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1 <br />1 <br />1 <br />COUNCIL MEETING DECEMBER 13, 1993 <br />operated a gas business within a franchise in the western portion <br />of Lino Lakes since 1961. The franchise was renegotiated in 1985 <br />and extended for 25 years. Since that time, the City of Lino <br />Lakes has experience substantial growth and the Lino Lakes gas <br />customers have grown from 185 to over 700. The gas utility has <br />now been extended into the Apollo Business Park and will serve <br />future commercial customers. The utility also serves the <br />Minnesota Correctional Facility on an interruptable basis. <br />Mr. Keinath noted that the Circle Pines Utility Commission <br />currently has one (1) representative from Lino Lakes and when the <br />percent of Lino Lakes customers reaches 40%, a second Lino Lakes <br />member will be added. Currently Lino Lakes customers make up 30% <br />of the users. <br />The Circle Pines gas utility currently is paying a 7% franchise <br />fee to Lino Lakes. The fee is unique in that it is not added to <br />the customers utility rate. It is anticipated that the City of <br />Lino Lakes will realize an income of approximately $30,000.00 <br />from the franchise fee in 1994. <br />Mr. Keinath noted that the natural gas business is highly <br />regulated by the government and there are spot checks to see that <br />all procedures are followed correctly. He also noted that <br />customer rates are regulated. Employees are tested by the <br />Minnesota Department of Transportation, Pipeline Safety Council <br />and it is anticipated that in the near future all employees who <br />work with pipelines will have to go through a certification <br />process. <br />The Circle Pines Gas Utility maintains a 24 hour service benefit <br />for all customers at no extra charge to the customer. <br />Currently consideration is being given to requiring all <br />municipalities and state police agencies to have vehicles <br />operating with alternate fuels. It is the hope of natural gas <br />suppliers that municipalities will consider the use of natural <br />gas. <br />Mr. Keinath noted that the City of New Ulm is one of the first <br />municipalities to convert some of its police vehicles to natural <br />gas. The Circle Pines Gas Utility Commission has a film that <br />shows the benefits of using natural gas as an alternate fuel and <br />they are willing to share that film with every community. <br />Mr.. Schumacher asked what affect deregulation will have on the <br />Circle Pines Gas Utility. Mr. Keinath explained that <br />deregulation is already here and has not had much of an impact <br />There will be no rate increases due to deregulation. He noted <br />PAGE 7 <br />