The lack of oversight is not a new issue. From: Svattheriver@aol.com To: burl.haar@state.mn.us Sent: 2/5/2014 4:03:22 P.M. Central Standard Time Subj: Crown Hydro

The Crown Hydro project funded in 2002 has no location secured to build a hydro facility. There is extensive public information especially as part of the FERC process about this project, rather than go into that detail, I would like to point out that the most recent status report sent to the PUC from Crown Hydro clearly states that they do not have site control and do not have a current FERC license for the property controlled by the United States Army Corps of Engineers.

There are concerns about this project which are included in FERC communications to Crown Hydro this past year and according to the FERC correspondence, it is unlikely that a license amendment would be considered. These concerns could prevent a license amendment or the securing of a location for this project. There are no assurances that this project will be able to be completed. Both the project and the Minneapolis central riverfront have significantly changed since 2002.

At the last public meeting in November Crow Hydro could not provide information about ownership or sources of funding, (other than the Renewable Energy Fund).

I have closely followed the issues concerning AnAerobics where lack of oversight and lack of site control were problematic issues.

There is $1,538,591 than has been invoiced from the total grant amount of $5,100,000.

The Renewable Energy Fund now has the benefit of time and experience to limit the resources that would be lost if a project does not come to fruition. I would suggest that the AnAerobics project would provide incentive for oversight and due diligence to protect the assets of the Renewable Energy Fund when construction projects are not constructed.

Thanks, Scott Vreeland 2437 33rd Ave. S. Minneapolis, MN 55406 (612) 721-7892

The oversight process concerning Crown Hydro has had very little to do with anyone being accountable for reasonable expectations of how the fund should be managed. Since 2002 Crown has reported glowing quarterly reports of how they are about to complete their project, when in fact they do not have site control or assurance that will have an amended FERC license. The dysfunction and soap opera of internal legal problems that have not been fully reported are problematic. The lack of oversight is not a new issue. I will include my correspondence about the problems with oversight process. Thanks, Scott Vreeland 2437 33rd Ave. S. Minneapolis, MN From: Svattheriver@aol.com To: dan.wolf@state.mn.us CC: amy.s.fredregrill@xcelenergy.com, Lisa.crum@ag.state.mn.us, christopher.moseng@state.mn.us Sent: 2/13/2017 10:04:31 A.M. Central Standard Time Subj: Re: Crown Hydro

Mr. Wolf, To clarify: Are you saying on behalf of the Renewable Development Fund Oversight Process and the State of Minnesota, that the $1.5 million grant is a gift to Crown Hydro and there are no assets that can be claimed if the project is not completed? Is this different than the disposition of AnAerobics assets?

Are you saying on behalf of the Renewable Development Fund Oversight Process and the State of Minnesota, that Crown Hydro has an infinite amount of time to seek the remaining $3.6 million to complete this project, even though this is not the case for any other RDF project and clearly was not the intention of the original Cycle 1 funding agreement?

I would note regarding the last sentence of the latest status report below that the St. Anthony Falls Aesthetic Flow Survey, prepared for Xcel Energy by Barr Engineering Company, dated December 2016, pursuant to United States of America 113 FERC ¶62,215 Order Modifying and Approving Aesthetic Flow Adequacy Plan Pursuant to Article 403, was not a survey completed by Crown Hydro.

There are many concerns that have been raised about this project and about its negative impact on the falls. The improvements and changes that will be implemented in the near future reflect a major transition of this area and changes since 2002. With neither site control nor a new or amended FERC licence to run a hydro project, this is not a project that would receive RDF funding in 2017 . After 15 years, Crown Hydro has still not secured a site and according to court documents no longer has turbines or generators to install at any location.

Are you saying that there are no oversight issues concerning the use of funding, infinite deadlines, or whether Crown Hydro summaries contain factual information? With a $5.1 million grant is there any oversight 15 years later about the remaining $3.6 million and whether this is still either a viable or desirable project for additional RDF funding?

Thanks, Scott Vreeland (612) 721-7892

In a message dated 2/10/2017 4:59:37 P.M. Central Standard Time, dan.wolf@state.mn.us writes: Mr. Vreeland:   Thank you for your correspondence.  As you are aware, the Crown Hydro project (AH-01) was awarded a $5.1 million grant in Xcel Energy’s Renewable Development Fund (RDF) Cycle 1 in April 2002.  The last grant disbursement to Crown Hydro was made on September 17, 2003 leaving a balance of $3.6 million in their Cycle 1 grant.  Between April 2002 and September 2003, Crown Hydro received $1.5 million for completion of engineering design, negotiation of the PPA, down payment on the turbine, etc.  No more grant money can be dispersed unless and until actual construction starts.   It was common in Cycle 1 to have grant payments, in part, to help with cash flow.  In the most current Cycle, Cycle 4,  most of the Energy Production projects will receive a lump sum once the project is fully commissioned.    The latest status report from Xcel on the RDF includes the following with respect to Crown Hydro:   Excerpt from Xcel Energy’s  January 30, 2016 RENEWABLE DEVELOPMENT FUND OVERSIGHT PROCESS 1ST, 3RD AND 4TH CYCLE QUARTERLY STATUS AND PROGRESS REPORT DOCKET NOS. E002/M-00-1583, E002/M-07-675 AND E002/M-12-1278     AH-01: Crown Hydro (3.2 MW Hydroelectric Generation Facility) Start Date: April 3, 2002 Grant Amount: $5,100,000 End Date: 400 days from Property Acquisition Date Funds Invoiced: $1,538,591 Project Summary: This Renewable Energy Production Project is located on the Mississippi River as it flows through the City of Minneapolis and is designed to provide 3.2 MW of renewable hydropower near the historic St. Anthony Falls Milling District. Fourth Quarter Activity: Crown Hydro continues to work toward approval of the amendment to its Federal Energy Regulatory Commission (FERC) license to move the project boundaries to within property controlled by the United States Army Corps of Engineers (USACE) and to extend the dates of the license. In prior quarters FERC issued a draft Environmental Assessment (EA) for Crown’s amendment, which is a first step toward issuing an order on the license. As Crown works on issues raised in the EA they are also waiting to receive FERC’s response to EA comments filed by other parties. Crown currently is working with Minnesota State Historic Preservation Officer ("SHPO") and the USACE about the effect the project will have on the historic character of the area and working through design with these parties. Crown has completed the Aesthetic flow survey which it will use in responding to FERC about flow concerns.   Dan Wolf           From: Svattheriver@aol.com [mailto:Svattheriver@aol.com]  Sent: Saturday, February 04, 2017 12:46 PM To: Wolf, Dan (PUC) Cc: amy.s.fredregrill@xcelenergy.com; Crum, Lisa- (AG Office) ; Moseng, Christopher (PUC) Subject: Crown Hydro

Mr. Wolf, Crown Hydro was granted $1,538,591 in 2002 in the first funding cycle of the Renewable Energy Fund.  Crown Hydro has not secured a site for their operations and has no clear indication that they will secure a site. We have seen the challenges in providing funding to organizations that have not have a secured site and the difficulty in returning the value of those assets to the Renewable Energy Fund with AnAerobics Inc. which was funded by the Renewable Energy Fund.

http://mn.gov/puc-stat/documents//puc_pdf_orders/009614.pdf

According to court documents concerning liens on the Crown Hydro turbines that were purchased with Renewable Energy Fund dollars, it may be important to intervene before there are claims on those assets as collateral for loans or debt that would impact cost recovery to the Renewable Energy fund.

Are there legal or oversight issues if the turbines are being used for collateral for a cash loan?

Since Crown Hydro has defaulted on a loan with Katherine E. Dusenberry, there is a summary judgement that states " Plaintiff's interest in the collateral issue in this action is hereby adjudged superior to that of the defendants in this action" Dated April 21.2016 Judge Bridget A. Sullivan District Court Judge filed in State of Minnesota District Court ,County of Hennepin, Fourth Judicial District.

There are related court documents about competing liens for the same collateral. Two 2x1700mm Axial Flow Kaplan turbines Two Potencia Indudtrial SA Synchronous 1575 KW generators

 The liquidation without the knowledge of the fund granting agency seems problematic.

Sincerely, Scott Vreeland (612) 721-7892