Wisconsin Seeks Excise Tax Workaround During Fuel Emergency

Thank you for your attention to this important matter that has the potential to negatively impact the economy of the state of Wisconsin.

For over fifty years, the northeastern part of Wisconsin has been primarily supplied with fuel by the West Shore Pipeline. This pipeline system allows for the supply of gasoline, diesel, and jet fuel to reach terminals strategically located within our state.

Unfortunately, the pipeline segment between the cities of Milwaukee and Green Bay was shut down after pipeline integrity concerns were detected. In response, we issued Executive Orders on May 6^th, September 7^th, and November 4^th declaring an energy emergency. We expect the situation will continue to warrant such a declaration.

Due to this closure and uncertainty on the future of this section of pipeline, we would anticipate material fuel shortages in Wisconsin for a relatively long period of time without extraordinary action by market participants. These shortages could dramatically increase fuel prices at the pump. A sudden increase of this magnitude would impact consumers and our economy.

As an alternative to the West Shore Pipeline system to supply the northern portion of our state, U.S. Venture, Inc., one of our larger licensed suppliers of fuel, has implemented a solution designed to avoid the shortages while the pipeline is out of service. Their strategy involves supplying fuel delivered to Milwaukee terminals by pipeline and transporting it via tank trucks and/or rail cars to Green Bay terminals. This strategy is commonly referred to as "Terminal to Terminal Transfers."

Although this is the next best year-round alternative to the pipeline, U.S. Venture, Inc. has advised us there is a federal taxation issue that is providing a challenge for the long term viability of this solution. Current regulations require the payment of the federal excise taxes by U.S. Venture, Inc. at the origin terminals, rather than when the fuel is withdrawn at the second terminal as is the case today when it is delivered by the pipeline directly to the second terminal. This taxation process causes a disincentive to such an operational solution and puts at risk its continued usage. It is our hope this issue can be resolved in short order to help with this energy emergency by requiring U.S. Venture, Inc. to pay Federal excise tax only at the second terminal.

Thank you for your anticipated assistance with this matter.

Sincerely,