How would Minneapolis pay for the energy infrastructure?


If formation of Municipal Utility was being pursued, Minneapolis would bond to pay for the electric grid and/or natural gas infrastructure. The City has a AA­A bond rating, (compare this to Xcel’s BBB+ bond rating) and rates for municipal bonds are at historic lows. Financially speaking this would have been an ideal time to do this sort of bonding. Yes, it is likely to be very expensive to buy the energy infrastructure. We would not even know the true numbers on how expensive it would be until after negotiations with the incumbent utilities would be completed. Under an ideal scenario, the fees paid by Minneapolis energy utility customers should be sufficient to pay off the bonds, if the City can purchase the infrastructure for a reasonable cost. And remember, the authorizing referendum campaigned for in 2013 would have required that the City not raise rates more than the historical average.

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