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Home My WebLink About11-26-2025 HUCMMINUTES Regular Meeting — Hutchinson Utilities Commission Wednesday, November 26, 2025 Call to order — 3:00 p.m. President Matt Cheney called the meeting to order. Members present: President Matt Cheney; Vice President Troy Pullis; Secretary Don Martinez; Commissioner Kathy Silvernale; Commissioner Tom Lambert; 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 Martinez second by Commissioner Silvernale to Approve the Consent Agenda. Motion carried unanimously. 3. Approve Financial Statements Mr. Martig presented the Financial Statements. Electric Division usage increased slightly. Other Revenues decreased due to vehicle sales from last year along with Operating Expenses also decreasing due to the donation for the VMF field lighting last year. Market purchases of power decreased due to past true up credits from MISO, which resulted in a credit for purchased power from the market for October. Natural Gas Division Total Revenue and Expenses both increased from last year. GM Carter reviewed the cash position and bond payments along with the Investment portfolio. Motion by Commissioner Lambert, second by Commissioner Pullis to Approve the Financial Statements. Motion carried unanimously. 4. Open Forum 5. Communication a. City Administrator — Matthew Jaunich — i. Working on Taxes and Levies b. Divisions i. Dan Lang, Engineering Services Manager— Absent ii. Dave Hunstad, Electric Transmission/Distribution Manager — 1. Inverter in the Solar Field failed and was replaced 2. Outage report has a new look with all the same information iii. Mike Gabrielson, Production Manager — 1. Continuing to work with GE regarding Unit 1 2. CAT is working with Staff on Unit 7 oil leak iv. Jared Martig, Financial Manager — 1. Postponing new billing software v. Byron Bettenhausen, Natural Gas Manager — 1. Wrapping up construction 2. Completed Cl Survey from Trimont to St. James with no major issues. c. Human Resources —Angie Radke - i. Working on PFML policy along with a couple of other policies ii. Next week information will be sent out to the Commissioners regarding General Manager Jeremy Carter's annual review d. Legal — Marc Sebora — i. Nothing to report e. General Manager —Jeremy Carter i. Finalizing Budget and CIP 6. Policies a. Review Policies i. CIP Rebate Level of Authority ii. Financial Reserve Policy iii. Service Beyond City Limits of Hutchinson iv. Surplus Property Policy v. Investment Policy vi. Delegation of Authority Policy vii. Purchasing Policy/Credit Cards/Fixed Assets b. Approve Changes i. Payments of HUC Payables Ms. Radke spoke of the above policy change. Payments of HUC Payables - looking to update the year to 2026 along with amending the date of the change. Motion by Commissioner Pullis, second by Commissioner Lambert to Approve Policy Changes. Motion carried unanimously. 7. Unfinished Business 8. New Business a. Approve Non -Waiver of Tort Liability Limits for General Liability Insurance Mr. Martig presented Approval of Non -Wavier Tort Liability Limits for General Liability Insurance, which is a requirement by the League of Minnesota Cities Insurance Trust. Staff is recommending to not waive the tort liability limits. Completion of the Wavier Form is done annually. In the past HUC has not waived the municipal tort limit. 2 Motion by Commissioner Martinez, second by Commissioner Silvernale to Approve Non -Wavier of Tort Liability Limits for General Liability Insurance. Motion carried unanimously. b. Approve Customer Uncollectable Write -Offs Mr. Martig presented Approval of Customer Uncollectable Write -Offs. HUC is requesting to approve write-offs of $6,036.58. Motion by Commissioner Silvernale, second by Commissioner Pullis to Approve Customer Uncollectable Write -Offs. Motion carried unanimously. c. Approve Resolution 25-01 Authorizing the Purchase of Natural Gas from Minnesota Municipal Gas Agency, D/B/A Minnesota Community Energy GM Carter presented Approval of Resolution 25-01 Authorizing the Purchase of Natural Gas from Minnesota Municipal Gas Agency, D/B/A Minnesota Community Energy. Approving the resolution authorizes HUC to continue moving forward under the pretense of executing final Long-term Gas Supply Agreements. Commissioner Lambert walked out at 3:11 pm. GM Carter noted Draft Form Gas Supply Agreements are included in the packet for the Commission to review along with an Attorney's Opinion Letter. The resolution does not bind HUC to execute the Gas Supply Agreements and allows for subsequent finalization of agreements with additional revisions if needed. Motion by Commissioner Pullis, second by Commissioner Martinez to Approve Resolution 25-01 Authorizing the Purchase of Natural Gas from Minnesota Municipal Gas Agency, D/B/A Minnesota Community Energy. Motion carried unanimously. Commissioner Lambert walked in at 3:13pm. d. Approve Resolution 25-02 Establishing a Natural Gas Rate Schedule for Large Industrial Customer GM Carter presented Approval of Resolution 25-02 Establishing a Natural Gas Rate Schedule for Large Industrial Customer. As part of the MCE Prepay Deal, HUC would be supplying natural gas volumes to a transportation customer on the transmission line. As part of the arrangement, a resolution needs to be approved establishing a rate schedule for natural gas sales to the large volume industrial customer. 3 Conversations were held on the rate schedule being used along with the volume and the final discount allocation between HUC and the industrial customer. Motion by Commissioner Pullis, second by Commissioner Silvernale to Approve Resolution 25-02 Establishing a Natural Gas Rate Schedule for Large Industrial Customer. Motion carried unanimously. e. Approve Req#010454 - B-MN Data Centers —Conductor and Terminators Mr. Hunstad presented Approval of Req#010454 — B-MN Data Centers — Conductor and Terminators. Last month the Board approved the Switchgears, the next step is approval of Conductor and Terminators. Mr. Hunstad reviewed the quotes that were received and Wesco has the best pricing for both the Conductor and Terminators that are needed for the project. Motion by Commissioner Silvernale, second by Commissioner Lambert to Approve Req#010454 — B-MN Data Centers — Conductor and Terminators. Motion carried unanimously. f. Discussion of 2026 Environmental Footprint Chart and 2024 Power Supply Mix Chart GM Carter reviewed the 2026 Environmental Footprint Chart and 2024 Power Supply Mix Chart. The Power Supply Mix Chart shows where HUC's electricity comes from for the previous year. Market purchases were the largest supply source at 44%, followed by Coal at 23%. The Environmental Footprint shows HUC's attributes. For 2026, because of the election the Board made, HUC will be 50% Carbon Free within the community. A portion (25%) will come from RECs that will be purchased from MRES as part of the allocation the Board approved, and a portion (25.3%) will come from market purchases declared as carbon free sources. HUC will be 25% Renewable. President Cheney added item 8g. g. Approval of Suspending Power Cost and Fuel Cost Adjustment Credits for 2026. GM Carter recapped the Budget meeting which was held prior to today's Regular Commission meeting. Looking at both Electric and Natural Gas, particularly on the Electric side, HUC is seeing large increases in transmission costs, wholesale power costs and operating costs. HUC has done retail rate increases and is currently in the 3rd year of rate adjustments based on a gradual glide path. 4 Looking at preliminary budgets, the retail rates and rate allocations that are being collected are not keeping pace with the forecasted increased costs of supplying power to HUC's customers. The mechanisms that have been used to level off the volatility of power supply costs for the retail rate customers while keeping adequate cash balance on hand to pay for these large projects coming up are not keeping pace. Staff is looking to suspend those mechanisms to keep cash on hand not only for operating cash purposes but also for large transmission and distribution projects coming up in the next 6 years. The large projects are unique circumstances that only happen every 40-50 years but are good projects to have with a good rate of financial return for those costs able to be reimbursed by the market. HUC needs to be respectful of the rate payers while still maintaining reliability as a priority. Normal Cap X can be pared down in the interim as its worth the investment to do these larger projects. It is customary for HUC to go through a Cost -of -Service Study every 5 years, unless circumstances dictate doing the study sooner. Since there are big projects coming up and operational costs are forecasted to increase above inflation, a Cost -of -Service Study would be helpful to set the financial direction for the next 6 years. A strategic planning meeting will be planned at the start of 2026. Motion by Commissioner Pullis, second by Commissioner Martinez to Approve Suspending Power Cost and Fuel Cost Adjustment Credits for 2026. Motion carried unanimously. GM Carter will bring forth a modified budget along with moving up the Cost -of - Service Study in 2026. Staff will also look at planning a Strategic Planning meeting in early 2026. h. Adjourn There being no further business, a motion by Commissioner Pullis, second by Commissioner Lambert to adjourn the meeting at 3:31 pm. Motion carried unanimously. ATTEST: `s �'°�� , mm�"��"", ... Matt Cheney, President 5 4on Martinez, Secre