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10-28-2020 HUCMMINUTES Regular Meeting — Hutchinson Utilities Commission Wednesday, October 28, 2020 Call to order — 3:00 p.m. President Don Martinez called the meeting to order. Members present: President Don Martinez, Vice President Matt Cheney; Secretary Robert Wendorff; Commissioner Monty Morrow; Commissioner Anthony Hanson; GM Jeremy Carter; 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 Cheney to approve the Consent Agenda. Motion carried unanimously. 3. Approve Financial Statements GM Carter presented the Financial Statements. Electric Division net profit increased by $18,316 despite lower usage and revenues mostly from a decrease in expenses directly related to providing power including purchased power, transmission and fuels. GM Carter noted the power cost for September 2020 brought in an additional $36K for the month and $500K YTD. For 2019, YTD was $1.5M. Natural Gas Division net profit increased by $30,939, which was due to an increase in customer revenue along with a decrease in operating expenses. Both Electric and Natural Gas Divisions are trending better than last year. Commissioner Hanson inquired about the Electric Division Sales for Resale in September with Rice Lake's contract; is there still capacity or revenues available to gain? GM Carter noted HUC has sold out of its current excess capacity through 2030. GM Carter also mentioned market sales are down this year in Sales for Resale because of the low market prices, along with the elimination of the Transalta Contract that ended in 2019. Motion by Commissioner Wendorff, second by Commissioner Hanson to approve the financial statements. Motion carried unanimously. 4. Open Forum 5. Communication a. City Administrator — Matthew Jaunich — Absent b. Divisions i. Dan Lang, Engineering Services Manager — Absent ii. Dave Hunstad, Electric Transmission/Distribution Manager— Absent iii. Randy Blake, Production Manager — Absent iv. John Webster, Natural Gas Division Director — Absent v. Jared Martig, Financial Manager- Absent c. Human Resources - Brenda Ewing — Absent d. Legal — Marc Sebora — Nothing to report e. General Manager — Jeremy Carter i. Working on Budget, CIP and Fleet ii. MRES area meetings started today- this will be a 4-day virtual meeting. Commissioner Hanson inquired when the division directors would be able to attend the Commission meetings. GM Carter stated right now it would be awhile before all the managers attend in person due to 6 feet spacing. Going forward, the intention is to have each director provide a written recap of the division and that will be included in the monthly packet. Another option for the Commission to consider is to have the directors rotate into the commission room to provide manager reports during the communication section or allow managers to attend the meeting when there are more significant topics or projects to cover. The consensus from the board is to have a written recap from each division or some type of presence from the managers if new business items would warrant. This will be left up to the Staff. 6. Policies a. Review Policies i. Security Light Rental — Rate to Furnish and Maintain Fixture ii. Electric Service Requirements & Charges iii. Temporary Service- Electric iv. Temporary Service in Case of Underground Failure v. Electric Meter Placement vi. Sealing of Meters — Electric vii. Meter Testing - Electric viii. Right -of -Way Clearing ix. Tree Removal of Trimming X. Locating Customer's Underground Utilities — Electric A. Natural Gas Service Requirements & Charges xii. Temporary Service — Natural Gas xiii. Natural Gas Meter Requirements & Placement xiv. Meter Testing — Natural Gas xv. Natural Gas Service Work xvi. Locating Customer's Underground Utilities — Natural Gas No changes recommended at this time. b. Approve Changes i. Electric -Rate Schedule ii. Natural Gas — Rate Schedule 2 GM Carter stated this is more of a formality to reflect the changes that were approved to the rates a couple of months ago. Motion by Commissioner Hanson, second by Commissioner Cheney to approve the policy changes. Motion carried unanimously. 7. Unfinished Business a. None 8. New Business a. Rescind RFP for Ground Mounted Ballasted Utility — Interactive Photovoltaic System Advertisement for Bid GM Carter presented rescinding the RFP for Ground Mounted Ballasted Utility — Interactive Photovoltaic System Advertisement for Bid. As Staff has proposed this advertisement for bid, the same question kept coming up by many developers; would HUC allow a partial ballasted option? This second option would allow a ground penetrating solar array option that would have poles placed in the ground with anchors and only consist of a ballasted portion of the solar array within HUC's Natural Gas Pipeline Easement, which would reduce costs. Contractors can bid either option or both options. Since this is a formal bid, Staff needs the Commission to rescind the previous Advertisement for Bid and approve the new Advertisement for Bid. A motion by Commissioner Cheney, second by Commissioner Morrow to Approve rescinding the RFP for Ground Mounted Ballasted Utility — Interactive Photovoltaic System Advertisement for Bid. Motion carried unanimously. b. Approve new RFP for Ground Mounted or Ground Mounted Ballasted Utility — Interactive Photovoltaic System Advertisement for Bid GM Carter presented approval of new RFP for Ground Mounted or Ground Mounted Ballasted Utility — Interactive Photovoltaic System Advertisement for Bid. Staff is recommending approval of the revised RFP and Advertisement for Bid to allow the greatest options on pricing and design. A motion by Commissioner Hanson, second by Commissioner Cheney to approve the new RFP for Ground Mounted or Ground Mounted Ballasted Utility — Interactive Photovoltaic System Advertisement for Bid. Motion carried unanimously. c. Discussion/Approval of Rescheduling the November 25, 2020 and December 30, 2020 Regular Commission Meetings if needed. 3 GM Carter initiated the discussion on rescheduling the November 25 and December 30 regular Commission Meetings if needed due to the meetings being so close to the holidays. The Commissioners held discussions on if rescheduling the two meetings is needed. The consensus from the Board was to keep the November 25, 2020 meeting as is and to reschedule the December 30, 2020 meeting to December 16, 2020. A motion by Commissioner Wendorff, second by Commissioner Cheney to approve rescheduling the December 30, 2020 meeting to December 16, 2020. Motion carried unanimously. d. Discussion of reappointment of Robert Wendorff to the Hutchinson Utilities Commission After discussion, Mr. Wendorff is willing to stay on and be re -appointed for another 5-year term. All Commissioners agreed with re -appointment of Commissioner Wendorff. A motion by Commissioner Cheney, second by Commissioner Hanson to re- appoint Commissioner Wendorff to the Hutchinson Utilities Commission. Motion carried unanimously. Mr. Sebora will relay the recommendation to the City Council for reappointment. e. Discussion of Moving 2021 Pay Grid GM Carter recapped information that was sent out to the Board on personnel cost and what the pay grid shift would mean. Not necessarily looking for a formal action today on moving the pay grid but looking for a general consensus from the Board to have an idea on what should be programmed into the budget for the November Review. Discussions were held on the movement of the pay grid in 2020, what that meant for future movement with market and inflation, and having a 2021 Compensation Study. Consensus from the Board is to continue down the path that was set forth last year, receive information from the 2021 Compensation Study and reassess based on the findings. For now, moving the grid based on inflation would be 1.5-2% GM Carter stated he would start at 1.5% and adjust from there. f. Discussion of Bright Energy Choices Program 4 GM Carter recapped information that was sent out to the Board on additional information regarding the Bright Energy Choices Program. Noting this would be a policy decision the Board would need to decide so that staff can market and implement the program based on the Commission's direction. A significant change from the last discussion held is that the price point on the Renewable Energy Credits (REC's) have come down from .05 cent to 1/10 of a cent, which is a significant change to the price structure. This know allows the Board to have different options to consider. Predominantly would the Board like to roll out a program that is non -voluntary to do something for the community and cover the costs from HUC's operating costs or would the Board like to stay with the consensus from the last discussion held and make this more of a voluntary program at the customer level. If the customer wants to participate with the program, HUC would pass the adder cost on to the customer through the utility bill. Discussions were held on the many options and different ways to roll out the program along with knowing this will need to be addressed every year. Reengagement of this item will be held at the November meeting when a decision will be made. g. Discussion of MRES Power Supply Refund Payment President Martinez initiated the discussion on the MRES Power Supply Refund. The President would like to have the Board discuss this unexpected refund amount coming back from MRES and determine how these dollars should be earmarked. GM Carter noted the amount coming back from MRES is approximately $1.2M, which is 10% of HUC's power supply. MRES had refinanced bonds, was under budget with market purchases, spend less on capital projects, and seen changes in baseloads and renewables. With all the positive impacts and the current strong financial position of MRES, MRES decided to provide a one-time refund to its utility members. Discussions were held on the many possibilities of how to earmark or distribute the MRES Power Supply Refund. The Commissioners would like to have input from the department heads on different possibilities on how to earmark the refund before the Commissioners make a final decision. Commissioners will also provide a list to review. 9. Adjourn There being no further business, a motion by Commissioner Cheney, second by Commissioner Wendorff to adjourn the meeting at 4:23p.m. Motion carried unanimously. 41 ATTEST Don Martinez, President 10 rt en See