MINUTES

Meeting No. 6
MAYOR'S Energy Task Force
Utility Subcommittee
Wednesday, March 10, 2004

1. Minutes of the Utility Subcommittee Meeting No. 5 of February 25, 2004 were approved as amended as follows:

a Add John Garvin to the list of attendees

b. Modify the 7th paragraph of subparagraph 5 to read:

“Vickerman stated that one of the most significant issues for the committee is that our transmission lines providing power to the City of Madison are reaching capacity. He felt that it was necessary to bring the Mayor into the discussion with regard to transmission lines. ATC is presently working on locating a transmission line from the Femrite substation to the Sprecher/Cottage Grove Substation. ATC will propose to upgrade the transmission line between the North Madison substation in the town of Vienna to the Columbia Power Plant. ATC is also evaluating the need for a new 345 KV line to serve the Madison Metropolitan area from the West.

2. Vickerman stated that he had received a lengthy e-mail addressed to himself and Jeanne Hoffman from Preston Schutt regarding the potential of on-site generation and distribution facilities. This will be placed on a future agenda.

3. The Committee reviewed the summary of energy use by city facilities. In 2003 the City purchased 56,516,110 KWH of which 95% was provided by Madison Gas & Electric Company.

a. The Subcommittee discussed goals for renewable energy. Greg Bollom provided data with respect to the City’s setting goals of 5, 10, 15 or 20% using a 2-cent premium and the current 3-cent premium.

Incremental Renewable Purchases Required to Meet Targets 2 Cent Premium 3 Cent Premium

5% 2,825,806 KWH $ 56,516 $ 84,774

10% 5,651,611 KWH $113,032 $ 169,548

15% 8,477,417 KWH $169,548 $ 254,322

20% 11,303,222 KWH $226,064 $ 339,097

Bollom stated that there was a potential for long-term contract between the City and Madison Gas & Electric for the purpose of renewable power.

Scot Cullen stated that the PSC would have to balance public policy vs. ratepayers for the Water Utility purchase of wind power. Higley inquired of how much “green power” was available for marketing by MGE.

Bollom responded that up to 40 MW could be available. Higley also inquired why not socialize all of the cost of wind power. Bollom responded that while wind energy with production tax credits is competitive today under certain gas cost scenarios, it remains more expensive under other scenarios. Even with the production tax credit, only a certain amount of wind energy can be cost effectively added to the utility supply mix as a fuel displacement for natural gas generation.

The Committee suggested that the City set a goal of purchasing 10% of its electrical energy from renewable sources by 2006 and 20% by 2010. Bollom stated that between the State and City purchases MG & E would need to commit 90 megawatts of wind power.

4. Transmission Requirements

Hiniker stated that there was a large group meeting regarding the electrical transmission needs for Dane County. It was agreed that the Subcommittee would need to meet with the other Subcommittee regarding growth of consumption. That meeting would be scheduled for May.

The Committee agreed that the City should become more involved with energy discussions before the Public Service Commission and in discussions with Dane County Group.

ATC (Garvin) will provide suggested goals for transmission needs.

5. Next meeting is scheduled for April 14, 2004 at 3:00 p.m. in Room LL120 of the Madison Municipal Building.

Meeting adjourned 5:00 p.m.

Submitted by:

Larry D. Nelson, P.E.
City Engineer