03-27-2019 HUCMMINUTES
Regular Meeting — Hutchinson Utilities Commission
Wednesday, March 27, 2019
Call to order — 3:00 p.m.
Vice President Matt Cheney called the meeting to order. Members present: Vice
President Matt Cheney; Secretary Robert Wendorff; Commissioner Monty Morrow;
Commissioner Anthony Hanson; GM Jeremy Carter
Absent: President Don Martinez and Attorney Marc Sebora
1. Conflict of Interest
2. Approve Consent Agenda
a. Approve Minutes
b. Ratify Payment of Bills
Motion by Commissioner Morrow, second by Commissioner Wendorff to approve
the Consent Agenda. Motion carried unanimously.
3. Approve Financial Statements
Jared Martig presented the financial statements. For the Electric Division,
Purchased Power is up due to not being able to start an engine at Plant 2 during the
Polar Vortex. For the Natural Gas Division, Natural Gas net income decreased by
$277,557. The decrease is mostly due to the credit on customer bills that were
missing in 2018. This is the last month of not being able to compare year to year
due to the missing credits from 2018.
GM Carter discussed how the Polar Vortex affected HUC and other Utilities in the
Midwest. GM Carter added that there have been many conversations on how to
mitigate the effects of extreme temperatures at the plants so this will not happen
again.
Commissioner Hanson inquired how many times extreme temperatures have
prevented HUC from starting an engine. Mr. Blake informed the Commission that it
has only happened one other time. HUC does have safe guards in place but it was
so cold and the engine would not operate that day.
GM Carter noted on the Electric Division, Large General is up from last year. The
increase is due to Uponor ramping up. GM Carter added that Industrial is down for
both HTI and 3M. HTI is ramping down and 3M has more energy efficiency in place.
Motion by Commissioner Hanson, second by Commissioner Morrow to approve the
financial statements. Motion carried unanimously.
4. Open Forum
5. Communication
a. City Administrator — Matthew Jaunich —
i. Middle of construction season
b. Divisions
i. Dan Lang, Engineering Services Manager — Absent
ii. Dave Hunstad, Electric Transmission/Distribution Manager —
1. Reviewed the 2018 Annual Benchmarking Report. HUC received
another Excellence in Reliability Certificate.
2. Projects will be starting soon.
iii. Randy Blake, Production Manager —
1 . Unit 1 auxiliary boiler has sprung a leak. Moorhead Boiler has already
come to weld the repair.
2. Cooling Tower cleanup work. There were three cracks found, will be
working with a local contractor to patch cracks inside and out.
Excavating will start this month and the cost of the repair will be about
$4K.
3. Construction down at Plant 1 is going well.
4. Quade's Electric has started on Units 6 & 7. Commissioner Hanson
inquired about the completion date and if it was behind schedule. Mr.
Blake noted the project is about one month behind.
iv. John Webster, Natural Gas Division Manager-
1. Attended the MEA Energy Association's Board of Directors meeting in
Austin Texas this month. Was elected to be an officer on the Board of
Directors.
v. Jared Martig, Financial Manager- Nothing to report
c. Legal — Marc Sebora — Absent
d. Human Resources - Brenda Ewing — Nothing to report
e. General Manager — Jeremy Carter
i. Catching up on Legislative bills
ii. Had an MMUA meeting in Owatonna with Dave. Discussed the new law
changes related to Distributed Energy Resources (DER) and the different
processes coming forward. In the next month or two, the Commission will
need to adopt new policies and rules to comply with the new State laws.
iii. Continuing to work on strategic planning. Will be sending topics to managers
this week. If the commissioners have anything to add, please send them
soon.
6. Policies
a. Review Policies
i. Section 3 of Exempt Handbook
ii. Section 3 of Non -Exempt Handbook
No changes recommended at this time.
b. Approve Changes
No changes made to the policies under review.
7. Unfinished Business
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8. New Business
a. Approve Requisition #007878, Custom Dakota Aluminum Service Body
Mr. Webster presented Requisition #007878, Custom Dakota Aluminum Service
Body. Earlier in the year, two new pickup trucks were ordered without the service
body. This requisition is for the service body, related work equipment,
miscellaneous materials and labor required for installation on the 2019 Ford F250.
A motion by Commissioner Morrow, second by Commissioner Hanson to Approve
Requisition #007878, Custom Dakota Aluminum Service Body. Motion carried
unanimously.
b. Approve Requisition #007879, Custom Dakota Aluminum Service Body
Mr. Webster presented Requisition #007879, Custom Dakota Aluminum Service
Body. As above, the pickup for this body was ordered earlier in the year. This
requisition is for the service body, related work equipment, miscellaneous
materials and all labor required for installation on a 2019 Ford F350.
A motion by Commissioner Wendorff, second by Commissioner Morrow to
Approve Requisition #07879, Custom Dakota Aluminum Service Body. Motion
carried unanimously.
c. Approve Requisition #007887, Purchase of Lube Oil
Mr. Blake presented Requisition #007887, Purchase of Lube Oil. The lube oil for
units 6 & 7 was not included in the Caterpillar contract. In order to be compliant
with the CAT warranty, HUC must use CAT1 NGEO Ultra 40 oil. This requisition
will be sufficient for both engines needing 850 gallons each along with having 100
gallons for inventory when needed.
A motion by Commissioner Hanson, second by Commissioner Wendorff to
Approve Requisition #007887, Purchase of Lube Oil. Motion carried unanimously.
d. Purchase of Natural Gas Commodity November 2026-October 2029
Mr. Webster presented Purchase of Natural Gas Commodity November 2026-
October 2029. Natural gas commodity was purchased for HUC customers for the
time period of November 2026 thru October 2029. Additionally, volumes not
associated with the prepay deal were blended in the future months in order to
reduce the price of the commodity. By blending the December 2024 thru October
2026 gas at $4.535 per Dth with the November 2026 thru October 2029 gas, HUC
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was able to acquire the $4.535 down to a new price of $4.08 Dth. This is not a
savings but a reduction in cost.
9. Adjourn
There being no further business, a motion by Commissioner Morrow, second by
Commissioner Wendorff to adjourn the meeting at 3:29p.m. Motion carried
unanimously.
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ATTEST:
on Martinez, Presi t
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