01-29-2020 HUCMju
Wednesday, January 29, 20201
Call to order — 31:OiO p.m.
President Don Martinez called the meeting to order. Members present: President Don
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Conflict of Interest
Commissioner Hanson declared conflict of interest in voting on agenda item 3,b
Rafify Payment of Bills; there is a CIP payment to 235 Hassan LLC, which hie i's a
part owner and agenda item 2f - Designate Depositories for Utility Funds, as he is,
an employee of Citizens BankCommissioner Hanson will be abstaininig
from both 3b and 2f agenda items.
2. Commission Reorganization
President Martinez called for the annual Commission reorganization.
Mr. Sebora stated that combination of a and b; President andi Vice President can
be made together.
a. A motion made by Commissioner Hanson, second by Commissioner Morrow to
elect Don Martinez to the position of president and Matt Cheney to the position
of vice president. Motion unanimously carried.
c. A motion made by Commissioner Morrow, second by Commissioner Hanson
re-elect Robert Wendorff to the position of secretary., Motion unanimously
carried. i
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fA motion made by Commissioner Wendorff , second by Commissioner Morrow
to designate Citizens Bank & Trust, Wells Fargo Bank, Wells Fargo Advisors,
Home State Bank, Morgan Stanley and Cetera Investment Services as
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I epositories for utility funds. Motion unanimously carried. Commissioner
Hanson abstained.
3. Approve Consent Agenda
a. Approve Minutes
b. Ratify Payment of Bills
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4. Approve Financial Statements
Mr. Martig presented the Financial Statements, In, December 2018, GA entries
caused Salaries and Benefits to reflect a lower amount compared to December
2019, which was due to a $140K decrease in, liabilities, & expenses booked. This
entry will still need to be made in, 2019 and it appears PERA had another good
investment year, which means there maybe another drop in the Salary & Benefits
category in December 2019,
GM Carter compared actual to budget numbers. For Electric Division!, Customer
Revenue was just under 96%, of budget. Every class, hit the budget projection by with
the exception of the Industrial class. Industrial class came in, at 87.7% of budget,
which was due to 3M being down 4.3% and H'TI down 16.5%. Sales for Resales
came in at 94% of budget; $147K shortfall came from less sales related to the
Transalta contract and MISO Energy sales because of the seasonable weather.
MISO sales was budgeted at $225k and ended up coming in at $190K, again due to
seasonable weather. Transmission expenses were significantly under, budget, due
to true ups that started in June with GRE reallocating and paying back over collection
from the previous years within the GRE zone, The transmission rate went down
approximately 25% from the budgeted rate at the beginning of the year, which was
the largest impact as to why HUC came in under budget. The smaller part of this is
that HUC,'s loads were not as high so the peak demands were down. In the,
production area, HUG was not generating as much due to loads being down which
lead to not spending as much on fuel costs for the hedging program: and servicing
the Transalta contract. Gas Division trending welll.
GM Carter stated overall another good year from an Income Statement/PNL/
Balance Sheet standpoint. Some year-end adjustments still need to be comipleted
but looking at combined year to date as an organization, Financials are at 5.9% on
Net Income, which Industry Average is around 7%. Financially another strong year.
GM Carter reviewed the Investment report. One of the federal agency step-up,
investments was called in December. Since then the Large Federal Agency $1.25K
was called in January. Interest rates have dropped, so agencies are calling
investments at 2%. Going forward there will no longer be Federal agencies on the
Investment Report; these are being moved towards CD's as they are paying better.
Trying to keep Interest earnings coming in consistently.
GM Carter reviewed Loath duration curves.
Motion by Commissioner Hanson, second by Commissioner Cheney to approve the
financial statements. Motion carded unanimously,
6. Communication
a. City Administrator — Matthew Jaunich —
i. Entered into an agreement with the Civil Air Patrol Facility
ii. Council did approve agreements with MN DOT on the Main Street project.
Bids to go, out the end of February. Anticipating construction early to, mid -
April.
b. Divisions
i. Dan, Lang, Engineering Services Manager —
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1. Update on McLeod Sub capacitor bank project. Moving ahead.
ii. Dave Hunstad, Electric Transmi�ssioni/Distribution Manager — Nothing to
report
ii�i. Randy Blake, Production Manager —
1, Added a couple of heaters to the bottom of the module on, the Gas Turbine
at Uniit 1.
John Web�ster, Natural Gas Division Director — Nothing to report
v. Jared Martigi, Financial Manager-
1 . Auditors are here this week
2. Comparisons work paper on Salesfor Resales for next month to compare
year to year.
c. Humian Resources - Brenda Ewing — Nothing to Report
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e. General Manager — Jeremy Carter
i. Finishing up 5-Year Buidg:et Projections and the Wholesale Updated Financial
Model.
Working on, Legislafive items.
Working through solar / EV project items
Looking at having a Strategic Planning meeting on an annual basis.
1. Dates available in April/May — Angie will send ema;il asking for available.
dates
2. Commissioners to think about survey questions
3. Follow up on Rate di,scussions,
7. Policies
a. Review Policies
i. Section 1 of Exempt Handbook
,i. Section 1 of Non-Exempbol
b. Approve Changes
Polli:cy
GM Carter reviewed the IT Policy. In the past, the City of Hutchinson and
HUC have had individual policies. IT Director, Tom Kloss, has been working
on coinsolidafing and having more of a comiprehensive IT Policy for both
organizatiopolicy was handed out separately since there is security
and confidenfial information in the policy.
Motion by Commissioner Cheney, second by Commissioner Morrow to approve the
changes to the IT Policy. Motion carried unanimously.
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Mr. Sebora recapped discussions that were held last month on the initial
conversation and possible change of the charter language to perhaps i I increase the
pool of possiibile commissioner candidates to serve on the Utilities Commission by
allowing owners of businesses to, potentially serve as commissioners,. Mr. Sebora
amended! the proposed language to add the rate -paying requirement After sending
the packet, it was noticed that a change was also needed in the language of Section
ii 1.08 Removal of Commissioners, thiis change has been made and a revised
document was sent.,
Discussions were held on the charter language and the consensus of the
Commissioners was to slightly broaden the definition. Mr. Sebora will forward the
conversations onto the Charter Commission for the April Meeting.
Neiw Business
,a. Approve Requisition #82'55 — WSB for 2020 Geohiazard Program
Mr. Webster presented Requisition #8255 — WSB for 2020 Gleohazard Program.
The Natural Gas Division is required to perform a Geohazard Analysis on the
HUC pipeline as required by DOT Pipeline Integrity Management Program,
Phase 1 was conducted by WSB in 2019, which provided for the desktop
modeling on the pipeline from New Ulm to Hutchinson.
Motion by Commissioner Morrow, second by Commissioner Hanson to Approve
Requisition #8,255 — WSB for 2020 Gleohazard Program, Motion carried
unanimously.
b. Approve Requisition #8256 — Energy Economics, Inc. for 2020 Sonic Nozzle
Prover.
Mr, Webster presented Requisition #8256- Energy Economics, Inc. for 2020
Sonic Nozzle Prover. The current meter prover in the Natural Gas Diviision was
purchased in, 2000 and has been unsupported since 2004. The prover failed in
N overn be r 2019 a nd servi ce a nd repa i 'r parts are unavailable so the prover must
be replaced. Energy Economics was the lowest bidder, is a local company in
Dodge Center and makes very good equipment.
A motion by Commissioner Cheney, second by Commissioner Wendorff to
Approve Requisition #8256 — Energy Economics, Inc. for 2020 Sonic Nozzle
Prover. Motion carried unanimously.
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compensation for inventory., This is a capital budget item in 202�01.
A motion by Commissioner, Hanson, second by Commissioner Morrow to
Approve Requisition #8263 — Nelson Technologies, Inc. Motion carded
unanimously.
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Mr. Hunstad presented Requisition #8267- 2020 John Deere 310 SL Tractor
Backhoe. As part of HUC's'fleet management program, HUC will be replacing the
2006 John Deere 310 Tractor Backhoe.
A motion by Commissioner Morrow, second by Commissioner Cheney to Approve
Requisition #8267- 20120 John Deere 310 SL Tractor Backhoe. Motion carried
unanimously.
Mr. Blake presented Requisition #8274 — 2020 Chevrolet 2,i51O HD 4.4 Work
Truck. As part of HUCs fleet management program, HUC will be repg
production department truck #990, Current truck was, 1/2 ton; this new truck will be
% ton since HU!C does a lot of hauling and should serve HUC adequately.
A motion by Commissioner Wendorff, second by Commissioner Hanson to
Approve Requisition #8274 — 20,20 Chevrolet 25OiO HD 4.4 Work Truck. Motion
carried unanimously.
Mr. �Blake presented Requisition #8278 — 20120 Chevrollet 1500 Crew, Cab 44 Work
Cab. As part of HUC's fleet management program, HUC will be replacing production
department truck #5,42. New truck will also, be 1/2 ton; no towing on this, new vehicle
is not needed.
A motion by Commissioner Morrow, second by Commissioner Hanson to Approv4
Requisition #8278 — 2020 Chevrolet 1500 Crew Cab 4x4 Work Cab. Motion
carded unanimously.
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Mr. Hunstad presented Requisition #8280 & #8281 — Service Truck #574. As part
of HUCs fleet management program, HUC will be replacing the 20018 service
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truck for the electric department. The purchase requires two separate
requisitions, one for the cabi/chass,is and one for the service body.
A motion by Commissioner Cheney, second by Commissioner Morrow to Approve
�Reqootion carried unanimously.
h, Approve Requisition #8285 — Two Atlas, Copco GA26 Rotary Screw Air
Compressors
Mr. Blake presented Requisition #8285 — Two Atlas Copco GA26 Rotary Screw
Air Compressors. After installation and commissioning of the new Caterpillar
units 6 & 7, HUC discovered when running these two engiines with the unit 5
Wartsila engine, there is insufficient instrument control air.The exiistiinig
instrument air compressor came with the Wartsila purchase and is too small to
support the equipment air load for 3 engines online at one time.
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Requisition; #8285 — Two Atlas Copco GA26 Rotary Screw Air Compressors.
Motion carded unanimously.
i. Approve Requisition #8286 — 2020 Chevrolet Silverado MD 4WD Crew Cab
and Chassis
Mr. Webster presented Requisition #8286 — 2020 Chevrolet Silverado MD 4WD
Crew Cab and Chassis. As part of HUC's fleet management program, HUC will
be replacing vehicle #357/2,002 welding truck.
Chassis. Motion carried unanimously.
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Mr. Hunstad presented Selling of Surplus Vehicles. Looking at approval to sell
surplus vehicles as replacements come in throughout the year.
A motion by Commissioner Hanson, second by Commissioner Cheney to
Approve Selling Surplus Vehicles. Motion carried unanimously.
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Transmission Owner HUC is required to perform "Transmission Planning" duties
as defined by NIERC Reliability Standards., Currently, Great River Energy is
designated as the "Transmissilon Planner" for HUC via a IVIRES/GRE agreement,
now GRE has indicated to MIRES they are no longer interested in performing the
rule for MRES and its members. This agreement now would shift HUC's
"Transmission Planner"responsibilitles from GRE to MIRES and ensure HUC
remains compliant with the NERC Reliability Standards. There is no cost to HUC.
A motion by Commissioner Morrow, second by Commissioner, Hanson to Approve
Reliability Compliance Services Agreement. Motion carried unanimously.
GM Carter presented the Brownton Electric Meter Reading Agreement. Currently
HUC provides, the Natural Gas readings, for Brownton and!, now Brownton is
requesting HUC to provide them with the monthly electric meter readings. This
would not change HUICs process but HIUC would now have more data on the
system. As part of this arranigiement, the City of Brownton will be, required to pay
their pro -rated share of any sensus costs incurred because of the addition of the
meters to our network. Costs would also cover an hour of customer service time to
pull in the reads, convert the data into the format needed by Brownton, and send the
data file back to do the billing function. This agreement will be renegotiated to
account for proper cost recovery of HUIC's staff time and materials if service levels
are requested to change over time.
After discussions, a motion by Commissioner Hanson, second by Commissioner
Cheney to Approve Birownton Electric Meter Reading Agreement, Motion carded
unanimously.
V. Adjourn
There being no further business, a motion by Commissioner Cheney, second by
Commissioner Morrow to adjourn the meeting at 3:55p,m. Motion carried
unanimously.
ATT EST
Doi Martinez, President
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