Northern States Power Company d/b/a Xcel Energy (Xcel) for electric generation equipment in Burnsville, Minnesota (the Black Dog facility);

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Brice Fields
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October 22, 2012 Jon Van Nurden Minnesota Department of Revenue Property Tax Division 600 North Roberts Street, 4th Floor Minnesota 55146-3340 RE: Efficiency Ratio Determination Update of the

1 October 22, 2012 Jon Van Nurden Minnesota Department of Revenue Property Tax Division 600 North Roberts Street, 4th Floor Minnesota RE: Efficiency Ratio Determination Update of the Minnesota Department of Commerce Docket Nos. E015/TX , E002/TX-00-, E111/TX , E002/TX , E002/TX , and E002/TX Dear Mr. Van Nurden: Minnesota Statutes (the Statute) provides for sliding-scale market-value exclusions based, in part, upon a determination by the Commissioner of the Minnesota Department of Commerce (Commissioner of Commerce) of the efficiency ratio of the facility in question. To date, the Commissioner of Commerce has determined the efficiency of six different facilities under the Statute: Minnesota Power, Inc. (MP) for steam and electric generation equipment in Cloquet, Minnesota (formerly the Potlatch facility, now known as the Sappi facility); Northern States Power Company d/b/a Xcel Energy (Xcel) for electric generation equipment in Burnsville, Minnesota (the Black Dog facility); Energy Alternatives (EA), a subsidiary of Dakota Electric Association, for electric generation equipment in Hastings and Lakeville, Minnesota; Koda Energy LLC (Koda), a partnership between Rahr Malting Company and the Shakopee Mdewakanton Dakota Community, for steam and electric generation equipment in Shakopee, Minnesota; Xcel for electric generation equipment in Minneapolis, Minnesota (the Riverside facility); and Xcel for electric generation equipment in Minnesota (the Highbridge facility);

2 Jon Van Nurden October 22, 2012 Page 2 The Statute states, in part: The Commissioner of Commerce shall determine the efficiency of the facility and certify the findings of that determination to the Commissioner of Revenue every two years thereafter from the date of the original certification. In a letter dated June 9, 2004 the Minnesota Department of Commerce (Commerce) indicated an intent to provide the Minnesota Department of Revenue updated data on all qualifying projects at the same time in a single report every two years. The last biennial update report was provided on January 3, Commerce obtained updated efficiency ratio data from Koda, MP, and Xcel. Commerce did not pursue updated data from EA based upon the Commerce s conclusion that EA s facility would not qualify under the 40 percent threshold now established by the Statute. 1 Based upon the updated data Commerce verified the efficiency ratios to be as shown in Table 1. Table 1: Efficiency Ratios Company Ratio MP % Koda % Xcel-Black Dog % Xcel-Riverside % Xcel-Highbridge % If you have any questions or require further information regarding this update, please contact myself at Sincerely, /s/ SUBODH PATEL, P.E. Engineer Specialist Div. of Energy Resources Dept. of Commerce SP/ja 1 The Commissioner of Commerce determined that the efficiency of EA s facilities was 36.3 percent in a letter sent to the Commissioner of Revenue on July 17, 2003 (Docket No. E111/TX ).

3 CERTIFICATE OF SERVICE I, Sharon Ferguson, hereby certify that I have this day, served copies of the following document on the attached list of persons by electronic filing, certified mail, , or by depositing a true and correct copy thereof properly enveloped with postage paid in the United States Mail at Minnesota. Minnesota Department of Commerce Efficiency Ratio Determination Update Docket No. E015/TX ; E002/TX-00-; E111/TX ; E002/TX ; E002/TX and E002/TX Dated this 22 nd of October, 2012 /s/sharon Ferguson

4 Christopher Anderson Minnesota Power 30 W Superior St Electronic Service No OFF_SL_0-695_ Duluth, John Lindell agorud.ecf@ag.state.m Electronic Service No OFF_SL_0-695_ Electronic Service No OFF_SL_0-695_ Electronic Service No OFF_SL_0-695_00-695

5 Sharon Ferguson Department of Commerce 85 7th Place E Ste John Lindell agorud.ecf@ag.state.m Esther Nelson N/A Dept of Revenue Property Tax Division Mail Station SaGonna Thompson Regulatory.Records@xcele nergy.com Xcel Energy 414 Nicollet Mall FL 7 Minneapolis, Electronic Service No OFF_SL_0-_TX-00- Electronic Service No OFF_SL_0-_TX-00- Electronic Service Yes OFF_SL_0-_TX-00- Electronic Service No OFF_SL_0-_TX-00- Paper Service No OFF_SL_0-_TX-00- Electronic Service No OFF_SL_0-_TX-00-

6 Sharon Ferguson Department of Commerce 85 7th Place E Ste Jerry Lauer ck@energyalternative.com Energy Alternatives Suite C Eaton Avenue Farmington, John Lindell agorud.ecf@ag.state.m Alan Whipple sa.property@state.m Minnesota Department Of Revenue Property Tax Division 600 N. Robert Street Electronic Service No OFF_SL_03-854_1 Electronic Service Yes OFF_SL_03-854_1 Electronic Service Yes OFF_SL_03-854_1 Paper Service No OFF_SL_03-854_1 Electronic Service No OFF_SL_03-854_1 Electronic Service No OFF_SL_03-854_1

7 Ward Einess N/A Minnesota Department of Revenue Sharon Ferguson 600 N. Robert Street Department of Commerce 85 7th Place E Ste John Lindell agorud.ecf@ag.state.m SaGonna Thompson Regulatory.Records@xcele nergy.com Kari L Valley kari.l.valley@xcelenergy.co m Xcel Energy 414 Nicollet Mall FL 7 Minneapolis, Xcel Energy Service Inc. 414 Nicollet Mall FL 5 Minneapolis, Paper Service No OFF_SL_10-179_Official Paper Service No OFF_SL_10-179_Official

8 Ward Einess N/A Minnesota Department of Revenue Sharon Ferguson 600 N. Robert Street Department of Commerce 85 7th Place E Ste John Lindell agorud.ecf@ag.state.m SaGonna Thompson Regulatory.Records@xcele nergy.com Xcel Energy 414 Nicollet Mall FL 7 Minneapolis, Paper Service No OFF_SL_10-180_Official

June 4, Dr. Burl Haar, Executive Secretary Minnesota Public Utilities Commission th Place East, Suite 350 St. Paul, MN

June 4, Dr. Burl Haar, Executive Secretary Minnesota Public Utilities Commission th Place East, Suite 350 St. Paul, MN June 4, 2003 Dr. Burl Haar, Executive Secretary Minnesota Public Utilities Commission 121 7 th Place East, Suite 350 St. Paul, MN 55101-2147 Subject: Dakota Electric Association Comments on Technical Workgroup