City, CLP go to trial over territory

Talk about it

The City of Two Harbors and Cooperative Light & Power (CLP) will meet in district court the week of March 31 to settle a dispute over service territory.

Steve Wattnem, general manager of CLP, spoke briefly about the issue. City administrator Lee Klein said he had been directed not to comment, and attorney Corey Ayling, who is handling the case for the city, could not be reached.

The issue revolves around land recently annexed to the city, including 80 undeveloped acres adjacent to the golf course, and particularly the 22 acres on the shore where Blue Waters is building the Burlington Homes--land that was within CLP's service area. When Blue Waters asked for city utilities on that property, the city agreed, with the stipulation that the property be annexed. That did occur.

In 1974, the Public Utilities Commission determined exclusive service territories for all utilities, Wattnem said. Because of that, although the city now has the right to provide electrical service to that area because it is within the city's corporate limits, it still must acquire the service territory and pay compensation to CLP. The issue is how much that compensation should be.

The PUC has allowed compensation to be based on potential earnings for the next 10 years. Wattnem said they used the Burlington Homes development for the 22 acres, and a "best guess" at what future development might bring for the other 80.

As a result, CLP asked for $750,000 in compensation, while the city set the figure at $40,000. Commissioners chosen by both parties to decide which figure will be used awarded the $40,000 amount.

CLP has now asked for a jury trial in the hopes of having that award adjusted in its favor.

Wattnem said that in other areas, as government boundaries and service territories change, utility companies have lost thousands of customers. The loss of that revenue can affect how well they are able to service the customers they retain.

"It's all about planning for the future," Wattnem said. "We've made plans for servicing our area, and losing potential customers messes up those plans."

Tags: twoharborscitycouncil, cooperativelightandpower, trial