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03-31-2021 HUCMMINUTES Regular Meeting — Hutchinson Utilities Commission Wednesday, March 31, 2021 Call to ordler —3:001 p.m. President Matt Cheney called the meeting to order. Members present: President M Cheney; Vice President Anthony Hanson; Secretary Don Martinez; Commissioner Mon Morrow; Commissioner Robert Wendorli GM Jeremy Carter; Attorney Marc Sebor Justin, McGraw with Conway, Deuth & Schmiesing Audit Firm I 1. Conflict of Interest 2. Appiroive Consent Agendli a. Approve Minutes b. Ratify Payment of Bills] W-571MMOT"= I I is slun fffl FPS'lTrVi7doW TrT Consent Agienda, Motion carried unanimously. Mir. McGraw reviewed' the Electric and Natural Gas Divisions Operating Revenues and Expienses. Change in Niet Position for the Electric Division is due to the MRES refund. Mr., McGraw summiarized the Communications portion of the report and the General Recommendations that consist of exos,s,-trainingi. Cross-trainingi is very important to have operations run smoothly. Mr. McGraw stated the audit went well and the Staff was very helpful. Motion by commissioner Hanson, second by Commissioner Wendorff to Approve the 2020 Financial Audit. Motion carriedi unanimously. I&IT7117-i - =I- the hiomes. GM Carter noted Purchase Power increased by $258K. MRES purchases decreased while market purchases/MISO costs increased. Generator Fuel for February 2021 wails $99,868 compared to $9l,535i in,2020. HIUIC did generate for 2 days during the early part of the Polar Vortex. Had Staff ran during the whole period of the Polar Vortex, HUC would have seen $.5M-$IMi in generating costs, GM� Carter reviewed the Natural Gas Divis,ion. GM Carter notL that Staff used Cash Reserves and the Rate Stabilization fund, which will be discussed in Niew Business, GM Carter reviewed the Cash Designation report. Mr. Martig noted on, the Combined Division Financiall Report, Commissioners now see the accounts, past due by 30 days balance comparison month/yea rl mionth/year, Motion by Commissioner Morrow, second by Commissioner Martinez to approve the financial statements, Motion carried unanimious,ly. OEM =,0=11 6l. Communication a. City Administrator ­ Matthew Jaunich — Absent b. Divisions L Dan Lang, Engineering Services Manager — Absent iL Dave Hiuinstad, Electric Transmission/Distribution Manager — Absent iiiRandy �lake, Production Manager ­ Absent iv. John Webster, Natural Gas Division Director — Absent v. Jared Martig, Financial Manager- 1 Provided a timel�in!e of Invoice Cloud. Information will go on the bi l Ills next month,, week after will be 2-page document and May bill will inc,lude an insert. Staff is, looking to have Invoice Cloud in place on April 2,th. 2l, Continuing to not charge; late fees on customer bills. Commissioner Martinez, inquired if there is a sunset date on not charging late fees. GM Carter stated as of now there is not, d. Legal — Marc Sebora — Nothing to report le, General Manager — Jeremy Carter- i. Provided business updates to Commissioners a few weeks ago, if there are any follow up questions please Legislative Updates — 1 MIN congress working on passing a zero interest rate loan for utilities in light of the polar vortex. Federal Level Update - 1, Renewables and climate change Z, Reinstituting tax-exempt advance Refunding and raising the cap limits for small bond issuers from $1GM to Commissioner Hanson inquired about refinancing on a couple of the bonds, GM Carter stated there may be 1 bond on the �A generatoi Federal level, 7. Policies a. Review Policies L Section 3 of Exempt Handbook ii. Section 3 of Non -Exempt Handbol No changes, rMecomm nd dl t this time. ,8. Unfinished Business a., Status of Governor's Salary Cap Mr, Seb,ora stated that it doesn't look like anything will happen this year. Mr. Sebora did have conversations with lobbyist at League of MN Cites and local legislators., Representative Urdahl and Representative Gruenhagen art supportive of the bill in the House. Senator Neuman wanted to wait until th,!z heading was held before taking a position. Deadlines for future hearings have already passed- not looking like any progress will be made in this session, This will! be kept as place holder on agenda for I more month, GM Carter presented the Approval of the Land Lease Agreement. GM Carter recapped the steps of the solar array, project leading up to, date. As part of the project, and prioir to approving the final contract with Zeigler Poiwer, HLIC has to enter into a land lease agreement with the City of Hutchinson. Once approved, this agreement will be presented to the Council at the April 13th meeti�ngi for approval. Shortly thereafte�r, HUC can bring forth to the Commission the final Ziegler contract for approval, M�r. Sebora stated as noted in the BAF, the annual lease payment of $40,0001/year, in the actual agreement it states $4K of the $40,000 must be paid to the Hutchinson Economic Development Authority to help with olpieratilons. After di:scussio�n, a motion by Commissioner Hanson, second by Commissioner Martinez to Approve Land Lease Agreement with the City of Hutchinson., Motion carried unanimously. " WIT =-- 01111IMMIMMUM i 4 G,M Carter presented the Natural Gas Facilities Maintenance Agreement with the City of Fairfax. The City of Fairfax has requiested HUC to commence performing the maintenance of the natural gas transmission/distribution facilities. Fairfax does not have staff to do this and in the past has been handled by New U11m. This will be a min,imial impact for HLIC since there is Staff that already goes down to this area, K Approve Natural Gas Maintenance Agreement with Fairfax, Motion carried uinanimously. GM Carter presenited'CE Power Plant Substation Improvements. G M Carter recapped back in January, the Commission did approve a $3i5K payment to C Power for the work that was completed in December 2020, leaving $102,197.. remaining. Staff is now recommending approval of the total requisition rather than brining each progress invoice to the Commission for individual approval, which wouild be more efficient. The total is a "Not to Exceed" total as there needed to be some assumptions made for MPCA disposal costs for the oil spill cleanup and testing. Commissioner Hanson looked to Mr. Sebora about any concerns on handling it this way,. Mr. Sebora had no concerns. A, motion by Commissioner Hanson, second by Commissioner Morrow to Approve Requisition #8694 - Plant 2 Substation Improvements. Motion carried unanimously, limin y 2MOTANEy �, I!L, MARS 37M Carter stated, while there is the ability to store natural gas in its gas state, thii is predominately done downsoas has salt mines in the ground and can tush the natural gas down into the rock beds and store until it needs to be .xtracted. It is not practical for HILIC to, do this since there are no salt mines in the Another conversation that has, been had is to store Natural Gas on! HUC's ,&3-mile pipieiline. Even thoughthis is HUC's pipelinei,, s,toiring natural gas cannot b 0 O.one since this is used by customers all over the region. This pipeline is an ope 2ccess system, HILIC can charge a fee for the use of the pipeline but HUC can no hoard the entire pipeline saying it is only for HUC customers; this is against the la and HUC would incur significant penalties. Conversations have also been held o, builicliling tanks, to store the Natural Gas. Just looking at the month of February, H�UC would have needed enough storage tanks to store 90 Million clubic feet of swing gas. There are 2 other alternatives to reduce the volume oif natural gas 1) liquefy-, however, a facility is needed to keep the gas liquified and cold, which cos 111F rd GM Carter stated back in 2018 a resolution was puit in place to incrementally increase the PILOT contribution by 4.51% throughoiut 2018-2020. Now it is time for the City and HUC to review the formula, and where both organizations are at. Mr. Jaunich proipoised to the City Council a couple of weeks ago to see who would like to sit on the committee from the Council. GM Carter looked to the Commissioners on who would like to sit on the committee. Commissioner Martinez and Commissioner Cheney have agreed to sit on the PILOT Committee,. HMffx-= 61 There being no further business, a motion by Commissioner Martinez, second by I Commissioner Weindorff to adjouirn the meeting p.m., Motion carried unanimously., 0 P SO W Owl ATTEST: Matt Cheney, President I