08-31-2022 HUCMMINUTES
Regular Meeting — Hutchinson Utilities Commission
Wednesday, August 31, 2022
Call to order — 3:00 p.m.
President Matt Cheney called the meeting to order. Members present: President Matt
Cheney; Vice President Anthony Hanson; Secretary Don Martinez; Commissioner Robert
Wendorff; Commissioner Kathy Sflvernale; GM Jeremy Carter; Attorney Marc Sebora
I. Conflict of Interest
2. Approve Consent Agenda
a. Approve Minutes
b. Ratify Payment of Bills
Motion by Commissioner Martinez, second by Commissioner Hanson to Approve
the Consent Agenda. Motion carried unanimously.
3. Approve Financial Statements
Mr. Martig presented the Financial Statemienits. There was an updated version of the
financial statements that were emailed out. Electric Division July 2021 had a double
payment from BP that should have been reversed, this updated version shows this
correction. Mr. Martig noted the Operating Expenses increase consist of elevator
maintenance, software purchase and transformer expenses. Purchase power
increased by $151K. Natural Gas Division is similar to 2021.
GMII Carter noted, the Dynasty Power agreement that was, just entered into the past
couple months has already been Galled on. Staff will continue to watch the MISO
market, Anticipating to see higher increased costs on purchase power alongi with
higher power cost adjustments.
When Cost of Service Study discussions start this Fall, Board and Staff will need to
be cognizant of the natural gas margins and rates.
Motion by Commissioner Wendorff, second by Commissioner SilvernMe to Approve
the Financial Statements. Motion carried unanimously.
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Alycia Gruenhagen and Ruby Pollmanin from Greener Pastures, presented before
the Commission meeting. Gruenhagen discussed their customer account situation
and asked for HUC to continue to work with them to avoid disconnection of the
property.
5. Communication
a. City Administrator — Matthew Jaunich —
1. Providedi an update on projects: Street project around aquatic center is on
schedule, PD is back on schedule and continuing to work on Arena
I
Dan Lang, Engineering Services Manager —
1. Nothing to report
Dave Hunstad, Electric Transmission/Distribuition Manager—
1. Provided an update on lead times and cost of materials. Currently HUC
has Transformers in inventory, however lead times are 6 months-1
1/2years out with 40-60% cost increase. Conductors have good
inventory on hiand. Fleet is 1-1 1/2years out.
GM Carter provided an update on conversations from Border States that
some vendors are providing 4 years out on lead times. The Energy
Industry is being hit the hardest with lead 'times and costs.
Conversations were held on what is causing the long lead times and
increased cost along with maintenance of items that are in service now
to lengthen the life of the equipment.
iii. Mi:keGabrielson, Production Manager-
1. Sterling Energy was onsite last week to take a look at units 3, 4 and 8
and will provide a scope of work and a start date of the removal of units.
iv. John Webster, Natural Gas Division Director — Absent
v. Jaredl Martig, Financial Manager —
1. Retrofit lighting project in the building has started
c. Human Resources — Angie Radke —
L Starting to work on 2023 health and dental insurance
d. Legal — Marc Sebora — Nothing to report
e. General Manager — Jeremy Carter
i. Working on General Liability Insurance with Jared
ii. Involved with MMUA and MMGA on strategic planniing moving forward
iii. Provided an update on a NAESB (North American Energy Standards Board)
meeting call. FERC and NERC have asked NAESB to come up with
recommendations to change some of the standards that both agencies have
in relation to harmonizing the gas and electric industries and the intentions
of the consideration.
iv. Meeting with MIRES tomorrow
v. Working on budgets and capital next month
6. Policies
a. Review Policies
i. Establishing a New Electric/Natural Gas Account
ii. Terminating Electric/Natural Gas Service by Customer
iii'. Definition of Your Bill
iv. Errors in Billing
v. Automatic Bill Payment Plan
vi., Budget Payment Plan
vii. Explanation of Billing Procedure
No changes recommended at this time.
b. Approve Changes
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L Hutchinson Utilities Commission
fl, Deposit Requirement — Residential
iii. Deposit Requirement — Commercial/Industrial
iv. Payment of Your Bill
v. Minnesota Cold Weather Rule
Ms. Radke spoke of the changes that are needed to the various policies. L) adding
the Facebook reference; ii. and iii.) adding verbiage to address remaining credit
balance after paying a final bill; iv.) adding payment method by text along with
updating email address; v.) updating date to match the statute along with, making a
grammatical change.
Motion by Commissioner Hanson, second by Commissioner Wendorff to approve
the Policy Changes. Motion carried unanimously.
7. Unfinished Business
8. New Business
a. Approve Req#009284 — Plant 1 Ladder Access
Mr. Gabrielson presented Approval of Req#0099284 — Plant 1 Ladder Access.
The ladder access to the different parts of Plant 1 need to be redone along with
adding platform access around the intake fans.
Motion by Commissioner Silvernale, second by Commissioner Wendorff to
Approve Req#009284 — P'lant 1 Ladder Access. Motion carried unanimously.
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Mr. Gabrielson presented Approval of Req#009285 — Plant 1 Cooling Tower
Repair. Cooling Tower needs repairs, currently fan deck is plywood this would be
replaced with fiberglass decking and fiber glass joists and supports. Handrail
replacement and ladders will also be comipleted along with nozzle replacement.
Gearbox lIine and vent line along with gearbox and fan assembly replacement will
be completed as well.
Motion by Commissioner Hanson, second by Commissioner Martinez to Approve
Req#0092�85 — Plant I Cooling Tower Repair. Motion carried unanimously.
c. 6 Month Solar Array Update
Mr. Hunst,ad provided a 6- month Solar Array update., The array was anticipated
to operate at a 15% capacity factor, however for the first 6 months the array is
operating better than expected at 19.05%. The array generated 522,788.87 Kwh
go
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President Cheney noted item 8d. Discussion of Unit 1 Generator is a new item to
be added,,
d. Discussion of Unit 1 Generator
Mr. Gabrielson started the diisc,ussion of the Unit 1 Generator. During routine
inspections Staff noticed oil coming out of the external drain on Unit 1 Staff
contacted IEM Energy Consultants who specialize in troubeshoiolting and
diagnosing problems on ILIV16000s. It was recommended at the time to replace
solve the problem. There is, a concern of the airnount of oil that is leaking which is
auxiliary gear box evacuated. If it gets beyond thiis, oil will start to back up into
the gearbox eventually washiing over the bearingadditional!
errors. Once oil leak reaches 1/GaI/Hr the unit needs to be shut down.,
GM Carter recapped the additional background on the unit which has, not been
taken out of service since 1999. The problems with the uniit cannot be done on,
site. Along with the fixes, that are needed, Staff would then also have needed
Bulletins completed at the same time. Estimated repair costs could be around the
$2M range so this is something that would need to go through the bid process.
This unit is the biggest uinilit in H�UC's fleet, Best time to take the unit out of
service would be in the Fall; this creates less concern of MISO market prices.,
Once the unit is out, HUC will have to supply the tolling agreement with market
purchases, some of the units downtown or a combination of both.
GM Carter supplied 3, different scenarios and what is the most cost effective along
with the contractional obgations.
This unit does need to stay in service until 2030 but beyond that it will be based
on future technology advancement with wind, solar, battery storage, regulatory
i requirements, and market demand.
Discussion was held on the different scenarios along with how to pay for the fix.
Financial reserve policies are in place, once reserves are below a certa,in
threshoild the Board needs to or at how to bufld the reserves back up to a
designated amount.
It was decided to move forward with the fix. Using cash makes the most sense,
A Special meeting will be held in September to look for approval of IEM Energy
Consultants Professional Service for LM6000. Once that is approved specs will
Wie Or,2,wn ur). Additional m,eetinas will then be held to Ar)Drove Advertise-tiett for
Unit could be out 3 imonths.
9. Adjourn
There beiing no further business, a motion by Commissioner Hanson, second by
Commissioner Silvernale to adjourn the meeting at 4:15p.m. Motion carried
unanimously.
ATTEST:
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n Martinez, Secretary ,