv- 1 ' ` ing energy and water. There is ' - � z often a partnership between the _ r - _ _ utility and its customers. Saving r . -`- r _ customers money allows them to ' - _ spend more dollars locally. . ) n - i We work to make our communities '. better places. We work to meet corn- munity expectations, ng env including Forty -seven Minnesota mu- _ ronmental expectations. We make an nicipal utilities satisfy a por- effort to improve the quality of life in ,. ' , tion of their wholesale power ::-:-- _ : - ,- our cities. Because our focus is local, needs with clean, renewable we are more interested in building +i s hydropower from the federal IN _ local resources. Our customers en- -ter: -: , 4 ft thusiastically support Western Area Power Admin y pport these efforts. istration y - • (WAPA). Located in the western third of the state, these municipal utilities serve There is a partnership more than 200,000 people. between the utility and Municipal utilities made a com- M its customers. We know r mitment many decades ago to our customers. They are , e buy reliable, cost based hydro our neighbors, family and :, r i power from these federal multi - friends. We are part of - -- � ° , purpose facilities. our community, so natu- 1.1-..,- rally we want to give it our best. t Fabric of Community f -.. Lk - .. We are part of the community that we 31ill serve. That adds to the incentive to give xi,,, = " great service to the community and our d citizens. We're all in it together and we work toward the common goal of keeping the utility bill as low as possible. Another great asset is that we employ ..' , local people. Variety is often part of the Keeping Minnesota : r' job at a municipal utility. We are a good competitive 44 1* source of local jobs and utility dollars are Our largest electric and natural _ , - - ` - recirculated throughout the community. gas customers are often known — --- nationally and internationally. . „,, We are pleased to provide these Every day is a different chal- well -known customers the reli- lenge at a municipal utility. , able, competitively - priced en- You might handle a custom- '' , ergy service and other utilities er question, figure out how # necessary for them to compete best to comply with a federal f / , in the global economy. environmental or safety 1 It, - regulation, try to find a new t water source, or make long - range power supply plans. % lh ' A Y ' - i., , Municipal utilities build an asset , e‘ - ` :r �frora il.•, i ._-`, in their communities for future r generations, for our children and "� ,z x _j. _ . grandchildren. Those benefits are going to flow in the future to our ' ..1 c - communities. Municipal We are art of the fabric of these — - 'ilk natural gas service p municipal electric and natural gas The largest Minnesota mu- communities in Minnesota. We are part of your history, and we hope to nicipal gas system is Duluth, continue to build on that history for years to come. with 25,871 customers. Aus- tin, Owatonna, New Ulm, and Hutchinson also have more o ; Century of service ., than 5,000 gas customers. More Seventy -two of the than half of Min ». ' 125 Minnesota mu- P uS T!y nesota's munici- r� f nicipal electric utili- pal natural gas °� �! �� ties, or 58 percent, u ., n utilities have I `, ¢ _ have successfully op fewer than 500 01% , -, ' -� 4 G g I erated for 100 years �'!� ;xi customers. � - ,.,,,, or more. As with electric infrastructure, munici- .�- .��;,r�- 'j pal efforts and investment have �; E W r c bolstered natural gas service in - _> ; ,INS AND Q T C jQ r V�ELFCT18 WORKSRff t . �u Greater Minnesota fora v. O 41 94 number of communities 1 irt and industries. A LOOK THROUGH TIME••• Shakopee Public Utilities . j 1 .4. . , .44,., ' J . ... ''..,...-..1 7 4_ - ! tek.S71:11 1 ! 1111 .i,4 >r ., ' . „ , .„ . t & - s 7 ... : r1, 1: : :::1;171-:' v Watax ..`1 t < f;r t ' . .,.� m. • ' # t pr.; , ,,,- i .----.•.....-.:,,,,i„,,,,,,, f ;',11.1iii .. ' Ny. ,, A ;- ;r : ,, :d. ,74f,-,"-----t1... ' ig ,. d 9 m L 0 _ ,,,,,, # "Lighting the Way — Yesterday, Today..." a _- .��._. w �. °am :. �.... , vn F., ¢.., ,,:..,. ,,u 7 . a4 ' 4�ti w�-, _ - - '; Dedication SPU Centennial History When the citizens of Shakopee voted to have the City own and operate the electric and water utility in 1900, they placed the community's energy and infrastructure demands squarely in their own hands. Electricity was a comparatively new phenomenon, and City officials instinctively understood that control of the marvelous new technology would best be exercised locally rather than by investors in Minneapolis or Chicago or New York. For nearly the first half - century of the utility's existence, it was ably run by the Mayor and City Council. Even though the City had closed its electric light plant in 1913 and elected to purchase wholesale power from neighboring Northern States Power Company and its predecessors, utility crews were responsible for the safe and reliable operation of substations and miles of distribution lines within the City. The formation of the Shakopee Public Utilities Commission in 1951 was recognition that providing electric and water services to the community had become more and more complex as the years had gone by. The appointed volunteer commissioners were able to devote their full attention to the all- important task of ensuring that Shakopee's residents had access to ample supplies of inexpensive and reliable electric power and safe, clean water. Shakopee's ownership of its electric and water system these past 100 years have been both a wonderful financial and social investment. Unlike privately -owned utility systems, Shakopee Public Utilities invests its profits back into the community; And Shakopee has benefited greatly from the volunteer efforts and community leadership skills of its utility employees. To all of those commissioners, employees and customers /citizens who have made Shakopee Public Utilities- past, present and future- such a vital force in the community, this centennial history is dedicated. Shakopee Public Utilities Commission Shakopee Public Utilities Commissioners 1951 -2003 Charles Fricke Randy Gorman Dr. J.E. Ponterio Jim Kepart Robert Condon Jerry Wampach Lawrence Kreuser Terrance O'Toole Robert Wampach Gloria Vierling Frank J. Schneider Jr. Andy Unseth Robert Jasper Joseph Wolf Ken Eidsvold David Thompson Ron Stocker Joan Lynch Don Bubotz Mark Miller Wallace Bishop Robert Sweeney Eldon Reinke John Engler Russell Nolting Cole Van Horn Barry Kirchmeier Brian Young Jim Cook Bill Beck Biography Writer and historian Bill Beck has nearly a decade - and -a -half of experience writing about business history. He wrote his first history for Minnesota Power in 1985, and has 40 published books to his credit. Recent books include illustrated centennial histories for the Kissimmee (Florida) Utilities Authority and the Association of Public Health Laboratories in Washington, D.C. Beck also serves as a field editor for Indiana Business, Area Development, Seaway Review and The Iron Age Scrap Price Bulletin. Beck is a 1971 graduate of Marian College and did graduate work in American History at the University of North Dakota. Beck started Lakeside Writers' Group 14 years ago following 10 years as a reporter for newspapers in Minnesota and North Carolina and seven years as the senior writer in the public affairs department at Minnesota Power & Light Company in Duluth. He has extensive knowledge of the public power movement in the United States and is currently completing a his- tory of the Rocky Mount (North Carolina) City Public Utilities system. CHAPTER 1 - A Valley So Fair Public Power in America is nearly In little more than one generation, the 125 years old. When the citizens of Wabash, settlers of 1850s Shakopee watched their Indiana decided in 1880 that the community become a thriving, prosperous municipality could build and operate the farm market village of nearly 1,000 people, city's electrical system, they created an with horseless carriages belching smoke electric utility model that is still thriving beneath the electric street lights of today. The nation's municipal utilities have downtown Lewis Street. brought inexpensive, reliable electric power to millions of Americans in the 20th century. Municipal utilities also give some 2,000 U.S. The Valley of the Minnesota communities a sense of energy independence and autonomy that they are carrying into the 21st century. Water made the settlement of Shakopee possible. While not the first community to own and operate its municipal utility, the Shakopee The Minnesota River drains most of the Public Utilities' roots go well back to the southern and western portions of the North industrial revolution. Early German, Star state on its slow and stately journey to Scandinavian and Irish settlers founded the the Mississippi River at Ft. Snelling. Rising community because of the waterpower in Big Stone Lake on the state's western potential of the Minnesota River for stove border, the Minnesota cuts southeast across works and iron foundries. The people of Minnesota before turning sharply northeast Shakopee can look back with pride on 100 at Mankato. By the time the river flows past years of municipal ownership of their Shakopee on the concluding portion of its electric power system. Unlike communities passage to the Father of Waters, it is a broad where electricity is provided by private, highway that has made commerce and investor owned utilities, Shakopee still travel possible throughout the past 10,000 controls its own energy destiny. years. And for that, the citizens of Shakopee today The first travelers were native Americans and tomorrow should give thanks to the and their forebears, paddling upriver to the visions of the pioneers who first installed a open country of the plains to the west, or tiny steam electric generator in a small floating down river to the Mississippi. The building at the foot of the bridge spanning water highway of the Upper Midwest the Minnesota River. carried clans and families in seasonal migrations from the time the last glaciers 1 retreated from Minnesota 15 millennia ago. fought the name What is now Shakopee was likely an of their leader, encampment of the Lakota 300 years ago. Shakopee. Translated as For much of the 18th century, the river was a "Little Six" in battleground between the Lakota and the - -. the Lakota Ojibway, forest peoples pushed west by the Iroquois Confederation. In 1858, the Lakota language, and Ojibway fought their last battle on Shakopee - or An Minnesota soil near Shakopee. Most of the Shakpay as it Lakota retreated west up the Minnesota was most River and on to the Great Plains of the commonly Dakotas and Nebraska, where they would pronounced, become the fiercest opponents of American became the site expansion in the post Civil War era. of a trading post Chief Shakopee (Little Six) in 1851. French The Lakota gave the landing on the fur traders had been exploring the Minnesota River where the 1858 battle was Minnesota River Valley since the 1700s. Shakopee At the Turn of the Century It was somehow appropriate that bacon and ham across Minnesota and the casks, a factory that made popular Shakopee welcomed welcomed the new century on Dakotas. top desks, two wagon factories, and a the afternoon of May 30, 1901 with the cigar factory. There were numerous other appearance of the first automobile on city Jacob Ries' bottling works was renowned smaller manufacturing and wholesale streets. Observers didn't report what for bottling more than half a million glass facilities, including a wholesale bakery, model automobile it was, but the local bottles a year of sasparilla and other repair shop, blacksmith shop and broom introduction of the automotive age gener- drinks that were known at the time as factory. ated a fair amount of excitement among 'temperance beverages." Two first-class onlookers. breweries slaked the thirst of county resi- "These industries atone insure Shakopee dents who did not normalcy partake of steady growth and permanent prosperity /' Local resident H.O. Smith purchased the temperance beverages. a contemporary journalist observed. first horseless carriage in Shakopee in The Minnesota Stove Company was one of That permanent prosperity made 1904, but it would be close to another the largest manufacturers of home and Shakopee a retail hub for much of Scott decade before the appearance of automo office stoves in what was then commonly and Carver counties. By 1900, brick bites became commonplace on city referred to as the Northwest. The stove buildings along Lewis and Holmes streets streets. At the turn of the 20th century, works in 1900 employed a work force of downtown had replaced the wooden the fashionable method of transportation nearly 500 people and produced more storefronts of an earlier generation. for the community's young people was than 200 different kinds of coal and wood Saturday afternoon at the turn of the riding a bicycle from Shakopee to stoves. An extensive machine shop and century found throngs of shoppers sam- Bloomington along a groomed cycle path. foundry provided ductile iron to the stove pling the wares at Kohler's Dry Goods, In 1900, Shakopee was a growing com- works as well as manufactured a popular Shakopee Cash Store, A. Greenberg's munity with an agricultural and industrial brick- making machine. The town's granite Department Store, Wilder's Lumberyard base. A flour mill produced 500 barrels of and marble works quarried much of the and Lins Brothers Central Meat Market. quality wheat flour a day for markets as polished building stone used in nearby Shakopee's growing reputation as a manu far east as Pennsylvania and New York. Minneapolis -St. Paul. facturing center would be a major factor Shakopee was one of the largest time pro- ducers north and west of Chicago, and Shakopee also boasted a wagon and car- in the decision of the city administration the town's pork packinghouse shipped riage factory, a brickyard, two cooper to build an electric light plant in 1902. shops for repairing wooden barrels and They were succeeded in the early 19th communities in Indiana and Wisconsin, century by British and American fur traders stepped off the flatboat Wild Paddy in the pushing south from the Great Lakes country. late summer of 1851 and quickly built a As early as 1819, the U.S. Army arrived in small tent encampment and log trading the Minnesota River Valley to erect posts to house on the site of what would become protect the vital fur trade of the region. A Shakopee. detachment of Army regulars arrived that In the 10 years between the establishment of summer and built a bastion that later would Holmes' town site and the outbreak of the be named Ft. Snelling at the mouth of the Civil War, Shakopee and surrounding Scott Minnesota. Within 20 years, wood -fired County would rapidly fill with settlers. The steamboats were regularly plying the Upper bottom lands along both sides of the river Minnesota between Ft. Snelling and Lac Qui were fertile and productive. German and Parle. Scandinavian farmers grew corn, wheat, oats The first settler in the Shakopee area was a and barley. Many of the German settlers French fur trader named Oliver Faribault, were refugees from the 1848 revolutions in who built a log trading post in the German principalities. The 1844. Three years later, sloping banks and lush growth of the the Reverend Samuel 1 William River illiam Pond, a -v. Valley reminded Connecticut native who had �" /1I them of the been in Rhine River. Minnesota In May 1857, since 1834, Shakopee was established a f incorporated, mission to the ° ° and N.M.D. Lakota adjacent to McMullen was Faribault's trading post. elected the first mayor Settlement of the of the town. The Downtown Shakopee, 1876 original incorporation Minnesota River Valley Photo by Sweet - Jacoby, Minnesota Historical Society papers, however, were would rapidly follow. In 1851, bands of the lost, and the city had to Sisseton, Wahpeton and Mdewakanton file again in 1870. Shakopee was among the Lakota signed the Treaty of Traverse des earliest settlements in Minnesota Territory to Sioux with the U.S. government, ceding 24 boast a newspaper, The Shakopee million acres of land in what would become Independent. In the fall of 1858, the Scott Minnesota, Iowa and South Dakota. County Courthouse was completed. Settlement, however, slowed dramatically The ceded lands included all of the during the early 1860s, primarily because of Minnesota River Valley. Within weeks, the uprising by Lakota bands in 1862. settlers began to stake their claims to the rich bottom lands west of Ft. Snelling. Thomas The end of the Civil War coincided with the A. Holmes, who had already founded replacement of steamboats on the Minnesota River with locomotives puffing along on 3 -x tom*" :SFr ;a e ,. dims u Lewis Street Bridge (swing bridge built in 1879, in use until 1927, torn down in 1942) tracks laid on the river's banks. The By the 1890s, Shakopee was a bustling Minnesota Valley Railroad Co. began service community of 1,500 people and a railroad between Shakopee and Mendota in 1865. hub for the agricultural community west of Four years later, the Hastings and Dakota the Twin Cities. The Chicago, Milwaukee & branch of the Chicago, Milwaukee & St. Paul St. Paul connected Shakopee with South Railroad laid tracks through Shakopee. The Dakota to the west and Winona, LaCrosse George Strait flour mill shipped process and Chicago to the south and east. The wheat flour east to the Twin Cities and main line of the Chicago, St. Paul, beyond in the 1870s. Minneapolis & Omaha Railway connected Shakopee to the Twin Cities and Lake Superior ports to the north and to Omaha A New Century and Denver to the west. The Minneapolis & St. Louis Railway ran through Shakopee from Minneapolis and St. Paul to Iowa and With the coming of the railroad, it was all points south. the more necessary to bridge the Minnesota River at Shakopee. The Minnesota Shakopee entered the 20th century with Legislature voted in 1878 to site a railroad optimism and hope. The Minnesota River bridge at Shakopee. The legislature's Valley county seat town was approaching its decision was based on the strength of a vote 50th anniversary and was looking forward by Shakopee residents to issue $20,000 in to taking its rightful place as a progressive bonds for the construction of the iron bridge. community in one of the nation's most Fighting over where in Shakopee the bridge progressive states. One action it could take was to be located consumed much of the to achieve that progressive reputation was to next two years. When the bridge finally was erect newfangled electric street lights constructed in 1880, it entered Shakopee at downtown. Lewis Street downtown. 4 CHAPTER 2 - Light in the Valley Shakopee began to seriously changed to arc street lighting by 1900. The consider installing electric street lights residents of both nearby St. Peter and downtown shortly after the turn of the New Chaska had voted to set up municipally- Year in 1900. Like many communities in owned utilities to light the streets of their Minnesota and the Upper Midwest, communities. St. Peter had been a public Shakopee had lighted its streets with gas or power community since 1891, Chaska since kerosene lamps during the last two decades 1899. of the 19th century. The gas and kerosene The decision that faced Shakopee in 1900 lamps gave off a dim and often smoky light was one that had been investigated by and had to be lit each night by a lamplighter dozens of Minnesota communities in the employed by the city 1890s: whether to build and own an electric There was a better way to light the streets in light plant or franchise the city's electric 1900. In the 1890s, hundreds of U.S. utility service to a private company. communities installed electric arc lights to illuminate city streets. Sputtering in the twilight sky, the arc lights were the The Electric Revolution technological marvel of their day. They consisted of a glass globe that contained two carbon rods. The arc lights gave off a Thomas Edison, Charles E Brush, Elihu brilliant light when a spark of electricity Thomson, Nikola Tesla and George jumped between the two carbon rods. Westinghouse had worked tirelessly during Arc lights also required the employment of a full -time trimmer to cut back the burnt -out carbon from the rods once or twice a week. x , Although arc lights created too much heat to : be of much use for residential lighting, they,' were ideally suited for street lighting and lighting large commercial spaces. Shakopee residents in 1899 and early 1900 , didn't have far to look to see other �;', ., Minnesota communities that had made the transformation from gas lighting to arc lighting. Minneapolis and St. Paul had Lewis Street Plant 5 the 1880s and 1890s in their quest to harness electric power. Brush, an engineer from -# Cleveland, Ohio, perfected an = x , arc lighting system in 1879 and �• helped light Cleveland's public { square with a 2,000 - candlepower - Y � jn Ct �� � _ � g ' .i� light mounted on a steel tower � • that summer. t _ ` I 4 n the fall of 1879, Edison' X designed a workable r i , _ incandescent electric light bulb • 1 ' y in his Menlo Park, New Jersey r i 1 ; workshop. Edison unveiled a _ ■ commercial incandescent ®m lighting system at the Pearl �.,. o Street Station in Lower • � o Manhattan in the fall of 1882, Erecting a Utility Pole at First Ave. and Lewis Street in Shakopee -1910 and the next year, he licensed his first community lighting system computers and the Internet are today. It to investors in Sunbury, Pennsylvania. could light homes, offices and streets. Edison reasoned that arc lights were Electricity could power pumps and lathes in inefficient when compared with factories. It could operate parlor fans and incandescent lighting systems. Incandescent toasters and other small appliances. lights were characterized by a softer glow, But electricity also was a business. Edison, and unlike arc lights, were cool to the touch. Brush, Thomson, Westinghouse and dozens The comparative coolness of incandescent of other electric power pioneers made lighting came from the filaments vacuum- money by selling franchises for their enclosed in a glass bulb. systems to local entrepreneurs, who were During the early 1880s, Elihu Thomson eager to bring the miracle of electric power developed both incandescent and arc to their communities — and to reap the lighting systems in his factory at Lynn, financial rewards of selling electricity. Massachusetts. His Thomson - Houston Co. In nearby Minneapolis, Henry M. Byllesby was a strong Edison competitor in the mid- was electrifying the Mill City with his 1880s. Meanwhile, Pittsburgh entrepreneur privately -owned Minneapolis General George Westinghouse joined with Nikola Electric Company. There were those in the Tesla, a brilliant Serbian immigrant inventor, Shakopee business community who agitated to design an alternating current system that for an entrepreneur such as Byllesby to own was superior to Edison's delivery of electric and operate the electric utility. In the end, power via direct current. however, Shakopee elected to build and own In 1880s and 1890s America, electricity was its electric light plant. fully as much a technological marvel as 6 `Shakopee Shall Have Electric Lights plant with a capaCity of 45 arc lights and 600 incandescent lights. Thiem and the committee estimated that the City would Early in 1900, the newly - elected City pay $4,413.29 per year to operate the plant. Council appointed a committee of three of More than half of the plant's operating its members to investigate the feasibility of expense would consist of shipping nearly building a "first- class" light plant. The 300 tons of Iowa coal to Shakopee and members of the committee - Herman burning it in the plant. Schroeder, A.H. Philipp and John Thiem - The committee noted that even with free arc surveyed residents and visited nearby lights for the city, the plant would still bring communities with municipally -owned $4,500 in receipts each year for a small electric light plants. profit. The group reported that two 100 - Thiem, who would be elected mayor later in horsepower coal -fired boilers, a 100 - the decade, wrote the committee's report horsepower compound engine, two recommending the construction of a light generators (or dynamos, as they were The High Line It was obvious almost from the start of elec- founded by Henry M. Byllesby in 1892. 1890s. Nye arranged a meeting of tric utility service in Shakopee that the Byllesby in 1899 had sold his interest in the Minneapolis General Electric executives and Lewis Street electric light plant didn't have company to Stone & Webster, then one of the Shakopee light and water committee in the capacity to serve the community's indus- the nation's major electric utility contrac- 1912. trial customers. The plant's boilers were tors. Stone & Webster had begun construc Negotiations to serve the stove works con only able to build enough steam to power tion of a network of high- voltage transmis- Shakopee's street lights and the residential sion lines radiating out from the Twin Cities tinned for most of the next eight months. electric lighting load. shortly after the turn of the 20th century. Minneapolis General Electric was adamant In 1911, the firm had built Riverside Station that the utility would reserve the right to That was unacceptable to Col. George Lewis serve the stove works directly. The Light and Nye, the president of the Minnesota Stove in northeast Minneapolis to replace the Main water committee was reluctant to set such a Company and the town's biggest to Street Plant, which had been destroyed in a P Y gg est em P Y er. January 1911 fire. precedent, but the stove works pumped Nye had long argued that the City needed to $5,000 into the local economy every payday. either triple or quadruple the size of the Riverside was a huge plant by the standards Finally, in July 1913, Shakopee agreed to Lewis Street plant or find an alternate of the day. Its twin 6,000 - kilowatt genera - source of electric power. tors could produce an eye - popping 53,000 become a wholesale customer of Minneapolis horsepower at peak capacity. Coupled with General Electric. The light and water com "When we get all the power we need," Nye an abundant source of hydroelectric power mittee hired crews to re -wire the City to said to whomever would listen, "watch us handle the new source of power. On Friday, from St. Anthony's Falls Dam on the grow, and watch Shakopee grow into a Mississippi River, the Riverside plant gave August 8, 1913, power started flowing into clean, Live, up -to -date City of industry and Minneapolis General Electric an ample supply Shakopee from the Minneapolis General suburban homes." of power to serve its own customers, as well Electric high line. Col. Nye had good reason to complain. as wholesale customers in outlying commu- "For a time," the Shakopee Tribune reported, Electrification of the factory floor was nities such as Shakopee. "steam will be kept up for pumping purposes becoming an accomplished fact by 1910. until the electric pump is in place, and then, Nye was able to see that reality in action in In 1912, Henry M. Byllesby purchased day and night, week days and Sundays, there nearby Minneapolis, where the Minneapolis Minneapolis General Electric back from Stone will be all the Light and power the popula & Webster. Within three years, Minneapolis General Electric Company was working furl- General Electric would become the corner- lion of Shakopee can use and then some." ously to electrify the grain elevators and stone of Northern States Power , Com an flour mills that provided the nation with Company, Shakopee would remain a wholesale cus much of its enriched wheat flower. Byllesb 's holding company for his Upper tomer of Minneapolis General Electric and its Midwest properties. The stove work's Col. successor, Northern States Power, for the Minneapolis General Electric had been Nye had known Byllesby since the utility next 75 years. pioneer worked in Minneapolis in the late known at the time), a marble switchboard to the committee underestimated the control the electric power at the light plant, maintenance cost for the new plant by as 200 distribution poles and 31 arc lamps much as $1,000 a year. could be installed for a cost not to exceed "If we only had to put in the first $10,000," $15,000. he wrote on the Thursday prior to the "We can, of course, secure a cheaper plant special bond election, "it would not be so by using the alternating system with bad, but with an extra load of $1,000 or so incandescent street lights, or a smaller plant every year for many years it is paying pretty by using less arc lights, or placing them dearly for our whistle." closer to business property" Theim pointed The bond election was widely believed to be out in his report. a toss -up. But when voters went to the polls In the previous five years, Shakopee had on Tuesday, May 22, 1900, they resoundingly paid off $40,000 in municipal improvement approved the bond issue by a 2 -1 margin. bonds. The City Council agreed to put up "The outcome was a surprise," the editor of $5,000 of public money for the new electric the Shakopee Tribune wrote that Friday, for light plant if voters would approve the while we expected a favorable vote, no one issuance of $10,000 in new bonds to finance ever thought it would be carried by such an the balance of the construction costs. overwhelming majority, 168 votes. This goes Supporters and opponents campaigned to show that people of Shakopee are throughout the spring of 1900. Not enterprising when given an opportunity to everybody in town supported the notion of demonstrate." electric lights. C.G. Bowdish, editor and The polls had closed at 5 p.m., and within manager of the Scott County Argus, was an hour, the results were known. An concerned that the committee's estimates impromptu celebration ensued, with were too low. Bowdish had speculated that performances by the town's Cadet and Maroon Bands, followed by a fireworks display. Hopes were high that Shakopee's streets would be lighted within months. "It may be said," the Argus editorialized, "that if matters are pushed with the same vigor which has marked the movement thus far, the plant should be in 9"" operation by September first. ! November 1 ought to be placed as the limit. Shakopee Stove Company 8 Lights on the Altar As it was, Shakopee waited nearly two years - m for electric lights. Problems with securing a site for the new power plant and delays in Shakopee, Minn. Pp% ordering and installing the equipment A postcard of Main Street in Downtown Shakopee- 1910 consumed much of 1900 and 1901. It wasn't until September 1901 that foundation work was completed on the electric light plant, increasing number of residential customers which was located at the foot of Lewis Street were added to the electric light plant's load. on the river bank. Initially, rates were 12 -1/2 cents per The Council hired S.L. Sly, a Twin Cities kilowatt-hour for incandescent service, electrician, as the first superintendent of the about what other municipal utility City's municipal utility. Sly spent much of customers in Chaska, LeSueur and Lake the 21 months between May 1900 and March City were charged. Shakopee customers 1902 overseeing the wiring of the paid 15 cents a month to rent a meter, and community. City crews wired prospective customers' homes for a cost of $1 to $3 per lamp. A 1901 national steel strike delayed the Broken light bulbs were replaced by the City delivery of much of the structural steel to be at a charge of 20 cents per bulb. The used in the electric light plant, but Sly and minimum charge per meter in the beginning his crews installed nearly 1,000 incandescent was $1 a month. Consumers were offered lights in homes and businesses during late discounts of between 5 and 20 percent for 1901 and early 1902. The Occidental Hotel prompt payment, depending upon the size had seven new lights, Strunk's Drugstore of the monthly bill. boasted 18, Kauth's Hotel had 17, and the Lander Opera House promised to be the Service during that first decade, as a best -lit building in town with 38 contemporary observer put it, "was incandescent lights. spasmodic and usually never available during daylight hours." Most of the The 100 - horsepower engine for the electric businesses downtown kept their gas fixtures light plant arrived by rail in late February as backups for the frequent power outages. 1902. Sly's crews worked the next month The utility also contended with a recurrent installing the equipment and testing the turnover in superintendents. Sly left boilers and generators. Finally, on Good Shakopee for a similar job in Sleepy Eye in Friday evening, March 28, 1902, Sly turned 1903, and the City hired A.K. Adams for the the switch at the electric light plant that vacant job. Adams departed in 1907 and illuminated Shakopee. Parishioners at St. was replaced by A.T. Harris. Mark's Catholic Church marveled at the electric lights on the high altar the next night In 1912, the City Council made the painful at Holy Saturday services. decision to abandon generation at the Lewis Street plant and seek a wholesale power Shakopee started municipal electric service contract with Minneapolis General Electric with 32 arc lights. Most of the businesses in Company. By that time, the Shakopee town had incandescent light service. During municipal utility was firmly ensconced in the first decade of the utility's history, an the water and sewer business. 9 CHAPTER 3 - Peaks & Valleys With the electric light plant in which meant that the Minnesota River was operation, Shakopee turned to other utility laden with agricultural waste by the time it services to offer residents. In 1908, Jacob reached Shakopee's water intakes. Ries, a store owner, petitioned the City Shakopee had not experienced a typhoid Common Council to establish a sewage outbreak since the 1890s, but typhoid and treatment facility and waterworks. other water -borne intestinal diseases were Alderman Henry Mergens chaired a council an ever-present threat for Minnesota committee to investigate costs to build water communities. Duluth had suffered serious and sewer mains throughout the cit typhoid outbreaks during the 1890s before The committee hired the St. Paul installing a pumping and filtering station on engineering firm of Loweth and Wolff to the shore of Lake Superior northeast of the furnish bids, and the engineers estimated city. Fargo- Moorhead reported an average that the City could begin building mains of five deaths per year from typhoid in the downtown for less than $10,000. A contract period 1900 -1910. was awarded to W.C. Fraser in October 1908 By 1910, most Minnesota communities were to build water mains along Lewis Street discovering that the best prevention against from the electric light plant south to Third typhoid was to sink deep artesian wells for a Street, then west on Third Street to Scott municipal water supply. Before Shakopee Street and east on Second Street to Main took that step, however, the City embarked Street. The flurry of water main upon an ambitious sewer main construction construction was one more sign that program. Shakopee was willing to take matters in hand to ensure the safety and comfort of its Instead of bonding for the project, Shakopee residents. assessed property owners who benefited from the sewer mains. The assessments Construction of the City's first water mains came in much higher than the City had was completed in the spring of 1909. But initially estimated, and affected property the water was drawn from the Minnesota owners filed 55 separate lawsuits against the River above Shakopee, and treatment was City by the fall of 1910. Judge P.W. Morrison almost non - existent. Unfortunately for consolidated the cases and ruled in Shakopee and other communities December 1910 that the City was within its downstream toward the Twin Cities, sewage rights to assess the property owners. treatment was still more of an art than a science. Much of the river upstream from The subject of water, meanwhile, was back Shakopee passed through dairy farms, in the headlines by the summer of 1910. In 10 v b drinking water on October 14, 1911. The . 44 AetP water from the deep artesian well flowed \ ,k, into a horizontal, double- acting Fairbanks steam pump with a capacity of one million i 4 gallons per day. '3 Engineers from the Minnesota State Board of w Health's Division of Sanitation estimated ' •nt that the flow of the well was in excess of 600 i t ' gallons per minute. They certified that the ■ � t . 2 water was "of good sanitary quality, as ' Z �"*, evidenced by the very low bacterial count d .Co group in 100 N. < 4 cu the centimeter absence of amoun E ts. li " In ad s they noted that the water had good color and no odor. • YS } , The completion of Well No. 1 brought to a 0 close the formative stage of Shakopee's foray Two women with Singer Vacuum Cleaners into municipal utility services. Well No. 1 would be the mainstay of Shakopee's August, Mayor John Thiem went before the municipal water system for most of the next City Common Council with a plea to secure 50 years and would not be abandoned until a permanent water supply that would lessen 1993 — 82 years after it was drilled. Shakopee's dependence on "foul river water." Thiem, who had spearheaded the Building Load council's drive to build the electric light plant 10 years before, suggested that Shakopee investigate drilling a deep well at Freed from the headaches of operating its the site of the electric light plant. own small generating plant, Shakopee's Thiem's recommendations were acted upon municipal electric utility could concentrate in the summer of 1911. A well - drilling crew on maintaining the City's distribution set up a rig adjacent to the power house on system and building load during the 1920s Lewis Street and began sending the bit and and 1930s. But maintaining electrical casing down through alternate layers of systems in the 1920s was an inherently limestone, shale, sandstone and more dangerous business. During a four -year limestone. At just over 690 feet, the crews period between 1917 and 1921, the Shakopee hit water. Unknown at the time to even municipal utility lost two of its employees to geologists from the University of Minnesota, fatal electrical accidents. Shakopee and other Minnesota River Richard J. Wise, a lineman for the City - communities west of the Twin Cities were owned utility, was electrocuted early in sitting on top of several of the larger aquifers September 1917 while working on a in the state of Minnesota. temporary connection in the Lewis Street Well No. 1 began providing Shakopee with alley between First and Second streets. 11 Hundreds of Shakopee residents mourned 175,000 kilowatt -hours of electricity the popular Wise at his funeral at St. Mary's The municipal utility reported revenue of Roman Catholic Church. Four years later, in July 1921, T.E. Harris, who had been $26,129 in 1927. The City paid Northern States Power Company (NSP), the successor superintendent of the electric utility since to Minneapolis General Electric, 2 cents a 1915, was electrocuted in the same alley kilowatt -hour for wholesale power. The within a few feet of where Wise had only other major costs were wages for the experienced his fatal accident. superintendent, a billing clerk and a Herman Hein replaced Harris as combination lineman /groundman. The superintendent, but served only three years utility also owned and operated a 1926 Ford before turning the job over to William Model T one -ton truck and a homemade Sudman in 1924. Sudman oversaw the 1926 pole trailer. replacement of many of the downtown arc lights with high - intensity incandescent street lights. The resulting "White Way" was very Surviving the Depression popular with downtown merchants and shoppers, especially as Saturday evening shopping hours became common during the The onset of the Great Depression in 1929 decade. devastated many communities in Minnesota and the Upper Midwest. Unemployment, Electric appliances — particularly fans, bank failures and the worst drought in toasters, irons and ranges — became modern times ravaged Minnesota and the increasingly affordable and popular during Dakotas. Shakopee was luckier than many the 1920s. The Shakopee municipal utility communities, thanks in part to the innate encouraged electric appliance use as a conservatism of the town's leaders. The method of building load for the utility. Even Shakopee electric light plant kept electric as late as 1927, the municipal utility was still rates low during the Depression decade and wiring Shakopee homes for electric service. established a policy of working with The City's population had reached nearly customers who had fallen on hard times. 2,000 people in the 1920 federal census, and there were an estimated 600 residential Shakopee had survived a terrible dwellings in the community But as of 1927, commercial setback in the mid -1920s when only 401 residences were served with electric the Minnesota Stove Company, the town's power. major employer for decades, failed. The stove works had been unprofitable for years, The 400 residential customers consumed and the company's major manufacturing 211,000 kilowatt -hours of electric power and plant was nearly destroyed in a March 1923 paid an average of 6.6 cents per kilowatt- fire. The next year, the owners placed the hour, slightly more than half the 12.5 cents company into receivership. per kilowatt -hour charged residential customers at the inception of electric power The closing of the stove works stunted service a quarter - century before. The Shakopee's growth for more than a decade. municipal utility reported 158 commercial The city's population of 2,020 in the 1930 and industrial customers in 1927. They paid federal census was a gain of only 32 people an average of 5.1 cents per kilowatt -hour for for the 1920s. But with the exception of a 12 1931 bank failure, Shakopee was relatively communities in Minnesota to fully recover unaffected by local business collapses from the Depression. In late 1934, Rahr during the Depression. Malting Co. of Manitowoc, Wisconsin Shakopee, in fact, was one of the first approached the City about locating a major The Golf Tee Water Tower When it was erected in the summer of 1940, Shakopee's on to the site in mid - distinctive water tower was likened to "a giant collar but summer, 1940. They ton." Later generations, more familiar with the exploits of quickly erected a 36- Arnold Palmer and Jack Nicklaus, called it the giant golf foot diameter concrete tee. foundation to support The municipal utility had added several wells to Shakopee , the the tubular column water system in the ate 1920s and 1930s, and the capacity holding up the sphere. A shipment of 115 tons of the original mid -1920s era standpipe water tank at Holmes Street and Shakopee Avenue was woefully inade of steel plates arrived quate to serve the city's needs. at the site in late July, and the CB &I crews In the spring of 1940, the City Common Council decided to arranged the plates like erect a modern municipal water tank. The new tank would sections of orange peel be located at Holmes Street and Prairie Avenue. At the at the base of the -- °° time the location was nearly out in the country, but the tower. Four electric waist. vver Common Council bet that Shakopee's growth during the arc welders began r trot.P.e 1940s would make it the logical choice for the city's future welding the plates Water Tower, Shakopee water supply. together into the sphere, which started to take shape by early September. The Council placed the new water tank out for bids early in Shortly after Labor Day, crews manning a crane lifted the the summer. The capacity specified was a whopping 42- foot - diameter tank atop the steel pedestal. 250,000 gallons. The successful bidder was Chicago Bridge & Iron Company (CB &I), a 50 -year old firm that had pio- When it was installed, the water tower soared 130 feet neered the erection of water and oil storage tanks around above the surrounding countryside and could be seen for the world. The firm's founder, Horace E. Horton, had got- miles around. "The tower will be a shining monument in ten his start in 1867 by designing and building a 126 -foot the City because its surface will be covered with aluminum wooden arch bridge across the Zumbro River at Oronoco, paint," explained S.J. Stanley, the CB &I engineer in charge Minnesota. of construction. In 1939, Chicago Bridge & Iron had built its first The new water tower was put in service on Tuesday, Watersphere® elevated tank for the municipal utility in September 17. City crews spent all night beforehand Longmont, Colorado. The 100,000 - gallon capacity tank pumping water into the new tank from the mains and the was a radical design departure from the wooden design and old tank. A minor mishap occurred when a six -inch gate welded -steel design water towers that were commonplace valve at the Rock Springs Bottling Plant failed, flooding a across Minnesota and the Midwest at the time. tunnel beneath the street. The engineers from CB &I assured Shakopee officials that One final task remained. On Wednesday, September 18, the pedestal design they planned was quite feasible with local sign painter Ed Fonnier climbed the 130 -foot tank and the welding technology then available. In addition, they erected scaffolding on the outside of the sphere. Then he noted that the pedestal Watersphere® design would cost far proceeded to paint SHAKOPEE in letters 4 feet, 8 inches less to build than the more standard welded -steel design, high. When completed, the lettering stretched 28 feet simply because the older design would require far more across the sphere. steel in the tower structure to support a 250,000 gallon That tank is plenty high," Fonnier said when he climbed tank. down. CB &I's bid came in at just under $22,000, and crews moved , 1 1. ar Td # ' ;" rs 1,.. 3 '''° , a "'a a 'w+;E g 5wi < 4 L . ' — I ' --- - ' s Y A Ball Park, Shakopee, 1948 barley malting plant in Shakopee. The of 225 -2. company, which operated a facility in With the Rahr Malting plant in operation, Minneapolis, was drawn to Shakopee by its the City was able to emerge from the rail connections, the abundance of artesian Depression debt -free when the City well water and the limestone ledges Common Council retired Shakopee's last underlying the site it had selected in West outstanding bond in 1938. The next year, Shakopee. Shakopee's municipal utility narrowly The seven -story malting plant was estimated missed becoming a power, gas and water to cost more than $1 million, and the year- utility long construction phase of the project would Natural gas from Kansas had become employ almost 500 people. The plant, available in southern Minnesota in 1939. which supplied breweries and bakeries When the Minnesota Valley Gas Company throughout the Upper Midwest, would approached the City about securing a provide permanent employment for 50 natural gas franchise, the City Common residents. The Chicago, Milwaukee & St. Council put the matter to a vote of residents. Paul Railroad and the Omaha Railway also spent several hundred thousand dollars to Mayor John J. Cavanaugh supported a upgrade tracks in Shakopee to serve the municipal gas distribution system, but the plant. electorate — by a 100 -vote margin — opted for a franchise agreement with Minnesota Shakopee's economic development coup, Valley Gas. Cavanaugh vetoed several however, was a bittersweet victory for the franchise agreements with the gas company, municipal utility As part of its negotiations but the City Common Council overrode the with the City, Rahr Malting requested that it vetoes. In the fall of 1939, Minnesota Valley be served directly by NSP. Under the terms Gas began supplying Shakopee residents of the wholesale power contract signed back with natural gas. in 1913 with NSP's predecessor, the Minneapolis General Electric Company, NSP Shakopee's municipal utility took the Rahr did reserve the right to serve industrial Malting Co. and gas franchise decisions in customers within the municipal utility's stride. By 1940, the utility was engaged in service territory. The City took the matter to building a water tower that would become a the voters on March 18, 1936, and the Shakopee landmark. electorate authorized the request by a vote 14 CHAPTER 4 - The Utilities Commission The two decades following World offered the city a 5 percent discount for War II were momentous years for prompt payment of the monthly power bill. Shakopee's municipal utility. Electric power As a result of the power supply contract, demand in Shakopee, the nearby Twin Cities Shakopee boasted some of the lowest and Minnesota increased sharply, with residential electric rates of any municipal kilowatt -hour growth averaging 7 percent a utility in Minnesota. In a 1946 rate year for much of the period. Shakopee comparison, Shakopee reported that changed the governance of the utility from residential customers paid 3.9 cents a city council oversight to a utilities kilowatt -hour for 100 kwh of electricity, and commission form in 1951. The Shakopee 2.7 cents a kwh for 250 kwh. The 100 -kwh Public Utilities Commission ended the era usage was 14 percent lower than the rates by building a new headquarters and central paid by customers of the state's other 28 maintenance facility for the utility on Fourth municipal utilities, and 11 percent less at the Street in 1968. 250 -kwh usage. Only New Prague, Sleepy In November 1946, the city signed a new Eye, Blue Earth and Litchfield had lower contract with Northern States Power electric rates for 100 -kwh usage, a standard Company (NSP), the successor to the consumption at the time. Minneapolis General Electric Company. Thanks to the economies of scale afforded The contract reflected one of the more by the NSP wholesale contracts, Shakopee beneficial realities of the post -World War II residents would enjoy electric rates lower electric utility industry Because of the than in many other Minnesota communities construction of larger, more efficient coal- through the early 1960s. fired electric power plants in the late 1940s and 1950s, the cost of electric power came down as kilowatt -hour demand went up. A New Way of Management The resulting economies of scale benefited Minnesota wholesale customers of NSP. Under the terms of the 10 -year contract Throughout most of its first half - century of extension with NSP, Shakopee paid about 1 operation, the Shakopee municipal utility cent per kilowatt -hour for wholesale electric had been managed by a superintendent with power. The 1946 wholesale power oversight by a light and water committee of agreement with NSP saved the city 11 the City Council. As the utility continued to percent on its wholesale power bill, which grow through the 1940s, it became apparent totaled just under $45,000 in 1947. NSP also to some in the community that a change in 15 governance was needed. Proponents of headlines in 1947, and the issue dominated change argued that the expanding municipal city politics for the next five years. electric and water business demanded more Complicating the matter was the existence of time than Councilors could afford to spend, a faction in the community who supported busy as they were with the affairs of the Shakopee's creation of a municipal liquor rapidly growing communit store. State law allowed fourth -class cities to Supporters of the change in governance own and operate one or more municipal first raised the issue with the City Council liquor stores. Supporters argued that as in the fall of 1950. They cited Chapter 453 with the municipal utility, the community of the laws of the state of Minnesota, could derive more revenue from the which provided for the creation of a Water, ownership of a liquor store than by selling Light, Power and Building commission for licenses to others. any city with a population of less than Liquor license politics had hopelessly split 10,000. The proposed Commission would the City Council. When the motion to create include three appointed members, who a Utilities Commission came before the would employ a secretary and have the Council in late 1950, the issue faced strong power to set all electric and water rates, opposition. Mayor Clarence Czaia and audit all claims presented to the utility and Councilman Elmer Dellwo opposed the generally oversee all electric and water measure. When it passed in December, operations. Czaia promptly vetoed it. In March 1951, The idea of a Commission was not new. the Council passed a revised measure by the Mayor Joseph A. Ring had proposed an barest of margins, 5 -4. This time, Czaia Electric Light and Water board to the signed the resolution, to become effective council in 1910. The proposal, however, April 1, 1951. had succumbed to political infighting and Richard C. Condon, Dr. James E. Ponterio opposition by the Scott County Argus and and Charles Fricke were appointed to the resulted in Ring's resignation that summer. first Commission. Condon was a former Since 1901, the municipal utility had been superintendent of the city's light and water operated under the direction of the City utilities, and Fricke had served on the Council. utilities commission in Manitowoc, What appeared to be a relatively benign Wisconsin during the 1930s. Ponterio was a administrative change, however, quickly popular local general practitioner. The three got caught up in the maelstrom of post- were appointed to staggered terms, which in World War II city politics. Since shortly effect gave the council the authority to after the end of the war, Shakopee had appoint or re- appoint a Commissioner every been embroiled in a dispute over the year. Full terms were three years. issuance of on -sale liquor licenses. As a The new Commissioners quickly agreed on fourth -class city under Minnesota law, the employment of Florian A. Dircks as Shakopee could issue no more than five Commission secretary, and they appointed on -sale liquor licenses. But since the 1930s, Julius A. Coller II as SPU's first attorney. the City Council had been issuing nine licenses without anyone questioning its The new Commissioners had wide latitude right to do so. The matter garnered local in the operation of the utilities. The Council 16 401 _ T, 'Nom — , A' , , T , " , z 0 k 9 0 ' - # ,..,1,.;:i. °fa u 0 ... . ,,-,,,, , , • 4 ..,..,,32.„ to , figai t , ' . - , ,.., : # L .. -,, „,„, 4 t I 11 74 I f t Pil ce, K Front, t to r: Dr. James Ponterio, Charles Fricke, and Richard Condon Back, 1 to r: F.A. Dircks, R.S. Houts, Julius Colter, II. had included management of the city's Progress and Improvements sewage system as part of SPU's responsibilities, and the Commissioners also were empowered to administer the city's The Utilities Commission had a rude zoning regulations and issuance of building introduction to the utility business. Above permits. The only thing Commissioners average snowmelt and torrential spring were not allowed to do without Council rains in 1951 and 1952 caused the Minnesota approval was to sell or dispose of utility River to flood both years. Shakopee itself property was not threatened, but SPU crews worked Working closely with Superintendents closely with their NSP counterparts to Robert S. Houts and his successor, James R. relocate transmission lines into the city Kotsmith, the Commission looked forward In August 1951, George "Corky" Ring, a to a bright future. member of the SPU line crew, was critically In retrospect, the 1951 establishment of the injured when he came into contact with a Utilities Commission proved the wisdom of 2,300 -volt distribution line. Although SPU's original supporters. The 1956 election initially feared fatally injured, Ring survived following the amputation of his right foot of Dr. D.L. Halver as Shakopee's mayor resurrected many of the political passions and hand. that had accompanied the liquor license The Utilities Commission was extensively issue a decade before. Dr. Halver and his involved with two major improvements to wife Dorothy were outspoken proponents of Shakopee in the mid- 1950s. SPU replaced a municipal liquor store, and Dr. Halver's many of the light standards in downtown term in office was marked by political Shakopee and created an attractive new infighting and the resignation of numerous downtown street- lighting "White Way" for aldermen. the community during the summer of 1954. Had the municipal utility remained under The reliability of the city's electric power the direct control of the City Council, it is supply was ensured two years later when questionable whether SPU could have made NSP embarked upon an ambitious project to the significant strides it did in the latter upgrade its high - voltage transmission grid 1950s and early 1960s. in the Minnesota River Valley. In the spring 17 of 1956, the Minneapolis utility began division, told reporters. "The large amount construction of a 115,000 -volt transmission of power made available by the high- voltage line from the Black Dog Generating Station line will provide a more than adequate in Burnsville west to the Scott County supply of power in this area for years to Substation just west of Shakopee. The 13.5- come." mile transmission line represented an SPU spearheaded perhaps one of the major investment of $370,000. municipal improvements in Shakopee's "The steady increase in the use of electricity history. As part of its charter, SPU was throughout this area has made necessary the responsible for the community's sewage construction of the new and larger line," Ray system. In the mid- 1950s, Shakopee was still Johnson, manager of NSP's Minnetonka limping along with the municipal sewers New Quarters By the mid- 1960s, SPU was bursting at the In early 1967, - seams. Revenues from the utility's electric, Commissioners Robert water and sewage operations topped Jasper, K.C. Eidsvold and $500,000 for the first time in 1967. F.J. Schneider, Jr. began ' ' '" fi�'' = Electric revenues of $450,000 were nearly studying a move to consoli- 10 times what they had been in 1951 dated quarters. SPU took " when the Commission was established. control of a parcel of land at 1030 East Fourth Avenue Utility operations were cramped for space. in Shakopee and advertised Barbara Thomas Menden joined SPU as the for bids for construction of office secretary shortly after graduating a new utility office and � from Shakopee High School in 1967. The utility offices at the time were in city hall. warehouse. gially been site had originally een purchased "Our office was right as you came in the by the City for use as a BittAi(iM1G WAS c HEIp WEEx AT THESiTEort7m 0 reaf2C9,89QheHlt i'uhi(e 64 flies om to hxlude ff.7 .7 ss shd d �pare¢e, Raid .t the front door," Menden recalled. "There was a park. In November 1967, = r Fourth Street hell diamond, Earth and kaumkeez the project tethorired by the Common o, ndi l the City d s a st its re meet . Tuesda ln Y lest week ,' 16. , t �t; a� M„ m G half - counter that had the old bank teller SPU signed a contract with ACKRON Building and ewerdtd t he cw credx Mdrttd Weleb, see rste ry o( >ce PubU, Utl C pmm i ,s i Rob rt J . spec, Y windows. Mine was the first window. The 9 P�lir tttth CommWhet ere«i , K em,mti, i Pobi trtiotles Comn, M*yor R* Slebehrl =Whet A&p 1lLLI din god 5 uppl X CU *Pt#ettcM Frenk Se hneid,,, P "''' next window was the city clerk, and then Supply Corp. of Minneapolis Utllttle t mlerl urr, sad eeM wMng. i,�Ile tt fifes eupgrinien¢ent the last window was the city treasurer." to build a 60,000- square- foot facility on the site. The $229,600 The entrance to the building was in the Martin A. Walsh, secretary of the Utilities contract represented the largest single middle, rather than its current location on Commission, worked in a small office on investment SPU had made since its incep- the west end of the building. Menden had the first floor of city hall, as did the lion. her own office, adjacent to the office of Shakopee city manager. The city engineer's Superintendent Lee Monnens. The biggest office shared space with the Shakopee ACKRON crews moved onto the site as soon change was for the line crews. The build - parks and recreation department in the as the frost left the ground in the spring of ing contained heated garage and storage basement of city hall. 1968. SPU took possession of its new space for the utility's line truck fleet, quarters in the summer of 1968, and the which would grow dramatically during the Utilities Superintendent Lee Monnens and Utilities Commission formally dedicated the 1970s. Poles and conductors could be kept his crew were housed in a 30- year -old building on October 20, 1968. in a storage yard behind the building. garage on Levee Drive. At the time, the line crew, which consisted of Ed Leaveck, "I was glad to get out of city hall," The 1968 move to the Fourth Avenue utili- Ray Friedges, Ray Lebens and Paul Geis, Menden recalled of the move to Fourth ty office and maintenance facility meant worked out of a 10- year -old yellow bucket Avenue. "The office area in the Fourth that SPU was growing with the community. truck. Monnens and Service Foreman Art Avenue building at that time was only half The utility soon would begin adding staff Fideldy shared a 1950s -era utility pickup the size it is now, but we had a big com- to serve the rapidly rising demand for elec- truck. Matt Drees, the sewage plant fore- munity room, and the Commission met in tricity and water. man, worked out of the sewage plant. there in the beginning." that Mayor Jacob Ries had built in 1910 the new plant. The estimated $885,000 cost following Joseph A. Ring's resignation. A would translate into $626,000 once the 1946 recommendation by a Twin Cities federal grant was taken into account. Since consulting engineering firm suggested the the Utilities Commission had escrowed construction of a conventional treatment more than $110,000 in the Reserve Fund plant with a capacity of serving 10,000 since its inception in 1954, the City's share of people. The estimated cost of $750,000, the construction costs would come to however, raised fears that the outlay would $516,000. create sewage charges that would cause On June 16, 1960, Shakopee's voters went to hardship to city residents. the polls to approve a $516,000 bond issue In the spring of 1954, Mayor George A. for construction of the new sewage Phillipp signed an ordinance that treatment plant. The Utilities Commission inaugurated the first sewer rental charges in and the City Council both feared that the Shakopee's history. Under the rental system, sum would be too large for residents to residents were assessed a charge for a fixed approve. But approve they did, by a 460 -160 number of years to help finance construction margin. of the sewage treatment plant. Two weeks When bids were opened in August, they later, the Council created the Public Works came in at just over $200,000 less than the Reserve Fund to escrow the sewer rentals original estimates. The city issued bonds for and designated SPU to oversee the fund. At $265,000, about half of what the voters had the same time, the Council selected the approved in June. Construction got Hauer property on the Minnesota River east underway in the fall of 1960. By the spring of downtown as the site for a sewage of 1962, contractors were completing the treatment plant. new facility. Events began accelerating in 1958. In Shakopee's mayor, Dr. Joseph C. Huber, city October, the City Council applied to the aldermen and SPU Commissioners officially federal government for a 30 percent dedicated Shakopee's new sewage plant on construction grant for the sewage treatment Saturday, May 26, 1962. It was not a facility. In February 1959, the Utilities moment too soon. Industrial development Commission transferred $30,000 from the efforts in Shakopee and Scott County were Reserve Fund to the City's general fund for beginning to bear fruit. And new companies purchase of the 32 -acre Hauer site. In May moving into the region demanded state -of- 1959, the City raised sewer rental rates. The the -art sewage and wastewater treatment next month, the Council hired the Minne- facilities. apolis firm of Toltz, King, Duvall, Anderson & Associates to draw up the actual plans and specifications for the new plant. In December 1959, the City was notified by the U.S. Department of Health, Education and Welfare (HEW) that Shakopee had qualified for the 30 percent construction grant -in -aid. In May 1960, the engineers completed the plans and specifications for 19 CHAPTER 5 - Rate Wars When Nancy Huth went to work at their grocery shopping and pay their utility SPU in 1971, Shakopee was still a small bills. People were very happy with the town. The town was dotted with empty lots utility service. If there was trouble, we and pastureland, and most of the 3,500 would always get people back on very residents did the majority of their shopping quickly. They knew they could talk to downtown. somebody in the office." "It was a nice small town," she said. "It The community room in the utility offices, wasn't a suburb yet. The only mall in the which later was converted to house the area was Southdale in Edina." engineering department, was a popular Huth had been hired as a part -time gathering spot in the 1970s. "The senior customer service representative. When the citizens would hold hotdish suppers and utility office moved to the new Fourth play cards in the community room," Huth Avenue location, SPU's billing and customer recalled. "There was one old guy who service functions had remained downtown cheated at cards at the senior citizens' card in city hall. Most of the utility's customers games. The ladies would come out and still came downtown to pay their bills. And complain to us." most paid in cash. "The billing machine we had was an old A Golden Era Burroughs," Huth said. "We posted in the ledger books by hand. The old manual envelope - stuffing equipment was down in For SPU and the utility industry in general, the basement." the 1960s had been a golden era. Economies of scale that first came to the forefront in the The customer service and billing late 1940s meant that the more electric departments moved to the Fourth Avenue power residents consumed, the less utility offices in 1972. Barbara Menden, who expensive it became. SPU cut electric rates had relocated to the new offices in 1968, four times between 1956 and 1965, due remembered that "in the 1960s and early mainly to contract extensions with NSP, its 1970s, we knew all the customers by name. wholesale electric supplier. For most of the We would dispatch trouble crews to the 1960s, SPU purchased electricity from NSP Schmidt house instead of a street address." at an average of less than a penny per Menden noted that the utility offices in the kilowatt -hour. early 1970s stayed open "Friday night until 8 Since SPU sold electric power to customers p.m. People would cash their paychecks, do 20 for an average of 2.2 cents per kilowatt-hour, SPU was one of the better -run municipal it returned a tidy profit to the city each year. utilities in Minnesota. By 1972, the electric During the 1950s, the utility transferred utility served nearly 2,700 customers; it had more than $350,000 to the general fund. In added 188 new customers during the year, a the 1960s, SPU managed to fund the 7 percent gain. The average electric $230,000 cost of its new offices and customer in Shakopee consumed nearly warehouse on Fourth Avenue from capital 11,500 kwh a year, due in part to the reserves and still return nearly $500,000 to aggressive marketing of an electric heat rate the Shakopee general fund. By 1972, SPU by the utility during the 1960s. The utility was reporting a net annual profit sold nearly 31 million kilowatts during 1972. approaching $100,000. More than 2 ilotts — 6.5 percent The Utilities Commission had invested of the city's total million sales k —were wa provided for money into improvements in the system. street lights, lighting and heating public SPU had funded a major overhaul the buildings, and running the pumps for the water system in 1962. The communof ity's well system, all at no cost to the taxpayer. three wells, dug in 1911, 1945 and 1956, had The water utility served 1,800 customers in been outfitted with new pumps and motors. 1972. SPU sold more than 200 million A consultant at the time estimated that the gallons of water from its three wells at a cost wells would be adequate to serve the city of 44 cents per 1,000 gallons of water. The until at least the late 1970s. water reserves in the Jordan Aquifer SPU's reserve fund was frequently tapped underlying the Minnesota River Valley led for community i In 1967, the utility planners to believe that Shakopee U tilities Commission transferred $48,000 to would have an adequate supply of fresh the parks and recreation department for water years into the future. construction of a new city swimming pool, The 1960s had been good years for the and $10,500 to the general fund for Shakopee economy. Rahr Malting, which construction of a new city hall. A 1968 Electric Utility Revenue Bond issue of '' a. $150,000 had funded major improvements to `� Shakopee's distribution _ a system, necessitated by m �E the growth of the city 4 and annexation of ,,s outlying areas. New 1,000 -watt mercury vapor street lights were .- . sat y added whenever �, o� �" subdivisions were o platted for development. Rahr Malting Company 21 had upgraded its Shakopee facility in 1955, Dark Clouds on the Horizon accounted for an annual payroll of more than $650,000 by 1965. The Valley Industrial Park, which had first been platted The world turned upside down for the in the mid- 1950s, was an engine for electric utility industry in Minnesota and the economic growth in Shakopee. The Park, United States in 1973. The first Arab oil which counted such major tenants as crisis, precipitated by the Yom Kippur War Midland Glass, Owens - Illinois, Kawasaki between Israel and Egypt and Syria, created Motors Corp., Toro, Air Products and U.S. oil shortages for the first time in the Chemicals, and Certain -Teed Products nation's history. Overnight in the fall of Corporation, employed more than 1,000 1973, oil prices doubled, tripled and doubled Shakopee and Scott County residents in again. Coupled with already existing 1972. inflationary pressures, the oil embargo Midland Glass alone employed 300 people created strong pressure to raise electric rates. in 1972, with plans to increase that to nearly Double -digit interest rates throughout the 500 employees by 1976. The firm in 1972 1970s contributed to even higher electric was in the midst of an $8 million expansion prices. that would make it the county's largest The rise in electric power costs had been taxpayer by the mid- 1970s. An increasing developing for years. Between 1964 and number of Shakopee residents were driving 1972, Presidents Lyndon Johnson and to jobs in Burnsville, Bloomington and the Richard Nixon attempted to fight a war in other booming southern suburbs of Vietnam on a peacetime economy. The Minneapolis. resulting inflation from the nation's Shakopee residents took pride in being economic policies trickled down to every Minnesotans in the early 1970s. A national sector of the U.S. economy. The Johnson tax audience of television viewers knew the increase of 1968, designed to help pay for Twin Cities from the television exploits of the war in Southeast Asia, hit particularly Mary Richards on the Mary Tyler Moore hard at electric utilities such as NSP that Show, and the Minnesota Vikings were were building power plants to meet almost an annual fixture in the professional increasing demand. football Super Bowl. Minnesota's boyish Finally, environmental costs dramatically Governor Wendell Anderson was on the increased the cost of building coal -fired cover of Time Magazine. Shakopee's own steam electric power plants, the foundation Maurice Stans was President Richard M. of baseload generation in Minnesota and the Nixon's secretary of commerce. Shakopee Upper Midwest since the 1930s. The first residents of the time could have been Earth Day took place in 1970, with some of forgiven for thinking that the good times the most fervent environmental would continue indefinitely. demonstrations occurring on the University of Minnesota campus. Within two years, Congress had passed and President Nixon had signed landmark air and water pollution control legislation. 22 The result of all the economic upheaval `A Fast Train Quick' affecting electric utilities nationwide caused a jump in electric rates for all classes of customers. NSP started raising its wholesale Wally Bishop was a guidance counselor in rates in 1970. The Minneapolis utility had a the Shakopee school system in 1972 when major building program underway at the friends convinced him to toss his hat into time, with nuclear construction projects in the ring for a vacancy on the Utilities progress at Prairie Island on the Mississippi Commission. Bishop applied to the City River south of Minneapolis and Monticello Council for the position and was appointed northwest of the Twin Cities. NSP was also to serve with Ron Stocker and Don Buboltz. in the midst of building its coal -fired Alan "The guy said it was only one meeting a King Generating Station on the St. Croix month," Bishop recalled. "And then we River east of St. Paul. started negotiating with NSP. We got on a fast train quick." Midland Glass vs. SPUC Settlement of the 1977 condemnation suit left one piece of area and that the Shakopee plant was the most productive unfinished business for SPU. Rahr Malting, Midland Glass of the four U.S. plants Midland Glass operated. "Our and the other industrial customers of NSP did not want to absenteeism is very low," he said, "and 60 percent of our be served by SPU. employees have been with us in excess of five years. We Midland Glass was particularly opposed to the City's plans. think our plant is a happy plant. It should be noted that Midland Glass as early as 1975 had argued during the con—slightly over 60 percent of our product goes out of state." demnation negotiations that the company would be finan- In 1976, Midland Glass sued the City of Shakopee. The cially penalized if it was forced to switch power suppliers. company argued that SPU's proposed 12 percent surcharge The firm let it be known that it was considering abandon- was an unconstitutional franchise fee, and that Midland ing its expansion plans in Shakopee if SPU went ahead with Glass should have the opportunity to remain a NSP cus- the takeover. tomer. NSP joined the suit as a friend of the plaintiff. Midland Glass noted in 1975 that it paid NSP $750,000 for Before the case could go to trial, the City settled with 45 million kwh each year. The company reported that it Midland Glass. In exchange for a $100,000 payment to the planned to expand production in the late 1970s, increasing City from NSP, SPU agreed to let NSP continue to serve electric consumption to 150 million kwh a year. At that Midland Glass and the other existing Valley Industrial Park level, Midland Glass would pay NSP $2.25 million a year. tenants. When SPU had announced condemnation proceedings Several of the Commissioners had hoped that the City against NSP, the city had noted that it would apply a 12 would hold out for a larger settlement. But the City was in percent surcharge on NSP's industrial customers to help pay need of money, and the utility had won the right to serve for the purchase of NSP's Blue Lake Substation. future industrial park tenants from the second access point "A 12 percent surcharge would equal $270,000 per annum" at the Blue Lake Substation. on the consumption of 150 million kwh, Midland Glass's "The case was settled in 1977," Lou Van Hout recalled. Gerard Coleman pointed out in the fall of 1975. "The City was caught with levy limits. The Council had Coleman estimated that Midland's yearly annual additional been very conservative in the late 1960s, and it needed a costs should SPU take over the NSP service could approach revenue source. The settlement solved the franchise fee $500,000. Coleman added that Midland Glass liked the fight. It got settled on good terms, and we went forward on a much better basis." Commission the issue of NSP's service to y� industrial customers in the Valley Industrial Park. NSP had insisted on the right to serve industrial customers, dating back to the original wholesale contract opee had signed with Minneapolis General Shak Electric Company, NSP's predecessor, back in 1913. In the 1960s, NSP had built its Blue Lake Substation specifically to serve the industrial park. Lee Monnens Bishop and the other Commissioners were Within a two -year period, wholesale power wrestling with another problem during the rates to Shakopee had increased nearly 15 NSP negotiations. Several aldermen wanted percent. When NSP filed for another to sell the municipal utility to NSP and reap wholesale power increase in 1973, Shakopee a one -time financial windfall. Bishop's goal acted. SPU joined 13 other NSP municipal was to keep the utility independent and the customers to form the River Electric Utilities Commission free of local politics. Association to oppose the NSP wholesale "One issue that was always pervasive was rate increase. Chaska, St. Peter, Anoka, SPU's autonomy /' Bishop said. "I wanted to North St. Paul, Arlington, Winthrop and see it kept separate. We were in charge of Lake City were among Shakopee's seeing to it that the city got safe, reliable, neighbors in the River Electric Association. inexpensive electric power. That was our In the course of the association's goal, to run this as a business and mesh it intervention with the Federal Power effectively with city operations." Commission appealing NSP's rate increase, Shakopee threatened to acquire NSP's lines Shakopee's attorneys discovered that NSP in the city through the use of its eminent was charging Midland Glass in Shakopee domain powers. In the midst of less at retail than it was charging Shakopee negotiations, NSP in January 1974 raised at wholesale, explained Bill Fahey. Now a wholesale prices by 15 percent. NSP Minneapolis at financial advisor, Fahey was followed that with a 16 percent increase in hired as Shakopee's city administrator in the January 1975. After fruitless negotiations fall of 1973. with the Minneapolis utility, Bishop and his When SPU found out that NSP was giving fellow Commissioners convinced the City to preferential rates to its own customers sue NSP for anti - competitive actions (known within the city, it brought to the Utilities as "price squeeze ") in early 1976. 24 Before litigation could be heard before a obvious to NSP's battery of courtroom judge, Lee Monnens died of a fatal heart attorneys that Lord was inclined to see the attack in March 1976. A Shakopee resident anti - competitive case as one of the big his entire life and 25 -year veteran of utility corporation against the little guys from work in his hometown, Monnens had Shakopee. On the first day of hearings in worked his way up from the line crew to the Lord's courtroom, the flinty judge mused superintendent's position in 1965, and his out loud that if he didn't hear any good title changed to manager in 1971. Monnens' reasons to the contrary, he would likely rule sudden death put the lawsuit on hold for six in favor of SPU and order NSP to pay $1 months. million in damages. Ed Leaveck, the superintendent, served as "That afternoon, NSP said, 'Let's settle,'" interim manager until Lou Van Hout, joined Fahey recalled. NSP began serious SPU in the fall of 1976. A Michigan native negotiations with Shakopee in early January and engineering graduate of the University 1977. The Minneapolis utility agreed to of Detroit, Van Hout had worked for the reimburse Shakopee $50,000 for legal fees. City of Detroit's Public Lighting Department Shakopee arranged to purchase a since 1968. distribution line within the city limits from "The first couple of days I was in the office," NSP for $11,000. Most importantly, NSP Van Hout recalled, "all the files were on the agreed to let Shakopee have a second point floor with attorneys going through them." of service from the Blue Lake Substation, which would allow SPU to serve customers When the price squeeze lawsuit against NSP in future years in the Valley Industrial Park. finally did get to court, it appeared on the docket of U.S. District Court Judge Miles "We did settle on a positive note," Van Hout Lord. One of Minnesota's most populist said. Shakopee got everything it wanted, judges, Lord had made his reputation Fahey echoed. fighting for the interests of little people SPU's 1977 settlement with NSP laid to rest against big corporations. He had garnered one of the two major legal issues that the national publicity in the contentious Reserve Utilities Commission dealt with during the Mining Company litigation in northern 1970s. The second, territorial dispute with a Minnesota, ruling in no uncertain terms that rural electric cooperative neighbor would the North Shore taconite mining company take more than two decades to resolve. was polluting Lake Superior. Fahey, who had watched with interest the City's case after he left the job of Shakopee City Administrator, said it quickly became 25 "We got a level playing field," Fahey said "Building that line gave SPU a major foothold in the Valley Green Rte• � Industrial Park" For Shakopee, the new line was an accomplished fact in its ' s ., ` . ; dispute with MVEC over the annexed service territory, although negotiations and court cases would continue for another 17 years before an agreement was finally signed in 1991. Canterbury Park Negotiations continued throughout the mid -1970s exchange with MVEC," he said. "We said, until Shakopee sued the electric cooperative 'Valley Green is Shakopee's'. We said that in condemnation proceedings in 1978. any new industries that come into the park, Under Minnesota law, cities have the power we want to serve them." to take land at appraised value if that land is Bishop, Monnens and Fahey came up with needed for municipal improvements. The an audacious plan to lay claim to the next year, the Minnesota Supreme Court industrial park. In the spring of 1974, SPU ruled in Shakopee's favor, asserting that the crews began building a distribution line municipal utility had the right to serve the 8 from the Shakopee Substation to the park. square miles north and east of Shakopee The line paralleled MVEC and NSP lines. served by MVEC. The crews built the distribution line from Shakopee wasn't the only municipal utility March -May 1974. The new Service Territory in Minnesota waging service territory battles law did not take effect until July 1974, and during the 1970s and 1980s. Municipal SPU energized the new line in mid -June. utilities in Olivia and St. Peter both contested service territory issues with "NSP was furious that we built the line," electric cooperatives during the period. And Fahey said. The Minneapolis utility NSP, Moorhead Public Service and Cass complained to the Minnesota Public Utilities County Rural Electric Cooperative engaged Commission (MPUC) that SPU had not in a three -way fight over serving a shopping finished the line before the new law went center near Moorhead. into effect. But SPU was deadly serious about laying claim to the industrial park. In 1975, Fahey, who doubled as the City's Negotiating a Fair Price Economic Development Director, met with the developer building a facility for Kawasaki Motors Corp. and pitched SPU's The Utilities Commission spent much of the industrial rates to the new tenant. 1980s negotiating an equitable price for the 28 electric cooperative's service territory. Barry system for 33 years, set a goal of bringing Kirchmeier was appointed to the the MVEC negotiations to a successful close. Commission in 1982 to replace Eldon "We took the approach that our rates were Reinke, who had been elected Shakopee's less," Kirchmeier said. "The Shakopee mayor. Kirchmeier, a Windom native who people science in the Shakopee school eople who were served by MVEC wanted Growth of the Water System Throughout the 1970s and 1980s, Shakopee's water supply "Our water is 'good' water," Unseth said. "We need to give needs were adequately served by eight wells and three it only minimal treatment. We just add chlorine and fluo- water towers. The community's growth through the period ride to it according to state standards — very normal treat - was rapid, rising from approximately 2,000 people in 1970 ment. There's no special filtering needed." to just over 12,000 people in the late 1980s. When Shakopee applied to the Minnesota Department of Shakopee and other Minnesota River Valley communities Natural Resources (MDNR) for a permit to drill Well No. 10 were fortunate in the existence of plentiful water supplies in the fall of 1997, SPU worked closely with MDNR to in the aquifers that underlay the entire region. The Jordan, ensure that the new well would help deliver the safest Hinckley, Mt. Simon and Franconia - Ironton - Gainesville water possible to the community. SPU wanted Well No. 10 Aquifers seemed more than capable of supplying the com- to be drilled in the Mt. Simon - Hinckley Aquifer, and was munity's water needs for decades to come. concerned about the level of nitrates in some of the wells The growth of Shakopee and the southwestern suburbs of in the Jordan Aquifer, primarily from farm fertilizer runoff the Twin Cities in the late 1980s and 1990s necessitated in the Minnesota River Valley. The MDNR, however, wanted ample supplies of water to serve that population increase. Well No. 10 to be drilled in the Franconia Ironton Between 1950 and 1989, Shakopee had drilled a total of Gainesville Aquifer, which is located between and Jordan seven wells to join Well No. 1 that had been dug in 1911 and Mt. Simon Hinckley Aquifers. adjacent to the utility's original power house. Shakopee Dave Thompson is a second -term Commissioner, first had added a second water tower in 1966 and a third on appointed in 1997. A native of East St. Paul, Thompson Canterbury Road in 1980. works in sales for Shakopee Valley Printing. Since joining In 1993, SPU retired Well No. 1 after 82 years of service. the Utilities Commission, he has been particularly con - Work was already underway on the drilling of Well No. 9 cerned with the adequacy of Shakopee's future water sup - and the construction of a new pump house just south of p the State Highway 101 Bypass around Shakopee. Unlike "In the 1960s, water supply was not a problem," he said. the previous four pump houses erected by the utility, the "But now, the DNR puts a Lot of pressure on us and other Well No. 9 pump house contained two booster pumps and a communities in the area of water conservation. It's not backup generator acquired from St. Francis Hospital. Art like we can just go put a well in." Young, water systems supervisor for the city, explained that Getting Well No. 10 permitted and drilled took far longer the additional pump was "needed out there because of the and cost far more than Shakopee had originally estimated. higher elevation." When pumping levels were deemed too low in the But by the mid- 1990s, the days of applying for a permit, Franconia - Ironton - Gainesville Aquifer, SPU asked MDNR for drilling a well and building a pump house had ended. permission to tap the Mt. Simon - Hinckley Aquifer to blend Throughout the decade, the U.S. Environmental Protection with water from Wells No. 6 and 7, which are Jordan Agency (USEPA) and the Minnesota Pollution Control Aquifer wells. Agency (MPCA) published ever stricter standards for drink- "It took three years and $800,000 to get DNR approval," ing water. Thompson said. Andy Unseth, an administrator at Bethany House Publishers Still, growth in Shakopee dictates that SPU continue to in Bloomington, joined the Utilities Commission in April drill new welts to serve a rapidly expanding population 1995, about the time that Well No. 9 went operational. base. Unseth assured residents the next year that Shakopee's water was safe. "We need to stay one well ahead of what we need," Thompson noted. 1 the exchange to take place. And we knew "very time consuming. It was tough to it done because of the make it e we had to get t do equitable with the existing q projected growth. We knew the growth was customers. We spent a lot of time adjusting coming. There were already discussions the rates. I remember that being the hardest taking place about the new bridge (over the part, plus all the money we had to spend - Minnesota River), and that was going to $2 million and change to build the make it a whole new ball game." infrastructure to serve the new customers. MVEC's rates in 1983 were 40 percent higher But the hardest part was getting those rates fair. than those charged by Shakopee. There were approximately 500 residential Twin Cities attorney Andy Shea was SPU's customers involved in the annexed area. lead counsel in the MVEC negotiations. "We met with the board of MVEC" in 1984, After the Minnesota Supreme Court ruled in Kirchmeier said. "We made a proposal face- Shakopee 's favor, the matter had gone to the Minnesota Public Utilities Commission to to -face in Jordan. We approached them not determine compensation. as adversaries. We told them we'd pay a fair, reasonable price. It was an honest, fair "We went through hearings before an approach." administrative law judge /' Shea explained. "Two- thirds of the way through the case, the Shakopee also offered to exchange a rural parties decided to settle. We filed the line that served farmers from Shakopee to settlement, and the MPUC approved." Prior Lake. The line had been built by a group of Prior Lake farmers in the 1950s, The agreement that SPU eventually signed and SPU had provided the approximately 50 with MVEC in 1990 provided that the farms along the line with electric power municipal utility pay the electric cooperative since then. the value of the lines acquired plus an allowance for loss of revenue to the Jim Kephart joined Kirchmeier and Jim cooperative for the existing customers in the Cook on the Utilities Commission in 1985. acquired area, plus all new customers added Kephart, a Richfield native who had moved over the next 10 years. to Shakopee in 1972, had helped inventory the annexed land in the early 1970s when he Shakopee agreed to buy power from was working for a Twin Cities engineering Cooperative Power for the annexed area for firm. 12 years. SPU's new customers in the "I got to know the people at SPU fairly well annexed area would pay rates 20 percent lower than what they had been paying — but back in the early 1970s," Kephart said. still 20 percent higher than existing SPU "They were a well -run organization. They customers paid — for four years to help pay were small, but they had good employees." for the settlement. Kephart remembered that the negotiations "They knew we were sincere," Kirchmeier with MVEC in the mid- to late -1980s were 30 described the negotiations with MVEC to operating revenues of nearly $6.3 million. the Minnesota Municipal Utility Association Retained earnings in 1990 had climbed to in 1991. "They recognized our right to take $6.44 million. the territory over; we recognized their right Since its inception, the Utilities Commission to a fair settlement. I am very pleased we had returned a portion of its revenues each reached a negotiated settlement." year to the City's General Fund. In 1983, a Kirchmeier also stressed the urgency of year in which the municipal utility had getting the negotiations completed because reported operating income of just under of the "fast growth phase" the city was $365,000, the Utilities Commission returned anticipating. "The longer we waited, the $266,058 to the City of Shakopee. That same more expensive it would get," he said. year, the value of free street lighting service For Kephart, settlement of the dispute with to the City was $26,093, and the municipal MVEC was the cap to a fulfilling term as a utility also provided $10,000 worth of Commissioner. "My last act as president of maintenance for the street lighting service. the Utilities Commission was to sign the The growth of Shakopee and its municipal agreement with MVEC," he said, "having utility in the 1990s would make those worked on the inventory of the annexed revenue and retained earnings seem paltry area 20 years previous." by comparison as the decade wore on. Into the 1990s With the NSP and MVEC settlements finally behind them, the Utilities Commission could look forward to the growth that the City had anticipated for more than a decade. Throughout the 1970s and 1980s, the utility had remained a profitable venture for the city. In 1980, SPUC had booked $2.7 million in revenues and had reported a profit of $292,000 for the year. The utility also reported 1980 retained earnings of $1.82 million dollars. By 1985, the utility's operating revenue had increased to $4.6 million. Retained earnings had more than doubled, to more than $3.96 million. In 1990, the utility reported 31 CHAPTER 7 - Keeping Up With Growth Shakopee in 1985 was a community roller coaster with 2,800 feet of track and a poised for tremendous growth. After 70 -foot drop on the first hill. registering a slow but steady population Eight years later, in March 1984, Shakopee increase from 1950 to the late 1970s, the was chosen as the site of Canterbury Downs, city's population passed the 11,000 mark in Minnesota's first horse racing track. the 1980 census. Minnesota Racetrack, Inc., the developers, The community's industrial and economic located the $70 million horse racing facility base was evolving rapidly in the mid- to late near the Valley Green Industrial Park. 1980s. Rahr Malting, the city's mainstay Racing at the track began in the spring of employer during the 1940s, 1950s and 1960s 1985. was no longer competitive with newer At about the same time, the Mdewakanton malting facilities elsewhere. By 1985, the Band of Lakota opened the Little 6 Bingo firm employed only 85 people. Midland Parlor in nearby Prior Lake, which was later Glass, SPU's adversary in the industrial park converted into a full-scale gambling casino. dispute with NSP, had a work force of more The entertainment dollar flowing into Scott than 400 people in 1985. Certain -Teed County after the mid -1970s further Products Corporation, which made roofing diversified the regional economy and shingles at its plant in the Valley Green provided a strong boost to retail Industrial Park, employed more than 200 development in Shakopee. people. Shakopee at the time was experiencing a diversification of its economy that would Joint Action for the Minnesota Valley continue through the next 15 years. In 1984, the giant retailer K -Mart had begun construction of a major distribution center When Jim Cook was appointed a on County Road 83 that would contain 23 Commissioner in 1983, Shakopee was poised acres under roof by 1990. The city also was for rapid growth. Cook, an Indiana native, becoming the focus of a major entertainment had done his undergraduate work at the and recreational industry for nearby University of Wisconsin and had come to Minneapolis -St. Paul. Shakopee in 1971 to work for the Gedney Company. Cook noted that he and fellow In May 1976, Valleyfair opened just outside Commissioners Barry Kirchmeier and Wally Shakopee. The amusement park boasted the Bishop were anticipating rapid growth after largest ferris wheel in the Midwest, and a the mid- 1980s. 32 ____ _ - - - - ____ ,____ , ,,, „..., , - r /. / / . -/ 4 \ , , ,„.„ ,.„ „ i X \ r.. / Through most of the period from 1973 to the -..,. - -- early 1990s, the Utilities Commission was -------- -- - -- - -- primarily concerned with settling SPU's Minnesota were beginning to band together disputes with NSP and MVEC. Cook to find a more competitive power supply. In recalled that he spent the majority of his 1992, eight Minnesota municipal utilities — time during his first two terms in office Anoka, Arlington, Brownton, Chaska, negotiating the agreement with MVEC. LeSeuer, North St. Paul, Olivia, and Without the service territory eventually Winthrop — created the Minnesota Municipal transferred to SPU in 1992, "this utility Power Agency (MMPA) to keep energy would have been a small island," Cook said. supply costs low for their residents. MMPA "We did everything through consultants. It was an outgrowth of the River Electric was very cordial, very slow and very Association (REA), which had been formed methodical. But it became increasingly in 1977 to protest wholesale rate increases important for us." and to help its members negotiate power supply contracts with NSP. When the agreement was signed with MVEC, Shakopee faced a major decision on Shakopee had belonged to the River Electric its power supply. As part of the agreement, Association since its establishment. Unlike SPU had contracted to buy electric power REA, however, MMPA was a full- fledged for the acquired territory from Cooperative Joint Action Agency, which meant it had the Power Association (CPA), MVEC's power authority to negotiate power supply supplier. contracts for its members with other power suppliers, or even to own partial shares of Meanwhile, the environment was changing electric power plants itself. in the electric utility industry. In 1992, President George H.W. Bush signed the That ownership obligation concerned SPU. Energy Policy Act, one of the first major Chaska, Shakopee's neighbor, was the restructuring initiatives in the electric utility spearhead behind the formation of MMPA. industry in decades. The act expanded the David Pokorney, Chaska's city authority of the Federal Energy Regulatory administrator, served as the first chairman of Commission (FERC) to order transmission the new power agency. sellers to provide transmission services to "Chaska basically formed MMPA," said Jim customers. Cook. "Shakopee declined to be a full Municipal utilities had long argued that member of MMPA, but we said we'd be a investor -owned utilities, which owned most customer." of the transmission grid in Minnesota and MMPA planned to purchase the bulk of its the nation, would not allow their high- power supply from Rochester Public voltage transmission network to be used for Utilities' Silver Lake plant. The power wheeling power supplies from competing agency would supplement its 100 - megawatt utilities. The Energy Policy Act of 1992 was purchase from Rochester with 30 megawatts the first federal legislation to begin of power from United Power Association's encouraging competition in the wholesale (UPA) Coal Creek plant and with surplus electric power market. power purchases from members of the Mid - At the same time, municipal utilities in Continent Area Power Pool (MAPP). 33 t t. r 9 Ht k Y . "It was a major change Van Hout recalled. "SPU chan decir Shakopee,ded to become a 1 customer of MMPA with the stipulation that we would be served by UPA in case of p roblems. " "It was a tough decision," J Cook said, "but it was a very big dolla savings on our part." UPA contra agreed ct, an d to MMPA stand b guaranteed hinthe MMPA Shakopee T that rates would be capped at 95 percent or less than the wholesale power rate offered a by NSP. Coal Creek Plant "That 5 percent difference between the MMPA rate and the NSP rate was the A New Power Supp Contract number we were happy with," Hout said. "Chaska is a full member Van of MMPA, and they have had about 10 percent lower By 1992, Shakopee had been a wholesale wholesale power costs than , but power supply customer of NSP and its Chaska took a risk. SPU is more SPU predecessors for nearly 80 years. The NSP conservative. But our rates have been contract was up for renewal that year, and cheaper than those offd by NSP, so that MMPA was offering SPU lower rates. was a good business d Although the relationship with NSP had The Utilities Commission signed a contract been rocky since the mid- 1970s, the with MMPA in July 1995. The contract runs Minneapolis utility had been an extremely through December 31, 2005. reliable power supplier for decades. The 1991 agreement with MVEC required "We had gotten power from NSP for many, SPUC to buy electric power for the many years," Cook explained. "It was a "acquired area" from MVEC's supplier, comfortable relationship," Lou Van Hout Cooperative Pow, added. In 1997, Cooperative er Association Power merged until with Still, the opportunity to purchase electric United Power Associati form Great power at a lower rate from MMPA was an River Energy The generation on to and attractive option. Van Hout and his staff put transmission coopti supplied all of a lot of effort into investigating the offer in SPU's wholesale power ve needs by 1998. 1992. Eventually, Van Hout recommended However, under the terms of another 1991 that SPU consider entering into a contract agreement, this one with NSP, SPU will with MMPA to purchase power, but not to revert back to NSP, now XCEL Energy, as its become a full member of the Joint Action power supplier for the "acquired area" for a Agency. six -year period beginning in 2003. 34 Building Infrastructure electrical engineering from the University of Minnesota's Institute of Technology before spending more than eight years in California Joseph Adams returned to his native working for the U.S. Navy. Minnesota in 1992 as an Administrative When Adams arrived in Shakopee, the Assistant with SPU. Originally from West utility provided service to slightly more than St. Paul, Adams had earned his degree in 6,000 meters; summer peak was about 25 Three Who Mattered r a ;0 ,, if- . SPU has always been about people, and the loss of valued Operator, maintaining li co- workers and colleagues has always been keenly felt by pumps, repairing and the dose knit municipal utility. One of the most difficult installing water meters, and i; periods in the utility's history took place between late overseeing the utility's ; q 1995 and early 2001. In that five -year period, SPU lost a hydrants. As supervisor of ol, ,,,..._ popular Commissioner and two longtime water utility the water department, he employees. was responsible for a daily In the summer of 1994, Gloria M. Vierling replaced 12 -year check of the utility's pump ^ 1, veteran Barry Kirchmeier on the Utilities Commission. A houses, inspection and con- _ fourth- generation Shakopee resident, Vierling brought a struction of new water mains, and periodic tests of , wealth of experience to her new assignment. From 1982 to 1994, Vierling served as the clinic manager at Sundance the water samples. Medical Clinic. For the 18 years prior to that, Vierling had "The system is always get - been a nurse at St. Francis Regional Medical Center in ting bigger," Young said just A, Shakopee. days before his death in Vierling's years of political experience also enhanced her December 1995. "Since I've Commission appointment. A 12 -year Shakopee City Council been working here, four new member, she also had served four years on the Metropolitan wells have been dug, two Ken Menden Waste Control Commission. Vierling was the city's liaison pump houses have been to the Suburban Rate Authority and served on the built, and a water tower was constructed." Metropolitan Technical Advisory Committee, which dealt Just over five years after Young's death, the utility was with utility issues in the Twin Cities area. shocked when Young's longtime partner in the water Vierling expressed her desire to promote good teamwork department passed away suddenly. Ken Menden, who suc between SPU and the city, and she noted that she wanted ceeded his friend as Water Systems Supervisor, died of a the Utilities Commission "to be proactive rather than rear heart attack on January 11, 2001. Menden had worked in the utility's water department since 1980, and his wife, tive." Barbara Menden, SPU's office manager, was the utility's Vierling had only two years to put her stamp on the future longest- serving employee in terms of seniority. direction of the Utilities Commission. In early 1996, she A Shakopee native, Menden graduated from the Shakopee died in Shakopee after a short fight with a fast - acting can High School and was an avid boater, angler, cross-country cer. skiier and bowler. "She was a hard-working Commissioner," SPU Manager Lou Menden's sudden death saddened all of his co- workers. Ken Van Flout said. "She studied the issues carefully and was and Barbara Menden knew virtually everybody in Shakopee, always prepared to make decisions." and they looked out for their fellow employees. "He was a Vierling's death followed by two months the untimely pass- valued member of the operation, and we'll all miss him," ing of Art Young, the utility's Water Systems Supervisor. eulogized Lou Van Flout. "Kenny always gave his best to The jovial Young had started with SPU as a Water Systems the utility and did his best for everybody." r side of Shakopee. The new substation was initially planned for a site in southern R a' Shakopee on Scott County Road 78 between i County Roads 17 and 79. At first, the Lou Van Hout, Utilities Manager Utilities Commission had considered locating the substation in or adjacent to the megawatts. But even then, the utility was Valley Green Industrial Park, but experiencing kilowatt -hour growth in excess Commissioner Barry Kirchmeier explained of 12 percent. that locating the substation near the "I think back to my interview with Lou," industrial park "would be too far away from Adams said. "He gave me the then current our present circuits, and greatly increase the Electric System Study to review. I made the costs." comment after the interview that I'd look Commissioner Jim Cook noted that the new forward to coming here because it would be substation would increase reliability. "Once a varied and dynamic work environment. It it is built," Cook said in the spring of 1994, shows you how naive we all were, because I "the entire City of Shakopee can be don't think the projections of growth in that supported by two substations, which means study were half of what they actually turned we won't have the power outages we've had out to be." in the past. Any two of the three should be One reason Adams was hired was to oversee able to support Shakopee's entire load for a expansion of SPU's electric and water short period of time." infrastructure in anticipation of the expected After public hearings in the fall of 1995, the growth of the system. Preparation was new substation was sited on Country Road already underway in 1992 for the 79, just over a half -mile south of Country construction of the Bloomington Ferry Road 78. SPU took great care to get Bridge over the Minnesota River, as well as landowner input in the siting process, and improvements to turn Highway 169 into a the Utilities Commission made every four -lane freeway connecting Shakopee to attempt to minimize noise and appearance Minneapolis. impacts. "It won't be an eyesore," Van Hout "Two of the first things I worked on when I assured local residents. started here was to arrange to have a fourth Land purchases for the new South Shakopee bay put in at the original Shakopee Substation were completed in August 1996. Substation and to work with NSP to actively R.W. Beck, a national engineering consulting energize a second circuit out of the Blue firm with close ties to public power utilities, Lake Substation," Adams said. designed the substation. Delta Star, Inc. of By 1994, SPU had decided to build a third Belmont, California was awarded the bid for substation on the rapidly growing south providing the new substation's transformer. 36 Construction began in the fall of 1996, and a `It Means Access' crane lowered the new transformer into place in early March 1997. By June 1997, the substation was operational. On October 6, 1995, the Minnesota "The existing substations are just about fully Department of Transportation officially loaded now," Van Hout said in the spring of dedicated the Bloomington Ferry Bridge 1997. "With the new substation, we have over the Minnesota River at Shakopee. The room to grow." new four -lane freeway bridge spanned the full expanse of the river and opened While construction was underway on the Shakopee to a quick commute to South Shakopee Substation, SPU crews Minneapolis -St. Paul, Bloomington, Eden upgraded circuits and lines to meet the city's Prairie and other suburbs south and west of growing needs. Throughout the summers of the Twin Cities. 1996 and 1997, line crews worked on a number of overhead and underground The $42 million bridge made Shakopee a distribution line projects. natural candidate for the suburban expansion that had been pushing south and They relocated and rebuilt feeder circuits west of Minneapolis for decades. The $35 along Scott County Roads Number 16, 77, million Shakopee Bypass, which opened in 42, 15 and 78. Crews built new facilities for the late summer of 1996, served to expedite feeder circuits across the Shakopee Bypass at the flow of traffic across the river between County Roads Number 18,16,17, 79, 77 and Shakopee and its urban neighbor to the 15, as well as in the Valley Green Industrial northeast. Park. In a cooperative agreement with the City of Shakopee and downtown businesses, "It means access," said Shakopee Mayor the line crews began a major project of Gary Laurent. "And access means undergrounding circuits within an eight- everything. The area businesses will have a block area of downtown Shakopee. whole new market." "We went from four substation exit circuits Minnesota DFL State Representative Becky in 1992 to six exit circuits in 1994 to 10 exit Kelso noted that the lack of easy access circuits in 1997," Joseph Adams said. "In between Scott County and the Twin Cities 1992, we had three circuits at the Shakopee had long been "an impediment to economic Substation. Now we have four. We had one development." circuit at the Blue Lake Substation. Now we With the new bridge and bypass, that would have two. And the new South Shakopee no longer be the case. From 1997 to 2002, Substation added four circuits." Shakopee experienced more growth than it SPU's aggressive initiative to upgrade the had in the half - century since World War II. City's electric infrastructure in the mid -1990s SPU was ready to serve that growth. was about to pay huge dividends. 37 CHAPTER 8 o Keeping Up With Growth The opening of the Bloomington and the mayor and city council took great Ferry Bridge in October 1995 and the pains in the latter half of the 1990s to retain improvements made to the Shakopee Bypass the small -town character of the community. in the following year created all of the SPU worked closely with city planners to elements necessary for sustained economic redevelop the city's downtown, completing development in Shakopee and surrounding a major project in 1995 -1996 that replaced all townships of Scott County of the overhead distribution lines serving The transportation enhancements coincided downtown with underground cable. with a booming Minnesota and U.S. Population growth went hand -in -hand with economy and placed Shakopee squarely in economic development after 1995. The city's the path of the suburban development population swelled to an just over 20,500 pushing outward from Minneapolis. people by the time of the 2000 federal We experienced explosive growth," census, with even more explosive explained Joseph Adams, SPU's population growth predicted for the first Administrative Assistant. It really pumped decade of the 21st century up in the space of five years' time. It is all "We have nearly doubled our population in related to the growth of the Twin Cities." the last 10 years," Adams said. "And we are Shakopee was never a Minneapolis suburb, told it will nearly double again in the next 10 years." In 1995, SPU served just over 6,500 electric meters. By 2002, when the city celebrated 100 F,' years of ownership of the 9 municipal utility, SPU served slightly over 12,000 electric meters. The utility's summer peak load in the mid -1990s II ei ti averaged about 25 megawatts. *OW = By the summer of 2002, the forecast peak load was 70 o megawatts. Much of the new residential Downtown Shakopee Beautification Project development took place in the 38 service territory SPU acquired from MVEC east to west, the business park became one in 1992. Seemingly overnight, tracts of land of the hottest development sites in the Twin that had been farm fields for generations Cities during the second half of the 1990s. blossomed with new houses. In 1999, A 1997 study by the Metropolitan Council in developers built 500 new homes in one Minneapolis found that the average Shakopee subdivision alone. commute time in the Twin Cities was 22 minutes. Valley Green boasted that the The Grass Is Getting Greener average commute to the business park from Bloomington was eight minutes, 10 -12 minutes from Richfield and Edina, 15 -18 With the population growth came new minutes from South Minneapolis and 20-22 business development. Much of that minutes from Minnetonka and Plymouth. economic expansion was centered in and The result of the increased access to the around the Valley Green Business Park. south and west suburban Twin Cities was a Because SPU had negotiated the agreement steady expression of interest in the business with NSP to serve new tenants of the park. Valley Green Project Director Jon business park, and the new service territory Albinson pointed out that access wasn't the law, most of the development after 1993 only factor attracting new businesses to meant that new industrial customers were Shakopee. served by SPU. "At the heart of it, companies don't Even before the dedication of the new necessarily buy a site," Albinson said. bridge and freeway, SPU's industrial and "They buy a location: the amenities of an commercial load was growing. In 1993, the entire community; availability of work force; Minnesota Women's Correctional Facility — roadways; moderate taxes; and easy access an SPU customer — doubled its bed capacity. to suppliers and customers." The business St. Francis Regional Medical Center, another park began advertising that "the grass really SPU customer, in 1994 announced is greener on our side of the river." construction of a new medical complex on Developers from the Twin Cities and the south side of Shakopee. That same year, Midwest quickly began erecting speculative Opus Corporation, a major Twin Cities buildings in the business park, most developer, completed construction of a designed to attract local businesses from the 300,000- square -foot facility for American seven - county metropolitan area interested in National Can Company. expanding or relocating. The majority of the By the summer of 1995, Valley Green new speculative buildings were 60,000 to Business Park was the largest planned 150,000- square -foot facilities that were business environment in the Twin Cities suitable for light industrial or distribution metropolitan area. Stretching nearly 2 miles purposes. south of the Minnesota River and 3 miles 39 e ADC and Seagate filoperditiO y In the fall of 1995, ADC ,�,,, x. °° 4 Telecommunications announced the E purchase of 8.26 acres of land in Valley ( "" ¢ "` Green Business Park. The Eden Prairie _ _ l ter, manufacturer and distributor of broadband " telecommunications networks and ■ r ' equipment announced plans to build a . " E 90 square -foot distribution facility in ° the business park. Vi i = U o ADC's interest in Shakopee was an ADC Facility, Shakopee indication of the changing nature of economic development in Scott County. For Less than a year after ADC opened its new much of the city's history, Shakopee had facility, Seagate Technology broke ground in been a manufacturing center. But during the June 1998 on a 280,000- square -foot 1990s, the Twin Cities began to establish a manufacturing and research and reputation for high technology development building in the business park. manufacturing and distribution. A California -based Seagate, the world's largest biomedical corridor developed along U.S. producer of computer disk drives, Highway 52 between Minneapolis and consolidated the operations of several of its Rochester, and a high technology plastics Twin Cities operations under one roof in manufacturing industry located along Valley Green. Seagate's new High Interstate 94 between St. Paul and Performance Products Group headquarters Menomonie, Wisconsin. opened in August 1999. Also, ADC expanded several times and then bought the In 1997 and 1998, that high technology building next door and filled it with growth came to Shakopee. Shortly after manufacturing and office facilities. opening its new facility in Valley Green Business Park, ADC Telecommunications For SPU, the ADC and Seagate Technology purchased an adjacent 22.5 acre parcel and expansions at Valley Green meant the began immediate construction on a 345,000- addition of large industrial loads to the square -foot office, manufacturing, and utility's system. Each ADC plant consumes research and development facility about four megawatts of electric power; Seagate Technology's disk drive Rick Palmer, the company's director of manufacturing facility consumes five corporate facilities, noted that "in addition to megawatts. By 2000, tenants of Valley the developability of the land and good soil Green Business Park were consuming nearly that is environmentally clean, Valley Green 40 megawatts of power, nearly equivalent to fits our existing shipping patterns, including SPU's entire electric power load in 1995. ease of access to southwestern truck routes and close proximity to the airport." 40 Dean Lake Sub 1simsi � l i ffl The spectacular growth of electric ; �� power demand in Shakopee averaged 13 percent annually from – i I 1992 to 2002, more than double the r trr — . increase in the Twin Cities and -' ' ° �� i • "' nearly three times the average rate , a , t j.. j of kilowatt -hour growth nationally. h i s >, The spike in demand meant that f f . I .q _ i 1 ,+ u --+ - , o SPU needed to build a new L � U substation. In the late summer of 1998, about the time that 7 N construction of the new Seagate Seagate Facility, Shakopee Technology plant at Valley Green Business Park got underway, SPU dedication. announced the planned construction of While the Dean Lake Substation was under Dean Lake Substation. Located south of the construction, SPU crews continued to Shakopee Bypass, west of Scott County Road rebuild and upgrade the city's distribution 83, and just north of and adjacent to County system. Electric projects underway in the Road 16, Dean Lake Substation would be the late 1990s and early 2000s included fourth on the Shakopee electric grid. upgrading power lines in the older part of "There's just been tremendous growth in the city from 4,160 volts to 12,470 volts, this city," Lou Van Hout explained the need upgrading circuitry serving Valley Green, for the new substation. "We at SPU have to and improving circuits and switches for the stretch ourselves to keep up with it. We new residential developments east of old have to do that as part of a growing Shakopee. community" "We always think we're providing a little Ground was broken for the Dean Lake breathing room," said Joseph Adams, "and Substation in the late summer of 1999. The then the growth just ramps up again." $2 million facility, which stepped down electricity from the adjacent 115,000 -volt Financing Growth transmission line to a more usable 13,800 g volts for distribution to residential and industrial customers in east Shakopee, was For 25 years, from 1968 to 1993, Shakopee energized and placed in service on May 19, paid for improvements to its electric and 2000. water system from the utility's retained "I'm certainly pleased to have this in place earnings. "The bond issue in 1968 was the for this summer and beyond to meet the last bond issue before 1993," said Lou Van growth of this area," Utilities Manager Van Hout. "We financed all of our Hout said at the new substation's improvements internally." 41 Above and Beyond For the Minnesota lineman, the most dreaded enemies of daily routine are wind and ice. Windstorms and torna- does, usually associated with the passage of a strong cold front, buffet the North Star State in late spring and early summer. Ice storms, in which freezing rain and sleet com- bine to weigh down trees and distribution lines with as t much as several inches of ice, are most prevalent in March and November. The spring of 1998 will be remembered by linemen from Shakopee and other utilities in the Minnesota River Valley for as long as they live. In the space of two months that spring, tornadoes and windstorms devastated municipal electric systems the length and breadth of the Valley. Hundreds of distribution poles were uprooted or sheared n � in the storms, and customers went without power for days at a time. The first storm hit at St. Peter, a municipal utility commu- nity 35 miles southwest of Shakopee. A tornado with estimated wind speeds of 260 mph slammed into St. Peter on Sunday, March 29, 1998. Within the space of a half - hour, the tornado ripped the small town apart. I f A K More than 90 percent of the 2,500 homes in the commu- nity of 10,000 people were destroyed or damaged, and � x 125 businesses were completely or partially destroyed. More than half of the municipal utility's distribution poles were down. The winds flipped 9,000 -pound transformers Utility Line Crew at Work, 1998 on their sides. Municipal utilities in Minnesota sign mutual assistance night, May 30, it packed super cell thunderstorms and pacts with their utility neighbors to provide trained line straight line winds of more than 80 mph. The black wall crews in times of emergency. Within hours of the torna- of storm clouds moved slowly across the southern fringe do, utility tine crews from Shakopee, Rochester, Fairmont, of the Twin Cities from 9 p.m. until midnight. The result - New Prague, Waseca and 20 other utilities were rolling ing devastation crippled Shakopee's electric distribution into St. Peter to assist with restoration efforts. Crews system and left more than 300,000 people without elec- from as far away as East Grand Forks and Brookings, South tric power from Shakopee east to Wisconsin. Dakota arrived to help with the clean -up. Kent Sanders was watching television news Saturday night Kent Sanders and Gene Pass from the Shakopee line crew and following the progress of the storm on the local sta- drove a bucket truck to St. Peter early on the first tion's weather radar. His wife Sandy was preparing to Saturday of April. When they pulled up to the visitors' leave for the Mystic Lake Casino. Sanders, a Little Falls center in the middle of town, the parking lot was filled native and 19 -year SPU lineman, called fellow lineman with buses and line trucks from all over the state. A St. Gene Pass and said he was getting ready to come in Peter police officer directed them through barricades to a should he be needed. work site, and they spent the weekend working with crews from Chaska and New Ulm to set poles and restore service. The wife left, and it hit," Sanders said. "It hit hard. Gene called back and said to get in here right away. " `It Hit Hard Sanders' wife had gotten a mile from home and turned around when she couldn't see to drive because of the tor- rential rain and wind. Sanders took his daughter to the neighbors and set out for the SPU headquarters on Fourth Sanders didn't realize it at the time, but he would be Avenue. delighted to see those utility crews he worked with in St. Peter arrive in Shakopee just two months later. "I got up to Tenth and Spencer, and Spencer was impassa- ble," Sanders said. "I zigzagged down to County Road 17, The last week of May was hot and muggy in southern and it was a mess. At that point, I knew the whole sys- Minnesota. Temperatures had been in the 80s since mid- tem was down." week, with humidity approaching 90 percent. An approaching cold front from the north and west promised Sanders headed north on County Road 17 and eventually relief from the heat over the weekend, but when the front worked his way through the storm debris to Ninth Avenue. did move through the Minnesota River Valley on Saturday Shakopee police manning a barricade told him to be care- ful, that wires were down all over the city. When he did of these new subdivisions. That means you can't get a reach the utility shops, he discovered that Gene Pass had truck back in there. Restoration takes a tot longer." gone directly to the old Shakopee Substation, and Brad Damage was so extensive in Shakopee that line crews had Gustafson, another lineman, had tried to make his way to to go street by street making repairs. Many of the distri- the Blue Lake Substation. Sanders headed to the South bution tines had sustained tree damage, and crews cut Shakopee Substation. limbs fr the lines before energizing them. Most of the What none of the linemen knew at the time was that the initial work was temporary. storm had knocked out power from the three NSP trans "We did a lot of temporary work," Dellwo said. "We fig - mission lines that provided power to Shakopee. Steel towers and wood poles on the 345,000 -volt, 115,000 -volt ured we could make it permanent later on. Our phitoso and 69,000 -volt transmission lines serving the city were phy was make it safe. Tie it up. Get them back on." twisted hulks of metal and splinters. SPU crews and office employees worked 18 -hour days for Power was out all over Shakopee. Because the breakers the next week to restore power to all of Shakopee's 7,600 on the substations were closed, Sanders, Pass and electric customers. Gustafson had to manually trip the breakers so that when the transmission system was repaired, power wouldn't We Knew We Needed Mutual Aid' start flowing again to the distribution lines down in every neighborhood of the city. On Sunday morning, Lou Van Hout took a call from the `Get Them Back On' Minnesota Municipal Utility Agency (MMUA) offering assis- tance under the terms of the mutual aid pact. By noon Monday, the first crews from surrounding utilities were Employees got to the SPU offices Saturday night any way arriving in Shakopee and being dispatched to particularly they could. Nancy Huth was at the Elko Speedway difficult trouble spots. Saturday night when the storm hit. On the way back to "We knew we needed mutual aid," said Van Hout. Shakopee, she said, "I told my husband to just drop me off at the office. When I got here, Lou Van Hout and Barb Crews from St. Peter, New Ulm, Owatonna, Elk River and Nevin were already taking calls." Huth, Nevin, Sherri Anoka spent most of the week in Shakopee. Crews from Anderson, Sharon Veglan and Barb Menden would make Chaska, New Prague, North St. Paul, Glencoe, Buffalo and themselves invaluable during the next week, answering Le Sueur helped out in Shakopee whenever they could spare a couple of hours from storm restoration duties in the phone, running errands and making arrangements to feed and house the support crews from all over Minnesota. their communities. Line Superintendent Mary Athmann was on vacation in "I drove into the parking lot early Tuesday morning," Kent Missouri. He called into the office early Sunday and told Sanders recalled, "and I was simply amazed at all the tine Van Hout that he was on the way back to Shakopee. trucks there." Athmann would spend the next week dispatching the MVEC helped out by arranging to have cooperative tine mutual aid crews to assist Shakopee crews in restoring crews repair the joint use lines shared with Shakopee in service. the rural area of Prior Lake. Lineman John Dellwo arrived home Sunday night from a With the help of the mutual aid crews, SPU restored power fishing trip in Canada. Dellwo reported for work early by 5 p.m. Friday to all but a few customers whose interior Monday morning and worked 72 hours straight. electric wiring had been damaged by the storm. For NSP managed to route power to the Blue Lake Substation Sanders, it was one of the most satisfying events in his at 1 a.m. Sunday. Shakopee crews restored power to the utility career. St. Francis Regional Medical Center, the Scott County and "Our guys would work until 10 at night," he said. "And City Emergency Centers and the SPU offices by dawn then they'd be back here at 6 a.m. I'd walk in at 5:30 in Sunday. NSP restored power to the South Shakopee the morning, and everybody would be sitting here waiting Substation early Sunday afternoon and to the old for me. Our crews were great. They didn't want to go Shakopee Substation Sunday evening. home at night until that last customer was back on. That At that point, nearly 90 percent of Shakopee residents adrenaline just started pumping." were still without electricity. For the next four days, line Jim Cook, who served 12 years as a Commissioner for SPU, crews worked around the clock, setting and repairing wasn't surprised by the utility's response to the May 1998 poles and bringing neighborhoods back onto the system, storm. "I would pit the Shakopee crew against NSP or one by one. any other utility in the U.S.," Cook said. "It was amazing "We found that there were a lot of backyards with no how well the utility functioned during that 1998 storm. access," Dellwo explained. "There are no alleys in a lot They did a truly phenomenal job." 5 ..& \ 1'' r } i some of the more draconian steps taken by - � :_._._ municipal water suppliers in Prior Lake, Y+ �� Minnetonka and St. Louis Park. ` , a A "A lot of communities had outright water , bans in 2001," Crooks said. "Fortunately s° 1 t we didn't, although we did have odd -even watering restrictions. We were able to fill r- `-� t , 4� , r - _.- - _,_; our towers every day. In this business, you never plan on rain." Once Well No. 13 starts flowing, SPU has �` ` 1 '> plans to build three more wells to serve the city by 2006. Shakopee already has purchased property for a water storage facility south of the city, and current Map of SPUC Service Territory blueprints call for the creation of a future well field in the vicinity of the new City city's fourth water tower. The 500,000- Soccer Complex east of Sunpath gallon tower was built on a four -acre site Elementary School. south of Valley View Road, Shakopee's first high - elevation service district. "Because of the growth," Crooks said, "we're accelerating our schedule of putting The site also contains Wells No. 12 and 13, wells in." as well as Pump House No. 12. Well No. 12 began flowing in the late spring of 2002, Commissioner Dave Thompson, a sales and Well No. 13 was drilled and will begin executive for Shakopee Valley Printing who flowing in late 2002. was appointed to the Commission in 1997, has closely followed water issues during "We needed these new wells, the pump his five -year tenure. He pointed out that house and water tower in addition to Minnesota Department of Natural promoting consrvation because Shakopee is Resources regulation of the state's water still growing by leaps and bounds," said supply has become steadily more stringent John Crooks, water system supervisor. "We during his two terms on the Commission. need to be able to supply the demands of But he added that Shakopee's escalating our customers and try to avoid having to expansion dictates a constant search for impose further restrictions on water use or new water supplies. outright water bans. With proper planning on our part, we hope to stay ahead of "We always need to stay one well ahead of Shakopee's growth rate — which is almost what we need," Thompson noted. 10 percent annually, and it won't stop for awhile. There's a lot of planning involved for the anticipated growth." Power Supply and Deregulation Shakopee experienced two dry summers in 2000 and 2001, but through careful In the fall of 2001, the Minnesota Public conservation measures, Shakopee avoided Utilities Commission (MPUC) issued the 48 most comprehensive update on electric assistance programs available through the utility regulations in the state in more than utility. In 2001, SPU spent approximately 20 years. $171,500 on electric conservation measures, Much of the report deals with energy and in 2002, the amount is projected to conservation. No Minnesota utility has exceed $300,000. built a baseload steam electric station since An innovative load management program the early 1980s. Although power supplies instituted in 2000 saves electricity by in the state are projected to be adequate controlling municipal water wells to fill through 2010, Minnesotans have become storage tanks during off -peak hours. adept at making the most efficient use of "I'm a firm believer in conservation," said electricity. Commissioner Joan Lynch. "Americans are SPU has been active in energy conservation not thinking energy conservation, and issues for most of the past 10 years. SPU that's a concern for the whole U.S. We all has worked with Scott County social make choices here, and that's the choice we service agencies to ensure that low income as a Commission are making." customers are kept informed of energy Another choice that the Commission will New Quarters If all goes according to plan, SPU will be more efficient. Both the electric and Phase 2 involved a general overview of move into new quarters on the northeast the water operations have become more seven different sites in the city, matching side of Shakopee sometime in the fall of complex, and we want to better serve our SPU's needs to each of the sites. At the 2003, 35 years after relocating to the customers." conclusion of Phase 2, the Commission Fourth Avenue offices, maintenance shop Van Hout added that SPU needs "a place narrowed the list to three sites. and service center. to hold employee meetings for such In Phase 3, which began late in the fall When it was built in 1968, the SPU serv- things as safety training and to meet pri- of 2001, BKV assessed the three final ice center had plenty of room to house all vately with customers to discuss their sites for a number of development consid- of the utilities' myriad functions. SPU accounts or to talk to them about energy erations, including road access, zoning, consolidated employees from several dif- conservation." bedrock, wetlands, and potential sur- ferent locations around town, including rounding residential and industrial devel- city hall. Line crews and mechanics In October 2001, SPU contracted with the opment. worked on equipment in spacious heated Twin Cities architectural firm of Boarman garage facilities. Most of the front office Kroos Vogel Group (BKV) to spearhead a BKV ranked and evaluated each of the employees had private offices. There was three -phase site selection study for a new sites in the spring of 2002, and the even a conference room where service center. Commission made a final selection. The Commissioners held monthly meetings. Phase 1 consisted of an in -depth analysis site selected was a 20 acre parcel just south of Highway 101 between But as Shakopee has grown, so too has of space needs in a future service center, Shenandoah and Sarazin roads. the city's utility. The conference room which would include expanded room for Construction of the new service center in was partitioned into offices. The fleet of electric and water operations, a much the proposed Shenandoah Business Park bucket trucks and line equipment outgrew bigger heated garage and workshop com wilt begin in the fall of 2002, with com- the space plex, covered storage for recyclable mate - garage e g p ace y ears ago. rigs, an expandable open pole yard, pletion and occupancy expected in fall "Our utility has shown dramatic growth," ample parking for employees and cus- 2004. Utilities Manager Lou Van Hout said in tomers, and storm water runoff retention the fall of 2001, "and we need more ponds. space to work in an organized fashion, to have to make in the near future concerns Spring and Summer 2002 revelations that power supply. SPU's contract with MMPA many energy trading companies have been expires in 2005, and the city is obligated to padding their financial results caused notify the power agency of its intentions legislators in many states to re -visit the three years prior to expiration of the wisdom of electric utility deregulation. contract. We don't know the answer to "We have to notify MMPA by the end of deregulation," SPU's Lynch said. "Nobody 2002 what we intend to do in the 2005 does. But I will venture to say that people renegotiations," said Commissioner Dave will take a second look at it because they Thompson. "That's a big decision. In fact, just don't understand deregulation that it's a $150 million decision over 10 years." well." Complicating the contract discussions with Shakopee's innate conservatism has served the power agency is the issue of the community well during a century of deregulation. Spurred by calls for more utility ownership. Five generations of competition in the wholesale and retail Shakopee residents have benefited from electric power industry, the federal 100 years of energy independence brought government since 1992 has deregulated about when the city council and electric much of the high - voltage electric light committee decided to build an electric transmission grid serving the United light plant at the foot of Lewis Street on the States. Most of the nation's investor- river bank in 1901. Generations to come owned utilities have sold or leased their will continue to benefit from municipal high - voltage transmission networks to ownership of Shakopee's critically Regional Transmission Organizations important electric power and water supply. (RTOs), which now control the flow of electric power across the continent. In addition, some states have required electric utilities to sell generating plant assets in expectation that third -party energy marketers will be able to sell electric power cheaper to end -use customers than in a regulated environment. The anticipation that private power marketers could sell electric power cheaper than regulated electric utilities evaporated with the California power crisis in 2000 -2001 and the Enron collapse in 2002. Minnesota's kilowatt -hour costs are among the lowest in the country, and so far, North Star state legislators have been hesitant to do radical surgery on Minnesota's regulated electric utility industry. The 50 8 1 7 1 6 5 1 4 3 2 1 , N V E C \ - / - CRY LIMB BOUNDARY D MVEC X:el D \\...9 '....... __ 11 .'. ,Xcel SPU CITY UM:T BOUNDARY X c e ! _ . / 1 / IS P U '`. L o.... ../ ... NI C . C , ..••.. I C I 1 �j Q r j CITY LIMIT ; • [ BOUNDARY i ' I I L .._.._.._.._.._. LkGEND '� �•� �•• • SPU - Shakopee Public Utilities �.._.. — ..., ��• Service Territory , � N • MVEC Minnesota Valtey r. S P I I • Electric Coop Service Territor LJ Q • xcel = xcel i , .._.._.._ Service Territory B — SPU Service Territory V V E I M \ / E C ) / �Q \ / ( Shakopee City Units V l� 1 ' 1 I- V CITY LIMIT BOUNDARY • M V E 1. i SF'U i k. r—' I i .:. J i li SPUi `! SPU, 1 CITY LIMIT M V E C I BOUNDARY i SPU MVEC A .M9CN DAM APPROVED m M" r. 1 SPUC Electric Service Territory A 2 SHAK ❑PEE PUBLIC UTILITIES i J I SHAK ❑PEE, MN. REVEwED t —02 —12 APPROVED . 9 8 1 7 1 6 1 5 T 4 1 3 1 2 1 1 Shakopee Public Utilities Commission Payment in Lieu of Taxes and Free Service to City of Shakopee Cost History TOTAL COSTS PILOT, PILOT PILOT Maintenance Free Service Electric Water Free of Street & Maintenance Year Transfer Transfer Service Lights of Street Lights 2000 727,102 366,736 47,597 (7,491) $ 1,133,944 2001 727,102 446,703 54,353 10,136 $ 1,238,294 2002 492,262 438,281 49,871 76,734 $ 1,057,148 2003 534,344 534,025 53,982 4,960 $ 1,127,311 2004 593,115 532,725 40,498 140,681 $ 1,307,019 2005 741,847 584,850 46,434 146,140 $ 1,519,272 2006 858,898 677,999 50,082 103,290 $ 1,690,269 2007 987,031 704,809 93,931 128,282 $ 1,914,053 2008 1,021,293 651,924 130,135 33,450 $ 1,836,802 2009 905,441 726,200 189,761 43,617 $ 1,865,019 2010 975,175 816,350 197,882 59,982 $ 2,049,389 2011 993,928 822,726 194,705 45,469 $ 2,056,828 2012 (Budget) 1,021,423 899,159 202,719 42,810 $ 2,166,111 Total 10,578,961 8,202,487 1,351,949 828,062 $ 20,961,459 M: \2012 \PILOT and Free Service Payment History 10/3/2012 SERVICES PROVIDED TO THE CITY OF SHAKOPEE Sanitary Sewer Billing and Collection Storm Sewer Billing and Collection Space for Billing Inserts Commercial and Industrial Cross Connection Control Program Use of SPUC Equipment Updates with Foreclosed /Abandoned Housing to Prevent Frozen Pipe Water Damage Use of State Conservation Funds for Qualifying City Projects Water for Fire Department Training Exercises Erecting the City Christmas Tree and Decorations Street Light Maintenance Street Light Relamping Electricity for Street Lights WCC /WAC TWC Prior Lake 2012 9000 5560 /acre Eden Prairie 2012 3920 /sac c/i 2510 /sac res Maple Grove 2012 8105 /acre c/i 2030 /unit res Savage 2012 2450 /sac c/i 3735 /acre 2450 /unit res Blaine 2012 3958 /acre c/i 1567 /unit res SPUC 2012 4322/sac 2452 /acre o c� m Q > ,--- � � �c`�� ' . c� o � ��"� �'� d � � z � � � � o � m �) G� �` (j) � -H. � / cn�N>•r �ro�in do. �' Q �i� z � � :` � _ � � o a 1e N � � � gOAA N� � MilircY .`( " LL U I L) .O J � . �l.�l `� � �Z rr�: O�" �i4 Q � �� a�a a ..��`� _�� o c� . �� `! � � � W W i �. o �~ � m W d d � O O '^�� C,) Y Y ` i—`__..---- � � Q Q / �; \c� d 2 2 �m CA V7(/1 �� � ` � � � � 3 r � � o � N J / ` ,�ij -- � i /// � ~ � �o` // � C � � �� � � o r_ . � � � vl , I � �� �! 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