HomeMy WebLinkAbout3-25-2026 HUCCPHUTCHINSON UTILITIES COMMISSION
AGENDA
REGULAR MEETING
March 25, 2026
3:00 p.m.
Swearing in of Commissioner Jeremy Crosby
1. CONFLICT OF INTEREST
2. APPROVE CONSENT AGENDA
a. Approve Minutes
b. Ratify Payment of Bills
3. APPROVE 2025 FINANCIAL AUDIT — PRESENTATION BY JUSTIN
MCGRAW
4. APPROVE FINANCIAL STATEMENTS
5. OPEN FORUM
6. COMMUNICATION
a. City Administrator
b. Divisions
C. Human Resources
d. Legal
e. General Manager
7. POLICIES
a. Review Policies
i. Section 3 of Exempt Handbook
ii. Section 3 of Non -Exempt Handbook
b. Approve Changes
8. UNFINISHED BUSINESS
9. NEW BUSINESS
a. Approval of New Ulm Natural Gas Firm Transportation Capacity
Agreement
b. Approval of New Ulm Natural Gas Interconnect Agreement
C. Approve Req#10521 — Close Interval Survey
d. Approve Req#10519 — Blasting and Recoat at MLBV 212 Site
e. Approve Selling of Surplus Equipment
f. Approve Sterling Energy LL Contract 1st Amendment
g. Approve Req#10531 — GE Stage 2 LPT Blade Warranty Replacement
Proposal 1725355
10. ADJOURN
MINUTES
Regular Meeting — Hutchinson Utilities Commission
Wednesday, February 25, 2026
Call to order — 3:00 p.m.
President Don Martinez called the meeting to order. Members present: President Don
Martinez; Secretary Matt Cheney; Vice President Tom Lambert; GM Jeremy Carter;
Attorney Marc Sebora
Absent: Commissioner Kathy Silvernale
Conflict of Interest
2. Approve Consent Agenda
a. Approve Minutes
b. Ratify Payment of Bills
Motion by Commissioner Cheney, second by Commissioner Lambert to Approve the
Consent Agenda. Motion carried unanimously.
3. Approve Financial Statements
Mr. Martig presented the Financial Statements. Electric Division Purchase Power
increased by $186,624. MRES purchases increased by $42,388 and market
purchase/MISO costs increased by $144,236. January PCA brought in an additional
$158,944 for the month and YTD. Natural Gas Division Fuel Cost Adjustment was
$3.4133/MCF bringing in an additional $523,639 for the month and YTD.
GM Carter elaborated on the natural gas prices in correlation to the energy prices
with different energy resources that are used or not used. GM Carter reviewed the
natural gas margins, along with reviewing the impact on customers with Storm Eri.
Cash Balance and investments were reviewed.
Motion by Commissioner Lambert, second by Commissioner Cheney to Approve the
Financial Statements. Motion carried unanimously.
4. Open Forum
5. Communication
a. City Administrator— Matthew Jaunich
i. City Council reviewed and approved apartments at the old Burns Manor
site, should start construction in Spring/Summer.
b. Divisions
i. Dan Lang, Engineering Services Manager — Nothing to Report
ii. Dave Hunstad, Electric Transmission/Distribution Manager — Nothing to
Report
iii. Mike Gabrielson, Production Manager
1. LM6000 still no update from GE, trying to explore other options that may
be available.
iv. Jared Martig, Financial Manager-
1. Auditors should be here next month
v. Byron Bettenhausen — Nothing to Report
c. Human Resources — Angie Radke -
i. Pay Equity has been approved and meets compliance requirements.
ii. Working on a new D&A Consortium and 3rd Party Administrator. Received
notification at the end of January that Total Compliance has closed shop.
d. Legal — Marc Sebora —
i. Nothing to report
e. General Manager — Jeremy Carter
i. LM6000 update regarding costs, warranty and looking at leasing a new unit
ii. Cost of Service Study
iii. JPM wrapping up final step, should hear more on Friday
iv. Winter Storm Fern update. The severe cold weather created a significant
gas impact.
6. Policies
a. Review Policies
i. Section 2 of Exempt Handbook
ii. Section 2 of Non -Exempt Handbook
No changes recommended at this time.
b. Approve Changes
i. Alcohol or Drugs (Exempt and Non -Exempt)
Ms. Radke spoke of the policy change. Looking to remove Total Compliance
Solutions from the policy, policy is still applicable.
Motion by Commissioner Cheney, second by Commissioner Lambert to Approve
Policy Changes. Motion carried unanimously.
7. Unfinished Business
8. New Business
a. Approval of 3M Natural Gas Transportation and Daily Swing Supply
Agreement
GM Carter presented Approval of 3M Natural Gas Transportation and Daily Swing
Supply Agreement. 3M's current agreement expires on March 1, 2026 at 9 A.M.
This agreement provides transportation rights to 3M on Hutchinson's facilities
from March 1, 2026 at 9.00 A.M. through March 1, 2027 at 9.00 A.M. This
agreement is identical to the 2025 agreement except for date changes and
increased monthly meter fee. All fees are in alignment with the rate realignment
2
structure proposed by the Commission for this customer.
Motion by Commissioner Lambert, second by Commissioner Cheney to Approve
3M Natural Gas Transportation and Daily Swing Supply Agreement. Motion
carried unanimously.
b. Approve Req#010514 —Cooling Tower Pipe Repair Plant #1
Mr. Gabrielson presented approval Req#010514 — Cooling Tower Pipe Repair at
Plant #1. The cooling tower has developed an underground water leak on the 20"
return line to the cooling tower. GPRS came out and scanned the pipe and
located the area of the leak. Rosnow Industrial will be fixing the underground
leak.
Motion by Commissioner Cheney, second by Commissioner Lambert to Approve
Req#010514 Cooling Tower Pipe Repair Plant #1. Motion carried unanimously.
9. Adjourn
There being no further business, a motion by Commissioner Lambert, second by
Commissioner Cheney to adjourn the meeting at 3:26p.m. Motion carried
unanimously.
ATTEST:
Don Martinez, President
3
Matt Cheney, Secretary
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HUTCHINSON UTILITIES COMMISSION
AUDITED FINANCIAL STATEMENTS AND
SUPPLEMENTARY INFORMATION
DECEMBER 31, 2025
CONWAY, DEUTH & SCHMIESING, PLLP
CPAS & ADVISORS
LITCHFIELD, MINNESOTA
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HUTCHINSON UTILITIES COMMISSION
TABLE OF CONTENTS
DECEMBER 31, 2025
ORGANIZATIONAL DATA
INDEPENDENT AUDITOR'S REPORT
REQUIRED SUPPLEMENTARY INFORMATION
Management's Discussion and Analysis
BASIC FINANCIAL STATEMENTS
Statement of Net Position
Statement of Revenues, Expenses and Changes in Net Position
Statement of Cash Flows
Notes to the Financial Statements
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Proportionate Share of Net Pension Liability
Schedule of Employer Contributions
Schedule of Changes in the Commission's Total OPEB Liability
Notes to Required Supplementary Information
SUPPLEMENTARY INFORMATION
Combining Statement of Net Position
Combining Schedule of Revenues and Expenses
Schedule of Division Cash Flows
Statement of Net Position - Electric Division
Detailed Schedule of Revenues, Expenses and Changes in Net Position -
Budget and Actual - Electric Division
Statement of Net Position - Natural Gas Division
Detailed Schedule of Revenues, Expenses and Changes in Net Position -
Budget and Actual - Natural Gas Division
1
2-4
5-9
10
11
12-13
14-38
39
40
41
42-48
49
50
51-52
53
54-56
57
58-60
HUTCHINSON UTILITIES COMMISSION
TABLE OF CONTENTS
DECEMBER 31, 2025
COMPLIANCE SECTION
Independent Auditor's Report on Minnesota Legal Compliance
Independent Auditor's Report on Internal Control Over Financial
Reporting and on Compliance and Other Matters Based on an
Audit of Financial Statements Performed in Accordance with
Government Auditing Standards
Summary Schedule of Prior Audit Findings
PAGE
61
62-63
64
HUTCHINSON UTILITIES COMMISSION
ORGANIZATIONAL DATA
DECEMBER 31, 2025
A Light and Power Commission was formed under the provisions of an amendment to the Hutchinson City Charter in
1935; the Commission was charged with the operation of the Municipal Electric Plant. Charter amendments approved
December 17, 1954 provided for a change in the name to Hutchinson Utilities Commission. Additional duties under that
amendment provided for the control and management of a municipal gas distribution system.
A revised city charter was adopted at a special election September 17, 1987. Some of the pertinent sections of this new
charter are briefly summarized in the following paragraphs.
The Commission shall have control and management of the Light Plant, the Light Plant distribution system, the Gas Plant
and the Gas Plant distribution system.
The Commission shall consist of five persons, who shall be appointed by the Council. A member shall be appointed every
year for a term of five years, to fill the place of the member whose term has expired. No member shall be appointed to
more than two successive terms. The members of the Commission shall receive compensation for their services as
determined annually by the Council. The Commission's charter approves one person on the Commission may live outside
the City of Hutchinson limits as long as they are a ratepayer.
The Commission shall provide for its own organization and rules of procedure and annually shall elect a president and
vice president from among its members. It shall also appoint a secretary who may or may not be a member of the
Commission.
The Commissioners and their official titles were as follows:
Matt Cheney
Troy Pullis
Don Martinez
Kathy Silvernale
Tom Lambert
President
Vice President
Secretary
Commissioner
Commissioner
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INDEPENDENT AUDITOR'S REPORT
Members of the Hutchinson Utilities Commission
Hutchinson, Minnesota
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of Hutchinson Utilities Commission, a fund of the City of
Hutchinson, Minnesota, as of and for the year ended December 31, 2025 and the related notes to the financial
statements, which collectively comprise the Commission's basic financial statements as listed in the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial
position of the Commission, as of December 31, 2025, and the respective changes in financial position, and cash flows
thereof for the year then ended in accordance with accounting principles generally accepted in the United States of
America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America
(GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor's
Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the
Commission, and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating
to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinions.
Report on Partial Comparative Information
We have previously audited the Commission's 2024 financial statements, and we expressed an unmodified audit opinion
on those audited financial statements in our report dated March 26, 2025. In our opinion, the partial comparative
information presented herein as of and for the year ended December 31, 2024 is consistent, in all material respects, with
the audited financial statements from which it has been derived. Refer to Note 18 of the Notes to the Financial
Statements for additional information regarding the prior year partial comparative information.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with
accounting principles generally accepted in the United States of America, and for the design, implementation, and
maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from
material misstatement, whether due to fraud or error.
'WW"ittmmaarr Office
331 Third 5t 5W, Ste 2
P10 Boy 570
'' iLrraar, MIN 56201
(320) 2'35-3311
(888) 388.1040
Benson Office
1209 Pactic Ave, Ste 3
Benson, MIN 56215
(320) 843.2302
Morris Office
401 Attant'ic Ave
Morris, IMN 56267
(320) 589®2602
w w vv. c: cl vc try rm. c o nii
Litchfield Office
820 Sbley Avm,r
Utcfftiel , Mid 55355
(320) 693-7975
8arrtellOffice
Ste 110
2:351 ConinectNcut Ave
Sartelll, MN 56377
(320) 252-7565
(800) 862 1337
Mc ibcicisArnerican hsfflruUM of Ccmtlf (N d ['ublicAccouTafants, Mhiresota ""tb(: ety of Ceitif ed Flubhc ACrC;CFuntait„a
In preparing the financial statements, management is required to evaluate whether there are conditions or events,
considered in the aggregate, that raise substantial doubt about the Commission's ability to continue as a going concern
for twelve months beyond the financial statement date, including any currently known information that may raise
substantial doubt shortly thereafter.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions.
Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an
audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material
misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the
aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
and design and perform audit procedures responsive to those risks. Such procedures include examining, on a
test basis, evidence regarding the amounts and disclosures in the financial statements.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Commission's internal control. Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluate the overall presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise
substantial doubt about the Commission's ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit, significant audit findings, and certain internal control -related matters that we identified
during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management's Discussion and
Analysis, the Schedule of Proportionate Share of Net Pension Liability, the Schedule of Employer Contributions, the
Schedule of Changes in the Commission's Total OPEB Liability and the related notes as listed in the table of contents be
presented to supplement the basic financial statements. Such information is the responsibility of management and,
although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who
considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. We have applied certain limited procedures to the required supplementary
information in accordance with auditing standards generally accepted in the United States of America, which consisted of
inquiries of management about the methods of preparing the information and comparing the information for consistency
with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during
our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information
because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the
Commission's basic financial statements. The statements and schedules listed in the table of contents as supplementary
information are presented for purposes of additional analysis and are not a required part of the basic financial statements.
Such information is the responsibility of management and was derived from and relates directly to the underlying
accounting and other records used to prepare the basic financial statements. The information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including
comparing and reconciling such information directly to the underlying accounting and other records used to prepare the
basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance
with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information
is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Information
Management is responsible for the other information included in the annual report. The other information comprises the
organizational data section but does not include the basic financial statements and our auditor's report thereon. Our
opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any
form of assurance thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the other information and
consider whether a material inconsistency exists between the other information and the basic financial statements, or the
other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an
uncorrected material misstatement of the other information exists, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated March 25, 2026 on our
consideration of the Commission's internal control over financial reporting and on our tests of its compliance with certain
provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to
describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing,
and not to provide an opinion on the effectiveness of the Commission's internal control over financial reporting or on
compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in
considering the Commission's internal control over financial reporting and compliance.
CONWAY, DEUTH & SCHMIESING, PLLP
CPAS & ADVISORS
LITCHFIELD, MINNESOTA
March 25, 2026
4
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REQUIRED SUPPLEMENTARY INFORMATION
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HUTCHINSON UTILITIES COMMISSION
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2025
Overview of the Financial Statements
Hutchinson Utilities Commission is a fund of the City of Hutchinson, Minnesota, and is responsible for the full operation
and management of the electric and natural gas systems of the City. The annual report of Hutchinson Utilities
Commission includes the financial statements, the independent auditor's report, and notes detailing the financial
statements and this management's discussion and analysis report. The report also includes supplementary informatior
for each of Hutchinson Utilities Commission's divisions.
Financial Statements Required
The financial statements report information about Hutchinson Utilities Commission using accounting methods similar to
those used by private sector companies. These statements offer short-term and long-term financial information about its
activities.
The Statement of Net Position includes all of the Commission's assets and deferred outflows of resources, liabilities and
deferred inflows of resources, and net position and provides information regarding the nature and amount of investments
in various assets and obligations to the Commission's creditors. They also provide the basis for computing rate of return,
evaluating the capital structure, and determining the liquidity and financial flexibility of the Commission.
The Statement of Revenues, Expenses and Changes in Net Position accounts for all the current year's revenues and
expenses. This statement measures the success of operations over the past year and can be used to determine whether
all costs are recovered through user fees and other charges. This statement measures the Commission's profitability and
credit worthiness.
The Statement of Cash Flows provides information about the Commission's cash receipts and cash payments during the
reporting period. This statement reports cash receipts, cash payments, and net changes in cash resulting in cash
balances during the reporting period.
Financial Statement Analvsis
Total gross investment in capital and right to use assets increased to $154,918,814 in 2025 from $146,124,457 in 2024.
Capital and right to use assets increased $8,794,357 due to various asset additions during the year and multiple projects
being capitalized.
Operating revenues increased and operating expenses increased from 2024 by $3,730,965 and $1,956,993,
respectively. Operating income increased from 2024 by $1,773,972. The primary increase in operating revenues was
due to an increase in electric and natural gas sales in 2025, by $3,210,939 and $424,454, respectively, from 2024. The
primary increase in operating expenses was due to an increase in production expenses that was mostly due to the
Commission having higher quantities of gas purchased during the year at a higher fixed price resulting in higher contract
The primary area of the increase in operating income was due to an increase in electricity being sold on the open market,
because of the cost to produce electricity compared to the cost to sell it on the open market the Commission found this
favorable.
5
HUTCHINSON UTILITIES COMMISSION
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2025
Significant Transactions
In 2025, the Commission transferred $1,942,628 per agreement to the City of Hutchinson.
Condensed Financial Statements
A summary of the Statement of Net Position is presented in Table 1.
Table 1
Condensed Statement of Net Position
Increase
2025 2024 (Decrease)
Current Assets
Restricted Assets
Net Capital and Right to Use Assets
Total Assets
Deferred Outflows of Resources
Total Assets and Deferred
Outflows of Resources
Current Liabilities
Long -Term Liabilities
Total Liabilities
Deferred Inflows of Resources
Net Position
Net Investment in Capital Assets
Restricted for Debt Service
Unrestricted
Total Net Position
Total Liabilities, Deferred Inflows of
Resources and Net Position
$ 22,342,556 $ 27,483,694 $ (5,141,138)
3,247,000
3,255,256
(8,256)
80,481,164
75,641,274
4,839,890
106,070,720
106,380,224
(309,504)
495,988
457,012
38,976
$ 106,566,708 $ 106,837,236 $ (270,528)
$ 3,657,955 $ 4,112,345 $ (454,390)
18,590,285 21,627,147 (3,036,862)
22,248,240 25,739,492 (3,491,252)
1,449,544 1,725,932 (276,388)
65,345,353
57,495,349 7,850,004
3,247,000
3,255,256
14,276,571
18,621,207 (4,344,636)
82,868,924
79,371,812 3,497,112
$ 106,566,708 $ 106,837,236 $ (270
A
HUTCHINSON UTILITIES COMMISSION
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2025
Condensed Financial Statements (Cont'd)
A summary of the Statement of Revenues, Expenses and Changes in Net Position is presented in Table 2.
Table 2
Condensed Statement of Revenues, Expenses and Changes in Net Position
Increase
2025 2024 (Decrease
Operating Revenues
Operating Expenses
Cost of Operations
Depreciation and Amortization
Total Operating Expenses
Operating Income (Loss)
Nonoperating Revenues (Expenses)
Change in Net Position
Net Position, Beginning of Year
Net Position, End of Year
Budgetary Highlights
$ 45,472,792 $ 41,741,827 $ 3,730,965
38,662,446
36,653,982
2,008,464
4,261,165
4,312,636
(51,471)
42,923,611
40,966,618
1,956,993
2,549,181
775,209
1,773,972
947,931 1,817,367 (869,436)
3,497,112 2,592,576 904,536
79,371,812 76,779,236 2,592,576
$ 82,868,924 $ 79,371,812 $ 3,497,112
The Commission adopts an annual Operating Budget and a Capital Improvement Budget. Because of its enterprise
nature and in order to comply with Federal Energy Regulatory Commission accounting and reporting requirements, the
budgets are not operated as statutory budgets. The Commission and Utilities staff review budget results monthly and the
budget is used as a financial management tool. A summary of the 2025 Budget Analysis is presented in Table 3.
7
HUTCHINSON UTILITIES COMMISSION
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2025
Budgetary Highlights (Cont'd)
Table 3
Condensed Budget Analysis
Operating Revenues
Operating Expenses
Cost of Operations
Depreciation and Amortization Expense
Total Operating Expenses
Operating Income (Loss)
Nonoperating Revenues (Expenses)
Change in Net Position
Net Position, Beginning of Year
Net Position, End of Year
2025 Budget 2025 Actual Over (Under)
$ 44,526,779 $ 45,472,792 $ 946,013
38,602,908
38,662,446
59,538
4,310,000
4,261,165
(48,835)
42,912,908
42,923,611
10,703
1,613,871
2,549,181
935,310
278,291 947,931 669,640
1,892,162 3,497,112 1,604,950
79,371,812 79,371,812
$ 81,263,974 $ 82,868,924 $ 1,604,950
Actual operating revenues were $946,013 over budgeted revenues while operating income (loss) was over budget by
$935,310. The actual operating revenues for the Commission had a variance of approximately 2.12% from budgeted
operating revenues.
Operating expenses were $10,703 more than budgeted. Purchased natural gas expenses were lower than budgeted due
to a decrease in gas demand for power generation. The Commission had increased customer account related expenses
and administrative and general expenses contributing to the increase from budgeted. Nonoperating revenue was
$669,640 more than budgeted. The Commission had a higher about of interest income and miscellaneous income that
was paid out in 2025 which largely contributed to the increase from budgeted.
In 2018, the Commission entered into an agreement for a specific Payment in Lieu of Taxes (PILOT). The agreement
requires the Commission to make payments equaling $1,942,628 in 2025.
Starting in calendar year 2007, the Commission reallocated its common expenses between the two divisions. Formulas
were developed and used to establish the common expenses between the two utilities, in particular, Customer Service
and Collection Accounts and the Administrative and General Accounts.
Capital and Right to Use Assets and Long -Term Liability Activity
The Commission's investment in capital and right to use assets increased to $154,918,814 in 2025. This is a increase of
$8,794,357 from 2024. Refer to Note 5 of the Notes to the Financial Statements for the Commission's 2025 capital asset
activity.
At year-end, the Commission had $13,830,000 in bonds outstanding and $1,323,336 in compensated absences. Refer to
Note 6 of the Notes to the Financial Statements for a schedule showing the Commission's long-term liability activity.
At 2025 year-end, the Commission had a Solar Array Land Lease Liability of $736,975. See Note 7 in the Financial
Statements for a schedule showing the Commission's long-term lease activity.
0
HUTCHINSON UTILITIES COMMISSION
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2025
Economic Factors and Next Year's Budget
The Commission considered many local community and external energy industry factors when setting the Electric & Gas
Division fiscal year 2025 budgets, rates, and fees that will be charged to customers. Of significance was the continual
increase in costs associated with purchased electrical wholesale power and transmission fees. Conversely, the Gas
Division continues to see favorable prices for the procurement of the natural gas commodity but is budgeting for higher
prices. Both divisions continue to see consistent energy consumption forecasts in the near future.
The Commission continued to "bundle" its electric wholesale rate to its retail customers. What this means is the
operating income the Commission receives from its wholesale KWHR sales is applied to the wholesale rate it charges its
retail customers. This "bundling" effect reduces the overall blended cost of wholesale power which aids in retail rate
pricing stability.
Contact Information
Any questions regarding information contained in this report and requests for additional information should be addressed
to the Hutchinson Utilities Commission, 225 Michigan Street SE, Hutchinson, MN 55350 or by phone at (320) 587-4746.
0
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BASIC FINANCIAL STATEMENTS
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Ia4to] :11►[.Y07►Rol IIIIII II*Role] dildiIF-9to] ►1
STATEMENT OF NET POSITION
DECEMBER 31, 2025
WITH PARTIAL COMPARATIVE AMOUNTS AS OF DECEMBER 31, 2024
ASSETS AND DEFERRED OUTFLOWS OF RESOURCES
Assets
Current Assets
Cash and Investments
Receivables
Accounts Receivable (Net of Allowance for Doubtful Accounts of
$136,688 and $68,111, Respectively)
Interest Receivable
Sales Tax Receivable
Inventory
Prepaid Items
Total Current Assets
Noncurrent Assets
Restricted Assets
Cash and Investments
Capital and Right to Use Assets
Assets Not Being Depreciated or Amortized
Other Capital and Right to Use Assets, Net of Depreciation and Amortization
Net Capital Assets
Total Noncurrent Assets
Total Assets
Deferred Outflows of Resources
Total Assets and Deferred Outflows of Resources
LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION
Liabilities
Current Liabilities
Accounts Payable
Customer Deposits
Unearned Revenue
Accrued Expenses
Interest
Salaries Payable
Total Current Liabilities
Long -Term Liabilities
Net Pension Liability
Total OPEB Liability
Other Long -Term Liabilities Due Within One Year
Other Long -Term Liabilities Due in More Than One Year
Total Long -Term Liabilities
Total Liabilities
Deferred Inflows of Resources
Net Position
Net Investment in Capital Assets
Restricted for Debt Service
Unrestricted
Total Net Position
Total Liabilities, Deferred Inflows of Resources and Net Position
2025 2024
15,311,768 $ 20,596,789
3,794,475
3,704,825
99,570
148,628
121,584
397,232
2,785,157
2,543,644
230,002
92,576
22,342,556
27,483,694
3,247,000 3,255,256
14,486,925
65,994,239
7,491,453
68,149,821
80,481,164
75,641,274
83,728,164
78,896,530
106,070,720
106, 380, 224
495,988 457,012
$ 106,566,708 $ 106,837,236
2,670,293 $ 2,960,729
341,674 294,610
467,102 416,677
38,805
49,688
140,081
390,641
3,657,955
4,112,345
2,113,771
2,442,997
56,282
53,173
3,302,124
3,026,031
13,118,108
16,104, 946
18,590,285
21,627,147
22,248,240
25,739,492
1,449,544 1,725,932
65,345,353
57,495,349
3,247,000
3,255,256
14,276,571
18,621,207
82,868,924
79,371,812
$ 106,566,708 $ 106,837,236
See Accompanying Notes to the Financial Statements
10
HUTCHINSON UTILITIES COMMISSION
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
YEAR ENDED DECEMBER 31, 2025
WITH PARTIAL COMPARATIVE AMOUNTS FOR THE YEAR ENDED DECEMBER 31, 2024
OPERATING REVENUES
Electric Energy Sales
Natural Gas Sales
Other Operating Revenues
Total Operating Revenues
OPERATING EXPENSES
Production
Operations
Maintenance
Purchased Power/Gas
Other Power Supply
Transmission
Operations
Maintenance
Distribution
Operations
Maintenance
Customer Accounts Expense
Sales Expense
Administrative and General
Depreciation and Amortization Expense
Contribution to City of Hutchinson
Total Operating Expenses
Operating Income (Loss)
NONOPERATING REVENUES (EXPENSES)
Interest Income
Merchandise and Contract Work, Net
Miscellaneous Income
Gain (Loss) on Disposal of Assets
Bond Premium
Interest Expense
Total Nonoperating Revenues (Expenses)
Change in Net Position
NET POSITION, BEGINNING OF YEAR
NET POSITION, END OF YEAR
See Accompanying Notes to the Financial Statements
11
2025 2024
$ 30,727,888 $ 27,516,949
11,711,866 11,287,412
3,033,038 2,937,466
45,472,792 41,741,827
4,860,798
3,981,539
1,161,093
906,474
19, 776, 673
19,167, 749
351,474
328,766
3,292,304 3,084,503
148,078 94,607
2,340,124
2,156,923
1,269,710
1,305,405
602,137
538,413
187,304
247,274
2,730,123
2,647,081
4,261,165
4,312,636
1,942,628
2,195,248
42,923,611
40,966,618
2,549,181
775,209
1,177,065
1,241,242
(46,200)
23,194
177,627
970,210
22,450
74,421
219,065
219,066
(602,076)
(710,766)
947,931
1,817,367
3,497,112
2,592,576
79,371,812 76,779,236
$ 82,868,924 $ 79,371,812
HUTCHINSON UTILITIES COMMISSION
STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 2025
WITH PARTIAL COMPARATIVE AMOUNTS FOR THE YEAR ENDED DECEMBER 31, 2024
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from Customers
Payments Received from Other Sources
Payments to Suppliers
Payments to Employees
Net Cash Provided (Used) by Operating Activities
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Other Noncapital Income (Expense)
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Additions to Utility Plant
Proceeds from Sale of Assets
Principal Payments on Long -Term Liabilities
Interest Paid on Long -Term Liabilities
Net Cash Provided (Used) by Capital and Related Financing Activities
CASH FLOWS FROM INVESTING ACTIVITIES
Interest Income
Net Increase (Decrease) in Cash and Cash Equivalents
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS, END OF YEAR
RECONCILIATION OF CASH AND CASH EQUIVALENTS
Current Assets - Cash and Investments
Restricted Assets - Cash and Investments
Total Cash and Cash Equivalents
See Accompanying Notes to the Financial Statements
12
2025 2024
$ 42,447,593 $ 38,767,940
3,308,686
2,858,402
(33,468,992)
(30,779,026)
(6,455,501)
(5,665,395)
5,831,786
5,181,921
131,427 993,404
(9,101,053) (8,072,320)
22,448
129,584
(2,791,049)
(2,675,536)
(612,959)
(719,616)
(12,482,613)
(11,337,888)
1,226,123 1,234,026
(5,293,277) (3,928,537)
23,852,045 27,780,582
$ 18,558,768 $ 23,852,045
$ 15,311,768 $ 20,596,789
3,247,000 3,255,256
$ 18,558,768 $ 23,852,045
HUTCHINSON UTILITIES COMMISSION
STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 2025
WITH PARTIAL COMPARATIVE AMOUNTS FOR THE YEAR ENDED DECEMBER 31, 2024
RECONCILIATION OF OPERATING INCOME (LOSS) TO CASH FLOWS FROM
OPERATING ACTIVITIES
Operating Income (Loss)
Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided (Used) by
Operating Activities
Depreciation and Amortization
Pension Related Adjustments
OPEB Related Adjustments
(Increase) Decrease in Assets
Accounts Receivable
Sales Tax Receivable
Inventory
Prepaid Items
Increase (Decrease) in Liabilities
Accounts Payable
Customer Deposits
Unearned Revenue
Salaries Payable
Compensated Absences
Net Cash Provided (Used) by Operating Activities
NONCASH INVESTING, CAPITAL, AND FINANCING ACTIVITIES
Amortization of Premium on Bonds Payable
See Accompanying Notes to the Financial Statements
13
2025
2024
$ 2,549,181
$ 775,209
4,261,165
4,312,636
(644,511)
(337,451)
3,030
(27,762)
(89,650)
(84,408)
275,648
(79,064)
(241,513)
(43,500)
(137,426)
136,247
(290,436)
319,620
47,064
(19,491)
50,425
67,478
(250,560)
49,869
299,369
112,538
$ 5,831,786 $ 5,181,921
219,065 219,066
HUTCHINSON UTILITIES COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. REPORTING ENTITY
Hutchinson Utilities Commission, a fund of the City of Hutchinson, Minnesota, is governed by five
members who are appointed by the Council of the City of Hutchinson, Minnesota. The accompanying
financial statements present only the Hutchinson Utilities Commission fund and are not intended to
present fairly the financial position of the City of Hutchinson, Minnesota.
The financial statements present the Commission and its component units. The Commission includes all
funds, organizations, institutions, agencies, departments and offices that are not legally separate from
such. Component units are legally separate entities for which the Commission is financially accountable,
or for which the exclusion of the component unit would render the financial statements of the
Commission misleading.
The criteria used to determine if the Commission is financially accountable for a component unit includes
whether or not 1) the Commission appoints the voting majority of the potential component unit's
governing body and is able to impose its will on the potential component unit or is in a relationship of
financial benefit or burden with the potential component unit, or 2) the potential component unit is fiscally
dependent on and there is a potential for the potential component unit to provide specific financial
benefits to, or impose specific financial burdens on, the Commission.
As a result of applying the component unit definition criteria above, the Commission does not have any
component units.
B. FUND ACCOUNTING
The operations of the Commission are recorded as a proprietary fund. The proprietary fund is used to
account for operations (a) that are financed and operated in a manner similar to private business
enterprises - where the intent of the governing body is that the costs (expenses, including depreciation)
of providing goods or services to the general public on a continuing basis be financed or recovered
primarily through user charges; or (b) where the governing body has decided that periodic determination
of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public
policy, management control, accountability or other purposes.
C. MEASUREMENT FOCUS. BASIS OF ACCOUNTING AND FINANCIAL STATEMENT
PRESENTATION
The financial statements include the operations of the City of Hutchinson Municipal Utilities. The Electric
and Natural Gas divisions are treated as a single enterprise fund of the City of Hutchinson, Minnesota.
The Utilities are governed by the Hutchinson Utilities Commission, which is appointed by the City
Council. No other operations are controlled by the Hutchinson Utilities Commission. The accounts of the
Commission are organized on the basis of fund accounting. The operation of the fund is accounted for
with a separate set of self -balancing accounts that comprise its assets, deferred outflows of resources,
liabilities, deferred inflows of resources, net position, revenues, and expenses. Government resources
are allocated to and accounted for in the individual fund based upon the purposes for which they are to
be spent and the means by which spending activities are controlled.
Basis of accounting refers to when revenues and expenses are recognized in the accounts and reported
in the financial statements. Basis of accounting relates to the timing of the measurements made,
regardless of the measurement focus applied.
14
HUTCHINSON UTILITIES COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING AND FINANCIAL STATEMENT
PRESENTATION (Cont'd)
The proprietary fund is accounted for using the accrual basis of accounting and economic resources
measurement focus. Revenues are recognized when earned, and expenses are recognized when
incurred. Revenue from electricity and gas sales is reflected in the accounts only at the time such
revenue is actually billed to customers. Accordingly, no recognition is given in the accounts for revenue
from sales between established cycle billing dates.
The proprietary fund distinguishes operating revenues and expenses from nonoperating items.
Operating revenues and expenses generally result from providing services and producing and delivering
goods in connection with a proprietary fund's principal ongoing operations. The principal operating
revenues of the enterprise funds are charges to customers for sales and services. Operating expenses
for enterprise funds include the cost of sales and services, administrative expenses, and depreciation of
capital and right to use assets. All revenues and expenses not meeting this definition are reported as
nonoperating revenues and expenses.
It is generally the Commission's policy to use restricted resources first, then unrestricted resources as
they are needed when an expense is incurred for purposes for which both restricted and unrestricted net
position is available.
D. DEPOSITS AND INVESTMENTS
The Commission's cash and cash equivalents are considered to be cash on hand, deposits and highly
liquid debt instruments purchased with original maturities of three months or less from the date of
acquisition.
The Commission may invest in the following types of investments as authorized by Minn. Stat.
§§118A.04 and 118A.05:
(1) securities which are direct obligations or are guaranteed or insured issues of the United States, its
agencies, its instrumentalities, or organizations created by an act of Congress, except mortgage -
backed securities defined as "high risk" by Minn. Stat. §118A.04, subd. 6;
(2) mutual funds through shares of registered investment companies provided the mutual fund receives
certain ratings depending on its investments;
(3) general obligations of the State of Minnesota and its municipalities, and in certain state agency and
local obligations of Minnesota and other states provided such obligations have certain specified
bond ratings by a national bond rating service;
(4) time deposits that are fully insured by the Federal Deposit Insurance Corporation or bankers
acceptances of United States banks;
(5) commercial paper issued by United States corporations or their Canadian subsidiaries that is rated
in the highest quality category by at least two nationally recognized rating agencies and matures in
270 days or less; and
15
HUTCHINSON UTILITIES COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
D. DEPOSITS AND INVESTMENTS (Cont'd)
(6) with certain restrictions, in repurchase agreements, securities lending agreements, joint powers
investment trusts, and guaranteed investment contracts.
Cash and investments were comprised of deposit accounts, money market accounts, municipal bonds,
FFCB bonds, FHLB bonds, US Treasury Strips, and brokered certificates of deposit.
The Commission categorizes its fair value measurements within the fair value hierarchy established by
accounting principles generally accepted in the United States of America. The hierarchy is based on the
valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active
markets for identical assets. Level 2 inputs are significant other observable inputs. Level 3 inputs are
significant unobservable inputs.
The Commission has an investment policy in place that addresses interest rate risk, credit risk,
concentration of credit risk and custodial risk as follows:
Custodial Credit Risk - Deposits: For deposits, this is the risk that in the event of bank failure, the
Commission's deposits may not be returned to it. Minnesota Statutes requires that all Commission
deposits be protected by insurance, surety bond, or collateral. The market value of collateral pledged
must equal 110 percent of deposits in excess of FDIC Insurance. The Commission's investment policy
states the collateralization level will be 110% of the market value of principal and accrued interest. When
the pledged collateral consists of notes secured by first mortgages, the collateral level will be 140% of
the market value of principal and accrued interest.
Authorized collateral includes the obligations of the U.S. Treasury, agencies, and instrumentalities,
shares of investment companies whose only investments are in the aforementioned securities,
obligations of the State of Minnesota or its municipalities, bankers' acceptances, futures contracts,
repurchase and reverse repurchase agreements, and commercial paper of the highest quality with a
maturity of no longer than 270 days, as well as certain first mortgage notes, and certain other state or
local government obligations. Minnesota statutes require that securities pledged as collateral be held in
safekeeping by the Commission treasurer or in a financial institution other than that furnishing the
collateral.
Interest Rate Risk - This is the risk that fair values of securities in a portfolio would decrease due to
changes in market interest rates. The Commission's investment policy states the Commission should
manage their interest rates based on safety, liquidity and the overall rate of return on the investment.
The portfolio should contain both short-term and long-term investments to meet anticipated cash flow
requirements. Extended maturities may be utilized to take advantage of higher yields; however, no
investment shall be made with a term of more than ten years.
Credit Risk - Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its
obligations. State law limits investments in commercial paper and corporate bonds to the top two ratings
issued by nationally recognized statistical rating organizations. The Commission's investment policy
states it will comply with Minnesota Statutes Chapter 118A.
HUTCHINSON UTILITIES COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
D. DEPOSITS AND INVESTMENTS (Cont'd)
Concentration of Credit Risk: This is the risk of loss attributed to the magnitude of an investment in a
single issuer. Investments should be diversified to avoid incurring unreasonable risk inherent in over
investing in specific instruments, individual financial institutions or maturities. The Commission's
investment policy states the Commission will attempt to diversify its investments according to type and
maturity.
Custodial Credit Risk - Investments: For an investment, this is the risk that in the event of the failure of
the counterparty, the Commission will not be able to recover the value of its investments or collateral
securities that are in the possession of an outside party. The Commission's investment policy states
when investments purchased by the Commission are held in safekeeping by a broker/dealer, they must
provide asset protection of $500,000 through the Securities Investor Protection Corporations (SIPC) and
at least another $2,000,000 Supplemental Insurance Protection, provided by the broker dealer.
E. RECEIVABLES AND OPERATING REVENUES AND EXPENSES
An allowance for doubtful accounts is recorded based on historical electric and natural gas revenues,
historical loss levels, and an analysis of the collectability of individual accounts.
Meters are read throughout the month and revenues are recognized when utility services are billed to
customers. Hutchinson Utilities Commission did not accrue revenues for services provided but not billed
at the end of the year.
Monthly billings from the wholesale power and natural gas suppliers, which are for power and natural
gas costs to the last day of the month, are reflected in the accounts.
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end
of the fiscal year are referred to as either "due to/from other funds" (i.e., the current portion of interfund
loans) or "advances to/from other funds" (i.e., the noncurrent portion of interfund loans). All other
outstanding balances between funds are reported as "due to/from other funds."
F. INVENTORY
Inventories of materials and supplies are recorded at average cost, which does not exceed market.
G. PREPAID ITEMS
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as
prepaid items in the financial statements.
H. CAPITAL AND RIGHT TO USE ASSETS
Capital and right to use assets, both tangible and intangible, which include property, plant, equipment
and infrastructure assets (e.g., roads, sidewalks and similar items) and easements, are recorded at cost.
Right to use assets are capitalized at the present value of minimum lease payments. The cost of
additions to capital assets includes contracted work, direct labor, and materials. Major outlays for capital
assets and improvements are capitalized as projects are constructed. Repairs, replacement, and the
renewal of items determined to be less than units of property are charged to maintenance. Donated
assets are recorded as capital assets at their estimated acquisition value at the date of donation.
17
HUTCHINSON UTILITIES COMMISSION
NOTE 1
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2025
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
H. CAPITAL AND RIGHT TO USE ASSETS (Cont'd)
Tangible and intangible capital and right to use assets of the Commission are amortized or depreciated
using the straight-line, full month convention method over the following estimated useful lives:
Buildings
35-60 years
Transmission plant (electric)
20-35 years
Distribution plant (electric)
20-35 years
Building improvement
15-30 years
Transmission plant (gas)
10-45 years
Distribution plant (gas)
10-45 years
Generation plant
10-30 years
General plant
5-10 years
Vehicles
5-10 years
Office equipment
3-5 years
Computer equipment
3-5 years
Capital assets not being depreciated include land, easements and construction in progress, if any.
I. DEFERRED OUTFLOWS OF RESOURCES
In addition to assets, the statement of financial position will sometimes report a separate section for
deferred outflows of resources. Deferred outflows of resources represents a consumption of net assets
that applies to a future reporting period. During that future period, it will be recognized as an outflow of
resources (expense). The Commission has two items that qualify for reporting in this category on the
financial statements which is related to pensions and other post -employment benefits.
J. UNEARNED REVENUE
Unearned revenue arises when assets are recognized before revenue recognition criteria have been
satisfied. Grants and certain other payments received before eligibility requirements are met are also
recorded as unearned revenue.
K. COMPENSATED ABSENCES
The liability for compensated absences reported in the financial statements consists of unpaid,
accumulated vacation and the current sick leave balance. The liability has been calculated using the
vesting method, in which leave amounts for both employees who currently are eligible to receive
termination payments and other employees who are expected to become eligible in the future to receive
such payments upon termination are included. The liabilty for the leave accumulates and the leave is
more likely than not to be used. The Statement of Net Position reports both current and noncurrent
portions of compensated absences using full accrual accounting. The current portion consists of an
amount based on a trend analysis of current usage of vacation and vested sick leave. The noncurrent
portion consists of the remaining amount of vacation and total vested sick leave.
18
HUTCHINSON UTILITIES COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
K. COMPENSATED ABSENCES (Cont'd)
Both union and nonunion employees can accrue a maximum of 200 hours per year of vacation pay. Both
union and nonunion employee may carry over a maximum of two times their annual accrual of vacation
into the next year. Each permanent nonunion full-time employee must use at least 40 hours of vacation
per year. Vacation pay is 100% payable at severance of employment. A maximum of 720 hours can be
accrued for sick leave. After accumulation of 720 hours, a payback of one-half of the amount over 720
hours will be made annually. This related liability is recorded as a salaries payable and is not included in
the compensated absences calcuation. Upon retirement or death before retirement, severance payable
is paid back at one-half of any amount of hours remaining will be made by the commission.
L. PENSIONS
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows
of resources related to pensions, and pension expense, information about the fiduciary net position of
the Public Employees Retirement Association (PERA) and additions to/deductions from PERA's fiduciary
net position have been determined on the same basis as they are reported by PERA. For this purpose,
plan contributions are recognized as of employer payroll paid dates and benefit payments and refunds
are recognized when due and payable in accordance with the benefit terms. Investments are reported at
fair value.
The Commission participates in various pension plans; total pension expense for the year ended
December 31, 2025, was $(181,195). The components of pension expense are noted in the plan
summaries.
M. POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS
Employees of the Commission pay premiums based on a negotiated schedule. Since the insurance rate
is not based on age, the Commission has an implicit rate subsidy factor in postemployment health care
expenses. Additionally, Minnesota Statutes require the Commission to allow retired employees to stay
on the health care plan with the retiree responsible to pay the entire premium for continuation coverage.
The Commission's bargaining agreement and personnel policy do not provide for any contributions upon
employee retirement.
N. LONG-TERM OBLIGATIONS
In the financial statements, long-term liabilities and other long-term obligations are reported as liabilities.
Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective
interest method. Bonds payable are reported net of the applicable bond premium or discount. Lease
liabilities are measured at the present value of payments expected to be made and amortized as a
component of interest expense over the lease term.
O. DEFERRED INFLOWS OF RESOURCES
In addition to liabilities, the statement of financial position will sometimes report a separate section for
deferred inflows of resources. Deferred inflows of resources represents an acquisition of net assets that
applies to a future reporting period. During that future period, it will be recognized as an inflow of
resources (revenue). The Commission has one item that qualifies for reporting in this category on the
financial statements which is related to pensions.
19
HUTCHINSON UTILITIES COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
P. NET POSITION
Net position represents the difference between assets plus deferred outflows of resources and liabilities
plus deferred inflows of resources in the financial statements. Net investment in capital assets consists
of capital assets, net of accumulated depreciation, and right to use assets, net of accumulated
amortization, reduced by the outstanding balance of any long-term liabilities used to build or acquire the
capital and right to use assets. Net position is reported as restricted in the financial statements when
there are limitations on their use through external restrictions imposed by creditors, grantors or laws or
regulations of other governments. Unrestricted net position consists of all other net position that does not
meet the definition of restricted or net investment in capital assets.
Q. BUDGETS AND BUDGETARY ACCOUNTING
The General Manager is responsible for preparing and submitting an annual budget. Budgets are
adopted on a basis consistent with accounting principles generally accepted in the United States of
America.
R. USE OF ESTIMATES
The preparation of the financial statements in conformity with accounting principles generally accepted in
the United States of America requires management to make estimates and assumptions that affect the
reported amount of assets and deferred outflows of resources, and liabilities and deferred inflows of
resources and disclosure of contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period. Actual results could differ
from those estimates.
S. PRIOR YEAR INFORMATION
The basic financial statements include certain prior -year partial comparative information in total but not
at the level of detail required for a presentation in conformity with accounting principles generally
accepted in the United States of America. Accordingly, such information should be read in conjunction
with the Commission's financial statements for the year ended December 31, 2024, from which the
partial information was derived.
NOTE 2. DEPOSITS AND INVESTMENTS
A. DEPOSITS
In accordance with applicable Minnesota Statutes, Hutchinson Utilities Commission maintains deposits
at depository banks authorized by the Commission.
Custodial Credit Risk - Deposits: The Commission's bank balances were not exposed to custodial credit
risk because they were fully insured through the Federal Deposit Insurance Corporation as well as
collateralized with securities held by the pledging financial institution's trust department or agent and in
the Commission's name.
20
HUTCHINSON UTILITIES COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 2. DEPOSITS AND INVESTMENTS (Cont'd)
A. DEPOSITS (Cont'd)
Deposits in Bank
Money Market Accounts
Petty Cash
Total Deposits
B. INVESTMENTS
The Commission had the following investments:
Municipal Bonds
FFCB Bonds
FHLB Bonds
US Treasury Strip
Brokered Certificates of Deposit
Total Investments
$ 1,460,744
15,192
850
$ 1,476,786
Fair
Value
$ 8,226,900
1,062,850
2,578,129
940,992
1,940,569
$ 14,749,440
Interest Rate
Risk
Maturity Date
1-10 years
1 year
1-2 years
1-2 years
1-3 years
The Municipal Bonds had a variety of ratings. The FFCB Bonds and FHLB Bonds were rated AA+. The
Brokered Certificates of Deposit and US Treasury Strip were not rated.
Investment's fair value measurements are as follows:
Investments at fair value:
Municipal Bonds
FFCB Bonds
FHLB Bonds
US Treasury Strip
Brokered Certificates of Deposit
Total Investments at fair value
Investments at Amortized Cost:
Brokered Money Market
Mutual Fund
Total Investments
Fair Value Measuring Unit
Fair Level Level Level
Value Inputs Inputs Inputs
$ 8,226,900 $ $ 8,226,900 $
1,062,850 1,062,850
2,578,129 2,578,129
940,992 940,992
1,940,569 1,940,569
$ 14,749,440 $
2,332,542
$ 17,081,982
0 $ 14,749,440 $ 0
21
HUTCHINSON UTILITIES COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 2. DEPOSITS AND INVESTMENTS (Cont'd)
B. INVESTMENTS (Cont'd)
The following is a summary total of deposits and investments:
Deposits (Note 2.A.) $ 1,476,786
Investments (Note 2.B.) 17,081,982
Total Deposits and Investments $ 18,558,768
Deposits and investments are presented in the basic financial statements as follows:
Current Assets
Cash and Investments $ 15,311,768
Noncurrent Assets
Restricted Assets
Cash and Investments 3,247,000
Total Deposits and Investments
$ 18,558,768
NOTE 3. DEPOSITS AND INVESTMENTS - RESTRICTED
Restricted cash and investments are designated by bond covenants for specific purposes. Restricted cash
consisted of the following:
2025
Public Utility Revenue Refunding Bonds, Series 2012A
Funds required to be held in a debt service reserve account based on
criteria set aside in the bond issuance document. $ 2,072,000
Public Utility Revenue Bonds, Series 2017B
Funds required to be held in a debt service reserve account based on
criteria set aside in the bond issuance document.
Total Cash and Investments - Restricted
22
1,175,000
$ 3,247,000
HUTCHINSON UTILITIES COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 4. INVENTORY
Inventory consists of the following:
Electric Division
Fuel Oil and Lubricants
$ 67,808
Plant Systems Material
19,123
Engine Parts
1,105,023
Distribution Materials
643,216
Transformers
440,625
Total Electric Division
2,275,795
Natural Gas Division
Fittings
205,792
Transmission Line Gas
303,570
Total Natural Gas Division
509,362
Total Inventory $ 2,785,157
NOTE 5. INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS
A. INTERFUND RECEIVABLES AND PAYABLES
The composition of interfund balances is as follows:
Receivable Fund Payable Fund Amount
Gas Fund Electric Fund $ 1,591,323
The purpose of the above interfund loan was to cover negative cash due to construction costs.
23
HUTCHINSON UTILITIES COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 6. CAPITAL ASSETS
Capital and right to use asset activity was as follows:
Beginning Ending
Balance Increase Decrease Balance
Capital Assets, Not Being
Depreciated
Land
$ 559,528
$
$
$ 559,528
Easements
4,030,760
4,030,760
Construction in Progress
2,901,165
9,101,053
(2,105,581)
9,896,637
Total Capital Assets,
Not Being Depreciated
7,491,453
9,101,053
(2,105,581)
14,486,925
Capital Assets, Being Depreciated
Structures and Improvements
116,173,645
1,689,169
117,862,814
Equipment
21,409,411
416,412
(306,696)
21,519,127
Software
208,632
208,632
Total Capital Assets,
Being Depreciated
137,791,688
2,105,581
(306,696)
139,590,573
Right to Use Assets, Being Amortized
Land
Less Accumulated Depreciation for
Structures and Improvements
Equipment
Software
Total Accumulated
Depreciation
Less Accumulated Amortization for
Land
841,316
57,213,485
3,477,467
13,012,582
754,140
172,984
1,514
70,399,051
4,233,121
84,132 28,044
841,316
60,690,952
(306,698) 13,460,024
174,498
(306,698) 74,325,474
112,176
Total Capital and Right to Use
Assets, Being Depreciated
and Amortized, Net 68,149,821 (2,155,584) 2 65,994,239
Net Capital Assets $ 75,641,274 $ 6,945,469 $ (2,105,579) $ 80,481,164
Depreciation and amortization expense was charged to the following functions:
Electric Division
Natural Gas Division
$ 3,084,770
1,176,395
Total Depreciation and Amortization Expense $ 4,261,165
24
HUTCHINSON UTILITIES COMMISSION
NOTE 7
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2025
LONG-TERM LIABILITIES
A. COMPONENTS OF LONG-TERM LIABILITIES
Interest
Rates
Public Utility Revenue Refunding
Bonds, Series 2012A 4.00-5.00%
Public Utility Revenue Bonds, Series 2017B 2.50-4.00%
Bond Premium
Long -Term Leases 2.50%
Compensated Absences
Total Long -Term Liabilities
Final Balance
Maturity Outstanding
12/01/2026 $ 2,080,000
12/01 /2037 11,750,000
568,836
1 /31 /2051 736,975
1,284,421
$ 16,420,232
On July 19, 2012, Hutchinson Utilities Commission issued Public Utility Revenue Refunding Bonds,
Series 2012A for $20,720,000, with an interest rate of 4.00% to 5.00%. The Commission issued the
bonds to advance refund a portion of the 2013 through 2025 maturities of the Public Utility Revenue
Bonds, Series 2003B. The Commission completed the refunding to reduce its debt service payment over
the next 14 years by $1,638,277. This results in an economic gain (difference between the present
values of the debt service payments on the old and new debt) of $1,245,620.
On October 31, 2017, the Hutchinson Utilities Commission issued Public Utility Revenue Bonds of 2017
for $16,675,000. The proceeds of the issue were used to purchase and install new generators for the
expansion of electric generation.
B. MINIMUM DEBT PAYMENTS
Annual debt service requirements to maturity for bonded debt is as follows:
Revenue Refunding Revenue Bonds,
Year Ending Bonds, Series 2012A Series 2017B
December 31 Principal Interest Principal Interest
2026
2027
2028
2029
2030
2030-2035
2036-2037
$ 2,080,000 $ 104,000
$ 820,000 $
361,656
850,000
328,856
885,000
294,856
910,000
272,731
930,000
249,981
5,100,000
813,408
2,255,000
104,864
$ 2,080,000 $ 104,000 $ 11,750,000 $ 2,426,353
25
HUTCHINSON UTILITIES COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 7. LONG-TERM LIABILITIES (Cont'd)
C. CHANGES IN LONG-TERM LIABILITIES
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Revenue Refunding
Bonds, Series
2012A
$ 4,060,000 $
$ (1,980,000)
$ 2,080,000
$ 2,080,000
Revenue Bonds,
Series 2017B
12,540,000
(790,000)
11,750,000
820,000
Bond Premium
787,901
(219,065)
568,836
203,598
Long -Term Leases
758,024
(21,049)
736,975
Compensated
Absences*
985,052
299,369
1,284,421
198,526
Total Long -Term
Liabilities
$ 19,130,977 $
299,369 $ (3,010,114)
$ 16,420,232
$ 3,302,124
* The change in compensated absences liability is presented as a net change.
D. PLEDGED REVENUES
Future revenue pledged for the payment of long-term debt is as follows:
Bond Issue/
Percent
Remaining
Principal
Pledged
Use of Proceeds/
of Total
Term of Principal
and Interest
Revenue
Type
Debt Service
Pledge and Interest
Paid
Received
Revenue Refunding
Bonds,
Series 2012A
Natural Gas
Utility Charges
100%
2012-2026 $ 2,184,000
$ 2,183,000
$ 11,711,866
Revenue Bonds,
Series 2017B
Electric
Utility Charges 100% 2017-2037 14,176,353 1,183,256 30,727,888
W,
HUTCHINSON UTILITIES COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 8. LONG-TERM LEASES
Lease agreements are summarized as follows:
Origination Payment Payment
Date Terms Amount Interest Rate
Solar Array Land Lease 1/31/2022 30 years $ 40,000 2.50%
Current Year
Original Lease Additional Balance
Liability Outflows Outstanding
Solar Array Land Lease $ 841,316 $ 0 $ 736,975
Land was leased by the Commission from the City of Hutchinson to be used to construct and operate a solar
power generating facility starting on 1/31/2022. The lease is for a period of 20 years and can be renewed for
up to two five year extensions. The interest rate on the lease is a fixed rate of 2.50%.
Annual requirements to amortize lease obligations and related interest are as follows:
Year Ending
December 31 Principal Interest
2026 $ $
2027
2028
2029
2030
2031-2035
2036-2040
2041-2045
2046-2050
2051
NOTE 9. RISK MANAGEMENT
21,576
18,424
22,115
17,885
22,668
17,332
23,235
16,765
125,182
74,818
141,632
58,368
160,243
39,757
181,301
18,699
39,023
976
$ 736,975 $
263,024
The Commission purchases commercial insurance coverage through the League of Minnesota Cities
Insurance Trust (LMCIT), which is a public entity risk pool currently operating as a common risk
management and insurance program, with cities in the state. The Commission pays an annual premium to
the LMCIT for its insurance coverage. The LMCIT is self-sustaining through commercial companies for
excess claims. The Commission is covered through the pool for any claims incurred but unreported, but
retains risk for the deductible portion of its insurance policies. The amount of these deductibles is considered
immaterial to the financial statements.
There were no significant reductions in insurance from the previous year or settlements in excess of
insurance coverage for any of the past three fiscal years.
27
HUTCHINSON UTILITIES COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 9. RISK MANAGEMENT (Cont'd)
The Commission's workers' compensation insurance policy is retrospectively rated. With this type of policy,
final premiums are determined after loss experience is known. The amount of premium adjustment for 2025
is estimated to be immaterial based on workers' compensation rates and salaries for the year.
There are no other claims liabilities reported in the funds based on the requirements of accounting
standards, which requires that a liability for claims be reported if information prior to the issuance of the
financial statements indicates it is probable that a liability has been incurred at the date of the financial
statements and the amount of the loss can be reasonably estimated.
NOTE 10. DEFINED BENEFIT PENSION PLANS -STATEWIDE
A. PLAN DESCRIPTION
The Commission participates in the following cost -sharing multiple -employer defined benefit pension
plans administered by the Public Employees Retirement Association of Minnesota (PERA). These plan
provisions are established and administered in accordance with Minnesota Statutes, Chapters 353,
353D, 353E, 353G, and 356. Minnesota Statutes chapter 356 defines each plan's financial reporting
requirements. PERA's defined benefit pension plans are tax qualified plans under Section 401(a) of the
Internal Revenue Code.
General Employees Retirement Plan (GERP; General Employees Plan; accounted for in the General
Employees Fund):
Membership in the General Plan includes employees of counties, cities, townships, schools in non -
certified positions, and other governmental entities whose revenues are derived from taxation, fees, or
assessments. Plan membership is required for any employee who is expected to earn more than $425 in
a month, unless the employee meets exclusion criteria.
B. BENEFITS PROVIDED
PERA provides retirement, disability, and death benefits. Benefit provisions are established by state
statute and can only be modified by the state Legislature. Vested, terminated employees who are
entitled to benefits, but are not receiving them yet, are bound by the provisions in effect at the time they
last terminated their public service. When a member is "vested," they have earned enough service
credit to receive a lifetime monthly benefit after leaving public service and reaching an eligible retirement
age. Members who retire at or over their Social Security full retirement age with at least one year of
service qualify for a retirement benefit.
28
HUTCHINSON UTILITIES COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 10. DEFINED BENEFIT PENSION PLANS -STATEWIDE (Cont'd)
B. BENEFITS PROVIDED (Cont'd)
GERP Benefits:
General Employees Plan requires three years of service to vest. Benefits are based on a member's
highest average salary for any five successive years of allowable service, age, and years of credit at
termination of service. Two methods are used to compute benefits for General Plan members. Members
hired prior to July 1, 1989, receive the higher of the Step or Level formulas. Only the Level formula is
used for members hired after June 30, 1989. Under the Step formula, General Plan members receive
1.20% of the highest average salary for each of the first 10 years of service and 1.70% for each
additional year. Under the Level formula, General Plan members receive 1.70% of highest average
salary for all years of service. For members hired prior to July 1, 1989 a full retirement benefit is
available when age plus years of service equal 90 and normal retirement age is 65. Members can
receive a reduced requirement benefit as early as age 55 if they have three or more years of service.
Early retirement benefits are reduced by .25% for each month under age 65. Members with 30 or more
years of service can retire at any age with a reduction of .25% for each month the member is younger
than age 62. The Level formula allows General Plan members to receive a full retirement benefit at age
65 if they were first hired before July 1, 1989 or at age 66 if they were hired on or after July 1, 1989.
Early retirement begins at age 55 with an actuarial reduction applied to the benefit.
Benefit increases are provided to benefit recipients each January. The postretirement increase is equal
to 50.00% of the cost -of -living adjustment (COLA) announced by the SSA, with a minimum increase of
at least 1.00% and a maximum of 1.50%. The 2025 annual increase was 1.25%. Recipients that have
been receiving the annuity or benefit for at least a full year as of the June 30 before the effective date of
the increase will receive the full increase. Recipients receiving the annuity or benefit for at least one
month but less than a full year as of the June 30 before the effective date of the increase will receive a
prorated increase.
C. CONTRIBUTIONS
Minnesota Statutes chapters 353, 353E, 353G, and 356 set the rates for employer and employee
contributions. Contribution rates can only be modified by the state Legislature
GERP Contributions:
Coordinated Plan members were required to contribute 6.50% of their annual covered salary in fiscal
year 2025 and the Commission was required to contribute 7.50% for Coordinated Plan members. The
Commission's contributions to the General Employees Fund for the year ended December 31, 2025,
were $461,945. The Commission's contributions were equal to the required contributions as set by state
statute.
29
HUTCHINSON UTILITIES COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 10. DEFINED BENEFIT PENSION PLANS -STATEWIDE (Cont'd)
D. PENSION COSTS
GERP Pension Costs:
At December 31, 2025, the Commission reported a liability of $2,113,771 for its proportionate share of
the General Employees Fund's net pension liability. The Commission's net pension liability reflected a
reduction due to the State of Minnesota's contribution of $16 million. The State of Minnesota is
considered a non -employer contributing entity and the state's contribution meets the definition of a
special funding situation. The State of Minnesota's proportionate share of the net pension liability
associated with the Commission totaled $50,991. The net pension liability was measured as of June 30,
2025, and the total pension liability used to calculate the net pension liability was determined by an
actuarial valuation as of that date. The Commission's proportionate share of the net pension liability was
based on the Commission's contributions received by PERA during the measurement period for
employer payroll paid dates from July 1, 2024, through June 30, 2025, relative to the total employer
contributions received from all of PERA's participating employers. The Commission's proportion share
was 0.0638% at the end of the measurement period and 0.0661 % for the beginning of the period.
Commission's Proportionate Share of the Net Pension Liability $ 2,113,771
State of Minnesota's Proportionate Share of the
Net Pension Liability Associated With the Commission 50,991
Total $ 2,164,762
There were no provision changes during the measurement period.
For the year ended December 31, 2025, the Commission recognized pension expense of $(79,407) for
its proportionate share of GERP's pension expense. In addition, the Commission recognized an
additional $(7,821) as pension expense (and grant revenue) for its proportionate share of the State of
Minnesota's contribution of $16 million to the General Employees Fund.
At December 31, 2025, the Commission reported its proportionate share of GERP's deferred outflows of
resources and deferred inflows of resources from the following sources:
30
HUTCHINSON UTILITIES COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 10. DEFINED BENEFIT PENSION PLANS -STATEWIDE (Cont'd)
D. PENSION COSTS (Cont'd)
GERP Pension Costs: (Cont'd)
Differences Between Expected and Actual Economic Experience
Changes in Actuarial Assumptions
Net Difference Between Projected and Actual Investment Earnings
on Pension Plan Investments
Changes in Proportion
Contributions Paid to GERP Subsequent to Measurement Date
Totals
Deferred Deferred
Outflows of Inflows of
Resources Resources
$ 201,444 $
50,942 486,487
841,290
121,767
242,633
$ 495,019 $ 1,449,544
The $242,633 reported as deferred outflows of resources related to pensions resulting from Commission
contributions subsequent to the measurement date will be recognized as a reduction of the net pension
liability in the year ended December 31, 2026. Other amounts reported as deferred outflows and inflows
of resources related to pensions will be recognized in pension expense as follows:
Year ended December 31, Pension Expense Amount
2026 $
(290,762)
2027
(432,946)
2028
(323,165)
2029
(150,285)
E. LONG-TERM EXPECTED RETURN ON INVESTMENT
The State Board of Investment, which manages the investments of PERA, prepares an analysis of the
reasonableness on a regular basis of the long-term expected rate of return using a building-block
method in which best -estimate ranges of expected future rates of return are developed for each major
asset class. These ranges are combined to produce an expected long-term rate of return by weighting
the expected future rates of return by the target asset allocation percentages. The target allocation and
best estimates of geometric real rates of return for each major asset class are summarized in the
following table:
Asset Class Target Allocation Long -Term Expected Real Rate of Return
Domestic Equity
33.50%
International Equity
16.50%
Fixed Income
25.00%
Private Markets
25.00%
100.00%
31
5.10%
5.30%
0.75%
5.90%
HUTCHINSON UTILITIES COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 10. DEFINED BENEFIT PENSION PLANS -STATEWIDE (Cont'd)
F. ACTUARIAL METHODS AND ASSUMPTIONS
The total pension liability for each of the cost -sharing defined benefit plans was determined by an
actuarial valuation as of June 30, 2025, using the entry age normal actuarial cost method. The long-term
rate of return on pension plan investments used to determine the total liability is 7.00%. The 7.00%
assumption is based on a review of inflation and investment return assumptions from a number of
national investment consulting firms. The review provided a range of investment return rates considered
reasonable by the actuary. An investment return of 7.00% is within that range.
Inflation is assumed to be 2.25% for the General Employees Plan. Benefit increases after retirement are
assumed to be 1.50% for the General Employees Plan.
Salary growth assumptions in the General Employees Plan range in annual increments from 11.50%
after one year of service to 3.00% after 27 years of service.
Mortality rates for the General Employees Plan are based on the Pub-2010 General Employee Mortality
Table. The table is adjusted slightly to fit PERA's experience.
Actuarial assumptions for the General Employees Plan are reviewed every four years. The most recent
four-year experience study for the General Employees Plan was completed in 2022. The assumption
changes were adopted by the Board and became effective with the July 1, 2023 actuarial valuation.
PERA anticipates the experience study will be approved by the Legislative Commission on Pensions and
Retirement and become effective with the July 1, 2025 actuarial valuation.
The following changes in actuarial assumptions occurred in 2025:
GERP
Changes in Actuarial Assumptions:
The combined service annuity loading factors increased from 15.00% to 19.00% for vested terminated
members and from 3.00% to 44.00% for non -vested, terminated members.
The assumed post -retirement benefit increase changed from 1.25% to 1.50%.
Changes in Plan Provisions:
The post -retirement benefit increase formula changed to 100.00% of the Social Security annual
increase, between 1.00% and 1.75% , beginning January 1, 2026. If the funded ratio (on a market value
of assets basis) is less than 85.00% for the last two consecutive annual valuations or is less than
80.00% in the most recent actuarial valuation, the maximum is reduced to 1.50%. Previously, the benefit
increase was 50.00% of the Social Security annual increase, between 1.00% and 1.50%.
The 1.00% additional employer contribution is eliminated when the plan reaches 98.00% funded status
(on an actuarial value of assets basis); this contribution was previously scheduled to stop when the plan
reached 100.00% funded status.
32
HUTCHINSON UTILITIES COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 10. DEFINED BENEFIT PENSION PLANS -STATEWIDE (Cont'd)
G DISCOUNT RATE
The discount rate used to measure the total pension liability in 2025 was 7.00%. The projection of cash
flows used to determine the discount rate assumed that contributions from plan members and employers
will be made at rates set in Minnesota Statutes. Based on these assumptions, the fiduciary net position
of the General Employees were projected to be available to make all projected future benefit payments
of current plan members. Therefore, the long-term expected rate of return on pension plan investments
was applied to all periods of projected benefit payments to determine the total pension liability.
H. PENSION LIABILITY SENSITIVITY
The following presents the Commission's proportionate share of the net pension liability (asset) for all
plans it participates in, calculated using the discount rate disclosed in the preceding paragraph, as well
as what the Commission's proportionate share of the net pension liability (asset) would be if it were
calculated using a discount rate one percentage point lower or one percentage point higher than the
current discount rate:
GERP
1.00% Lower 6.00% $ 5,134,017
Current Discount Rate 7.00% 2,113,771
1.00% Higher 8.00% (336,239)
I. PENSION PLAN FIDUCIARY NET POSITION
Detailed information about each pension plan's fiduciary net position is available in a separately -issued
PERA financial report that includes financial statements and required supplementary information. That
report may be obtained on the Internet at www.mnpera.org.
NOTE 11. DEFERRED COMPENSATION PLAN
The Commission offers its employees a deferred compensation plan created in accordance with Internal
Revenue Code Section 457. The plan, available to all Commission employees, permits them to defer a
portion of their salary into future years. Participation in the plan is optional. The deferred compensation is not
available to employees until termination, retirement, death or unforeseeable emergency.
Investments are managed by the plan's trustee under one of four investment options, or a combination
thereof. The choice of the investment option(s) is made by the participants.
NOTE 12. PUBLIC EMPLOYEES DEFINED CONTRIBUTION PLAN
Five Commissioners of the Hutchinson Utilities Commission are covered by the Defined Contribution Plan, a
multiple -employer deferred compensation plan administered by PERA. The Defined Contribution Plan is a
tax qualified plan under Section 401(a) of the Internal Revenue Code and all contributions by or on behalf of
employees are tax deferred until time of withdrawal.
33
HUTCHINSON UTILITIES COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 12. PUBLIC EMPLOYEES DEFINED CONTRIBUTION PLAN (Cont'd)
Plan benefits depend solely on amounts contributed to the plan plus investment earnings, less administrative
expenses. Minnesota Statutes, Chapter 353D and 356, specifies plan provisions, including the employee
and employer contribution rates for those qualified personnel who elect to participate. An eligible elected
official who decides to participate contributes 5.00% of salary which is matched by the elected official's
employer. Employees who are paid for their services may elect to make member contributions in an amount
not to exceed the employer share. Employer and employee contributions are combined and used to
purchase shares in one or more of the seven accounts of the Minnesota Supplemental Investment Fund. For
administering the plan, PERA receives 2.00% of employer contributions and 0.25% of the assets in each
member's account annually.
Total contributions made by the Commission during fiscal year 2025 were:
Contribution Amount Percentage of Covered Payroll
Employee Employer Employee Employer Required Rate
Commissioners $ 1,370 $ 1,370 5.00% 5.00% 5.00%
NOTE 13. OTHER POST -EMPLOYMENT BENEFITS (OPEB) PLAN
A. PLAN DESCRIPTION
The Commission operates a single -employer retiree benefit plan (the Plan) that provides health, dental,
and life insurance to eligible employees and their spouses through the Commission's commercial
insurance plans. There are 50 active participants and 1 retired participants. Benefit and eligibility
provisions are established through negotiations between the Commission and employee groups
including a union. The union contract is renegotiated each two-year bargaining period. The Plan does
not issue a publicly available financial report. No assets are accumulated in a trust that meets all of the
criteria in GASB Statement No. 75, paragraph 4.
B. TOTAL OPEB LIABILITY
The Commission's total OPEB liability of $56,282 was measured as of December 31, 2024, and was
determined by an actuarial valuation as of that date. Update procedures were used to roll forward the
total OPEB liability to December 31, 2025.
34
HUTCHINSON UTILITIES COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 13. OTHER POST -EMPLOYMENT BENEFITS (OPEB) PLAN (Cont'd)
C. CHANGES IN TOTAL OPEB LIABILITY
Changes in the total OPEB liability were as follows:
Total OPEB
Liability
Beginning of Year $ 53,173
Changes for the Year
Service Cost 3,243
Interest 2,110
Changes of Assumptions or Other Inputs (1,355)
Benefit Payments (889)
Net Changes 3,109
End of Year $ 56,282
Changes of assumptions and other inputs reflect a change in the discount rate from 3.77% in 2024 to
4.08% in 2025.
Sensitivity of the total OPEB liability to changes in the discount rate. The following presents the total
OPEB liability of the Commission, as well as what the Commission's total OPEB liability would be if it
were calculated using a discount rate that is 1-percentage-point lower (3.08%) or 1-percentage-point
higher (5.08%) than the current discount rate:
Total OPEB Liability
1.00% Decrease 1.00% Increase
in Discount Discount Rate in Discount
Rate (3.08%) (4.08%) Rate (5.08%)
$ 60,723 $ 56,282 $ 52,049
Sensitivity of the total OPEB liability to changes in the healthcare cost trend rates. The following presents
the total OPEB liability of the Commission, as well as what the Commission's total OPEB liability would
be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower (7.60%
decreasing to 2.90%) or 1-percentage-point higher (9.60% decreasing to 4.90%) than the current
healthcare cost trend rates:
Healthcare Cost
1.00% Decrease
Trend Rates
1.00% Increase
(7.60%
(8.60%
(9.60%
decreasing
decreasing
decreasing
to 2.90%)
to 3.90%)
to 4.90%)
Total OPEB Liability $ 49,936
$ 56,282
$ 63,537
35
HUTCHINSON UTILITIES COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 13. OTHER POST -EMPLOYMENT BENEFITS (OPEB) PLAN (Cont'd)
D. OPEB EXPENSE, DEFERRED OUTFLOWS OF RESOURCES AND DEFERRED INFLOWS OF
RESOURCES RELATED TO OPEB
For the year ended December 31, 2025, the Commission recognized OPEB expense of $3,030. At
December 31, 2025, the Commission reported deferred outflows of resources and deferred inflows of
resources related to OPEB from the following sources:
Deferred Deferred
Outflows of Inflows of
Resources Resources
Contributions Paid Subsequent to Measurement Date $ 969 $
$969 reported as deferred outflows of resources related to OPEB resulting from the Commission
contributions subsequent to the measurement date will be recognized as a reduction of the total OPEB
liability in the year ended December 31, 2026.
E. ACTUARIAL METHODS AND ASSUMPTIONS
I@]
The total OPEB liability in the December 31, 2023 actuarial valuation was determined using the following
actuarial assumptions and other inputs, applied to all periods included in the measurement, unless
otherwise specified:
Inflation
Salary Increases
Healthcare Cost Trend Rates
Retiree's Share of Benefit -Related Costs
2.50%
Based on the most recently disclosed
assumptions for the pension plan in which the
employee participates.
8.60% for 2025, gradually decreasing over
several decades to an ultimate rate of 3.90% for
2075 and later years.
Assumed to increase with healthcare trend rates.
A discount rate of 4.08% was applied in the measurement of the total OPEB liability. The discount rate is
based on the index rate for 20-year, tax-exempt general obligation municipal bonds with an average
rating of AA/Aa or higher.
Mortality rates were based on assumptions for General Employees used in the July 1, 2023 PERA of
Minnesota Retirement Plan actuarial valuations, PUB-2010 General mortality tables with projected
mortality improvements based on a scale MP-2021, and other adjustments.
The actuarial assumptions used in the December 31, 2023 valuation were based on the results of an
actuarial experience study for the period January 1, 2024— December 31, 2024.
NOTE 14. MAJOR CUSTOMERS
The Electric Division derived approximately 44.38% of utility revenue from the top five major customers.
The Natural Gas Division derived approximately 50.06% of its utility revenue from the top five major
customers.
REP
HUTCHINSON UTILITIES COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 15. RECLASSIFICATIONS
Certain immaterial prior year financial statement amounts have been reclassified to conform to the current
year's presentation. There was no affect on total net position.
NOTE 16. COMMITMENTS
A. PURCHASED POWER
The Commission is committed to purchase 25 MW of its power requirements from Missouri River
Energy Services pursuant to the Power Sale Agreement dated April 28, 2010. This contract is effective
through January 1, 2046.
B. PAYMENT IN LIEU OF TAXES
The Commission is committed to contribute a portion of its total operating revenue to the City of
Hutchinson in lieu of the payment of taxes pursuant to the Resolution No. 14853 dated February 10,
2018.
C. CONSTRUCTION COMMITMENTS
The Commission had the following projects in progress:
Contract Remaining
Project Amount Commitment
Substation Transformer $ 11,311,323 $ 5,715,806
NOTE 17. DEFERRED OUTFLOWS AND INFLOWS OF RESOURCES
The following is a summary of the major components of deferred outflows and inflows as presented in the
Statement of Net Position:
Related to Pensions
Related to OPEB
Total
Deferred Deferred
Outflows of Inflows of
Resources Resources
$ 495,019 $ 1,449,544
969
$ 495,988 $ 1,449,544
37
HUTCHINSON UTILITIES COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 18. PRIOR PERIOD ADJUSTMENT
The net investment in capital assets net position balances have been restated to reflect a correction of an
error. In the Commission's December 31, 2024 financial statements, the capital asset restricted cash for
payment of capital debt amount was incorrectly included in the calculation for net investment in capital
assets. The Electric Division December 31, 2024 net investment in capital assets balance has been restated
from $36,868,023 to $35,684,770 (a decrease of $1,183,256) and the restricted net position for 2024 has
been restated from $0 to $1,183,256 (an increase of $1,183,256). The Natural Gas Division December 31,
2024 net investment in capital assets balance has been restated from $23,882,579 to $21,810,579 (a
decrease of $2,072,000) and the restricted net position for 2024 has been restated from $0 to $2,072,000
(an increase of $2,072,000). The Commission December 31, 2024 net investment in capital assets balance
has been restated from $60,750,605 to $57,495,349 (a decrease of $3,255,256). As a result the restricted
net position for 2024 has been restated to $3,255,256.
38
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REQUIRED SUPPLEMENTARY INFORMATION
This page intentionally left blank
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HUTCHINSON UTILITIES COMMISSION
SCHEDULE OF EMPLOYER CONTRIBUTIONS
DECEMBER 31, 2025
Contributions
in Relation
Statutorily
to the Statutorily Contribution
Required
Required Deficiency Covered
Fiscal Year Contribution
Contribution (Excess) Payroll
Ending (a)
(b) (a-b) (d)
Pensions
GERP
12/31 /2025
12/31 /2024
12/31 /2023
12/31 /2022
12/31 /2021
12/31 /2020
12/31 /2019
12/31 /2018
12/31 /2017
12/31 /2016
Contributions
as a Percentage
of Covered
Payroll
(b/d)
$ 461,945 $
461,945 $
$ 6,159,267
7.50%
428,792
428,792
5,717,227
7.50%
405,709
405,709
5,409,453
7.50%
388,459
388,459
5,179,453
7.50%
376,462
376,462
5,019,493
7.50%
367,734
367,734
4,903,120
7.50%
351,656
351,656
4,688,747
7.50%
337,735
337,735
4,503,133
7.50%
314,977
314,977
4,201,039
7.50%
310,915
310,915
4,145,538
7.50%
See Accompanying Notes to the Required Supplementary Information
40
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This page intentionally left blank
HUTCHINSON UTILITIES COMMISSION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
DECEMBER 31, 2025
NOTE 1. CHANGES IN PLAN PROVISIONS
A. GENERAL EMPLOYEE RETIREMENT PLAN (GERP)
2025 Changes:
The post -retirement benefit increase formula changed to 100% of the Social Security annual increase,
between 1 % and 1.75%, beginning January 1, 2026. If the funded ratio (on a market value of assets basis)
is less than 85% for the last two consecutive annual valuations or is less than 80% in the most recent
actuarial valuation, the maximum is reduced to 1.5%. Previously, the benefit increase was 50% of the
Social Security annual increase, between 1 % and 1.5%.
The 1 % additional employer contribution is eliminated when the plan reaches 98% funded status (on an
actuarial value of assets basis); this contribution was previously scheduled to stop when the plan reached
100% funded status.
2024 Changes:
The workers' compensation offset for disability benefits was eliminated. The actuarial equivalent factors
updated to reflect the changes in assumptions.
2023 Changes:
An additional one-time direct state aid contribution of $170.1 million will be contributed to the Plan on
October 1, 2023.
The vesting period of those hired after June 30, 2010, was changed from five years of allowable service to
three years of allowable service.
The benefit increase delay for early retirements on or after January 1, 2024, was eliminated.
A one-time, non -compounding benefit increase of 2.50% minus the actual 2024 adjustment will be payable
in a lump sum for calendar year 2024, by March 31, 2024.
2022 Changes:
There have been no changes since the prior valuation.
2021 Changes:
There have been no changes since the prior valuation.
2020 Changes:
Augmentation for current privatized members was reduced to 2.00% for the period July 1, 2020, through
December 31, 2023, and 0.00% after. Augmentation was eliminated for privatizations occurring after June
30, 2020.
42
HUTCHINSON UTILITIES COMMISSION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
DECEMBER 31, 2025
NOTE 1. CHANGES IN PLAN PROVISIONS (Cont'd)
A. GENERAL EMPLOYEE RETIREMENT PLAN (GERP) (Cont'd)
2019 Changes:
The employer supplemental contribution was changed prospectively, decreasing from $31.0 million to
$21.0 million per year. The State's special funding contribution was changed prospectively, requiring $16.0
million due per year through 2031.
2018 Changes:
The augmentation adjustment in early retirement factors is eliminated over a five-year period starting July
1, 2019, resulting in actuarial equivalence after June 30, 2024.
Interest credited on member contributions decreased from 4.00% to 3.00%, beginning July 1, 2018.
Deferred augmentation was changed to 0.00%, effective January 1, 2019. Augmentation that has already
accrued for deferred members will still apply.
Contribution stabilizer provisions were repealed.
Postretirement benefit increases were changed from 1.00% per year with a provision to increase to 2.50%
upon attainment of 90.00% funding ratio to 50.00% of the Social Security Cost of Living Adjustment, not
less than 1.00% and not more than 1.50%, beginning January 1, 2019.
For retirements on or after January 1, 2024, the first benefit increase is delayed until the retiree reaches
normal retirement age; does not apply to Rule of 90 retirees, disability benefit recipients, or survivors.
Actuarial equivalent factors were updated to reflect revised mortality and interest assumptions.
2017 Changes:
The State's contribution for the Minneapolis Employees Retirement Fund equals $16 million in 2017 and
2018, and $6 million thereafter.
The Employer Supplemental Contribution for the Minneapolis Employees Retirement Fund changed from
$21 million to $31 million in calendar years 2019 to 2031. The state's contribution changed from $16 million
to $6 million in calendar years 2019 to 2031.
2016 Changes:
There have been no changes since the prior valuation.
B. OTHER POST -EMPLOYMENT BENEFITS (OPEB) PLAN NOT ADMINISTERED IN A TRUST
2025 Changes:
There have been no changes since the prior valuation
43
HUTCHINSON UTILITIES COMMISSION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
DECEMBER 31, 2025
NOTE 1. CHANGES IN PLAN PROVISIONS (Cont'd)
B. OTHER POST -EMPLOYMENT BENEFITS (OPEB) PLAN NOT ADMINISTERED IN A TRUST (Cont'd)
2024 Changes:
Retiree premiums were update to current levels.
2023 Changes:
There have been no changes since the prior valuation.
2022 Changes:
Retiree premiums were update to current levels.
2021 Changes:
There have been no changes since the prior valuation.
2020 Changes:
Retiree premiums were update to current levels.
2019 Changes:
There have been no changes since the prior valuation.
2018 Changes:
There have been no changes since the prior valuation.
NOTE 2. CHANGES IN ACTUARIAL ASSUMPTIONS
A. GENERAL EMPLOYEE RETIREMENT PLAN (GERP)
2025 Changes:
The combined service annuity loading factors increased from 15% to 19% for vested terminated members
and from 3% to 44% for non -vested, terminated members.
The assumed post -retirement benefit increase changed from 1.25% to 1.5%.
2024 Changes:
Rates of merit and seniority were adjusted, resulting in slightly higher rates.
Assumed rates of retirement were adjusted as follows: increase the rate of assumed unreduced
retirements, slight adjustments to Rule of 90 retirement rates, and slight adjustments to early retirement
rates for Tier 1 and Tier 2 members.
44
HUTCHINSON UTILITIES COMMISSION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
DECEMBER 31, 2025
NOTE 2. CHANGES IN ACTUARIAL ASSUMPTIONS (Cont'd)
A. GENERAL EMPLOYEE RETIREMENT PLAN (GERP) (Cont'd)
2024 Changes: (Cont'd)
Minor increase in assumed withdrawals for males and females.
Lower rates of disability.
Continued use of Pub-2010 general mortality table with slight rate adjustments as recommended in the
most recent experience study.
Minor changes to form of payment assumptions for male and female retirees.
Minor changes to assumptions made with respect to missing participant data.
2023 Changes:
The investment return assumption and single discount rate were changed from 6.50% to 7.00%.
2022 Changes:
The mortality improvement scale was changed from Scale MP-2020 to Scale MP-2021.
2021 Changes:
The investment return and single discount rates were changed from 7.50% to 6.50%, for financial reporting
purposes.
The mortality improvement scale was changed from Scale MP-2019 to Scale MP-2020.
2020 Changes:
The price inflation assumption was decreased from 2.50% to 2.25%.
The payroll growth assumption was decreased from 3.25% to 3.00%.
Assumed salary increase rates were changed as recommended in the June 30, 2019 experience study.
The net effect is assumed rates that average 0.25% less than previous rates.
Assumed rates of retirement were changed as recommended in the June 30, 2019 experience study. The
changes result in more unreduced (normal) retirements and slightly fewer Rule of 90 and early retirements.
Assumed rates of termination were changed as recommended in the June 30, 2019 experience study. The
new rates are based on service and are generally lower than the previous rates for years 2-5 and slightly
higher thereafter.
45
HUTCHINSON UTILITIES COMMISSION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
DECEMBER 31, 2025
NOTE 2. CHANGES IN ACTUARIAL ASSUMPTIONS (Cont'd)
A. GENERAL EMPLOYEE RETIREMENT PLAN (GERP) (Cont'd)
2020 Changes: (Cont'd)
Assumed rates of disability were changed as recommended in the June 30, 2019 experience study. The
change results in fewer predicted disability retirements for males and females.
The base mortality table for healthy annuitants and employees was changed from the RP-2014 table to the
Pub-2010 General Mortality table, with adjustments. The base mortality table for disabled annuitants was
changed from the RP-2014 disabled annuitant mortality table to the Pub-2010 General/Teacher disabled
annuitant mortality table, with adjustments.
The mortality improvement scale was changed from Scale MP-2018 to Scale MP-2019.
The assumed spouse age difference was changed from two years older for females to one year older.
The assumed number of married male new retirees electing the 100.00% Joint & Survivor option changed
from 35.00% to 45.00%. The assumed number of married female new retirees electing the 100.00% Joint
& Survivor option changed from 15.00% to 30.00%. The corresponding number of married new retirees
electing the Life annuity option was adjusted accordingly.
2019 Changes:
The mortality projection scale was changed from MP-2017 to MP-2018.
2018 Changes:
The mortality projection was changed from MP-2015 to MP-2017.
The assumed benefit increase was changed from 1.00% per year through 2044 and 2.50% per year
thereafter to 1.25% per year.
2017 Changes:
The combined service annuity (CSA) loads were changed from 0.80% for active members and 60.00% for
vested and non -vested deferred members. The revised CSA loads are now 0.00% for active member
liability, 15.00% for vested deferred member liability and 3.00% for non -vested deferred member liability.
The assumed post -retirement benefit increase rate was changed from 1.00% per year for all years to
1.00% per year through 2044 and 2.50% per year thereafter.
2016 Changes:
The assumed post -retirement benefit increase rate was changed for 1.00% per year through 2035 and
2.50% per year thereafter to 1.00% per year for all years.
The assumed investment return was changed from 7.90% to 7.50%. The single discount rate was changed
from 7.90% to 7.50%.
HUTCHINSON UTILITIES COMMISSION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
DECEMBER 31, 2025
NOTE 2. CHANGES IN ACTUARIAL ASSUMPTIONS (Cont'd)
A. GENERAL EMPLOYEE RETIREMENT PLAN (GERP) (Cont'd)
2016 Changes: (Cont'd)
Other assumptions were changed pursuant to the experience study dated June 30, 2015. The assumed
future salary increases, payroll growth, and inflation were decreased by 0.25% to 3.25% for payroll growth
and 2.50% for inflation.
B. OTHER POST -EMPLOYMENT BENEFITS (OPEB) PLAN NOT ADMINISTERED IN A TRUST
2025 Changes:
The discount rate was changed from 3.77% to 4.08% based on updated 20-year municipal bond rates.
2024 Changes:
The discount rate was changed from 4.05% to 3.77% based on updated 20-year municipal bond rates.
Healthcare trend rates were reset to reflect updated cost increase expectations.
Medical per capita claims costs were updated to reflect recent experience.
Withdrawal, mortality, and salary increase rates were updated from the rates used in the July 1, 2023
PERA General Employees Plan valuation to the rates used in the 2023 experience study.
The inflation assumption was changed from 2.25% to 2.50% based on an updated historical analysis of
inflation rates and forward -looking market expectations.
The payroll growth rate was changed from 3.00% to 3.25% based on an update in the underlying inflation
assumption.
2023 Changes:
The discount rate was changed from 1.84% to 4.05% based on the updated 20-year municipal bond rates.
2022 Changes:
The discount rate was changed from 2.00% to 1.84% based on the updated 20-year municipal bond rates.
Healthcare trend rates were reset to reflect updated cost increase expectations.
Medical per capita claims costs were update to reflect recent experience.
Withdrawal, mortality, and salary increase rates were updated from the rates used in the July 1, 2019
PERA General Employees Plan valuation to the rates used in the July 1, 2021 valuation.
2021 Changes:
The discount rate was changed from 2.75% to 2.00% based on the updated 20-year municipal bond rates.
47
HUTCHINSON UTILITIES COMMISSION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
DECEMBER 31, 2025
NOTE 2. CHANGES IN ACTUARIAL ASSUMPTIONS (Cont'd)
B. OTHER POST -EMPLOYMENT BENEFITS (OPEB) PLAN NOT ADMINISTERED IN A TRUST (Cont'd)
2020 Changes:
The inflation assumption was changed from 2.50% to 2.25% based on an updated historical analysis of
inflation rates and forward -looking market expectations.
The discount rate was changed from 3.71 % to 2.75% based on the updated 20-year municipal bond rates.
Healthcare trend rates were reset to reflect updated cost increase expectations.
Medical per capita claims costs were update to reflect recent experience.
Mortality and salary increase rates were update from the rates used in the July 1, 2017 PERA General
Employees Plan valuation to the rates used in the July 1, 2019 valuation.
The inflation assumption was changed from 2.75% to 2.50% based on an updated historical analysis of
inflation rates and forward -looking market expectations.
2019 Changes:
The index rate for 20 year, tax-exempt municipal bonds used in the determination of the discount rate was
changed from 3.31 % to 3.71 %.
Healthcare trend rates were reset to reflect updated cost increase expectations, including an adjustment to
reflect the impact of the Affordable Care Act's Excise Tax on high -cost health insurance plans.
2018 Changes:
There have been no changes since the prior valuation.
48
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SUPPLEMENTARY INFORMATION
This page intentionally left blank
HUTCHINSON UTILITIES COMMISSION
COMBINING STATEMENT OF NET POSITION
DECEMBER 31, 2025
ASSETS AND DEFERRED OUTFLOWS OF RESOURCES
Assets
Current Assets
Cash and Investments
Receivables
Accounts Receivable (Net of Allowance for Doubtful Accounts of
$69,711 and $66,977, Respectively)
Interest Receivable
Sales Tax Receivable
Inventory
Prepaid Items
Due from Other Funds
Total Current Assets
Noncurrent Assets
Restricted Assets
Cash and Investments
Capital and Right to Use Assets
Natural
Electric Gas
Division Division Total
$ 15,311,768 $ 15,311,768
1,989,118
1,805,357
3,794,475
49,785
49,785
99,570
121,584
121,584
2,275,795
509,362
2,785,157
140,090
89,912
230,002
1,591,323
1,591,323
4,576,372
19,357,507
23,933,879
1,175,000
2,072,000
3,247,000
Assets Not Being Depreciated or Amortized
10,586,804
3,900,121
14,486,925
Other Capital and Right to Use Assets, Net of Depreciation and Amortization
44,226,315
21,767,924
65,994,239
Net Capital Assets
54,813,119
25,668,045
80,481,164
Total Noncurrent Assets
55,988,119
27,740,045
83,728,164
Total Assets
60,564,491
47,097,552
107,662,043
Deferred Outflows of Resources
Total Assets and Deferred Outflows of Resources
LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION
Liabilities
Current Liabilities
Accounts Payable
Customer Deposits
Unearned Revenue
Accrued Expenses
Interest
Salaries Payable
Due to Other Funds
Total Current Liabilities
Long -Term Liabilities
Net Pension Liability
Total OPEB Liability
Other Long -Term Liabilities Due Within One Year
Other Long -Term Liabilities Due in More Than One Year
Total Long -Term Liabilities
Total Liabilities
Deferred Inflows of Resources
Net Position
Net Investment in Capital Assets
Restriced for Debt Service
Unrestricted
Total Net Position
Total Liabilities, Deferred Inflows of Resources and Net Position
49
371,991 123,997 495,988
$ 60,936,482 $ 47,221,549 $ 108,158,031
$ 1,430,218 $
1,240,075
$ 2,670,293
222,088
119,586
341,674
238,222
228,880
467,102
30,138
8,667
38,805
110,963
29,118
140,081
1,591,323
1,591,323
3,622,952
1,626,326
5,249,278
1,585,328
528,443
2,113,771
42,211
14,071
56,282
998,371
2,303,753
3,302,124
12,860,437
257,671
13,118,108
15,486,347
3,103,938
18,590,285
19,109,299
4,730,264
23,839,563
1,087,158
362,386
1,449,544
41,927,449
23,417,904
65,345,353
1,175,000
2,072,000
3,247,000
(2,362,424)
16,638,995
14,276,571
40,740,025
42,128,899
82,868,924
$ 60,936,482 $ 47,221,549 $ 108,158,031
HUTCHINSON UTILITIES COMMISSION
COMBINING SCHEDULE OF REVENUES AND EXPENSES
YEAR ENDED DECEMBER 31, 2025
OPERATING REVENUES
Electric Energy Sales
Natural Gas Sales
Other Operating Revenues
Total Operating Revenues
OPERATING EXPENSES
Production
Operations
Maintenance
Purchased Power/Gas
Other Power Supply
Transmission
Operations
Maintenance
Distribution
Operations
Maintenance
Customer Accounts Expense
Sales Expense
Administrative and General
Depreciation and Amortization Expense
Contribution to City of Hutchinson
Total Operating Expenses
Operating Income (Loss)
NONOPERATING REVENUES (EXPENSES)
Interest Income
Merchandise and Contract Work, Net
Miscellaneous Income
Gain (Loss) on Disposal of Assets
Bond Premium
Interest Expense
Total Nonoperating Revenues (Expenses)
Change in Net Position
NET POSITION, BEGINNING OF YEAR
Electric Natural Gas
Division Division Total
$ 30,727,888 $ $ 30,727,888
11,711,866 11,711,866
166,513 2,866,525 3,033,038
30,894,401 14,578,391 45,472,792
4,860,798
4,860,798
1,161,093
1,161,093
12,385,247
7,391,426
19,776,673
351,474
351,474
2,964,927
327,377
3,292,304
73,521
74,557
148,078
1,312,709
1,027,415
2,340,124
988,005
281,705
1,269,710
325,490
276,647
602,137
105,086
82,218
187,304
1,679,626
1,050,497
2,730,123
3,084,770
1,176,395
4,261,165
1,345,802
596,826
1,942,628
30,638,548
12,285,063
42,923,611
255,853
2,293,328
2,549,181
593,538
583,527
1,177,065
(65,238)
19,038
(46,200)
108,663
68,964
177,627
22,450
22,450
33,457
185,608
219,065
(401,575)
(200,501)
(602,076)
291,295
656,636
947,931
547,148
2,949,964
3,497,112
40,192,877
39,178,935
79,371,812
NET POSITION, END OF YEAR $ 40,740,025 $ 42,128,899 $ 82,868,924
50
HUTCHINSON UTILITIES COMMISSION
SCHEDULE OF DIVISIONS CASH FLOWS
YEAR ENDED DECEMBER 31, 2025
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from Customers
Payments Received from Other Sources
Payments to Suppliers
Payments to Employees
Net Cash Provided (Used) by Operating Activities
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Interfund Activity
Other Noncapital Income (Expense)
Net Cash Provided (Used) by
Noncapital Financing Activities
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Additions to Utility Plant
Sale of Assets
Principal Payments on Long -Term Liabilities
Interest Paid on Long -Term Liabilities
Net Cash Provided (Used) by Capital
and Related Financing Activities
CASH FLOWS FROM INVESTING ACTIVITIES
Interest Income
Net Increase (Decrease) in Cash and Cash Equivalents
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS, END OF YEAR
RECONCILIATION OF CASH AND CASH EQUIVALENTS
Current Assets - Cash and Investments
Restricted Assets - Cash and Investments
Total Cash and Cash Equivalents
See Accompanying Notes to the Financial Statements
51
Electric Natural Gas
Division Division Total
$ 30,813,299 $ 11,634,294 $ 42,447,593
442,161
2,866,525
3,308,686
(24,408,304)
(9,060,688)
(33,468,992)
(4,421,569)
(2,033,932)
(6,455,501)
2,425,587
3,406,199
5,831,786
1,591,323
(1,591,323)
43.425
88.002
131.427
1,634,748 (1,503,321) 131,427
(8,482,941)
(618,112) (9,101,053)
22,448
22,448
(811,049)
(1,980,000) (2,791,049)
(404,208)
(208,751) (612,959)
(9,675,750) (2,806,863) (12,482,613)
618,067 608,056 1,226,123
(4,997,348) (295,929) (5,293,277)
6,172,348 17,679,697 23,852,045
$ 1,175,000 $ 17,383,768 $ 18,558,768
$ $ 15,311,768 $ 15,311,768
1,175,000 2,072,000 3,247,000
$ 1,175,000 $ 17,383,768 $ 18,558,768
HUTCHINSON UTILITIES COMMISSION
SCHEDULE OF DIVISIONS CASH FLOWS
YEAR ENDED DECEMBER 31, 2025
RECONCILIATION OF OPERATING INCOME (LOSS) TO CASH
FLOWS FROM OPERATING ACTIVITIES
Operating Income (Loss)
Adjustments to Reconcile Operating Income (Loss) to Net Cash
Provided (Used) by Operating Activities
Depreciation and Amortization
Pension Related Adjustments
OPEB Related Adjustments
(Increase) Decrease in Assets
Accounts Receivable
Sales Tax Receivable
Inventory
Prepaid Items
Increase (Decrease) in Liabilities
Accounts Payable
Customer Deposits
Unearned Revenue
Salaries Payable
Compensated Absences
Net Cash Provided (Used) by Operating Activities
NONCASH FINANCING ACTIVITIES
Amortization of Premium on Bonds Payable
Electric Natural Gas
$ 255,853 $ 2,293,328 $ 2,549,181
3,084,770
1,176,395
4,261,165
(483,384)
(161,127)
(644,511)
2,272
758
3,030
45,769
(135,419)
(89,650)
275,648
275,648
(277,417)
35,904
(241,513)
(74,846)
(62,580)
(137,426)
(447,076)
156,640
(290,436)
30,592
16,472
47,064
9,050
41,375
50,425
(190,627)
(59,933)
(250,560)
194,983
104,386
299,369
$ 33,457 $ 185,608 $ 219,065
52
HUTCHINSON UTILITIES COMMISSION
STATEMENT OF NET POSITION
ELECTRIC DIVISION
DECEMBER 31, 2025
WITH PARTIAL COMPARATIVE AMOUNTS AS OF DECEMBER 31. 2024
ASSETS AND DEFERRED OUTFLOWS OF RESOURCES
Assets
Current Assets
Cash and Investments
Receivables
Accounts Receivable (Net of Allowance for Doubtful Accounts of
$69,711 and $37,461, Respectively)
Interest Receivable
Sales Tax Receivable
Inventory
Prepaid Items
Total Current Assets
Noncurrent Assets
Restricted Assets
Cash and Investments
Capital and Right to Use Assets
Assets Not Being Depreciated or Amortized
Other Capital and Right to Use Assets, Net of Depreciation and Amortization
Net Capital Assets
Total Noncurrent Assets
Total Assets
Deferred Outflows of Resources
Total Assets and Deferred Outflows of Resources
LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION
Liabilities
Current Liabilities
Accounts Payable
Customer Deposits
Unearned Revenue
Accrued Expenses
Interest
Salaries Payable
Due to Other Funds
Total Current Liabilities
Long -Term Liabilities
Net Pension Liability
Total OPEB Liability
Other Long -Term Liabilities Due Within One Year
Other Long -Term Liabilities Due in More Than One Year
Total Long -Term Liabilities
Total Liabilities
Deferred Inflows of Resources
Net Position
Net Investment in Capital Assets
Restriced for Debt Service
Unrestricted
Total Net Position
Total Liabilities, Deferred Inflows of Resources and Net Position
2025 2024
4,989,092
1,989,118
2,034,887
49,785
74,314
121,584
397,232
2,275,795
1,998,378
140,090
65,244
4,576,372
9,559,147
1,175, 000 1,183,256
10,586,804 3,591,534
44,226,315 45,823,412
54,813,119 49,414,946
55,988,119 50,598,202
60,564, 491 60,157,349
371,991 342,759
$ 60,936,482 $ 60,500,108
1,430,218 $ 1,877,294
222,088 191,496
238,222 229,172
30,138
32,771
110,963
301,590
1,591,323
3,622,952
2,632,323
1,585,328
1,832,248
42,211
39,880
998,371
851,947
12,860,437
13,656, 384
15, 486, 347
16,380,459
19,109, 299
19,012,782
1,087,158 1,294,449
41,927,449
35,684,770
1,175, 000
1,183,256
(2,362,424)
3,324,851
40,740,025
40,192,877
$ 60,936,482 $ 60,500,108
53
HUTCHINSON UTILITIES COMMISSION
DETAILED SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
BUDGET AND ACTUAL - ELECTRIC DIVISION
YEAR ENDED DECEMBER 31, 2025
WITH PARTIAL COMPARATIVE AMOUNTS FOR THE YEAR ENDED DECEMBER 31, 2024
OPERATING REVENUES
Utility Revenues
Residential
General Service
Industrial
Street Lighting
Resale
Total Utility Revenues
Other Operating Revenues
Penalties/Fees
Security Lights
Total Other Operating Revenues
Total Operating Revenues
OPERATING EXPENSES
Production
Operations
Supervision and Engineering
Other Employee Benefits
Station
Gas for Generation
Transportation
Waste Disposal
Total Operations
Maintenance
Structures
Generating Units
Other Equipment
Total Maintenance
Total Production
Power Costs
Purchased Power
Budget
2025 2024
Over (Under)
Actual Budget Actual
$ 6,486,293 $ 6,288,332 $ (197,961) $ 6,040,987
9,990,633
10,023,369
32,736
9,050,761
9,011,237
7,491,674
(1,519,563)
8,644,375
121,054
121,336
282
124,399
3,490,250
6,803,177
3,312,927
3,656,427
29,099,467
30,727,888
1,628,421
27,516,949
135,000
156,881
21,881
144,740
9,500
9,632
132
9,495
144,500
166,513
22,013
154,235
29,243,967
30,894,401
1,650,434
27,671,184
1,226,219
1,375,574
149,355
1,294,157
880,732
426,096
(454,636)
684,278
197,200
295,902
98,702
192,058
1,126,000
1,991,899
865,899
1,048,044
727,666
727,666
724,600
35,000
43,661
8,661
38,402
4,192,817
4,860,798
667,981
3,981,539
26,000
6,536
(19,464)
19,620
636,977
762,219
125,242
601,410
284,000
392,338
108,338
285,444
946,977
1,161,093
214,116
906,474
5,139,794
6,021,891
882,097
4,888,013
12,605,893
12,385,247
(220,646)
11,904,189
54
HUTCHINSON UTILITIES COMMISSION
DETAILED SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
BUDGET AND ACTUAL - ELECTRIC DIVISION
YEAR ENDED DECEMBER 31, 2025
WITH PARTIAL COMPARATIVE AMOUNTS FOR THE YEAR ENDED DECEMBER 31, 2024
OPERATING EXPENSES (Cont'd)
Other Power Supply
Supervision and General Salaries
Professional Services
Total Other Power Supply
Transmission
Operations
Transmission
Station
Total Operations
Maintenance
Plant and Equipment
Total Transmission
Distribution
Operations
Supervision and Engineering
Other Employee Benefits
Line
Meter
Territory Service Agreement
Other
Total Operations
Maintenance
Station Equipment
Underground Lines
Lines Transformers
Street Lighting
Other Equipment
Total Maintenance
Total Distribution
Customer Accounts Expense
Meter Reading
Collection
Other Employee Benefits
Uncollectible Accounts
Customer Services
Meetings and Training
Total Customer Accounts Expense
2025
2024
Over (Under)
Budget
Actual
Budget
Actual
$ 299,407
$ 311,824
$ 12,417
$ 292,166
49,800
39,650
(10,150)
36,600
349,207
351,474
2,267
328,766
3,015,064
2,734,140
(280,924)
2,522,972
212,000
230,787
18,787
223,701
3,227,064
2,964,927
(262,137)
2,746,673
32,097
73,521
41,424
84,576
3,259,161
3,038,448
(220,713)
2,831,249
629,808
533,936
(95,872)
494,968
464,676
426,308
(38,368)
460,430
191,911
130,562
(61,349)
265,044
15,926
32,593
16,667
34,115
2,156
2,156
164,000
187,154
23,154
158,275
1,466,321
1,312,709
(153,612)
1,412,832
26,718
31,131
4,413
32,473
402,951
414,899
11,948
527,734
37,800
198,036
160,236
38,260
105,231
260,362
155,131
255,168
56,169
83,577
27,408
61,150
628,869
988,005
359,136
914,785
2,095,190
2,300,714
205,524
2,327,617
31,566
5,111
(26,455)
33,710
183,277
187,380
4,103
185,225
18,000
21,041
3,041
22,365
4,000
35,838
31,838
(17,174)
48,889
76,115
27,226
70,799
1,650
5
(1,645)
1,276
287,382
325,490
38,108
296,201
55
HUTCHINSON UTILITIES COMMISSION
DETAILED SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
BUDGET AND ACTUAL - ELECTRIC DIVISION
YEAR ENDED DECEMBER 31, 2025
WITH PARTIAL COMPARATIVE AMOUNTS FOR THE YEAR ENDED DECEMBER 31, 2024
OPERATING EXPENSES (Cont'd)
Sales Expense
Salaries
Conservation
Total Sales Expense
Administrative and General
Supervision and General Salaries
Office Supplies
Outside Services Employed
Property Insurance
Medical Insurance
Other Employee Benefits
Regulatory
Commissioners Salaries
Travel
Miscellaneous
Maintenance of General Plant
Total Administrative and General
Depreciation and Amortization Expense
Contribution to City of Hutchinson
Budget
$ 56,763
255,499
312,262
2025
2024
Over (Under)
Actual
Budget
Actual
$ 46,973
$ (9,790)
$ 47,433
58,113
(197,386)
96,798
105,086
(207,176)
144,231
579,462
542,781
(36,681)
568,023
319,462
339,835
20,373
293,650
75,907
96,767
20,860
71,811
331,014
337,862
6,848
324,841
104,476
90,318
(14,158)
106,009
109,100
102,503
(6,597)
113,584
900
420
(480)
375
15,836
15,883
47
15,808
7,000
4,728
(2,272)
3,695
73,346
74,434
1,088
68,383
66,593
74,095
7,502
64,719
1,683,096
1,679,626
(3,470)
1,630,898
3,200,000
3,084,770
(115,230)
3,188,060
Payment in Lieu of Taxes
1,345,802
1,345,802
1,345,803
Lighting
252,620
Total Contributions to City of Hutchinson
1,345,802
1,345,802
0
1,598,423
Total Operating Expenses
30,277,787
30,638,548
360,761
29,137,647
Operating Income (Loss)
(1,033,820)
255,853
1,289,673
(1,466,463)
NONOPERATING REVENUES (EXPENSES)
Interest Income
300,000
593,538
293,538
620,831
Merchandise and Contract Work, Net
(65,238)
(65,238)
(26,401)
Miscellaneous Income
46,626
108,663
62,037
77,850
Gain (Loss) on Disposal of Assets
22,450
22,450
60,871
Bond Premium
33,457
33,457
33,457
Interest Expense
(394,732)
(401,575)
(6,843)
(432,134)
Total Nonoperating Revenues (Expenses)
(14,649)
291,295
305,944
334,474
Change in Net Position
$ (1,048,469)
547,148
$ 1,595,617
(1,131,989)
NET POSITION, BEGINNING OF YEAR
NET POSITION, END OF YEAR
56
40,192,877 41,324,866
$ 40,740,025 $ 40,192,877
HUTCHINSON UTILITIES COMMISSION
STATEMENT OF NET POSITION
NATURAL GAS DIVISION
DECEMBER 31, 2025
WITH PARTIAL COMPARATIVE AMOUNTS AS OF DECEMBER 31, 2024
2025
2024
ASSETS AND DEFERRED OUTFLOWS OF RESOURCES
Assets
Current Assets
Cash and Investments
$ 15,311,768 $
15,607,697
Receivables
Accounts Receivable (Net of Allowance for Doubtful Accounts of
$66,977 and $30,650, Respectively)
1,805,357
1,669,938
Interest Receivable
49,785
74,314
Inventory
509,362
545,266
Prepaid Items
89,912
27,332
Due from Other Funds
1,591,323
Total Current Assets
19,357,507
17,924,547
Noncurrent Assets
Restricted Assets
Cash and Investments
2,072,000
2,072,000
Capital and Right to Use Assets
Assets Not Being Depreciated or Amortized
3,900,121
3,899,919
Other Capital and Right to Use Assets, Net of Depreciation and Amortization
21,767,924
22,326,409
Net Capital Assets
25,668,045
26,226,328
Total Noncurrent Assets
27,740,045
28,298,328
Total Assets
47,097,552
46,222,875
Deferred Outflows of Resources
123,997
114,253
Total Assets and Deferred Outflows of Resources
$ 47,221,549 $
46,337,128
LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION
Liabilities
Current Liabilities
Accounts Payable
$ 1,240,075 $
1,083,435
Customer Deposits
119,586
103,114
Unearned Revenue
228,880
187,505
Accrued Expenses
Interest
8,667
16,917
Salaries Payable
29,118
89,051
Total Current Liabilities
1,626,326
1,480,022
Long -Term Liabilities
Net Pension Liability 528,443 610,749
Total OPEB Liability 14,071 13,293
Other Long -Term Liabilities Due Within One Year 2,303,753 2,174,084
Other Long -Term Liabilities Due in More Than One Year 257,671 2,448,562
Total Long -Term Liabilities 3,103,938 5,246,688
Total Liabilities 4,730,264 6,726,710
Deferred Inflows of Resources 362,386 431,483
Net Position
Net Investment in Capital Assets 23,417,904 21,810,579
Restricted for Debt Service 2,072,000 2,072,000
Unrestricted 16,638,995 15,296,356
Total Net Position 42,128,899 39,178,935
Total Liabilities, Deferred Inflows of Resources and Net Position $ 47,221,549 $ 46,337,128
57
HUTCHINSON UTILITIES COMMISSION
DETAILED SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
BUDGET AND ACTUAL - NATURAL GAS DIVISION
YEAR ENDED DECEMBER 31, 2025
WITH PARTIAL COMPARATIVE AMOUNTS FOR THE YEAR ENDED DECEMBER 31, 2024
Budget
2025 2024
Over (Under)
Actual Budget Actual
OPERATING REVENUES
Utility Revenues
Residential
$ 3,942,877
$ 3,636,316
$ (306,561)
$ 3,526,225
Commercial
2,865,310
2,560,549
(304,761)
2,526,865
Industrial
5,623,741
5,515,001
(108,740)
5,234,322
Total Utility Revenues
12,431,928
11,711,866
(720,062)
11,287,412
Other Operating Revenues
Gas Transportation Contract - New Ulm
822,278
826,179
3,901
754,398
Transportation - Electric Division
727,666
727,666
724,600
Penalties/Fees
52,000
56,407
4,407
55,177
Gas Transportation Contract - Other
1,248,940
1,256,273
7,333
1,249,056
Total Other Operating Revenues
2,850,884
2,866,525
15,641
2,783,231
Total Operating Revenues
15,282,812
14,578,391
(704,421)
14,070,643
OPERATING EXPENSES
Purchased Natural Gas
7,650,274
7,391,426
(258,848)
7,263,560
Transmission
Operations
Supervision and Engineering
175,361
147,150
(28,211)
184,962
Other
81,500
180,227
98,727
152,868
Total Operations
256,861
327,377
70,516
337,830
Maintenance
Supervision and Engineering
2,165
674
(1,491)
7,068
Other
38,000
73,883
35,883
2,963
Total Maintenance
40,165
74,557
34,392
10,031
Total Transmission
297,026
401,934
104,908
347,861
Distribution
Operations
Supervision and Engineering
258,829
219,046
(39,783)
179,285
Other Employee Benefits
530,606
335,475
(195,131)
348,006
Mains and Services
277,582
379,034
101,452
135,746
Meters
91,800
54,216
(37,584)
36,243
Other
51,200
39,644
(11,556)
44,811
Total Operations
1,210,017
1,027,415
(182,602)
744,091
Maintenance
Mains and Services
268,036
228,903
(39,133)
280,700
Meters
16,545
11,859
(4,686)
18,891
Other Equipment
60,500
40,943
(19,557)
91,029
Total Maintenance
345,081
281,705
(63,376)
390,620
Total Distribution
1,555,098
1,309,120
(245,978)
1,134,711
58
HUTCHINSON UTILITIES COMMISSION
DETAILED SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
BUDGET AND ACTUAL - NATURAL GAS DIVISION
YEAR ENDED DECEMBER 31, 2025
WITH PARTIAL COMPARATIVE AMOUNTS FOR THE YEAR ENDED DECEMBER 31, 2024
OPERATING EXPENSES (Cont'd)
Customer Accounts Expense
Meter Reading
Collection
Other Employee Benefits
Uncollectible Accounts
Customer Services
Meetings and Training
Total Customer Accounts Expense
Sales Expense
Salaries
Conservation
Total Sales Expense
Administrative and General
Supervision and General Salaries
Office Supplies
Outside Services Employed
Property Insurance
Medical Insurance
Other Employee Benefits
Regulatory
Commissioners Salaries
Travel
Miscellaneous
Maintenance of General Plant
Total Administrative and General
Depreciation and Amortization Expense
Contribution to City of Hutchinson
Payment in Lieu of Taxes
Total Operating Expenses
Operating Income (Loss)
2025
2024
Over (Under)
Budget
Actual
Budget
Actual
$ 6,827
$ 4,561
$ (2,266)
$ 31,583
169,045
153,228
(15,817)
152,191
9,000
17,799
8,799
19,621
1,000
38,756
37,756
(20,154)
40,000
62,276
22,276
57,927
1,350
27
(1,323)
1,044
227,222
276,647
49,425
242,212
56,763
46,972
(9,791)
47,432
135,646
35,246
(100,400)
55,611
192,409
82,218
(110,191)
103,043
436,952
490,789
53,837
474,371
121,354
124,636
3,282
108,805
35,969
59,665
23,696
35,957
74,513
75,952
1,439
77,700
65,871
64,229
(1,642)
66,576
93,100
81,126
(11,974)
90,454
60,000
47,538
(12,462)
53,574
10,558
10,589
31
10,539
4,000
3,536
(464)
3,045
46,000
48,044
2,044
42,559
57,951
44,393
(13,558)
52,603
1,006,268
1,050,497
44,229
1,016,183
1,110,000
1,176,395
66,395
1,124,576
596,824
596,826
2
596,825
12,635,121
12,285,063
(350,058)
11,828,971
2,647,691
2,293,328
(354,363)
2,241,672
59
HUTCHINSON UTILITIES COMMISSION
DETAILED SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
BUDGET AND ACTUAL - NATURAL GAS DIVISION
YEAR ENDED DECEMBER 31, 2025
WITH PARTIAL COMPARATIVE AMOUNTS FOR THE YEAR ENDED DECEMBER 31, 2024
2025
Budget
NONOPERATING REVENUES (EXPENSES)
2024
Over (Under)
Actual Budget Actual
Interest Income
$ 300,000
$ 583,527 $
283,527
$ 620,411
Merchandise and Contract Work, Net
(13,500)
19,038
32,538
49,595
Miscellaneous Income
25,107
68,964
43,857
892,360
Gain (Loss) on Disposal of Assets
13,550
Bond Premium
185,608
185,608
185,609
Interest Expense
(204,275)
(200,501)
3,774
(278,632)
Total Nonoperating
Revenues (Expenses)
292,940
656,636
363,696
1,482,893
Change in Net Position
$ 2,940,631
2,949,964 $
9,333
3,724,565
NET POSITION, BEGINNING OF YEAR
39,178,935
35,454,370
NET POSITION, END OF YEAR
$ 42,128,899
$ 39,178,935
:1
COMPLIANCE SECTION
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INDEPENDENT AUDITOR'S REPORT ON MINNESOTA LEGAL COMPLIANCE
Members of the Hutchinson Utilities Commission
Hutchinson, Minnesota
We have audited, in accordance with auditing standards generally accepted in the United States of America and the
standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General
of the United States, the financial statements of Hutchinson Utilities Commission, a fund of the City of Hutchinson,
Minnesota, as of and for the year ended December 31, 2025, and the related notes to the financial statements, which
collectively comprise the Commission's basic financial statements, and have issued our report thereon dated March 25,
2026.
In connection with our audit, nothing came to our attention that caused us to believe that the Commission failed to comply
with the provisions of the contracting -bid laws, depositories of public funds and investments, conflicts of interest, public
indebtedness, claims and disbursements, and miscellaneous provisions of the Minnesota Legal Compliance Audit Guide
for Cities, promulgated by the State Auditor pursuant to Minn. Stat. § 6.65, insofar as they relate to accounting matters.
However, our audit was not directed primarily toward obtaining knowledge of such noncompliance. Accordingly, had we
performed additional procedures, other matters may have come to our attention regarding the Commission's
noncompliance with the above referenced provisions, insofar as they relate to accounting matters.
The purpose of this report is solely to describe the scope of our testing of compliance and the results of that testing, and
not to provide an opinion on compliance. Accordingly, this communication is not suitable for any other purpose.
cfJY1a,,�, Z)uz,% 4 �✓%�i r / G-F
CONWAY, DEUTH & SCHMIESING, PLLP
CPAS & ADVISORS
LITCHFIELD, MINNESOTA
March 25, 2026
Willmar Office
331 Third St SW, Ste 2
PO Box 570
Willmar, MN 56201
(320) 235-3311
(888( 388-1040
61
wwww w a dsw; pa coun
Litchfield Office
820 Sibley Ave H
Leitchfield, MN 55355
(3 ,0) 693.7975
Sarlell Office
Ste 110
2351 ConnecticutAve
Sarlell, MN 5637'7
(320) 2 52-7565
(800) 862-1337'
Mernbem Ainerican institute of certified Public Accountants, Minnesota Society of Certified Public Accountants
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INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN
AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
Members of the Hutchinson Utilities Commission
Hutchinson, Minnesota
We have audited in accordance with auditing standards generally accepted in the United States of America and the
standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General
of the United States, the financial statements of Hutchinson Utilities Commission, a fund of the City of Hutchinson,
Minnesota, as of and for the year ended December 31, 2025, and the related notes to the financial statements, which
collectively comprise the Commission's basic financial statements, and have issued our report thereon dated March 25,
2026.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Commission's internal control over
financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances
for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion
on the effectiveness of the Commission's internal control. Accordingly, we do not express an opinion on the effectiveness
of the Commission's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements
on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that
there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or
detected and corrected on a timely basis. A significant deficiency is a deficiency, or combination of deficiencies, in
internal control that is less severe than a material weakness, yet important enough to merit attention by those charged
with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was
not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies.
Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be
material weaknesses or significant deficiencies. However, material weaknesses or significant deficiencies may exist that
have not been identified.
Willmar Office
331 Thirst 5t SK Ste 2
PO Box 570
`+, ilirnnar, MIN 56201
(320) 233..3311
(888) 388-1040
em on Office
11209Pacific Ave,Ste3
Benson, MIN56215
(320) 843 2;302
62
nrr°ry r r 1(-, a.r. rrn
Liithf'ieildl Office
820 Sibley Ave N
Litchfield, MIN 55355
1320) 3-7975
artelil Office
Ste 110
2351 C:onnerticutAve
Sartelill, MN 56377
(320) 232-7565
(800) 3 2-1337
Micnnbers: Arnericarn Institute of Certified Puiatic Accountants, Minnesota Socrety of: Certified PuNic Accountants
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Commission's financial statements are free from material
misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant
agreements, noncompliance with which could have a direct and material effect on the determination of financial
statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit,
and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or
other matters that are required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the result
of that testing, and not to provide an opinion on the effectiveness of the Commission's internal control or on compliance.
This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering
the Commission's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Cone', Z)h cA ,;&s1 , �-Lim
CONWAY, DEUTH & SCHMIESING, PLLP
CPAS & ADVISORS
LITCHFIELD, MINNESOTA
March 25, 2026
63
HUTCHINSON UTILITIES COMMISSION
Finding
Reference
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
DECEMBER 31, 2025
Year Finding If Not Corrected, Provide Planned
Finding Title Status Initially Occurred Corrective Action or Other Explanation
Financial Statement Findings:
None
Minnesota Legal Compliance Findings:
None
64
HUTCHINSON UTILITIES COMMISSION
MANAGEMENT LETTER
DECEMBER 31, 2025
CONWAY, DEUTH & SCHMIESING, PLLP
CPAS & ADVISORS
LITCHFIELD, MINNESOTA
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HUTCHINSON UTILITIES COMMISSION
TABLE OF CONTENTS
DECEMBER 31, 2025
gdeft
Required Communications 1-5
Comparative Financial Data 6
Graphical Information 7-14
Schedule of Findings on Accounting Issues and Internal Controls 15
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Members of the Hutchinson Utilities Commission
Hutchinson, Minnesota
We have audited the financial statements of the Hutchinson Utilities Commission, a fund of the City of Hutchinson,
Minnesota, as of and for the year ended December 31, 2025, and have issued our report thereon dated March 25, 2026.
Professional standards require that we advise you of the following matters relating to our audit.
Our Responsibility in Relation to the Financial Statement Audit
As communicated in our engagement letter dated January 6, 2026, our responsibility, as described by professional
standards, is to form and express an opinion(s) about whether the financial statements that have been prepared by
management with your oversight are presented fairly, in all material respects, in accordance with accounting principles
generally accepted in the United States of America. Our audit of the financial statements does not relieve you or
management of your respective responsibilities.
Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather
than absolute, assurance about whether the financial statements are free of material misstatement. An audit of financial
statements includes consideration of the system of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity's internal control over financial reporting. Accordingly, as part of our audit, we considered the
system of internal control of the Commission solely for the purpose of determining our audit procedures and not to
provide any assurance concerning such internal control.
We are also responsible for communicating significant matters related to the audit that are, in our professional judgment,
relevant to your responsibilities in overseeing the financial reporting process. However, we are not required to design
procedures for the purpose of identifying other matters to communicate to you.
We have provided our findings regarding significant control deficiencies over financial reporting and material
noncompliance, and other matters noted during our audit in a separate letter March 25, 2026.
Planned Scope and Timing of the Audit
We conducted our audit consistent with the planned scope and timing we previously communicated to you.
Compliance with All Ethics Requirements Regarding Independence
The engagement team, others in our firm, as appropriate, and our firm have complied with all relevant ethical
requirements regarding independence.
Wittman Office
3311 Third at 5W, Ste 2
PO Box 570
"ppw'"yw,��`ryryilpyl'�pa"ynary, MIN 56201
5320) 235"..7311,,',..
(888) 388-1040
Litchfield Office
820 Sibley Ave N
Litchfieicl, MN 55355
(320) 693.7975
Srtetl Office
Ste 110
2351 CcnnecticuartAve
S arte (1, MN 56377
4320) 252.7565
(800) 862-1337
Members: American Institute of Certified PuNic Accountants„ Minnesota Society of C'ertufied Pubbc Accetuntarls
The following safeguards have been applied to eliminate identified threats to independence or to reduce them to an
acceptable level:
• Management oversight of review of work performed by individual with appropriate skills, knowledge and
experience to oversee our services.
Technical review performed by an individual who is not a member of the engagement team with sufficient
technical expertise and experience.
Significant Risks Identified
We have identified the following significant risks:
• Management Override of Controls — Management override of internal control is considered a risk in
substantially all engagements as management may be incentivized to produce better results.
• Revenue Recognition — This risk is considered significant because incomplete or inaccurate reporting of
revenues for the period could result in material misstatements if all revenues earned are not properly captured
in the financial statements.
• Expense & Accounts Payable -This risk is considered significant because if expenses or expenditures are not
properly accrued and recorded in the correct accounting period, it could result in material misstatements in the
financial statements.
Qualitative Aspects of the Entity's Significant Accounting Practices
Significant Accounting Policies
Management has the responsibility to select and use appropriate accounting policies. A summary of the significant
accounting policies adopted by the Commission is included in Note 1 to the financial statements. There have been no
initial selection of accounting policies and no changes in significant accounting policies or their application during 2025
No matters have come to our attention that would require us, under professional standards, to inform you about (1) the
methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in
controversial or emerging areas for which there is a lack of authoritative guidance or consensus.
Significant Accounting Estimates and Related Disclosures
Accounting estimates and related disclosures are an integral part of the financial statements prepared by management
and are based on management's current judgments. Those judgments are normally based on knowledge and experience
about past and current events and assumptions about future events. Certain accounting estimates are particularly
sensitive because of their significance to the financial statements and because of the possibility that future events
affecting them may differ markedly from management's current judgments.
The most sensitive accounting estimates affecting the financial statements are:
• Estimated useful lives of depreciable capital assets
• Estimated compensated absences liability
• Estimated pension on other post -employment benefit liabilities and related items
• Estimated lease terms and discount rates
• Estimated fair value of investments
Management's estimate of useful lives for depreciable assets is based on policies set by the Commission. The useful life
of a depreciable asset determines the amount of depreciation that will be recorded in any given reporting period as well
as the amount of accumulated depreciation that is reported at the end of a reporting period.
Management's estimate of compensated absences liability is based on current employee pay rates, accumulated unpaid
leave balances, and the Commission's policies regarding vacation, sick leave, and other compensated absences. The
estimate also considers assumptions regarding the likelihood that employees will utilize or forfeit accrued leave in the
future. Changes in these assumptions or in Commission policies could have a significant effect on the amounts reported.
Management's estimate of pension and other post -employment benefit liabilities and related items is based on actuarial
valuations performed by consultants specializing in those areas.
Management's estimates of lease terms and discount rates on leases are based on information stated in the agreements
and expectations of the lease. The terms and discount rates determine the amount of amortization of right to use assets
and interest expense that will be recorded during each reporting period as well as the amount of right to use assets,
accumulated amortization and lease liability that is reported at the end of a reporting period.
Management's estimate of the fair value of investments is based on the selection of valuation techniques and significant
assumptions (unobservable inputs), rather than directly quoted market prices, which creates high measurement
uncertainty and makes the estimate highly sensitive to changes in those assumptions.
We evaluated the factors and assumptions used to develop the accounting estimates listed above and determined that it
is reasonable in relation to the basic financial statements taken as a whole and in relation to the applicable opinion units.
Financial Statement Disclosures
Certain financial statement disclosures involve significant judgment and are particularly sensitive because of their
significance to financial statement users. The basic financial statement disclosures are neutral, consistent and clear.
Significant Difficulties Encountered during the Audit
We encountered no significant difficulties in dealing with management relating to the performance of the audit.
Uncorrected and Corrected Misstatements
For purposes of this communication, professional standards also require us to accumulate all known and likely
misstatements identified during the audit, other than those that we believe are trivial, and communicate them to the
appropriate level of management. Further, professional standards require us to also communicate the effect of
uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or
disclosures, and the financial statements as a whole and each applicable opinion unit. Management has corrected all
such misstatements.
In addition, professional standards require us to communicate to you all material, corrected misstatements that were
brought to the attention of management as a result of our audit procedures. The following material misstatements that we
identified as a result of our audit procedures were brought to the attention of, and corrected by, management and are
available by request from management.
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not
resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to
the Commission's financial statements or the auditor's report. No such disagreements arose during the course of the
audit.
Representations Requested from Management
We have requested certain written representations from management, which are included in the attached letter dated
March 25, 2026.
3
Management's Consultations with Other Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters.
Management informed us that, and to our knowledge, there were no consultations with other accountants regarding
auditing and accounting matters.
Other Significant Matters, Findings, or Issues
In the normal course of our professional association with the Commission, we generally discuss a variety of matters,
including the application of accounting principles and auditing standards, significant events or transactions that occurred
during the year, operating and regulatory conditions affecting the entity, and operational plans and strategies that may
affect the risks of material misstatement. None of the matters discussed resulted in a condition to our retention as the
Commission's auditors.
Other Information Included in Annual Reports
Pursuant to professional standards, our responsibility as auditors for other information, whether financial or nonfinancial,
included in the Commission's annual reports, does not extend beyond the information identified in the audit report, and
we are not required to perform any procedures to obtain assurance about such other information.
We applied certain limited procedures to the Management's Discussion and Analysis, the Schedule of Proportionate
Share of the Net Pension Liability, Schedule of Employer Contributions, and the Schedule of Changes in the
Commission's Total OPEB Liability as listed in the table of contents, which are required supplementary information that
supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the
methods of preparing the information and comparing the information for consistency with management's responses to
our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial
statements. We did not audit the required supplementary information and do not express an opinion or provide any
assurance on the required supplementary information.
We were engaged to report on the statements and schedules listed in the table of contents as supplementary
information, which accompany the financial statements but are not required supplementary information. With respect to
this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods
of preparing the information to determine that the information complies with accounting principles generally accepted in
the United States of America, the method of preparing it has not changed from the prior period, and the information is
appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the
supplementary information to the underlying accounting records used to prepare the financial statements or to the
financial statements themselves.
We were not engaged to report on the Orgainzational Date, which accompany the financial statements but are not
required supplementary information. Such information has not been subjected to the auditing procedures applied in the
audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it.
Our responsibility also includes communicating to you any information which we believe is a material misstatement of
fact. Nothing came to our attention that caused us to believe that such information, or its manner of presentation, is
materially inconsistent with the information, or manner of its presentation, appearing in the financial statements.
4
This report is intended solely for the information and use of the Commission, and management of the Commission and is
not intended to be and should not be used by anyone other than these specified parties.
CONWAY, DEUTH & SCHMIESING, PLLP
CPAS & ADVISORS
LITCHFIELD, MINNESOTA
March 25, 2026
5
This page intentionally left blank
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HUTCHINSON UTILITIES COMMISSION
ELECTRIC DIVISION
Operating Revenues & Expenses and Net Nonoperating Revenues (Expenses)
$35,000,000
$29, 696, 029
$30,463,813 $32,116,526 $30,894,401 $30,638,548
$30,000,000 $29349429 27 671 184 $29,137, 647
$29,884,530 $28,202,457
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
$0 $437,386 $334,474 $291,295
$(345,928) $(842,544)
-$5,000,000
2021 2022 2023 2024 2025
®Total Operating Revenues ®Total Operating Expenses ®Net Nonoperating Revenues (Expenses)
Change in Net Position
$1,000,000
$547,148
$500,000
$0
-$500,000
$ (534, 429)
$(709,586)
-$1,000,000
$(1,131,989)
-$1,500,000
-$2,000,000
-$2,500,000
$(2,495,257)
-$3,000,000
2021 2022 2023 2024 2025
®Change in Net Position
7
HUTCHINSON UTILITIES COMMISSION
ELECTRIC DIVISION
Major Revenue by Source
11 000 000.......................................................................................................................................................................................................................................................................................................................................................................................................................................................
$10,000,000
$9,000,000
$8,000,000
$7,000,000
$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$0
2021 2022 2023 2024 2025
■Residential ®General Service 0Industrial
Purchased Power & Fuel Costs Compared to Total Sales
$35,000,000
$30,000,000
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
$0
2021 2022 2023 2024 2025
®Purchased Power - Electric ®Total Electric Sales
L�:
HUTCHINSON UTILITIES COMMISSION
ANALYSIS OF OPERATIONS
ELECTRIC DIVISION
YEARS ENDED DECEMBER 31, 2025 AND 2024
The Statement of Revenues and Expenses set forth the results of the operations in detail for the years ended December
31, 2025 and 2024. Operating revenues, kilowatt hours (KWH) sold, and average revenue per kilowatt hour sold by class
of service are as follows:
Year Ended December 31, 2025
Revenue Per
Amount KWH Sold KWH
INWIN&
Residential
$ 6,017,211
54,553,056 $
0.1103
All Electric
271,121
2,502,879
0.1083
Small General Service
1,900,781
17,881,801
0.1063
Large General Service
8,122,588
92,559,960
0.0878
Industrial
7,491,674
96,872,000
0.0773
Sale for Resale
6,806,177
42,459,000
0.1603
Street Lighting
121,336
31,266
3.8808
$ 30,730,888
306,859,962 $
0.1001
Year Ended December 31, 2024
Revenue Per
Amount
KWH Sold
KWH
INWIN&
Residential
$ 5,797,023
52,253,044 $
0.1109
All Electric
243,964
2,242,174
0.1088
Small General Service
1,841,287
17,334,013
0.1062
Large General Service
7,209,474
77,961,863
0.0925
Industrial
8,644,375
109,141,000
0.0792
Sale for Resale
3,656,427
18,020,000
0.2029
Street Lighting
124,399
31,446
3.9560
$ 27,516,949
276,983,540 $
0.0993
M
HUTCHINSON UTILITIES COMMISSION
ANALYSIS OF OPERATIONS
ELECTRIC DIVISION
YEARS ENDED DECEMBER 31, 2025 AND 2024
KWH Sold
31,266
Street Lighting
31,446
42, 459, 000
Sale for Resale
18,020,000
96, 872, 000
Industrial
109,141,000
92, 5
59,960
Large General Service
77,961,863
17,881,801
Small General Service
17,334,013
2,502,879
All Electric
2, 442,174
54, 553, 056
Residential
52,253,044
0
50,000,000
100,000,000 150,000,000
02025 KWH Sold
®2024 KWH Sold
Street Lighting
Sale for Resale
Industrial
Large General Service
Small General Service
All Electric
Residential
Average $/KWH
I.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00
02025 Revenue Per KWH 02024 Revenue Per KWH
10
HUTCHINSON UTILITIES COMMISSION
NATURAL GAS DIVISION
Operating Revenues & Expenses and Net Nonoperating Revenues (Expenses)
063
i, 636
Change in Net Position
$4, 000, 000
$3, 500, 000
$3,724,565
$3, 000, 000
$2,949,964
$2,500,000
$2,346,080
$2, 000, 000
$1,500,000
$1,000,000
$1,187,743 $1,153,613
$500,000
$0
2021 2022 2023 2024 2025
®Change in Net Position
HUTCHINSON UTILITIES COMMISSION
NATURAL GAS DIVISION
Major Revenue by Source
$7,000,000
$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$0 -1[ 1 !]1 1
2021 2022 2023 2024 2025
®Residential ®Commercial 0Industrial
12
HUTCHINSON UTILITIES COMMISSION
ANALYSIS OF OPERATIONS
NATURAL GAS DIVISION
YEARS ENDED DECEMBER 31, 2025 AND 2024
The Statement of Revenues and Expenses set forth the results of the operations in detail for the years ended December
31, 2025 and 2024. Operating revenues, cubic feet sold, and average revenue per thousand cubic feet sold by class of
service are as follows:
CLASS
Residential
Commercial
Large Industrial
CLASS
Residential
Commercial
Large Industrial
Year Ended December 31, 2025
Revenue Per
Thousand
Amount CF Sold MCF
$ 3,636,316
2,560,549
5,515,001
$ 11,711,866
Amount
419,927,409 $
8.6594
319,004,351
8.0267
829,667,950
6.6472
1,568,599,710 $
7.4664
Year Ended December 31, 2024
$ 3,526,225
2,526,865
5,234,322
$ 11,287,412
Revenue Per
Thousand
CF Sold MCF
367,176,151 $ 9.6036
282,949,225 8.9305
773,724,270 6.7651
1,423,849,646 $ 7.9274
13
HUTCHINSON UTILITIES COMMISSION
ANALYSIS OF OPERATIONS
NATURAL GAS DIVISION
YEARS ENDED DECEMBER 31, 2025 AND 2024
CF Sold
Average $/MCF
14
This page intentionally left blank
HUTCHINSON UTILITIES COMMISSION
SCHEDULE OF FINDINGS ON ACCOUNTING ISSUES AND INTERNAL CONTROLS
DECEMBER 31, 2025
We noted certain matters involving the internal control structure and its operation that we consider being deficiencies in
internal control under standards established by the American Institute of Certified Public Accountants. A deficiency in
internal control exists when the design or operation of a control does not allow management or employees, in the normal
course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis.
INTERNAL CONTROL
The objective of internal accounting control is to provide reasonable, but not absolute, assurance as to the safeguarding
of assets against loss from unauthorized use or disposition, and the reliability of financial records for preparing financial
statements and maintaining accountability for assets. The concept of reasonable assurance recognizes that the cost of a
system of internal accounting control should not exceed the benefits derived and also recognizes that the valuation of
these factors necessarily requires estimates and judgments by management.
It should be recognized that within the Commission, an inherent risk is present with certain positions. It is very common
for entities such as Hutchinson Utilities Commission, to assign many major responsibilities to a few key individuals in an
attempt to operate within limited budgets. The inherent risk is again addressed only to maintain the awareness of the
internal control structure and to encourage the Commission's continual review of financial information at monthly
meetings.
GENERAL RECOMMENDATIONS
Throughout the course of the audit, we spoke with management regarding certain items that we see as an opportunity to
improve. None of these were considered significant within the scope of the audit. The items discussed requiring action
have been resolved or are in the process of resolution. We would like to acknowledge the assistance and courtesies
extended to us by the personnel of the Hutchinson Utilities Commission.
The Governmental Accounting Standards Board (GASB) issued Statement No. 103, Financial Reporting Model
Improvements, to improve key components of the financial reporting model to enhance its effectiveness in providing
information that is essential for decision -making and assessing a government's accountability. This Statement addresses
presentation requirements across proprietary fund financial statements, and may impact how certain transactions and
financial data are reported. In addition, GASB 103 incorporates changes and clarifications to the reporting of the
Management's Discussion and Analysis and budgetary comparison information. The Statement is effective for fiscal
years beginning after June 15, 2025.
The Governmental Accounting Standards Board (GASB) issued Statement No. 104, Disclosure of Certain Capital Assets,
to provide users of government financial statements with essential and more detailed information about specific types of
capital assets. This Statement requires governments to separately disclose, by major asset class, lease assets, intangible
right -to -use assets, and subscription -based information technology assets, in addition to other intangible assets. GASB
104 also introduces new disclosure requirements for capital assets held for sale, including information on historical cost,
accumulated depreciation, and related collateralized debt. The Statement is effective for fiscal years beginning after June
15, 2025.
We recommend that management of the Commission begin the process of evaluating the impact of implementation of
these standards. Changes may be necessary to your financial records and it will benefit the Commission to begin this
process now. If requested, Conway, Deuth and Schmiesing, PLLP will assist in the implementation. These services will
be billed separate from, and in addition to, your annual audit engagement fees. Please contact us with any questions.
15
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HUTCHINSON UTILITIES COMMISSION
COMBINED DIVISIONS
FINANCIAL REPORT FOR FEBRUARY, 2026
Combined Division
Customer Revenue
Sales for Resale
NG Transportation
Electric Division Transfer
Other Revenues
Interest Income
TOTAL REVENUES
Salaries & Benefits
Purchased Commodities
Transmission
Generator Fuel/Chem.
Depreciation
Transfers (Elect./City)
Operating Expense
Debt Interest
TOTAL EXPENSES
NET PROFIT/(LOSS)
16.67% of Year Comp.
2026 2025 Di %Chna 2026 2025 Di %Chna Full Yr Bud %of Bud
$ 3,642,748 $ 3,642,320 $ 428
$ 323,673 $ 274,960 $ 48,713
$ 164,230 $ 171,767 $ (7,536)
$ 60,667 $ 60,639 $ 28
$ 74,669 $ 48,450 $ 26,219
$ 50,755 $ 61,617 $ (10,861)
$ 4,316,742 $ 4,259,752 $ 56,990
0.0%
$ 8,633,911
$
7,382,486
$ 1,251,426
17.0%
$ 40,209,447
21.5%
17.7%
$ 831,056
$
612,534
$ 218,522
35.7%
$ 4,339,200
19.2%
(4.4%)
$ 332,292
$
347,441
$ (15,149)
(4.4%)
$ 2,037,588
16.3%
0.0%
$ 121,333
$
121,278
$ 56
0.0%
$ 728,000
16.7%
54.1%
$ 115,034
$
87,285
$ 27,749
31.8%
$ 573,955
20.0%
(17.6%)
$ 84,049
$
129,014
$ (44,965)
(34.9%)
$ 583,457
14.4%
1.3%
$ 10,117,675
$
8,680,037
$ 1,437,637
16.6%
$ 48,471,647
20.9%
$ 639,834
$ 623,725
$ 16,110
2.58%
$ 1,384,034
$
1,271,677
$ 112,357
8.8%
$ 8,524,717
16.2%
$ 1,976,212
$ 2,168,278
$ (192,066)
(8.9%)
$ 5,775,561
$
4,549,098
$ 1,226,463
27.0%
$ 20,816,157
27.7%
$ 261,095
$ 161,400
$ 99,694
61.8%
$ 718,818
$
348,514
$ 370,304
106.3%
$ 4,200,000
17.1%
$ 72,458
$ 53,423
$ 19,035
35.6%
$ 209,098
$
151,407
$ 57,691
38.1%
$ 2,008,656
10.4%
$ 353,796
$ 353,506
$ 291
0.1%
$ 707,593
$
702,979
$ 4,614
0.7%
$ 4,190,000
16.9%
$ 222,552
$ 222,524
$ 28
0.0%
$ 445,104
$
445,049
$ 56
0.0%
$ 2,670,626
16.7%
$ 169,738
$ 156,330
$ 13,408
8.6%
$ 447,121
$
506,161
$ (59,040)
(11.7%)
$ 3,791,274
11.8%
$ 38,805
$ 49,688
$ (10,883)
(21.9%)
$ 77,609
$
99,376
$ (21,767)
21.9%
$ 465,657
16.7%
$ 3,734,490
$ 3,788,875
$ (54,385)
(1.4%)
$ 9,764,940
$
8,074,261
$ 1,690,679
20.9%
$ 46,667,087
20.9%
$ 582,252
$ 470,877
$ 111,375
23.7%
$ 352,735
$
605,776
$ (253,042)
(41.8%)
$ 1,804,560
19.5%
February
February
i,
YTD
YTD
2026
HUC
2026
2025
Change
2026
2025
Change
Budget
Target
Gross Margin %:
36.0%
34.0%
2.0%
24.5%
31.3%
-6.7%
32.2%
26%- 28%
Operating Income Per Revenue $ (%):
11.9%
10.3%
1.6%
2.5%
6.2%
-3.7%
2.8%
Net Income Per Revenue $ (%):
13.5%
11.1%
2.4%
3.5%
7.0%
-3.5%
3.7%
N ���
HUTCHINSON UTILITIES COMMISSION
ELECTRIC DIVISION
FINANCIAL REPORT FOR FEBRUARY, 2026
2026
2025
Di .
%Chna
2026
2025
Di
%Chna
FullYrBud
%of Bud
Electric Division
Customer Revenue
$
2,141,325
$ 1,990,231
$
151,094
7.6%
$ 4,342,535
$
3,948,846
$ 393,689
10.0%
$ 27,471,918
15.8%
Sales for Resale
$
323,673
$ 274,960
$
48,713
17.7%
$ 831,056
$
612,534
$ 218,522
35.7%
$ 4,339,200
19.2%
Other Revenues
$
43,684
$ 19,220
$
24,464
127.3%
$ 56,856
$
34,794
$ 22,062
63.4%
$ 202,862
28.0%
Interest Income
$
26,772
$ 32,202
$
(5,431)
(16.9%)
$ 44,813
$
67,295
$ (22,483)
(33.4%)
$ 308,457
14.5%
TOTAL REVENUES
$
2,535,454
$ 2,316,614
$
218,840
9.4%
$ 5,275,259
$
4,663,469
$ 611,791
13.1%
$ 32,322,437
16.3%
Salaries & Benefits
$
471,471
$ 476,029
$
(4,558)
(1.0%)
$
1,022,837
$ 968,898
$ 53,939
5.6%
$ 6,178,442
16.6%
Purchased Power
$
1,146,720
$ 1,044,293
$
102,428
9.8%
$
2,511,127
$ 2,222,076
$ 289,051
13.0%
$ 13,035,315
19.3%
Transmission
$
261,095
$ 161,400
$
99,694
61.8%
$
718,818
$ 348,514
$ 370,304
106.3%
$ 4,200,000
17.1%
Generator Fuel/Chem.
$
72,458
$ 53,423
$
19,035
35.6%
$
209,098
$ 151,407
$ 57,691
38.1%
$ 2,008,656
10.4%
Depreciation
$
254,589
$ 255,673
$
(1,084)
(0.4%)
$
509,179
$ 507,314
$ 1,865
0.4%
$ 3,060,000
16.6%
Transfers (Elect./City)
$
172,817
$ 172,789
$
28
0.0%
$
345,634
$ 345,578
$ 56
0.0%
$ 2,073,802
16.7%
Operating Expense
$
117,023
$ 89,042
$
27,981
31.4%
$
306,056
$ 326,880
$ (20,824)
(6.4%)
$ 2,553,967
12.0%
Debt Interest
$
30,138
$ 32,771
$
(2,633)
(8.0%)
$
60,276
$ 65,543
$ (5,267)
jLgL
$ 361,657
16.7%
TOTAL EXPENSES
$
2,526,312
$ 2,285,420
$
240,891
10.5%
$
5,683,025
$ 4,936,209
$ 746,816
15.1%
$ 33,471,839
17.0%
NET PROFIT/(LOSS)
$
9,143
$ 31,194
$
(22,051)
(70.7%)
$
(407,766)
$ (272,740)
$ (135,026)
49.5%
$ (1,149,402)
35.5%
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,
16.67�6 of Year Comp.
2026
2025
Di .
%Chna
2026
2025
Di
%Chna
FullYrBud
%of Bud
Electric Division
Residential
3,902,472
4,188,058
(285,586)
(6.82%)
8,747,922
8,977,676
(229,754)
(2.56%)
54,016,284
16.2%
All Electric
263,880
331,591
(67,711)
(20.42%)
644,775
714,898
(70,123)
(9.81%)
2,281,979
28.3%
Small General
1,361,601
1,337,229
24,372
1.82%
2,914,721
3,160,035
(245,314)
(7.76%)
17,753,235
16.4%
Large General
6,784,460
5,722,310
1,062,150
18.56%
14,566,430
11,924,360
2,642,070
22.16%
92,221,607
15.8%
Industrial
7,454,000
8,289,000
(835,000)
(10.07%)
15,074,000
16,845,000
(1,771,000)
(10.51%)
97,880,814
15.4%
Total KWH Sold
19,766,413
19,868,188
(101,775)
(0.51%)
41,947,848
41,621,969
325,879
0.78%1
264,153,919
15.9%
February
February
YTD
YTD
2026
HUC
2026
2025
Change
2026
2025
Change
Budget
Target
Gross Margin %:
25.3%
29.4%
-4.1%
19.0%
24.4%
-5.4%
24.7%
24%-28%
Operating Income Per Revenue $ (%):
-1.1%
1.2%
-2.3%
-8.3%
-6.1%
-2.3%
-3.6%
0%- 1%
Net Income Per Revenue $ (%):
0.4%
1.3%
-1.0%
-7.7%
-5.8%
-1.9%
-3.6%
0%- 1%
Customer Revenue per KWH:
$0.1083
$0.1002
$0.0082
$0.1035
$0.0949
$0.0086
$0.1040
$0.1040
Total Power Supply Exp. per KWH:
$0.0933
$0.0810
$0.0123
$0.1003
$0.0834
$0.0169
$0.0911
$0.0911
Net Profit decreased by $22,051 over February 2025. Revenues were up but offset by an increase in mostly purchased power and transmission costs.
Sales for Resale of $323,673 consisted of $92,673 in market sales, $98,000 in capacity sales to Rice Lake, $70,000 in capacity sales to AEP, and $63,000 in
capacity sales to Nextera. February 2025 Sales for Resale of $274,960 included $30,710 in market sales, $98,000 in capacity sales to Rice Lake and $146,250 in
capacity sales to AEP. February 2024 Sales for Resale of $279,644 consisted of $35,394 in market sales, $98,000 in capacity sales to Rice Lake and $146,250 in
capacity sales to AEP.
Overall Purchased Power increased by $102,427. MRES purchases increased by $50,070 and market purchases/MISO costs increased by $52,357.
The average cost of MISO power was $31.99/mwh (2,596 mwh's purchased), compared to $37.10/mwh (3,428 mwh's purchased) in February 2025.
February 2026 PCA was $.01555/kwhr bringing in an additional $303,560 for the month and $462,504 YTD.
February 2025 PCA was $.00763/kwhr bringing in an additional $151,798 for the month and YTD.
HUTCHINSON UTILITIES COMMISSION
GAS DIVISION
FINANCIAL REPORT FOR FEBRUARY, 2026
16.67% of Year Comp.
2026
2025
2
%Chna
2026
2025
2 .
%Chna
Full YrBud
%of Bud
Gas Division
Customer Revenue
$
1,501,423
$ 1,652,088
$
(150,666)
(9.1%)
$ 4,291,376
$
3,433,640
$
857,736
25.0%
$ 12,737,529
33.7%
Transportation
$
164,230
$ 171,767
$
(7,536)
(4.4%)
$ 332,292
$
347,441
$
(15,149)
(4.4%)
$ 2,037,588
16.3%
Electric Div. Transfer
$
60,667
$ 60,639
$
28
0.0%
$ 121,333
$
121,278
$
56
0.0%
$ 728,000
16.7%
Other Revenues
$
30,984
$ 29,230
$
1,755
6.0%
$ 58,178
$
52,492
$
5,687
10.8%
$ 371,093
15.7%
Interest Income
$
23,984
$ 29,414
$
(5,431)
(18.5%)
$ 39,236
$
61,719
$
(22,483)
(36.4%)
$ 275,000
14.3%
TOTAL REVENUES
$
1,781,287
$ 1,943,138
$
(161,850)
(8.3%)
$ 4,842,416
$
4,016,569
$
825,847
20.6%
$ 16,149,210
30.0%
Salaries & Benefits
$
168,363
$ 147,696
$
20,667
14.0%
$ 361,197
$
302,779
$ 58,418
19.3%
$ 2,346,275
15.4%
Purchased Gas
$
829,492
$ 1,123,985
$
(294,494)
(26.2%)
$ 3,264,434
$
2,327,022
$ 937,412
40.3%
$ 7,780,842
42.0%
Operating Expense
$
52,714
$ 67,288
$
(14,574)
(21.7%)
$ 141,065
$
179,281
$ (38,216)
(21.3%)
$ 1,237,307
11.4%
Depreciation
$
99,207
$ 97,833
$
1,374
1.4%
$ 198,414
$
195,665
$ 2,749
1.4%
$ 1,130,000
17.6%
Transfers (City)
$
49,735
$ 49,735
$
0
0.0%
$ 99,471
$
99,471
$ 0
0.0%
$ 596,824
16.7%
Debt Interest
$
8,667
$ 16,917
$
(8,250)
0.0%
$ 17,333
$
33,833
$ (16,500)
48.8%
$ 104,000
16.7%
TOTAL EXPENSES
$
1,208,179
$ 1,503,454
$
(295,276)
(19.6%)
$ 4,081,915
$
3,138,052
$ 943,863
30.1%
$ 13,195,248
30.9%
NET PROFIT/(LOSS)
$
573,109
$ 439,684
$
133,425
30.3%
$ 2,953,962
25.7%
$ 760,500 $ 878,517 $ (118,016) (13.4%)
2026 2025 2 %Chnq 2026 2025 p %Chnq Full YrBud %of Bud
Gas Division
Residential 58,869,595
Commercial 42,707,621
Industrial 83,782,675
74,996,518
52,726,379
94,058,961
(16,126,923)
(10,018,758)
(10,276,286)
(21.50%)
(19.00%)
(10.93%)
147,750,621
105,246,884
189,062,059
162,183,518
113,321,147
201,876,581
(14,432,897)
(8,074,263)
(12,814,522)
(8.90%)
(7.13%)
(6.35%)
410,283,000
317,957,000
820,578,000
36.0%
33.1%
23.0%
Total CF Sold 185,359,891
221,781,858
(36,421,967)
(16.42%)
442,059,564
477,381,246
(35,321,682)
(7.40%)
1,548,818,000
28.5%
February
February
YTD
YTD
2026 HUC
2026
2025
Change
2026
2025
Change
Budget Target
Gross Margin %:
51.2%
39.5%
11.7%
30.6%
39.3%
-8.7%
47.7% 37%-40%
Operating Income Per Revenue $ (%):
30.5%
21.3%
9.2%
14.4%
20.7%
-6.2%
15.9%
Net Income Per Revenue $ (%):
32.2%
22.6%
9.5%
15.7%
21.9%
-6.2%
18.3%
Contracted Customer Rev. per CF:
$0.0074
$0.0069
$0.0004
$0.0087
$0.0069
$0.0019
$0.0069
Customer Revenue per CF:
$0.0087
$0.0078
$0.0009
$0.0104
$0.0074
$0.0030
$0.0095
Total N.G. Supply Exp. per CF:
$0.0045
$0.0052
($0.0006)
$0.0075
$0.0050
$0.0025
$0.0053
Notes/Graphs:
February Net Income increased by $133,425. Usage and revenues were down compared to February 2025 but that was offset by a decrease in purchased
gas costs.
There was no February 2026 Fuel Cost Adjustment leaving the YTD total at $523,639.
February 2025 Fuel Cost "Credit" Adjustment was $.61929/MCF crediting customers $81,455 for the month and $264,540 YTD.
Current Assets
UnrestrictedlUndesignated Cash
Cash
Petty Cash
Designated Cash
Capital Expenditures - Five Yr. CIP
Payment in Lieu of Taxes
Rate Stabilization - Electric
Rate Stabilization - Gas
Catastrophic Funds
Restricted Cash
Bond & Interest Payment 2017
Bond & Interest Payment 2012
Debt Service Reserve Funds
Total Current Assets
Receivables
Accounts (net of uncollectible allowances)
Interest
Total Receivables
Other Assets
Inventory
Prepaid Expenses
Sales Tax Receivable
Deferred Outflows - Electric
Deferred Outflows - Gas
Total Other Assets
Total Current Assets
Capital Assets
Land & Land Rights
Depreciable Capital Assets
Accumulated Depreciation
Construction - Work in Progress
Total Net Capital Assets
HUTCHINSON UTILITIES COMMISSION
BALANCE SHEET - CONSOLIDATED
FEBRUARY
28, 2026
Electric
Gas
Total
Total
Net Change
Division
Division
2026
2025
Total (YTD)
(8,885,394.65)
15,525,444.57
6,640,049.92
11,543,903.41
(4,903,853.49)
680.00
170.00
850.00
850.00
-
2,750,000.00
700,000.00
3,450,000.00
3,450,000.00
-
1,345,802.00
596,824.00
1,942,626.00
1,942,626.00
-
1,301,838.58
-
1,301,838.58
337,362.32
964,476.26
-
287,280.38
287,280.38
615,294.19
(328,013.81)
800,000.00
200,000.00
1,000,000.00
1,000,000.00
-
295,414.08
-
295,414.08
296,214.05
(799.97)
-
546,000.00
546,000.00
545,749.97
250.03
1,175,000.00
2,072,000.00
3,247,000.00
3,255,256.00
(8,256.00)
(1,216,659.99)
19,927,718.95
18,711,058.96
22,987,255.94
(4,276,196.98)
2,256,624.82
1,489,718.45
3,746,343.27
3,665,599.52
80,743.75
49,785.32
49,785.33
99,570.65
148,628.57
(49,057.92)
2,306,410.14
1,539,503.78
3,845,913.92
3,814,228.09
31,685.83
2,477,108.40
510,034.22
2,987,142.62
2,659,363.18
327,779.44
162,090.05
90,121.61
252,211.66
532,404.91
(280,193.25)
129,877.34
-
129,877.34
405,752.26
(275,874.92)
342,759.00
-
342,759.00
342,759.00
-
-
114,253.00
114,253.00
114,253.00
-
3,111,834.79
714,408.83
3,826,243.62
4,054,532.35
(228,288.73)
4,201,584.94 22,181,631.56
690,368.40
3,899,918.60
95,282,772.18
45,149,321.56
(51,565,428.70)
(23,579,810.59)
10,471,763.20
13,078.83
54,879,475.08 25,482,508.40
26,383,216.50 30,856,016.38 (4,472,799.88)
4,590,287.00
4,590,287.00
-
140,432,093.74
139,370,294.25
1,061,799.49
(75,145,239.29)
(71,186,158.79)
(3,959,080.50)
10,484,842.03
2,655,468.79
7,829,373.24
80,361,983.48
75,429,891.25
4,932,092.23
Total Assets 59,081,060.02 47,664,139.96 106,745,199.98 106,285,907.63 459,292.35
Current Liabilities
Current Portion of Long-term Debt
Bonds Payable
Bond Premium
Lease Liability - Solar Array
Accounts Payable
Accrued Expenses
Accrued Interest
Accrued Payroll
Total Current Liabilities
Long -Term Liabilities
Noncurrent Portion of Long-term Debt
2017 Bonds
2012 Bonds
Bond Premium 2012
Pension Liability- Electric
Pension Liability - Electric OPEB
Pension Liability - Nat Gas
Pension Liability - Nat Gas OPEB
Accrued Vacation Payable
Accrued Severance
Deferred Outflows - Electric
Deferred Outflows - Nat Gas
Total Long -Term Liabilities
Net Position
Retained Earnings
Total Net Position
HUTCHINSON UTILITIES COMMISSION
BALANCE SHEET - CONSOLIDATED
FEBRUARY 28, 2026
Electric Gas Total
Division Division 2026
820,000.00
19, 546.00
2,855,549.27
90,414.09
62,440.87
3,847,950.23
10,930,000.00
393,119.28
1,832,248.00
39,880.00
635,863.89
224,153.38
1,294,449.00
15,349,713.55
2,080,000.00
185,608.32
1,306,043.58
25,999.95
23,112.72
3,620,764.57
(46,402.45)
610,749.00
13,293.00
224,492.28
44,404.41
431,483.00
1,278,019.24
2,900,000.00
185,608.32
19, 546.00
4,161, 592.85
116,414.04
85,553.59
7,468,714.80
10,930,000.00
346,716.83
1,832,248.00
39,880.00
610,749.00
13,293.00
860,356.17
268,557.79
1,294,449.00
431,483.00
16,627,732.79
Total Net Change
2025 Total (YTD)
2, 770, 000.00 130, 000.00
185,608.32 -
- 19,546.00
3,522,480.64 639,112.21
149,064.04 (32,650.00)
78,227.52 7,326.07
6,705,380.52 763,334.28
11,750,000.00
(820,000.00)
2,080,000.00
(2,080,000.00)
565,782.11
(219,065.28)
1,832,248.00
-
39,880.00
-
610,749.00
-
13,293.00
-
739,330.02
121,026.15
245,721.73
22,836.06
1,294,449.00
-
431,483.00
-
19,602,935.86 (2,975,203.07)
39,883,396.24 42,765,356.15 82,648,752.39 79,977,591.25 2,671,161.14
39,883,396.24 42,765,356.15 82,648,752.39 79,977,591.25 2,671,161.14
Total Liabilities and Net Position 59,081,060.02 47,664,139.96 106,745,199.98 106,285,907.63 459,292.35
Hutchinson Utilities Commission
Cash -Designations Report, Combined
2/28/2026
Financial
Institution
Current Interest Rate
Annual
Interest
Balance,
February 2026
Balance,
January 2026
Change in
Cash/Reserve
Position
Savings, Checking, Investments varies varies varies 18,711,058.96 18,478,818.51 232,240.45
Total Operating Funds 18,711,058.96 18,478,818.51 232,240.45
Debt Reserve Requirements Bond Covenants - sinking fund
Debt Reserve Requirements Bond Covenants -1 year Max. P & I
Total Restricted Funds
Operating Reserve
Rate Stabalization Funds
PILOT Funds
Catastrophic Funds
Capital Reserves
Total Designated Funds
Min 60 days of 2026 Operating Bud.
Charter (Formula Only)
Risk Mitigation Amount
5 Year CIP (2026-2030 Fleet & Infrastructure Maintenance)
841,414.08 560,942.72 280,471.36
3,247,000.00 3,247,000.00 -
4,088,414.08 3,807,942.72 280,471.36
7,079,514.50
7,079,514.50 -
1,589,118.96
1,501,838.58 87,280.38
1,942,626.00
1,942,626.00 -
1, 000, 000.00
1, 000, 000.00
3,450,000.00
3,450,000.00 -
15,061,259.46
14,973,979.08 87,280.38
YE
YE
YE
YE
YTD
HUC
2022
2023
2024
2025
2026
Target
Debt to Asset 31.4%
28.6%
26.0%
22.3%
22.6%
Current Ratio 4.47
4.48
3.67
3.10
2.93
RONA -1.38%
1.96%
2.63%
3.23%
0.37%
Historical Change
in Cash Balance
Month End
Electric
Elec. Change
Natural Gas
Gas Change
Total
Total Change
2/28/2026
(1,216,660)
19,927,719
18,711,059
12/31/2025
(416,323)
(800,337)
18,975,091
952,628
18,558,768
152,291
12/31/2024
6,134,710
(6,551,033)
17,717,453
1,257,638
23,852,164
(5,293,396)
12/31/2023
12,158,338
(6,023,628)
15,622,242
2,095,211
27,780,580
(3,928,416)
12/31/2022
11,633,212
525,126
15,450,554
171,688
27,083,766
696,815
12/31/2021
12,870,253
(1,237,041)
15,086,000
364,554
27,956,253
(872,487)
12/31/2020
14,239,233
(1,368,981)
15,019,173
66,827
29,258,406
(1,302,153)
12/31/2019
12,124,142
2,115,092
13,837,040
1,182,133
25,961,181
3,297,225
12/31/2018
15,559,867
(3,435,725)
12,335,998
1,501,042
27,895,864
(1,934,683)
12/31/2017
23,213,245
(7,653,378)
10,702,689
1,633,309
33,915,934
(6,020,070)
12/31/2016
8,612,801
14,600,444
9,500,074
1,202,615
18,112,875
15,803,059
12/31/2015
6,170,790
2,442,011
9,037,373
462,701
15,208,163
2,904,712
12/31/2014
3,598,821
2,571,969
6,765,165
2,272,208
10,363,986
4,844,177
* 2017's Significant increase in cash balance is due to issuing bonds for the generator project.
Hutchinson Utilities Commission
Cash -Designations Report, Electric
2/28/2026
Change in
Financial
Annual
Balance,
Balance,
Cash/Reserve
Institution
Current Interest Rate
Interest
February 2026
January 2026
Position
�' Rr
Savings, Checking, Investments varies varies varies 18,711,058.96 18,478,818.51 232,240.45
Total HUC Operating Funds 18,711,058.96 18,478,818.51 232,240.45
Debt Restricted Requirements
Debt Restricted Requirements
Total Restricted Funds
Bond Covenants - sinking fund
Bond Covenants -1 year Max. P & 1
295,414.08
1,175,000.00
1,470,414.08
196,942.72
1,175,000.00
1,371,942.72
98,471.36
-
98,471.36
Excess Reserves Less Restrictions,
Electric
(2,687,074.07)
(2,312,671.54)
(374,402.53)
J11J! !!1 1 !1
J
Operating Reserve
Min 60 days of 2026 Operating Bud.
5,068,639.83
5,068,639.83
Rate Stabalization Funds
$400K-$1.2K
1,301,838.58
1,301,838.58
PILOT Funds
Charter (Formula Only)
1,345,802.00
1,345,802.00
Catastrophic Funds
Risk Mitigation Amount
800,000.00
800,000.00
Capital Reserves
5 Year CIP (2026-2030 Fleet & Infrastructure Maintenance)
2,750,000.00
2,750,000.00
Total Designated Funds
11,266,280.41
11,266,280.41
Excess Reserves Less Restrictions
& Designations, Electric
(13,953,354.48)
(13,578,951.95)
(374,402.53)
YE YE YE YE
YTD
APPA Ratio
HUC
2022 2023 2024 2025
2026
5K-10K Cust.
Target
Debt to Asset Ratio (* w/Gen.)
34.8% 34.0% 33.9% 31.6%
32.5%
39.8%
pp ppppp
ryry NNNNNNNNNNNN
Current Ratio
4.96 4.35 2.38 0.80
0.62
3.75
>2.0
RONA
-4.2% -0.9% -2.1% 0.4%
-0.8%
NA
>0%
Hutchinson Utilities Commission
Cash -Designations Report, Gas
2/28/2026
Change in
Financial
Annual
Balance,
Balance,
Cash/Reserve
Institution
Current Interest Rate
Interest
February 2026
January 2026
Position
51' Rr
Savings, Checking, Investments varies varies varies 18,711,058.96 18,478,818.51 232,240.45
Total HUC Operating Funds 18,711,058.96 18,478,818.51 232,240.45
Debt Restricted Requirements
Bond Covenants - sinking fund
546,000.00
364,000.00
182,000.00
Debt Restricted Requirements
Bond Covenants -1 year Max. P & 1
2,072,000.00
2,072,000.00
-
Total Restricted Funds
2,618,000.00
2,436,000.00
182,000.00
Excess Reserves Less Restrictions,
Gas
17,309,718.95
16,983,547.33
326,171.62
1 1 JJJ1 111 1 11
J J
Operating Reserve
Min 60 days of 2026 Operating Bud.
2,010,874.67
2,010,874.67
-
Rate Stabalization Funds
$200K-$600K
287,280.38
200,000.00
87,280.38
PILOT Funds
Charter (Formula Only)
596,824.00
596,824.00
-
Catastrophic Funds
Risk Mitigation Amount
200,000.00
200,000.00
Capital Reserves
5 Year CIP (2026-2030 Fleet & Infrastructure Maintenance)
700,000.00
700,000.00
-
Total Designated Funds
3,794,979.05
3,707,698.67
87,280.38
YE
YE
YE
YE
YTD
HUC
2022
2023
2024
2025
2026
AGA Ratio
Target
Debt to Asset 26.5%
21.0%
15.5%
10.6%
10.3%
35%-50%
Current Ratio 4.06
4.61
5.08
5.18
5.37
1.0-3.0
RONA 3.0%
6.2%
9.1%
7%
1.8%
2%-5%
Notes/Graphs:
ELECTRIC DIVISION
Operating Revenue
February 2026
CLASS
AMOUNT
KWH
/KWH
Street Lights
21.42
393
$0.0545
Electric Residential Service
$524,966.24
3,902,472
$0.1345
All Electric Residential Service
$32,279.36
263,880
$0.1223
Electric Small General Service
$174,976.32
1,361,601
$0.1285
Electric Large General Service
$717,619.64
6,784,460
$0.1058
Electric Large Industrial Service
$691,462.50
7,454,000
$0.0928
Total
$2,141,325.48
19,766,806
$0.1083
Power Adjustment
$0.01555
Rate Without Power Adjustment
$0.09278
Electric Division Year -to -Date
® 2026 $ Amount ❑ 2025 $ Amount ® 2026 KWH110 ❑ 2025 KWH110
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
0
Residential All Elec. Resid. Small Gen. Srv. Large Gen. Srv. Large Industrial Sales For Resale Total
NOTE: This graph includes sales for resale (capacity and energy sales) but excludes street lights and security lights
NATURAL GAS DIVISION
Operating Revenue
February 2026
CLASS
AMOUNT
MCF
/MCF
Residential
$518,026.46
58,870
$8.7996
Commercial
$363,742.25
42,708
$8.5170
Large Industrial
$24,444.15
2,903
$8.4212
Large Industrial Contracts
$595,209.71
80,880
$7.3592
Total
$1,501,422.57
185,360
$8.1000
Fuel Adjustment $0.00000
Rate Without Fuel Adjustment $8.10004
Natural Gas Division Year -to -Date
❑ 2026 $ Amount ❑ 2025 $ Amount m 2026 MCF ❑ 2025 MCF
5,000,000
4,500,000
4,000,000
3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
Gas Residential Gas Commercial Large Industrial Large Industrial Total
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HUTCHINSON UTILITIES COMMISSION 9T,
Board Action Form
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Agenda Item: Review Policies
Presenter: Angie Radke
Agenda Item Type:
Time Requested (Minutes): 5
Review Policies
Attachments: Yes
BACKGROUND/EXPLANATION OFAGENDA ITEM:
As part of HUC's standard operating procedures, a continual policy review is practiced.
This month, the following policies were reviewed and no changes are recommended on
these policies at this time:
i. Section 3 of Exempt Handbook
ii. Section 3 of Non -Exempt Handbook
BOARD ACTION REQUESTED:
None
Fiscal Impact:
Included in current budget: Budget Change:
PROJECT SECTION:
Total Project Cost: Remaining Cost:
EXEMPT
SECTION 3 — HOURS AND CONDITIONS OF EMPLOYMENT
Staff Personnel will establish work schedules, subject to the General Manager's approval. The
regular work week is five 8-hour working days with two consecutive days off. The normal work
week is Monday through Friday, except as otherwise established by Staff Personnel based on the
customers' and Department's needs.
The Utilities office hours are 7:30 a.m. to 4:00 p.m. Monday through Friday.
FLEXTIME PROGRAM
HUC's flextime program allows exempt employees to vary their scheduled work hours to conform
with the operations of the Utilities. Flextime is approved by the employee's Manager.
REST PERIODS
Employees may take one 15-minute paid rest period during each four-hour work period. One rest
period is taken in the morning and the other rest period is taken in the afternoon. Rest periods shall
not be cumulative and shall not be utilized to compensate for other absences.
MEAL PERIODS
Employees receive an unpaid meal period either one-half hour or one -hour long for a shift lasting
at least six hours. Meal periods shall not be cumulative and shall not be utilized to compensate for
other absences.
ATTENDANCE/TARDINESS
Employees are expected to work or use approved leave for all their scheduled hours.
Unsatisfactory attendance including reporting late, quitting early or excessive absenteeism shall
be cause for disciplinary action. An employee anticipating being late for any reason, must contact
his/her Manager or Supervisor as far in advance as possible. Employees are also required to report
to their Manager or Supervisor if they are ill and unable to continue working. If an employee is ill
and cannot report to work, the employee must notify his/her Manager or Supervisor before the
scheduled start of the workday.
INCLEMENT WEATHER
If inclement weather causes an employee to arrive late or leave the job early, the employee must
use vacation time, floating holiday, compensatory time or time without pay for the portion of the
scheduled shift the employee did not work. If the General Manager determines it is necessary to
close HUC offices due to weather, all employees will be paid their regular pay. Essential
employees will be required to remain on -duty, however, they will be given comparable time off at
a later date. If an essential employee living within the limits of the City of Hutchinson cannot get
to the job site due to inclement weather, a HUC vehicle or snowplow will be dispatched to pick up
the essential employee.
Non -Exempt
SECTION 3 — HOURS AND CONDITIONS OF EMPLOYMENT
See Union Contract.
REST PERIODS
Employees may take one 15-minute paid rest period during each four-hour work period. Rest
periods are taken during the second and third hours and between the sixth and seventh hours of the
workday. During the summer, the afternoon rest period shall be taken when the Manager deems it
appropriate. Rest periods shall not be cumulative and shall not be utilized to compensate for other
absences.
MEAL PERIODS
Employees receive an unpaid meal period of one-half hour for a shift lasting at least six hours.
Meal periods may not be cumulative and may not be utilized to compensate for other absences.
ATTENDANCE/TARDINESS
Employees are expected to work or use approved leave for all their scheduled hours.
Unsatisfactory attendance including reporting late, quitting early or excessive absenteeism shall
be cause for disciplinary action. An employee anticipating being late for any reason, must contact
his/her Manager as far in advance as possible. Employees are also required to report to the Manager
if they are ill and unable to continue working. If an employee is ill and cannot report to work, the
employee must notify his/her Manager before the scheduled start of the workday.
USE OF FACILITIES DURING OFF -DUTY HOURS
Employees are not allowed on -site during off -duty hours without prior approval of a Manager.
INCLEMENT WEATHER
If inclement weather causes an employee to arrive late or leave the job early, the employee must
use vacation time, floating holiday, compensatory time or time without pay for the portion of the
scheduled shift the employee did not work. If the General Manager determines it is necessary to
close HUC offices due to weather, all employees will be paid their regular pay. Essential
employees will be required to remain on -duty, however, they will be given comparable time off at
a later date. If an essential employee living within the limits of the City of Hutchinson cannot get
to the job site due to inclement weather, a HUC vehicle or snowplow will be dispatched to pick up
the essential employee.
HUTCHINSON UTILITIES COMMISSION
^I'xP61Tti'°"
Board Action Form
Agenda Item: Approval of the New Ulm Natural Gas Transportation Capacity Agreement
Presenter: Jeremy Carter
Agenda Item Type:
Time Requested (Minutes): 5
New Business
Attachments: Yes
BACKGROUND/EXPLANATION OFAGENDA ITEM:
New Ulm's current transportation capacity agreement has been in place since April 1,
2004 (inception of the pipeline). This agreement is scheduled to expire on March 31,
2026.
The new transportation capacity agreement is a 5 year agreement that includes
reserving 15,000 Dth's per day of capacity on HUC's transmission line extending from
Trimont, MN to Hutchinson (93 miles).
This new agreement phases in a reservation charge increase over two years so that
starting in 2028 the reservation charge is consistent with other customers on the
transmission line with significant volume/capacity needs. The rates adjust as follows:
April 1-Dec 31, 2026: $4.50/Dth per month ($0.15/Dth/Day)
Jan 1-Dec 31, 2027: $5.34/Dth per month ($0.175/Dth/Day
Jan 1-Dec 31, 2028: $6.10/Dth per month ($0.20/Dth/Day)
In addition, the agreement addresses additional fees that could be incurred for daily and
monthly (+/-) imbalances outside of agreed upon tolerances. These types of provisions
help ensure the intrastate transmission line continues to operate within acceptable
ranges as it is connected to the Northern Border interstate pipeline system.
BOARD ACTION REQUESTED:
Approval of the New Ulm Natural Gas Transportation Capacity Agreement
Fiscal Impact: $8001<41.11V! Annually
Included in current budget: Yes Budget Change: No
PROJECT SECTION:
Total Project Cost: Remaining Cost:
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NATURAL GAS mmFIRM wTRANSPORTATION _CAPACITY AGREEMENT
THIS NATURAL GAS FIRM TRANSPORTATION CAPACITY AGREEMENT
("AGREEMENT") IS MADE AND ENTERED INTO ON THIS 25TH DAY OF MARCH, 2026, TO BE
EFFECTIVE AS OF THE I ST DAY OF APRIL, 2026, BY AND BETWEEN NEW ULM PUBLIC UTILITIES
COMMISSION ("NEW ULM") WITH OFFICES LOCATED AT 310 I ST NORTH STREET, NEW ULM,
MINNESOTA, 56073 AND HUTCHINSON UTILITIES COMMISSION ("HUTCHINSON") A
MINNESOTA MUNICIPAL UTILITY LOCATED AT 225 MICHIGAN ST. SE, HUTCHINSON,
MINNESOTA, 55350. NEW ULM AND HUTCHINSON SHALL HEREINAFTER SOMETIMES BE
REFERRED TO SEPARATELY AS "PARTY" OR JOINTLY AS "PARTIES."
WITNESSETH:
WHEREAS, NEW ULM DESIRES TO CONTRACT WITH HUTCHINSON FOR THE PROVISION
OF LONG-TERM FIRM TRANSPORTATION CAPACITY BY HUTCHINSON TO NEW ULM;
WHEREAS, HUTCHINSON HAS THE CAPABILITY TO PROVIDE NEW ULM WITH LONG TERM
FIRM TRANSPORTATION CAPACITY ON HUTCHINSON'S SOLELY OWNED AND CONTROLLED
INTRASTATE PIPELINE;
NOW THEREFORE, IN CONSIDERATION OF THE PREMISES AND MUTUAL COVENANTS
AND CONDITIONS CONTAINED IN THIS AGREEMENT, HUTCHINSON AND NEW ULM AGREE AS
FOLLOWS:
CHARACTER OF SERVICE.
A. FIRM NATURAL GAS TRANSPORTATION SERVICE - HUTCHINSON SHALL
PROVIDE TO NEW ULM FIRM NATURAL GAS TRANSPORTATION CAPACITY IN
THE AMOUNT OF 15,000 DTH PER DAY COMMENCING ON THE I ST DAY OF
APRIL, 2026, AND CONTINUING FOR AN INITIAL PERIOD OF 5 YEARS,
THROUGH MARCH 3 I ST, 203 1, UNDER THE RATES, TERMS AND
CONDITIONS SET FORTH IN THIS AGREEMENT. THIS SERVICE SHALL ALWAYS
BE AVAILABLE TO NEW ULM UNLESS CURTAILED OR INTERRUPTED
PURSUANT TO THE TERMS OF THIS AGREEMENT. THIS SERVICE MAY NOT BE
CURTAILED OR INTERRUPTED EXCEPT PURSUANT TO THE TERMS OF THIS
AGREEMENT.
B. SOLE OBLIGATION TO PROVIDE FIRM TRANSPORTATION CAPACITY -
HUTCHINSON'S SOLE OBLIGATION UNDER THIS AGREEMENT IS TO PROVIDE
FIRM CAPACITY TO NEW ULM OVER WHICH NEW ULM MAY TRANSPORT
NEW ULM TRANSPORTATION AGREEMENT
APRIL 1, 2026
NATURAL GAS SUPPLIES PURCHASED FROM AN INDEPENDENT $RD PARTY
SUPPLIER.
2. AVAILABILITY AND CONDITIONS.
A. GENERALLY - FIRM TRANSPORTATION SERVICE UNDER THIS AGREEMENT
SHALL BE AVAILABLE TO NEW ULM UNDER THE TERMS AND CONDITIONS OF
THIS AGREEMENT. SUCH CAPACITY, UP TO THE MAXIMUM DAILY QUANTITY
(MDQ) OF 15,000 DTH PER DAY, SHALL ALWAYS BE AVAILABLE TO NEW
ULM UNLESS SUCH CAPACITY IS CURTAILED OR INTERRUPTED PURSUANT TO
THE TERMS OF THIS AGREEMENT. THIS SERVICE MAY NOT BE CURTAILED OR
INTERRUPTED EXCEPT PURSUANT TO THE TERMS OF THIS AGREEMENT.
B. NATURAL GASSTANDARDS- GAS SUPPLIES TRANSPORTED BY NEW ULM
UNDER THE TERMS OF THIS AGREEMENT SHALL MEET THE STANDARDS
REASONABLY SPECIFIED BY HUTCHINSON FROM TIME TO TIME. THE GAS
SUPPLY STANDARDS SHALL BE IDENTICAL TO THE STANDARDS IMPOSED ON
HUTCHINSON BY ITS INTERSTATE NATURAL GAS PIPELINE TRANSPORTER,
NORTHERN BORDER PIPELINE COMPANY.
C. METERING - HUTCHINSON SHALL USE A MASS FLOW METER & SPECIFIC
GRAVITY METER TO METER THE VOLUME OF NATURAL GAS TRANSPORTED TO
NEW ULM AT THE DELIVERY POINT.
D. CONTACT PERSONS
NEW ULM SHALL SUPPLY TO HUTCHINSON THE NAME,
BUSINESS ADDRESS, A PRIMARY AND SECONDARY CONTACT
PERSON, TELEPHONE NUMBERS FOR THE PRIMARY AND
SECONDARY CONTACT PERSON, AND A TWENTY -FOUR-HOUR
EMERGENCY TELEPHONE NUMBER.
2. HUTCHINSON SHALL SUPPLY TO NEW ULM THE NAME,
BUSINESS ADDRESS, A PRIMARY AND SECONDARY CONTACT
PERSON, TELEPHONE NUMBERS FOR THE PRIMARY AND
SECONDARY CONTACT PERSON, AND A TWENTY -FOUR-HOUR
EMERGENCY TELEPHONE NUMBER.
E. COMPLIANCEWITHAGREEMENT - SERVICE UNDER THIS AGREEMENT SHALL
NOT COMMENCE UNTIL BOTH PARTIES HAVE FULLY EXECUTED THIS
AGREEMENT AND COMPLIED WITH ALL RELEVANT REQUIREMENTS
CONTAINED HEREIN.
F. RECEIPT POINT - ATTACHMENT A TO THIS AGREEMENT SETS FORTH THE
RECEIPT POINT FOR RECEIPT OF NATURAL GAS FROM NEW ULM TO
HUTCHINSON.
G. DELIVERY POINTS - ATTACHMENT A TO THIS AGREEMENT SETS FORTH THE
DELIVERY POINTS) FOR DELIVERY OF NATURAL GAS FROM HUTCHINSON TO
NEW ULM.
NEW ULM TRANSPORTATION AGREEMENT
APRIL 1, 2026
H. CONTRACT CHANGES - HUTCHINSON HAS THE RIGHT TO MODIFY THIS
AGREEMENT DUE TO CHANGES IMPOSED BY ITS INTERSTATE NATURAL GAS
PIPELINE TRANSPORTER, NORTHERN BORDER PIPELINE COMPANY OR
REGULATORY AGENCIES WITH OVERSIGHT OF HUTCHINSON'S INTRASTATE
PIPELINE.
3. TERM.
THE INITIAL TERM FOR SERVICE UNDER THIS AGREEMENT IS 5 YEARS. NEW ULM
MUST NOTIFY HUTCHINSON IN WRITING SIX (6) MONTHS PRIOR TO THE EXPIRATION
OF THE TERM IF NEW ULM DESIRES TO CONTINUE SERVICE UNDER THIS
AGREEMENT. IF NEW ULM HAS COMPLIED WITH ALL TERMS OF THIS AGREEMENT,
AND HAS NO OUTSTANDING ARREARAGES, NEW ULM MAY, UPON WRITTEN NOTICE
PROVIDED TO HUTCHINSON SIX (6) MONTHS PRIOR TO THE EXPIRATION OF THE
CURRENT TERM, EXTEND THIS AGREEMENT FOR A MUTUALLY AGREED -UPON
PERIOD. IF A TERM FOR THE EXTENSION CANNOT BE AGREED UPON BY NEW ULM
AND HUTCHINSON, THE PARTIES AGREE TO A MINIMUM TERM OF ONE (1) YEAR. IF
SUCH TIMELY NOTICE IS NOT PROVIDED BY NEW ULM, HUTCHINSON IS NOT
OBLIGATED TO RENEW SERVICE FOR NEW ULM. REPRESENTATIVES OF
HUTCHINSON AND NEW ULM SHALL MEET APPROXIMATELY SIX (6) MONTHS PRIOR
TO THE EXPIRATION DATE OF THE INITIAL TERM OF THIS AGREEMENT TO DISCUSS
SIGNIFICANT CHANGES IN FUTURE OPERATIONS.
4. RATES.
A. RATES ITITFOR wwSERVICE - THE FOLLOWING CHARGES SHALL APPLY TO THE FIRM
TRANSPORTATION CAPACITY TO BE PROVIDED TO NEW ULM BY HUTCHINSON:
RESERVATION CHARGE.
RESERVATION CHARGE, PER DTH OF MDQ:
APRIL 'I -DEC 31, 2026 - $4.50/DTH PER MONTH,
($0.15/DTH/DAY)
2027- $5.34/DTH PER MONTH, $0.1 7.5/DTH/DAY)
2028 -- MARCH 31, 2031 $6.1 O/DTH PER MONTH,
$0.20/DTH/DAY)
MONTH IS DEFINED AS BEING 30.5 DAYS IN LENGTH.
2. TRANSPORTATION CHARGE.
TRANSPORTATION CHARGE, PER DTH, ALL USAGE DURING A MONTH - $0.00
HUTCHINSON UTILITIES SHALL RESERVE THE RIGHT TO REVIEW AND MODIFY ANY AND ALL FEES
IN THIS AGREEMENT IN APRIL 2031 , AND EACH 5 YEARS THEREAFTER, TO BE EFFECTIVE IN
JANUARY OF THE FOLLOWING YEAR, DUE TO CHANGES IN HUTCHINSON'S TRANSMISSION LINE
RATES. ANY SUCH INCREASE IN FEES SHALL BE PROPORTIONAL TO INCREASES IN COSTS
INCURRED BY HUTCHINSON RELATED TO ITS NATURAL GAS PIPELINE FACILITIES.
NEW ULM TRANSPORTATION AGREEMENT 3
APRIL 1, 2026
B. THIRD PARTY CHARGES.
NEW ULM IS RESPONSIBLE FOR ALL CHARGES IMPOSED BY A SUPPLIER,
BROKER, MARKETER, OR ANY OTHER THIRD PARTY FOR ANY SERVICE THAT IS
PROVIDED TO, OR ON BEHALF OF, NEW ULM BY ANY OF THESE ENTITIES.
THESE CHARGES INCLUDE, BUT ARE NOT LIMITED TO, COST OF GAS,
RESERVATION CHARGES, ADMINISTRATIVE FEES, BILLING FEES, MINIMUM
TAKE CHARGES, AND ANY AND ALL OTHER TYPES OF CHARGES FROM ANY
SUCH ENTITY.
C. PENALTIES.
NEW ULM SHALL PAY ANY FINES, ADDITIONAL AMOUNTS, OR PENALTIES IMPOSED
UNDER THE TERMS OF THIS AGREEMENT.
5. BILLING AND PAYMENT.
A. BILLING - RESERVATION INVOICE WILL BE RENDERED TO NEW ULM OR ITS
AGENT BY THE FIFTEENTH DAY OF THE MONTH PRECEDING THE MONTH IN
WHICH SERVICE IS RENDERED BY HUTCHINSON. REMAINING BILLS WILL BE
RENDERED TO NEW ULM OR ITS AGENT BY THE FIFTEENTH DAY OF THE
MONTH FOLLOWING THE MONTH IN WHICH SERVICE IS RENDERED BY
HUTCHINSON.
B. PAYMENT - PAYMENT IS DUE FROM NEW ULM ON OR BEFORE THE
FIFTEENTH BUSINESS DAY FOLLOWING THE DATE THE BILL IS ISSUED BY
HUTCHINSON. A LATE PAYMENT CHARGE OF 1 O% PER ANNUM, OR THE
LEGALLY AUTHORIZED MAXIMUM INTEREST RATE, WHICHEVER IS LOWER,
SHALL BE LEVIED ON ANY UNPAID BALANCES.
C. PIPELINE, SUPPLIER, AND THIRD -PARTY CHARGES -• ANY CHARGES WHICH
HUTCHINSON REASONABLY INCURS ON BEHALF OF NEW ULM FROM ANY
PIPELINE, SUPPLIER, OR OTHER THIRD PARTY, SHALL BE PASSED THROUGH
TO, AND PAID IN FULL BY, NEW ULM. HUTCHINSON SHALL PROVIDE TO NEW
ULM IN WRITING FULL DETAILS CONCERNING ANY SUCH CHARGES.
D. GOOD FAITHDISPUTE-• IF NEW ULM, IN GOOD FAITH, DISPUTES THE
AMOUNT OF ANY INVOICE RENDERED BY HUTCHINSON, OR ANY PART
THEREOF, NEW ULM SHALL PAY THE FULL AMOUNT OF THE INVOICE.
HUTCHINSON SHALL PROMPTLY PROVIDE IN WRITING TO NEW ULM
SUPPORTING DOCUMENTATION ACCEPTABLE IN INDUSTRY PRACTICE TO
SUPPORT THE AMOUNT INVOICED, AND NEW ULM SHALL PROMPTLY PROVIDE
TO HUTCHINSON IN WRITING THE BASIS FOR ANY DISPUTE, INCLUDING
SUPPORTING DOCUMENTATION ACCEPTABLE IN INDUSTRY PRACTICE. IN THE
EVENT THE PARTIES ARE UNABLE TO RESOLVE SUCH DISPUTE, EITHER PARTY
MAY PURSUE ANY REMEDY AVAILABLE AT LAW OR IN EQUITY TO ENFORCE ITS
RIGHTS PURSUANT TO THIS PROVISION.
NEW ULM TRANSPORTATION AGREEMENT
APRIL 1. 2026
E. RIGHT TO INSPECT - A PARTY SHALL HAVE THE RIGHT, AT ITS OWN EXPENSE,
UPON REASONABLE NOTICE AND AT REASONABLE TIMES, TO EXAMINE AND
AUDIT AND TO OBTAIN COPIES OF THE RELEVANT PORTION OF THE BOOKS,
RECORDS, EMAILS, AND TELEPHONE RECORDINGS OF THE OTHER PARTY
ONLY TO THE EXTENT REASONABLY NECESSARY TO VERIFY THE ACCURACY
OF ANY STATEMENT, CHARGE, PAYMENT, OR COMPUTATION MADE UNDER
THIS AGREEMENT. THIS RIGHT TO EXAMINE, AUDIT, AND TO OBTAIN COPIES
SHALL NOT BE AVAILABLE WITH RESPECT TO PROPRIETARY INFORMATION
NOT DIRECTLY RELEVANT TO TRANSACTIONS UNDER THIS AGREEMENT.
F. FINALITY -ALL INVOICES AND BILLINGS SHALL BE CONCLUSIVELY
PRESUMED FINAL AND ACCURATE AND ALL ASSOCIATED CLAIMS FOR UNDER -
OR OVERPAYMENTS SHALL BE DEEMED WAIVED UNLESS SUCH INVOICES OR
BILLINGS ARE OBJECTED TO, IN WRITING, WITH ADEQUATE EXPLANATION
AND/OR DOCUMENTATION, WITHIN TWO YEARS AFTER THE INITIAL BILLING
DATE FOR THE INVOICE OR BILL IN DISPUTE.
6. CONDITIONS OF SERVICE.
A. FIRM CAPACITY REQUIREMENT - HUTCHINSON HEREBY CERTIFIES THAT IT
HAS SUFFICIENT FIRM TRANSPORTATION CAPACITY TO PROVIDE THE
AMOUNT OF FIRM TRANSPORTATION SERVICE TO NEW ULM PURSUANT TO
THE TERMS OF THIS AGREEMENT FOR THE TERM OF THIS AGREEMENT.
B. EFFECT OF FAILURE TO PROVIDE GAS SUPPLIES
1 . NEW ULM AGREES TO IMMEDIATELY CURTAIL ITS DELIVERIES AT
HUTCHINSON's DELIVERY POINT UNDER THIS AGREEMENT
WHEN NEW ULM's GAS SUPPLIES ARE NOT RECEIVED INTO
HUTCHINSON's RECEIPT POINT, UNLESS THE PARTIES AGREE
OTHERWISE IN WRITING.
2. NEW ULM SHALL INDEMNIFY, DEFEND AND HOLD HUTCHINSON
HARMLESS FOR ANY DAMAGES CAUSED BY NEW ULM's FAILURE
TO DELIVER, OR TO HAVE DELIVERED ON ITS BEHALF, SUPPLIES
AT HUTCHINSON's RECEIPT POINT FOR TRANSPORTATION
OVER HUTCHINSON's SYSTEM.
7. OPERATIONAL _REQUIREMENTS.
A. BTU ADJUSTMENT - THE QUANTITY OF GAS RECEIVED BY HUTCHINSON AT
HUTCHINSON's RECEIPT POINT, FROM NEW ULM, AND THE QUANTITY OF
GAS DELIVERED TO NEW ULM BY HUTCHINSON, AT HUTCHINSON's
DELIVERY POINT, SHALL BE THERMALLY BALANCED. BILLED VOLUMES MAY
BE ADJUSTED WHEN THE BTU CONTENT OF NEW ULM's GAS VARIES FROM
1,000 BTUs PER CUBIC FOOT.
B. GAS QUALITY- GAS RECEIVED BY HUTCHINSON, AT HUTCHINSON's
RECEIPT POINT, ON BEHALF OF NEW ULM, SHALL BE COMMERCIALLY CLEAN
AND MERCHANTABLE. SUCH GAS SHALL BE COMPARABLE IN QUALITY TO
NEW ULM TRANSPORTATION AGREEMENT
APRIL 1, 202,E
AND INTERCHANGEABLE WITH GAS PURCHASED BY HUTCHINSON.
HUTCHINSON RESERVES THE RIGHT TO REFUSE TO ACCEPT GAS THAT DOES
NOT MEET HUTCHINSON's QUALITY SPECIFICATIONS AS SPECIFIED IN THIS
AGREEMENT.
C. RESPONSIBILITY FOR TRANSPORTING _GAS SUPPLIES -, HUTCHINSON SHALL
HAVE THE SOLE RESPONSIBILITY FOR TRANSPORTING NATURAL GAS
SUPPLIES FROM THE RECEIPT POINT(S) TO THE DELIVERY POINT(S). NEW
ULM SHALL HAVE THE SOLE RESPONSIBILITY FOR TRANSPORTING NATURAL
GAS FROM THE DELIVERY POINT(S).
8. AGENTS.
A. DESIIGNATION OF AGENTS - NEW ULM MAY DESIGNATE AN AGENT FOR
NOMINATING AND SCHEDULING VOLUMES FOR TRANSPORTATION ON
HUTCHINSON's SYSTEM. NEW ULM SHALL NOTIFY HUTCHINSON IN
WRITING AT LEAST FIFTEEN (1 5) BUSINESS DAYS PRIOR TO THE FIRST DAY
OF THE MONTH IN WHICH SUCH SERVICES WILL BE UTILIZED THAT A THIRD
PARTY HAS BEEN DESIGNATED AS NEW ULM'S AGENT AND SHALL ACT AS
AGENT FOR NEW ULM FOR PURPOSES OF NOMINATIONS, BILLING, AND/OR
OTHER FUNCTIONS AS SPECIFIED BY NEW ULM. IF NEW ULM UTILIZES AN
AGENT FOR ANY OR ALL OF THESE PURPOSES, NEW ULM AGREES THAT
INFORMATION TO BE SUPPLIED BY HUTCHINSON TO NEW ULM MAY BE
SUPPLIED ONLY TO THE AGENT AND THAT INFORMATION SUPPLIED BY THE
AGENT TO HUTCHINSON SHALL BE RELIED UPON BY HUTCHINSON AS IF
PROVIDED BY NEW ULM. HUTCHINSON SHALL BE HELD HARMLESS FOR
ANY ERRORS BETWEEN NEW ULM AND SAID AGENT. SUCH DESIGNATION
SHALL REMAIN IN EFFECT UNTIL NEW ULM NOTIFIES HUTCHINSON IN
WRITING THAT THE PREVIOUSLY DESIGNATED AGENT IS NO LONGER ITS
AGENT.
B. INFORMATION REQUIRED - NEW ULM SHALL PROVIDE THE FOLLOWING
INFORMATION TO HUTCHINSON CONCERNING EACH AGENT USED BY NEW
ULM FOR ANY PURPOSE:
NAME AND ADDRESS OF THE AGENT OR AGENTS;
2. PRIMARY AND SECONDARY CONTACT PERSONS FOR THE AGENT
OR AGENTS;
3. TELEPHONE AND E-MAIL ADDRESSES FOR PRIMARY AND
SECONDARY CONTACT PERSONS FOR THE AGENT OR AGENTS;
AND
4. TWENTY -FOUR-HOUR TELEPHONE NUMBER FOR WEEKENDS AND
HOLIDAYS FOR THE AGENT OR AGENTS.
C. NEW ULM TO REMAIN LIABLE - NEW ULM MAY ELECT TO HAVE ITS BILL
FOR SERVICES UNDER THIS AGREEMENT SENT DIRECTLY TO ITS AGENT.
HOWEVER, IF NEW ULM SELECTS THIS OPTION, NEW ULM REMAINS FULLY
NEW ULM TRANSPORTATION AGREEMENT �+
APRIL 1, 2026 V
LIABLE FOR ANY BILL RENDERED BY HUTCHINSON. ALL DEADLINES SET
FORTH IN THIS AGREEMENT SHALL CONTINUE TO APPLY, REGARDLESS OF
WHETHER HUTCHINSON's BILL IS SENT DIRECTLY TO NEW ULM OR TO
NEW ULM's DESIGNATED AGENT.
9. NOMINATIONS AND SCHEDULING.
A. FIRST OF THE MONTH NOMINATIONS - BY 7:00 A.M. CENTRAL CLOCK TIME
("C.C.T."), AT LEAST FIVE (5) BUSINESS DAYS PRIOR TO THE FIRST OF EACH
MONTH NEW ULM OR ITS DESIGNATED AGENT SHALL PROVIDE
HUTCHINSON A WRITTEN ESTIMATE OF NEW ULM's DAILY FIRM
TRANSPORTATION CAPACITY REQUIREMENTS AND TOTAL MONTHLY
REQUIREMENT FOR TRANSPORTATION SERVICE UNDER THIS AGREEMENT.
ABSENT AGREEMENT IN WRITING, NOMINATIONS BY NEW ULM OR ITS
DESIGNATED AGENT MAY NOT EXCEED NEW ULM's ("MDQ").
B. DAILY NOMINATIONS — NEW ULM OR ITS DESIGNATED AGENT SHALL
NOTIFY HUTCHINSON OF ANY REQUESTED CHANGE TO ITS NOMINATION AT
HUTCHINSON's RECEIPT POINT, IN WRITING, BY 8:00 A.M. C.C.T AT LEAST
ONE (1) BUSINESS DAY PRIOR TO THE DATE OF THE REQUESTED CHANGE.
HUTCHINSON SHALL GRANT SUCH REQUESTS IN ITS REASONABLE
DISCRETION. ABSENT AGREEMENT IN WRITING, NOMINATIONS BY NEW ULM
OR ITS DESIGNATED AGENT MAY NOT EXCEED NEW ULM's MDQ.
C. CHANGES TO NOMINATIONS RESULTING FROMCURTAILMENTOR
INTERRUPTION - IF A CURTAILMENT OR INTERRUPTION IS CALLED UNDER THE
TERMS AND CONDITIONS OF THIS AGREEMENT, HUTCHINSON SHALL NOTIFY
NEW ULM OR ITS DESIGNATED AGENT AS SOON AS REASONABLY POSSIBLE
AND AS NECESSARY TO MAINTAIN THE INTEGRITY OF THE SYSTEM, OF THE
RECEIPT AND DELIVERY CONDITIONS APPLICABLE TO SERVICE UNDER THIS
AGREEMENT. SUCH CONDITIONS SHALL BECOME EFFECTIVE BEGINNING
THE NEXT GAS DAY COMMENCING AT 9:00 A.M. C.C.T., OR AT SUCH EARLIER
TIME AS IS NECESSARY. UNDER THESE CONDITIONS, HUTCHINSON SHALL
HAVE THE RIGHT TO REQUIRE REDUCTIONS IN PREVIOUSLY NOMINATED
AMOUNTS UNDER THIS PROVISION, CONSISTENT WITH OTHER PROVISIONS
OF THIS AGREEMENT.
D. WAIVER - HUTCHINSON MAY, IN ITS SOLE DISCRETION AND ON A NON-
DISCRIMINATORY BASIS, WAIVE ANY OF THE NOMINATION REQUIREMENTS
SET FORTH IN THIS SECTION IF HUTCHINSON DETERMINES THAT IT CAN
ACCOMMODATE SUCH NOMINATIONS.
E. LATE NOMINATION — IF HUTCHINSON HAS NOT WAIVED THE NOMINATION
REQUIREMENTS, HUTCHINSON MAY STILL, IN ITS SOLE DISCRETION AND ON
A NON-DISCRIMINATORY BASIS, CONFIRM A LATE NOMINATION.
NEW ULM TRANSPORTATION AGREEMENT 7
APRIL 1, 2026
10. BALANCING.
A. DAILY BALANCING RE UIRED - ON A DAILY BASIS, NEW ULM OR ITS
DESIGNATED AGENT SHALL BALANCE (1) THE RECEIPT OF NEW ULM's GAS
VOLUMES AT HUTCHINSON's RECEIPT POINT WITH (2) THE DELIVERY OF
THERMALLY EQUIVALENT GAS VOLUMES BY HUTCHINSON TO NEW ULM AT
THE HUTCHINSON DELIVERY POINT. DIFFERENCES BETWEEN DAILY
RECEIPTS FROM AND DAILY DELIVERIES TO NEW ULM SHALL BE
ACCUMULATED IN AN IMBALANCE ACCOUNT. NEW ULM OR ITS
DESIGNATED AGENT SHALL MONITOR RECEIPTS AND DELIVERIES ON ITS
BEHALF AND SHALL ADJUST ITS CONSUMPTION OF GAS SO AS TO ENSURE
THAT ITS RECEIPTS AND DELIVERIES ARE IN BALANCE TO THE EXTENT
PRACTICABLE.
B. POSITIVE AND NEGATIVE DAILY OR MONTHLY mmIMBALANCES - A POSITIVE
DAILY OR MONTHLY IMBALANCE OCCURS WHEN RECEIPTS OF GAS, AT THE
HUTCHINSON RECEIPT POINT, ON BEHALF OF NEW ULM EXCEED
DELIVERIES OF GAS TO NEW ULM AT THE HUTCHINSON DELIVERY POINT.
A NEGATIVE DAILY OR MONTHLY IMBALANCE OCCURS WHEN DELIVERIES OF
GAS To NEW ULM, AT THE HUTCHINSON DELIVERY POINT, EXCEED
RECEIPTS OF GAS ON BEHALF OF NEW ULM AT THE HUTCHINSON RECEIPT
POINT.
C. DAILY BALANCINGLIMITATION- NEW ULM SHALL BE PERMITTED TO INCUR
A POSITIVE DAILY IMBALANCE OR A NEGATIVE DAILY IMBALANCE OF UP TO
25% OF NEW ULM's DAILY -NOMINATED QUANTITY, AT HUTCHINSON's
DELIVERY POINT, EXCEPT DURING CURTAILMENT OR INTERRUPTION UNDER
THE TERMS OF THIS AGREEMENT. DURING CURTAILMENT OR INTERRUPTION,
NEW ULM SHALL BE REQUIRED TO ABIDE BY THE TERMS OF ANY
CURTAILMENT OR INTERRUPTION INSTRUCTIONS ISSUED BY HUTCHINSON.
D. MONTHLYBALANCINGLIMITATION - NEW ULM MAY INCUR A CUMULATIVE
MONTHLY POSITIVE OR NEGATIVE IMBALANCE OF UP TO AND INCLUDING
40% OF NEW ULM's MDQ. NO IMBALANCE CHARGES SHALL APPLY TO
CUMULATIVE MONTHLY IMBALANCES UP TO AND INCLUDING THIS 40% OF
NEW ULM's MDQ.
1 1. SCHEDULING AND IMBALANCE CHARGES.
A. DAILY SCHEDULING CHARGES.
1 . DAILY DELIVERIES IN EXCESS OF NOMINATED QUANTITIES - IF DAILY
DELIVERY TO NEW ULM, AT HUTCHINSON's DELIVERY POINT,
EXCEEDS NEW ULM's NOMINATION AT HUTCHINSON's RECEIPT
POINT, FOR THAT DAY, NEW ULM SHALL PAY THE FOLLOWING
CHARGES:
FOR DELIVERIES, AT HUTCHINSON's DELIVERY POINT, IN EXCESS OF
NEW ULM's DAILY NOMINATION, AT HUTCHINSON's RECEIPT POINT,
PLUS THE DAILY TOLERANCE OF 25% OF NEW ULM's DAILY
NEW ULM TRANSPORTATION AGREEMENT APRIL 1, 2026 a
NOMINATED QUANTITY, NEW ULM SHALL PAY AN ADDITIONAL
CHARGE OF $O. 1 Of DTH.
FOR DELIVERIES, AT HUTCHINSON's DELIVERY POINT, IN EXCESS OF
NEW ULM's DAILY MDQ, NEW ULM SHALL PAY AN ADDITIONAL
TRANSPORTATION CHARGE OF $ 9.00IDTH FOR EACH OCCURRENCE
IN ADDITION TO ANY OTHER CHARGES THAT MAY APPLY.
HUTCHINSON MAY ELECT TO WAIVE THESE CHARGES ON A
PARTICULAR DAY OR DAYS. WAIVER OF THESE CHARGES ON ANY DAY
OR DAYS SHALL NOT BE CONSTRUED TO BE A WAIVER FOR ANY
SUBSEQUENT DAY.
2. DAILY DELIVERIESIT LESS THAN NOMINATED UANTITIES,- IF DAILY
DELIVERY TO NEW ULM, AT HUTCHINSON's DELIVERY POINT, IS LESS
THAN NEW ULM'S NOMINATION, AT HUTCHINSON's RECEIPT POINT,
FOR THAT DAY, NEW ULM SHALL PAY THE FOLLOWING CHARGES:
FOR DELIVERIES AT THE HUTCHINSON DELIVERY POINT THAT ARE
LESS THAN NEW ULM'S DAILY NOMINATION, AT HUTCHINSON's
RECEIPT POINT, MINUS THE DAILY TOLERANCE OF 25% OF NEW
ULM'S DAILY -NOMINATED QUANTITY, AT HUTCHINSON'S RECEIPT
POINT, NEW ULM SHALL PAY AN ADDITIONAL CHARGE OF
$O. 1 OIDTH.
HUTCHINSON MAY ELECT TO WAIVE THESE CHARGES ON A
PARTICULAR DAY OR DAYS. WAIVER OF THESE CHARGES ON ANY DAY
OR DAYS SHALL NOT BE CONSTRUED TO BE A WAIVER FOR ANY
SUBSEQUENT DAY.
3. OTHER CHARGES - IF HUTCHINSON INCURS ANY ADDITIONAL,
VERIFIABLE CHARGES FROM ITS INTERSTATE PIPELINE SUPPLIER
DIRECTLY AS A RESULT OF NEW ULM'S IMBALANCE, THOSE COSTS
SHALL BE PAID IN FULL BY NEW ULM. HUTCHINSON SHALL PROVIDE
TO NEW ULM FULL DETAILS OF THESE CHARGES IN WRITING ON OR
BEFORE THE BILLING DATE.
4. EFFECT ON CHARGES w THESE CHARGES ARE IN ADDITION TO, AND
NOT IN PLACE OF, ANY CHARGES IMPOSED ON NEW ULM BY AN
ENTITY OTHER THAN HUTCHINSON.
5. LIMITATIONS W NOTWITHSTANDING ANY OTHER PROVISION OF THIS
AGREEMENT, NEW ULM SHALL NOT BE LIABLE FOR ANY DAILY
SCHEDULING CHARGES INCURRED AS A RESULT OF HUTCHINSON's
FAILURE TO NOMINATE, SCHEDULE, AND/OR CONFIRM THE CORRECT
AMOUNT OF DAILY FIRM TRANSPORTATION CAPACITY FOR NEW ULM.
IN SUCH INSTANCE, HUTCHINSON SHALL PAY SUCH DAILY
SCHEDULING CHARGES OR REIMBURSE NEW ULM FOR SUCH DAILY
SCHEDULING CHARGES PAID BY NEW ULM.
NEW ULM TRANSPORTATION AGREEMENT A
APRIL 1, 2026 9
B. SETTLEMENTOFMONTHLY IMBALANCES -NEW ULM SHALL BE REQUIRED
TO SETTLE OUTSTANDING IMBALANCES ON A MONTHLY BASIS. ON A
MONTHLY BASIS, BY THE 20TH OF THE FOLLOWING MONTH OR THE NEXT
BUSINESS DAY FOLLOWING THE 20TH OF THE MONTH IF THE 20TH OF THE
MONTH FALLS ON A SATURDAY, SUNDAY, OR LEGAL HOLIDAY, HUTCHINSON
SHALL PROVIDE AN IMBALANCE STATEMENT TO NEW ULM DETAILING THE
DAILY QUANTITIES RECEIVED ON BEHALF OF NEW ULM, AT THE
HUTCHINSON RECEIPT POINT, AND THE DAILY VOLUMES DELIVERED TO
NEW ULM AT THE HUTCHINSON DELIVERY POINT. ANY POSITIVE OR
NEGATIVE IMBALANCE REMAINING AT THE END OF A GIVEN MONTH SHALL BE
RESOLVED AS FOLLOWS:
POSITIVE IMBALANCE - IN ADDITION TO ANY OTHER APPLICABLE
CHARGES, INCLUDING, BUT NOT LIMITED TO, THE CHARGES SET
FORTH ABOVE, ANY POSITIVE MONTHLY IMBALANCE GREATER THAN
40% OF NEW ULM'S MDQ SHALL BE ASSESSED A POSITIVE
MONTHLY IMBALANCE CHARGE OF $0.1 O/DTH. HUTCHINSON
SHALL ALLOW NEW ULM TO ROLL THE OUTSTANDING IMBALANCE
QUANTITIES INTO FOLLOWING MONTH.
2. NEGATIVE IMBALANCE - IN ADDITION TO ANY OTHER APPLICABLE
CHARGES, INCLUDING, BUT NOT LIMITED TO, THE CHARGES SET
FORTH ABOVE, ANY NEGATIVE MONTHLY IMBALANCE GREATER THAN
40% OF NEW ULM'S MDQ SHALL BE ASSESSED A NEGATIVE
MONTHLY IMBALANCE CHARGE OF $0.1 O/DTH. HUTCHINSON
SHALL ALLOW NEW ULM TO ROLL THE OUTSTANDING IMBALANCE
QUANTITIES INTO FOLLOWING MONTH.
3. OTHER CHARGES - IF HUTCHINSON INCURS ANY ADDITIONAL,
VERIFIABLE CHARGES FROM ITS INTERSTATE PIPELINE SUPPLIER
DIRECTLY AS A RESULT OF NEW ULM'S IMBALANCE, THOSE COSTS
SHALL BE PAID IN FULL BY NEW ULM. HUTCHINSON SHALL PROVIDE
TO NEW ULM FULL DETAILS OF THESE CHARGES IN WRITING ON OR
BEFORE THE BILLING DATE.
4. EFFECT ON CHARGES - THESE CHARGES ARE IN ADDITION TO, AND
NOT IN PLACE OF, ANY CHARGES IMPOSED ON NEW ULM BY AN
ENTITY OTHER THAN HUTCHINSON.
5. LIMITATIONS - NOTWITHSTANDING ANY OTHER PROVISION OF THIS
AGREEMENT, NEW ULM SHALL NOT BE LIABLE FOR ANY IMBALANCE
CHARGES INCURRED AS A RESULT OF HUTCHINSON's FAILURE TO
NOMINATE, SCHEDULE, AND/OR CONFIRM THE CORRECT AMOUNT OF
FIRM TRANSPORTATION CAPACITY. IN SUCH INSTANCE, HUTCHINSON
SHALL PAY FOR SUCH IMBALANCE CHARGES OR REIMBURSE NEW
ULM FOR SUCH IMBALANCE CHARGES PAID BY NEW ULM.
12. PENALTY „mFOR UNAUTHORIZED RECEIPTS AT THE NEW ULM RECEIPT POINT
NEW ULM TRANSPORTATION AGREEMENT 1 0
APRIL 1, 2026
DURING CURTAILMENT OR INTERRUPTION.
PROVIDED THAT HUTCHINSON HAS COMPLIED WITH THE TERMS OF THIS
AGREEMENT WITH RESPECT TO SUCH CURTAILMENT OR INTERRUPTION, IF NEW
ULM FAILS TO CURTAIL OR INTERRUPT ITS RECEIPTS AT THE NEW ULM RECEIPT
POINT WHEN DIRECTED TO DO SO BY HUTCHINSON, NEW ULM SHALL BE BILLED
FOR ALL VOLUMES TAKEN IN EXCESS OF THE APPLICABLE LIMITATION AT A RATE
EQUAL TO THE DAILY CHICAGO INDEX PLUS $ 10.00 PER DTH. IN ADDITION,
HUTCHINSON SHALL HAVE THE RIGHT TO DISCONNECT NEW ULM'S SUPPLY OF
GAS, AT HUTCHINSON's DELIVERY POINT, IF NEW ULM FAILS TO CURTAIL OR
INTERRUPT ITS USE OF GAS WHEN AND AS DIRECTED BY HUTCHINSON.
HUTCHINSON MUST RESTORE SUCH SERVICE AS SOON AS PRACTICABLE
FOLLOWING ANY SUCH DISCONNECTION.
13. TITLE _LIABILITY, AND INSURANCE.
A. TITLE - GAS RECEIVED BY HUTCHINSON ON BEHALF OF NEW ULM FOR
DELIVERY TO NEW ULM SHALL REMAIN THE PROPERTY OF NEW ULM.
B. LIABILITY - HUTCHINSON SHALL NOT BE LIABLE TO NEW ULM FOR ANY
LOSS OF GAS FOR ANY CAUSE OTHER THAN NEGLIGENCE OR MISCONDUCT
BY HUTCHINSON OR ITS EMPLOYEES. NEW ULM'S GAS MAY BE
COMMINGLED WITH OTHER GAS SUPPLIES IN HUTCHINSON's SYSTEM.
C. INSURANCE - NEW ULM SHALL BE RESPONSIBLE FOR MAINTAINING
SUFFICIENT INSURANCE AS NECESSARY TO PROTECT ITS PROPERTY AND
OTHER INTERESTS IN THE GAS PRIOR TO, DURING, AND AFTER ITS RECEIPT BY
HUTCHINSON. HUTCHINSON SHALL BE RESPONSIBLE FOR MAINTAINING
SUFFICIENT INSURANCE AS NECESSARY TO PROTECT ITS PROPERTY AND
OTHER INTERESTS IN PROVIDING TRANSPORTATION SERVICE UNDER THIS
AGREEMENT TO NEW ULM.
14. CURTAILMENT AND INTERRUPTION.
SERVICE UNDER THIS AGREEMENT MAY BE CURTAILED OR INTERRUPTED AS
NECESSARY DUE TO PHYSICAL, OPERATIONAL, OR OTHER SIMILAR CONSTRAINTS
ON HUTCHINSON'S SYSTEM. IF HUTCHINSON IS REQUIRED TO CURTAIL OR
INTERRUPT SERVICE DUE TO CAPACITY CONSTRAINTS, FORCE MAJEURE EVENTS,
SYSTEM INTEGRITY, OR OTHER CONDITIONS, ANY INTERRUPTIBLE SERVICES
PROVIDED TO OTHER ENTITIES BY HUTCHINSON SHALL BE CURTAILED
COMPLETELY BEFORE FIRM SERVICES ARE CURTAILED, AND FIRM
TRANSPORTATION SERVICES UNDER THIS AGREEMENT SHALL BE CURTAILED ON A
PRO RATA BASIS WITH HUTCHINSON's OTHER FIRM SALES AND/OR
TRANSPORTATION SERVICES.
15. FORCE MAJEURE,.
A. DEFINITION - EITHER PARTY SHALL BE EXCUSED FROM PERFORMANCE
NEW ULM TRANSPORTATION AGREEMENT 1 y
APRIL 1, 2026 1
UNDER THIS AGREEMENT By FORCE MAJEURE ACTS AND EVENTS. "FORC
MAJEURE"SHALL iN ACTS AND EVENTS
,, CONTROL
THE PARTY CLAIMING FORCE MAJEURE, AND SHALL INCLUDE, BUT NOT BE
LIMITED TO, ACTS OF GOD, STRIKES, LOCKOUTS, MATERIAL, EQUIPMENT, 0
LABOR SHORTAGES, WARS, RIOTS, INSURRECTIONS, EPIDEMICS,
PANDEMICS, a", D' EARTHQUAKES, FLOODS,
GOVERNMENT OR COURT ORDERS, CIVIL DISTURBANCES, EXPLOSIONS,
BREAKAGE OR ACCIDENT TO MACHINERY OR PIPELINES, FREEZING OF
WELLS OR PIPELINES, OR ANY OTHER CAUSE OF AT5V,
SPECIFICALLY ENUMERATED HEREIN OR NOT, THAT
CONTROL OF THE PARTY CLAIMINGi, "
I IF HUTCHINSON IS UNABLE TO PROVIDE SERVICE UNDER THIS
AGREEMENT DUE TO 4FORCEMAJEURE ACT OR EVENT,
PROVIDEHUTCHINSON'S OBLIGATION TO
AGREEMENT SHALL BE SUSPENDED FOR THE DURATION OF THE
THE FORCE MAJEURE EVENT 4 REASONABLY AS
POSSIBLEBY ANY MEANS PRACTICABLE, INCLUDING, BUT NOT
LIMITED TO, TELEPHONE OR FACSIMILE,SHALL
DETAILSTHE R, MAJEURE ACT OR EVENT IN
WRITING WITHIN A REASONABLE AMOUNT OF
HUTCHINSON SHALL WORK TO REMEDY THE FORCE MAJEURE
ACT OR EVENT AS SOON AS REASONABLY POSSIBLE AND SHALL
KEEP NEW ULM APPRISED OF THE TIME, DATE,AND
CIRCUMSTANCESar UNDER THIS AGREEMENT
REQUIREDSHALL BE RESTORED. NEW ULM IS NOT , , P,
CHARGESAY ANY
rt
FORCE MAJEURE ACT OR EVENT.
2. IF NEW ULM IS UNABLE TO TAKE SERVICE UNDER THIS
AGREEMENT DUE TO A FORCE MAJEURE ACT OR EVENT,
OBLIGATION TO PROVIDE SERVICE UNDER THIS
AGREEMENT ,4 BE SUSPENDED FOR THE
DURATION
ACT OR EVENT. NEW ULM SHALL
THE FORCE MAJEURE EVENT AS SOON AS REASONABLY
POSSIBLE BY ANY MEANS PRACTICABLE, INCLUDING, BUT NOT
LIMITED TO, TELEPHONE OR FACSIMILE, AND SHALL
AK
DETAILSTHE er ' MAJEURE ACT ,R EVENT IN
WRITING REASONABLEAMOUNT THEREAFTER.
NEW ULM SHALL WORK TO REMEDY THE FORCE MAJEURE ACT
OR EVENT AS SOON AS REASONABLY POSSIS AND SHALL
KEEP HUTCHINSON APPRISED OF THE TIME, DATE, AND
CIRCUMSTANCES WHEN NEW ULM WILL RESUME SERVICE
UNDER THIS AGREEMENT. HUTCHINSON IS NOT REQUIRED TO
PROVIDE SERVICE UNDER THIS AGREEMENT
OF THE FORCE MAJEURE ACT OR EVENT.
NEw ULM TRANSPORTATION AGREEMENT y
RIL 1, 2026 1
C. LIMITATIONS ON FORCE wMAJEURE- NEITHER PARTY SHALL BE ENTITLED TO
THE BENEFIT OF THE PROVISIONS OF FORCE MAJEURE TO THE EXTENT
PERFORMANCE IS AFFECTED BY ANY OR ALL OF THE FOLLOWING
CIRCUMSTANCES: (I) THE CURTAILMENT OF INTERRUPTIBLE OR SECONDARY
FIRM TRANSPORTATION UNLESS PRIMARY, IN -PATH, FIRM TRANSPORTATION
IS ALSO CURTAILED; (II) THE PARTY CLAIMING EXCUSE FAILED TO REMEDY
THE CONDITION AND TO RESUME THE PERFORMANCE OF SUCH COVENANTS
OR OBLIGATIONS WITH REASONABLE DISPATCH; OR (III) ECONOMIC
HARDSHIP OF EITHER PARTY. NOTWITHSTANDING ANY OTHER PROVISION OF
THIS AGREEMENT, THE PARTY CLAIMING FORCE MAJEURE SHALL NOT BE
EXCUSED FROM ITS RESPONSIBILITY FOR IMBALANCE CHARGES.
16. NOTICES.
A. ADDRESSES - ALL INVOICES, PAYMENTS AND OTHER COMMUNICATIONS
MADE PURSUANT TO THIS AGREEMENT SHALL BE MADE TO THE ADDRESSES
SPECIFIED IN WRITING BY THE RESPECTIVE PARTIES FROM TIME TO TIME.
B. ACCEPTABLE FORMS, - ALL NOTICES REQUIRED HEREUNDER MAY BE SENT
BY FACSIMILE OR MUTUALLY ACCEPTABLE ELECTRONIC MEANS, A
NATIONALLY RECOGNIZED OVERNIGHT COURIER SERVICE, FIRST CLASS MAIL,
OR HAND DELIVERED.
C. DELIVERY DATE - IN THE ABSENCE OF PROOF OF THE ACTUAL RECEIPT DATE
FOR SUCH NOTICES, THE FOLLOWING PRESUMPTIONS WILL APPLY.
NOTICES SENT BY FACSIMILE SHALL BE DEEMED TO HAVE BEEN RECEIVED
UPON THE SENDING PARTY'S RECEIPT OF ITS FACSIMILE MACHINETS
CONFIRMATION OF SUCCESSFUL TRANSMISSION. IF THE DAY ON WHICH
SUCH FACSIMILE IS RECEIVED IS NOT A BUSINESS DAY OR IS AFTER FIVE P.M.
C.C.T., ON A BUSINESS DAY, THEN SUCH FACSIMILE SHALL BE DEEMED TO
HAVE BEEN RECEIVED ON THE NEXT FOLLOWING BUSINESS DAY. NOTICE BY
OVERNIGHT MAIL OR COURIER SHALL BE DEEMED TO HAVE BEEN RECEIVED
ON THE NEXT BUSINESS DAY AFTER IT WAS SENT OR SUCH EARLIER TIME AS
IS CONFIRMED BY THE RECEIVING PARTY. NOTICE VIA FIRST CLASS MAIL
SHALL BE CONSIDERED DELIVERED FIVE BUSINESS DAYS AFTER MAILING.
17. LAWS, REGULATIONS AND ORDERS.
A. SERVICE UNDER THIS AGREEMENT IS SUBJECT TO ALL PRESENT AND
FUTURE VALID LAWS, ORDERS, RULES, REGULATIONS, ETC, ISSUED BY ANY
FEDERAL, STATE, OR LOCAL AUTHORITY HAVING JURISDICTION OVER THE
MATTERS SET FORTH HEREIN.
B. IT IS UNDERSTOOD BY NEW ULM THAT IT IS ECONOMICALLY FEASIBLE TO
ENTER INTO THIS AGREEMENT TO PROVIDE FIRM TRANSPORTATION TO
NEW ULM ONLY DUE TO THE FACT THAT HUTCHINSON IS AN
UNREGULATED MUNICIPAL UTILITY. IF AT ANY TIME ANY OF THE ACTIVITIES
COVERED UNDER THIS AGREEMENT BECOME SUBJECT TO REGULATION BY
THE PUBLIC UTILITIES COMMISSION OF THE STATE OF MINNESOTA OR ANY
NEW ULM TRANSPORTATION AGREEMENT 1
APRIL 1, 2026
OTHER STATE OR FEDERAL AGENCY WHICH WOULD NOT CURRENTLY
CONTROL THE ACTIVITIES OF HUTCHINSON UNDER THIS AGREEMENT,
HUTCHINSON SHALL HAVE THE OPTION, AT ITS SOLE DISCRETION TO PASS
ALL COSTS INCURRED, DUE TO HUTCHINSON'S REGULATION, TO NEW
ULM FOR THE LENGTH OF THIS AGREEMENT.
18. MISCELLANEOUS PROVISIONS.
A. DECLARATION OF, INVALIDITY w 1F ANY PROVISION OF THIS AGREEMENT IS
DETERMINED TO BE INVALID, VOID, OR UNENFORCEABLE BY ANY COURT OR
OTHER ENTITY HAVING JURISDICTION, SUCH DETERMINATION SHALL NOT
INVALIDATE, VOID, OR MAKE UNENFORCEABLE ANY OTHER PROVISION,
AGREEMENT OR COVENANT OF THIS AGREEMENT; AND THE PARTIES AGREE
TO NEGOTIATE IN GOOD FAITH A REPLACEMENT TO SUCH INVALID, VOID OR
UNENFORCEABLE PROVISION AND/OR ANY OTHER AMENDMENTS AS MAY BE
NECESSARY TO ENSURE THAT THE AGREEMENT AS A WHOLE REFLECTS THE
ORIGINAL INTENTIONS OF THE PARTIES.
B. NO CONTINUING WAIV ER - NO WAIVER OF ANY BREACH OF THIS
AGREEMENT SHALL BE HELD TO BE A WAIVER OF ANY OTHER OR
SUBSEQUENT BREACH.
C. LIMITATIwON ON AGREEMENT, - THE PARTIES EXPRESSLY ACKNOWLEDGE AND
AGREE THAT IT IS NEITHER THE PURPOSE OF THIS AGREEMENT NOR THEIR
INTENT TO CREATE A PARTNERSHIP, JOINT VENTURE CONTRACT OR
COMPANY, ASSOCIATION OR TRUST, FIDUCIARY RELATIONSHIP OR
PARTNERSHIP BETWEEN THEM. EXCEPT AS EXPRESSLY PROVIDED HEREIN,
NEITHER PARTY SHALL HAVE ANY AUTHORITY TO ACT FOR OR ASSUME ANY
OBLIGATIONS, OR RESPONSIBILITIES ON BEHALF OF, THE OTHER PARTY.
D. COMPLETEAGREEMENT- THIS AGREEMENT SETS FORTH ALL
UNDERSTANDINGS BETWEEN THE PARTIES AS OF THE EFFECTIVE DATE
HEREIN. ANY PRIOR CONTRACTS, UNDERSTANDINGS AND
REPRESENTATIONS, WHETHER ORAL OR WRITTEN, RELATING TO THE
MATTERS ADDRESSED IN THIS AGREEMENT ARE MERGED INTO AND
SUPERSEDED BY THIS AGREEMENT. THIS AGREEMENT MAY BE AMENDED
ONLY BY A WRITING EXECUTED BY BOTH PARTIES.
E. GOVERNING LAW - THE INTERPRETATION AND PERFORMANCE OF THIS
AGREEMENT SHALL BE GOVERNED BY THE LAWS OF MINNESOTA,
EXCLUDING, HOWEVER, ANY CONFLICT OF LAWS RULE THAT WOULD APPLY
THE LAW OF ANOTHER JURISDICTION.
F. CONFIDENTIALITY REQUIRED - NEITHER PARTY SHALL DISCLOSE DIRECTLY
OR INDIRECTLY WITHOUT THE PRIOR WRITTEN CONSENT OF THE OTHER
PARTY THE TERMS OF THIS AGREEMENT TO A THIRD PARTY EXCEPT (I) IN
ORDER TO COMPLY WITH ANY APPLICABLE LAW, LEGAL PROCESS, ORDER,
REGULATION, OR EXCHANGE RULE; (II) TO THE EXTENT NECESSARY FOR THE
ENFORCEMENT OF THIS AGREEMENT; AND (III) TO THE EXTENT NECESSARY
TO IMPLEMENT AND PERFORM THIS AGREEMENT. EACH PARTY SHALL
NEW ULM TRANSPORTATION AGREEMENT {
APRIL 1, 2026 L
NOTIFY THE OTHER PARTY OF ANY DEMAND OR PROCEEDING OF WHICH IT IS
AWARE WHICH MAY RESULT IN DISCLOSURE OF THE TERMS OF THIS
AGREEMENT (OTHER THAN AS PERMITTED HEREUNDER) AND USE
REASONABLE EFFORTS TO PREVENT OR LIMIT THE DISCLOSURE. THE
PARTIES SHALL BE ENTITLED TO ALL REMEDIES AVAILABLE AT LAW OR IN
EQUITY TO ENFORCE OR SEEK RELIEF IN CONNECTION WITH THIS
CONFIDENTIALITY OBLIGATION. THE TERMS OF THIS AGREEMENT SHALL BE
KEPT CONFIDENTIAL BY THE PARTIES HERETO FOR TWO YEARS FROM THE
EXPIRATION OR TERMINATION OF THIS AGREEMENT.
IN THE EVENT THAT DISCLOSURE IS REQUIRED BY A GOVERNMENTAL BODY
OR APPLICABLE LAW, THE PARTY SUBJECT TO SUCH REQUIREMENT MAY
DISCLOSE THE MATERIAL TERMS OF THIS AGREEMENT TO THE EXTENT SO
REQUIRED, BUT SHALL PROMPTLY NOTIFY THE OTHER PARTY, PRIOR TO
DISCLOSURE, AND SHALL COOPERATE (CONSISTENT WITH THE DISCLOSING
PARTY'S LEGAL OBLIGATIONS) WITH THE OTHER PARTY'S EFFORTS TO
OBTAIN PROTECTIVE ORDERS OR SIMILAR RESTRAINTS WITH RESPECT TO
SUCH DISCLOSURE AT THE EXPENSE OF THE OTHER PARTY.
G. AUTHORITY TO ENTER AGREEMENT - EACH PARTY TO THIS AGREEMENT
REPRESENTS AND WARRANTS THAT IT HAS FULL AND COMPLETE AUTHORITY
TO ENTER INTO AND PERFORM THIS AGREEMENT. EACH PERSON WHO
EXECUTES THIS AGREEMENT ON BEHALF OF EITHER PARTY REPRESENTS
AND WARRANTS THAT IT HAS FULL AND COMPLETE AUTHORITY TO DO SO
AND THAT SUCH PARTY WILL BE BOUND THEREBY.
H. No THIRD- PARTY BENEFICIARY, - THERE IS NO THIRD -PARTY BENEFICIARY TO
THIS AGREEMENT,
NEW ULM TRANSPORTATION AGREEMENT y
APRIL 1, 2026 1
WHEREFORE, THE PARTIES HAVE EXECUTED THIS AGREEMENT THROUGH THEIR DULY
AUTHORIZED REPRESENTATIVES EFFECTIVE AS OF THE DATE SPECIFIED ABOVE
HUTCHINSON UTILITIES
COMMISSION
BY:
NAME:
TITLE:
DATE:
WITNESS:
DATE
NEW ULM PUBLIC UTILITIES
COMMISSION
BY:
NAME: L' �l I"I°I
TITLE: V
DATE:.......
WITNESS
DATE: z
NEW ULM TRANSPORTATION AGREEMENT G+
APRIL 1, 2026 V
NATURAL GAS FIRM TRANSPORTATION CAPACITY AGREEMENT
BETWEEN HUTCHINSON UTILITIES COMMISSION
AND NEW ULM
ATTACHMENT A
RECEIPT POINT
HUTCHINSON UTILITIES COMMISSION MAY RECEIVE NATURAL GAS FROM NEW
ULM AT THE FOLLOWING RECEIPT POINT:
STATION NAME,
NBPL COMPRESSOR STATION 13
TRIMONT
COUNTY CITY
MARTIN TRIMONT
DELIVERY POINT
STATE
MINNESOTA
HUTCHINSON UTILITIES COMMISSION MAY DELIVER NATURAL GAS TO NEW ULM
AT THE FOLLOWING DELIVERY POINT:
STATION NAME COUNTY
HUC/NEW ULM INTERCONNECT BROWN
STATION
17
CITY
NEW ULM
STATE
MINNESOTA
HUTCHINSON UTILITIES COMMISSION
^I'�xP61Tti'°"
Board Action Form
Agenda Item: Approval of the New Ulm Interconnect Agreement
Presenter: Jeremy Carter
Agenda Item Type:
Time Requested (Minutes): 5
New Business
Attachments: Yes
BACKGROUND/EXPLANATION OFAGENDA ITEM:
In order for HUC to supply and transport natural gas to the City of New Ulm an
interconnect agreement needs to be in place between both parties.
The interconnect agreement establishes the commodity custody transfer point and the
interconnection point between Hutchinson's natural gas pipeline facilities and New Ulm's
natural gas pipeline facilities.
This agreement also spells out the equipment necessary at the interconnection station to
transport and read the flow of natural gas at predetermined pressures. A monthly fee of
$660 is billed to New Ulm to provide monthly operation and maintenance of the facilities.
This routine work includes: general maintenance and monthly testing, including monthly
calibration of pressure and temperature transmitters, remote terminal unit maintenance,
annual inspections and proving of meters.
Other non-rountine/special services work will be billed according to Exhibit A.
BOARD ACTION REQUESTED:
Approval of the New Ulm Interconnect Agreement
Fiscal Impact: Min. $7,920
Included in current budget: Yes Budget Change: No
PROJECT SECTION:
Total Project Cost: Remaining Cost:
0 Ni
IN FERCONNIECI AGREE.MEN" F'
INTERCONNECT AGREEMENT
THIS INTERCONNECT AGREEMENT, (THE "AGREEMENT"), 1S MADE AND
ENTERED INTO THIS 25TH DAY OF MARCH, 2026, TO BE EFFECTIVE AS OF THE 'I ST
DAY OF APRIL, 2026, BY AND BETWEEN NEW ULM PUBLIC UTILITIES ("NEW ULM")
A MINNESOTA MUNICIPAL UTILITY WITH OFFICES LOCATED AT 3 10 FIRST NORTH
STREET, NEW ULM, MINNESOTA 56073 AND HUTCHINSON UTILITIES COMMISSION
("HUTCHINSON") A MINNESOTA MUNICIPAL UTILITY LOCATED AT 225 MICHIGAN ST
SE, HUTCHINSON, MINNESOTA 55350. NEW ULM AND HUTCHINSON SHALL
HEREINAFTER SOMETIMES BE REFERRED TO SEPARATELY AS "PARTY" OR JOINTLY
AS "PARTIES."
WITNESSETH:
WHEREAS, NEW ULM WILL OWN INTRASTATE PIPELINE FACILITIES WHICH
ARE LOCATED WITHIN THE STATE OF MINNESOTA;
WHEREAS, HUTCHINSON OWNS AND OPERATES AN EXISTING INTRASTATE
NATURAL GAS PIPELINE SYSTEM WHICH COMMENCES FROM A POINT ON THE
NORTHERN BORDER PIPELINE NEAR TRIMONT, MINNESOTA TO A POINT OF
TERMINUS NEAR HUTCHINSON, MINNESOTA; AND
WHEREAS, NEW ULM DESIRES TO ESTABLISH AND MAINTAIN
INTERCONNECTION BETWEEN ITS PIPELINE FACILITIES AND THE NATURAL GAS
PIPELINE FACILITIES OF HUTCHINSON AND HUTCHINSON IS WILLING TO ESTABLISH
AND MAINTAIN SUCH INTERCONNECTION UNDER THE TERMS AND CONDITIONS SET
FORTH HEREIN; AND
WHEREAS, NEW ULM AND HUTCHINSON DESIRE TO HAVE THE
INTERCONNECTION BETWEEN THEIR RESPECTIVE FACILITIES IN SERVICE ON OR
BEFORE APRIL 1, 2026;
NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND OF THE
MUTUAL COVENANTS AND AGREEMENTS HEREINAFTER SET FORTH, THE PARTIES,
EACH FOR ITSELF AND FOR ITS SUCCESSORS AND PERMITTED ASSIGNS, HEREBY
AGREE AS FOLLOWS:
New Ulm Interconnect Agreement 1
April 1, 2026
1 . THE POINT OF INTERCONNECTION BETWEEN HUTCHINSON'S NATURAL
GAS PIPELINE FACILITIES AND NEW ULM'S NATURAL GAS PIPELINE
FACILITIES SHALL BE LOCATED ON PROPERTY IN BROWN COUNTY,
MINNESOTA LEGALLY DESCRIBED AS FOLLOWS:
A PIECE OF LAND 100 FT. BY 100 FT. LYING NORTH OF
KC ROAD IN GOV'T LOT 7 OF SECTION 2-1 1 ON-3 1 W.
(HEREINAFTER REFERRED TO AS THE "NEW ULM METER
STATION")
2. HUTCHINSON WILL OWN AND MAINTAIN THE FACILITIES LISTED IN
SECTIONS 2.1 THROUGH 2.7 (HEREIN REFERRED TO AS THE
"HUTCHINSON INTERCONNECT FACILITIES") CAPABLE OF DELIVERING
TO NEW ULM 20 MMSCF/D AT HUTCHINSON'S LINE PRESSURE.
HUTCHINSON LINE PRESSURE AT THE CUSTODY TRANSFER POINT MAY
FROM TIME TO TIME BE REDUCED BELOW HUTCHINSON'S MAINLINE
PRESSURE BECAUSE OF FRICTIONAL LOSSES CAUSED BY THE
HUTCHINSON DELIVERY FACILITIES.
2.1 METER RUN. A SINGLE MASS FLOW METER AND SPECIFIC
GRAVITY METER IN ADDITION TO METER RUN PIPING DESIGNED
AND INSTALLED IN ACCORDANCE WITH HUTCHINSON
ENGINEERING STANDARDS. THE METER RUN WILL BE USED FOR
CUSTODY TRANSFER GAS VOLUME MEASUREMENT.
2.2 PIPING. PIPING IS INSTALLED FROM THE SIDE VALVE TO THE
PIPING ON THE METER AND THEN TO THE DOWNSTREAM FLANGE
OF THE CUSTODY TRANSFER CUSTOMER VALVE. AN INSULATING
GASKET KIT IS INSTALLED IN THE DOWNSTREAM FLANGE OF THE
CUSTOMER VALVE FOR ELECTRICAL ISOLATION BETWEEN THE
HUTCHINSON AND NEW ULM PIPING SYSTEMS. ALL BURIED
PIPING INSTALLED IN THIS AREA SHALL BE AT A MINIMUM DEPTH
OF 3 FEET. THE ABOVE GRADE PIPING IS DESIGNED PER
HUTCHINSON ENGINEERING STANDARDS.
HUTCHINSON PIPING AT THE HUTCHINSON INTERCONNECT
FACILITIES IS DESIGNED FOR A DESIGN PRESSURE OF 1,440
PSIG WITH A 0.5 DESIGN FACTOR PER U.S. DEPARTMENT OF
TRANSPORTATION (DOT) PIPELINE SAFETY REGULATIONS,
PART 192 FOR NATURAL GAS. THE NEW ULM INTERCONNECT
PIPING IS DESIGNED FOR 1,440 PSIG. IF A LOWER DESIGN
PRESSURE IS EVER INSTALLED ON THE INTERCONNECT PIPING,
NEW ULM SHALL INSTALL CODE APPROVED SAFETY VALVES TO
PROTECT THEIR SYSTEM FROM ACCIDENTAL OVERPRESSURE BY
THE HUTCHISON GAS SUPPLY.
New Ulm Interconnect Agreement 2
April 1, 2026
2.3 FILTER/METER SKID. THE METER ASSEMBLY CONTAINS THE
METER, AND A BYPASS LINE AROUND THE FILTER FOR FILTER
MAINTENANCE. THE STATION DESIGN WILL NOT INCLUDE
AUTOMATIC STATION BLOW DOWN.
2.4 VALVES. THE SIDE VALVE AND THE CUSTOMER VALVE WILL BE
MANUALLY OPERATED.
2.5 PRESSURE ANDITITITITIT mTEMPERATURE TRANSMITTERS. ALL
TRANSMITTERS SHALL ADHERE TO HUTCHINSON ENGINEERING
STANDARDS.
2.6 CABLE AND CONDUIT. ALL NECESSARY CONDUIT AND CABLE
FROM THE MEASUREMENT FACILITIES TO THE RTU. CONDUIT
SHALL BE GALVANIZED AND RIGID ABOVE GRADE AND PVC
COATED RIGID BELOW GROUND.
2.7 REMOTE TERMINAL UNIT (RTU). HUTCHINSON WILL INSTALL,
MAINTAIN, AND OPERATE A RTU AND A FLOW COMPUTER WITH
ELECTRONIC FLOW MEASUREMENT (EFM) CAPABILITIES.
3. HUTCHINSON SHALL CONTROL ALL VOLUMES DELIVERED TO THE NEW
ULM METER STATION.
4. NEW ULM WILL OWN, MAINTAIN AND OPERATE THE FOLLOWING
FACILITIES (HEREIN REFERRED TO AS THE "NEW ULM INTERCONNECT
FACILITIES") DOWNSTREAM OF THE CUSTODY TRANSFER POINT:
4.1 PIPING AND RELATED EQUIPMENT. A CONNECTING 8 INCH O.D.
LINE WITH OVERPRESSURE PROTECTION AS REQUIRED.
5. HUTCHINSON WILL SUPPLY NEW ULM WITH THE FOLLOWING: A SIGNAL
REPRESENTATIVE OF THE INSTANTANEOUS NATURAL GAS FLOW RATE;
AND A PRESSURE TAP AND THERMAL WELL LOCATED ON THE METER
RUN TO BE USED WITH NEW ULM TRANSMITTERS. NEW ULM WILL
PROVIDE ITS OWN POWER, DATA COMMUNICATION EQUIPMENT AND
TELEPHONE SERVICE. GROUNDING SHALL BE CONNECTED TO THE
HUTCHINSON'S GROUNDING GRID.
6. THE DATA INFORMATION COLLECTED BY THE RTU WILL BE ACCESSED
BY HUTCHINSON'S TELECOMMUNICATION FACILITIES ON A
CONTINUOUS BASIS. HUTCHINSON SHALL ALLOW NEW ULM TO
ACCESS VOLUMES, TEMPERATURE AND PRESSURE AT THE
INTERCONNECT. HUTCHINSON WILL DEDICATE A COMMUNICATION
PORT ON HUTCHINSON'S FLOW COMPUTER FOR READ ONLY USE BY
New Ulm Interconnect Agreement 3
April 1, 2026
NEW ULM. NEW ULM MAY INSTALL ITS OWN SENSOR TO MEASURE
VOLUMES, TEMPERATURE AND PRESSURE ON ITS SIDE OF THE
INTERCONNECT. NEW ULM AGREES THAT SUCH INTERCONNECTION
WILL NOT CAUSE INTERFERENCE TO HUTCHINSON'S EQUIPMENT.
HUTCHINSON MAKES NO WARRANTIES AS TO THE ACCURACY OR
COMPLETENESS OF ANY DATA PROVIDED TO NEW ULM PURSUANT TO
THIS AGREEMENT; HOWEVER, UPON DISCOVERING, OR BEING ALERTED
TO, A DISCREPANCY IN THE DATA BETWEEN THE PARTIES' RESPECTIVE
EQUIPMENT, THE PARTIES SHALL COOPERATE WITH EACH OTHER AND
MAKE ANY CHANGES TO THEIR RESPECTIVE EQUIPMENT AS
REASONABLY NECESSARY TO RESOLVE THE DISCREPANCY. THE
PARTIES SHALL EACH BE RESPONSIBLE FOR THEIR OWN EQUIPMENT,
RISKS OF BODILY INJURY, DEATH OR PROPERTY DAMAGE AND FOR ANY
AND ALL ACTIONS, CLAIMS, LIABILITIES OR DAMAGES ARISING OUT OF
THEIR OWN NEGLIGENCE.
7. THE CUSTODY TRANSFER POINT WILL BE LOCATED AT THE OUTLET
FLANGE OF THE CUSTOMER VALVE.
8. NEW ULM IS RESPONSIBLE FOR CONSTRUCTING AND MAINTAINING THE
NEW ULM INTERCONNECT FACILITIES, PROVIDED THAT HUTCHINSON
SHALL HAVE THE RIGHT TO APPROVE THE DESIGN OF ALL NEW ULM
INTERCONNECT FACILITIES AT THE NEW ULM METER STATION.
HUTCHINSON SHALL HAVE THE RIGHT TO REVIEW ALL CONSTRUCTION
PROCEDURES AND TO INSPECT ALL CONSTRUCTION WORK IN
PROGRESS FOR THE NEW ULM INTERCONNECT FACILITIES LOCATED
AT THE NEW ULM METER STATION. IF IT SHOULD APPEAR THAT ANY OF
THE CONSTRUCTION WORK ON THE NEW ULM INTERCONNECT
FACILITIES IS ENDANGERING THE FACILITIES OF HUTCHINSON, THEN
HUTCHINSON SHALL HAVE THE RIGHT TO STOP WORK UNTIL
NECESSARY CORRECTIONS ARE MADE AND APPROVED BY
HUTCHINSON. HUTCHINSON SHALL HAVE THE RIGHT TO HAVE AT
LEAST ONE REPRESENTATIVE PRESENT WHEN ANY WORK IS REQUIRED
AT THE NEW ULM METER STATION. NEW ULM SHALL NOTIFY
HUTCHINSON AS TO THE SCHEDULE AND THE NATURE OF ANY WORK
TO BE PERFORMED NO LESS THAN ONE (1) WEEK IN ADVANCE OF THE
WORK.
9. IF ADDITIONAL PROPERTY ADJACENT TO THE NEW ULM METER
STATION IS NECESSARY TO CONSTRUCT, OPERATE AND TO OBTAIN
ACCESS TO THE HUTCHINSON INTERCONNECT FACILITIES, SUCH
ADDITIONAL PROPERTY AND RIGHT-OF-WAY WILL BE ACQUIRED BY
HUTCHINSON.
10. HUTCHINSON SHALL OBTAIN ALL OF THE PROPERTY OR RIGHT-OF-WAY
New Ulm Interconnect Agreement 4
April 1, 2026
NECESSARY FOR THE CONSTRUCTION, OPERATION AND ACCESS TO
THE NEW ULM INTERCONNECT FACILITIES AND NEW ULM'S RELATED
FACILITIES. HUTCHINSON SHALL OBTAIN AND BE IN COMPLIANCE WITH
ALL APPLICABLE REGULATORY AND/OR ENVIRONMENTAL PERMITS
AND CLEARANCES NECESSARY FOR THE CONSTRUCTION AND
OPERATION OF NEW ULM'S FACILITIES. NEW ULM SHALL BE IN
COMPLIANCE WITH ALL FEDERAL, STATE, AND LOCAL LAWS AND
REGULATIONS THAT GOVERN THE OPERATION OF THE NEW ULM
INTERCONNECT FACILITIES. NEW ULM SHALL BE RESPONSIBLE FOR
THE GENERAL MAINTENANCE AND SITE UP -KEEP (INCLUDING PAINTING,
WEED CONTROL, AND GENERAL BUILDING AND GROUND
MAINTENANCE) OF THE NEW ULM AND HUTCHINSON INTERCONNECT
SITE.
1 1 . HUTCHINSON SHALL OBTAIN ALL OF THE PROPERTY OR RIGHT-OF-WAY
NECESSARY FOR THE CONSTRUCTION, OPERATION AND ACCESS TO
THE HUTCHINSON INTERCONNECT FACILITIES. HUTCHINSON SHALL
OBTAIN AND BE IN COMPLIANCE WITH ALL APPLICABLE REGULATORY
AND/OR ENVIRONMENTAL PERMITS AND CLEARANCES NECESSARY
FOR THE CONSTRUCTION AND OPERATION OF ITS FACILITIES.
HUTCHINSON SHALL BE IN COMPLIANCE WITH ALL FEDERAL, STATE,
AND LOCAL LAWS AND REGULATIONS THAT GOVERN THE OPERATION
OF THE HUTCHINSON INTERCONNECT FACILITIES.
12. HUTCHINSON WILL OPERATE AND MAINTAIN THE HUTCHINSON
INTERCONNECT FACILITIES. NEW ULM SHALL PAY TO HUTCHINSON A
MONTHLY OPERATION AND MAINTENANCE FEE FOR ROUTINE SERVICES
OF $660 PER MONTH EFFECTIVE AS OF THE 1 ST DAY OF APRIL 2026.
FOR PURPOSES OF THIS AGREEMENT, ROUTINE SERVICES SHALL
INCLUDE THE FOLLOWING: (1) GENERAL MAINTENANCE AND MONTHLY
TESTING OF THE HUTCHINSON INTERCONNECT FACILITIES (INCLUDING
MONTHLY CALIBRATION OF PRESSURE AND TEMPERATURE
TRANSMITTERS, REMOTE TERMINAL UNIT MAINTENANCE, AND ANNUAL
INSPECTION AND PROVING OF METERS); NOT INCLUDING RESTORATION
OF DAMAGE TO RIGHT-OF-WAY, SITES, BUILDINGS, THE HUTCHINSON
INTERCONNECT FACILITIES, OR PIPING CAUSED BY FLOODING, FIRE OR
FROST HEAVING.
12.1 NEW ULM SHALL ALSO REIMBURSE HUTCHINSON FOR ANY
MATERIALS AND SUPPLIES PURCHASED AND CONTRACTED
SERVICES (AT THE RATES AS PROVIDED IN SECTIONS 16.2 AND
16.3) IN CONNECTION WITH THE PROVISION OF ROUTINE
SERVICES.
13. IN ADDITION TO THE ROUTINE SERVICES SET FORTH ABOVE,
HUTCHINSON SHALL, PERFORM SPECIAL SERVICES FROM TIME TO
New Ulm Interconnect Agreement 5
April 1, 2026
TIME AS HUTCHINSON DETERMINES, ARE NECESSARY TO MAINTAIN THE
HUTCHINSON INTERCONNECT FACILITIES UPON THE PRIOR WRITTEN
APPROVAL OF NEW ULM. "SPECIAL SERVICES" MAY INCLUDE,
WITHOUT LIMITATION, THE FOLLOWING: (1) MAINTENANCE OF ROADS; (11)
SPECIAL CONSTRUCTION; (III) OPERATION OR MAINTENANCE SERVICES;
(IV) RECONSTRUCTION AND RECONDITIONING OF EQUIPMENT; AND (V)
OVERHAUL, AND/OR REPLACEMENT OF THE HUTCHINSON
INTERCONNECT FACILITIES. HUTCHINSON WILL PROCURE AND
FURNISH ALL MATERIALS, EQUIPMENT, SUPPLIES, SERVICES, AND
LABOR NECESSARY FOR SUCH SPECIAL SERVICES. IF NEW ULM
APPROVES SUCH SPECIAL SERVICES, EXPENSES WILL BE PAID IN
ACCORDANCE WITH SECTION 16 BELOW, AND HUTCHINSON SHALL
INVOICE NEW ULM FOR ALL SUCH EXPENSES SO INCURRED AND NEW
ULM SHALL PAY THE INVOICED AMOUNTS.
14. IN CASE OF AN EXPLOSION, FIRE, STORM, OR OTHER EMERGENCY
WHICH MIGHT THREATEN LIFE OR PROPERTY OR RENDER THE
HUTCHINSON INTERCONNECT FACILITIES OR ANY PART THEREOF
INCAPABLE OF CONTINUED OPERATION, HUTCHINSON MAY, AT ITS
SOLE DISCRETION, PROVIDE SUCH SERVICES (HEREIN CALLED
"EMERGENCY SERVICES") AND INCUR SUCH EXPENSES AS IN ITS SOLE
OPINION ARE REQUIRED AND CAN BE PROVIDED BY HUTCHINSON TO
DEAL WITH SUCH EMERGENCY, AND SHALL IMMEDIATELY REPORT SUCH
EMERGENCY TO NEW ULM. AS SOON AS PRACTICAL, AFTER SUCH
EXPENSES HAVE BEEN INCURRED, HUTCHINSON SHALL NOTIFY NEW
ULM THAT SUCH EXPENSES HAVE BEEN INCURRED, AND IN
ACCORDANCE WITH SECTION 16 BELOW, SHALL INVOICE NEW ULM
FOR ALL SUCH EXPENSES SO INCURRED AND NEW ULM SHALL PAY THE
INVOICED AMOUNTS.
15. HUTCHINSON SHALL INVOICE NEW ULM ON OR BEFORE THE 5TH DAY
OF EACH MONTH FOR THE FOLLOWING AMOUNTS: (I) THE FOLLOWING
MONTHS` OPERATION AND MAINTENANCE FEE; (11) THE PREVIOUS
MONTH'S MATERIALS AND SUPPLIES PURCHASED; (Ill) THE PREVIOUS
MONTH'S CONTRACTED SERVICES; AND (IV) ANY AMOUNT DUE UNDER
SECTIONS 13 AND 14. THE MONTHLY OPERATION AND MAINTENANCE
FEE FOR ROUTINE SERVICES WILL BE FIXED FROM THE EFFECTIVE DATE
OF THE INTERCONNECT AGREEMENT UNTIL DECEMBER 31, 203 1.
THEREAFTER, THE MONTHLY FEE FOR ROUTINE SERVICES MAY BE
INCREASED ON AN ANNUAL BASIS, PROVIDED THAT ANY SUCH
INCREASE SHALL BE PROPORTIONAL TO INCREASES IN COSTS
INCURRED BY HUTCHINSON RELATED TO ITS NATURAL GAS PIPELINE
FACILITIES, AND UNDER NO CIRCUMSTANCES SHALL THE MONTHLY FEE
FOR ROUTINE SERVICES INCREASE BY MORE THAN 10% OVER THE
PREVIOUS YEAR'S FEE. HUTCHINSON WILL NOTIFY NEW ULM OF ANY
SUCH INCREASE AT LEAST 90 DAYS PRIOR TO JANUARY 1 OF EACH
New Ulm Interconnect Agreement 6
April 1, 2026
SUBSEQUENT YEAR. IN THE EVENT PAYMENT OF ANY INVOICE AMOUNT
IS NOT MADE WITHIN 15 BUSINESS DAYS OF RECEIPT OF THE INVOICE,
INTEREST SHALL ACCRUE ON ALL UNPAID AMOUNTS AT THE RATE OF
1 O% PER ANNUM, OR THE LEGALLY AUTHORIZED MAXIMUM INTEREST
RATE, WHICHEVER IS LOWER.
16. THE CHARGES FOR SPECIAL SERVICES SHALL BE COMPUTED IN
ACCORDANCE WITH THE RATES PROVIDED IN EXHIBIT A, ATTACHED
HERETO AND INCORPORATED BY THIS REFERENCE. THE CHARGES FOR
ANY STANDBY EQUIPMENT, MATERIALS AND SUPPLIES, CONTRACTED
SERVICES, RENTALS AND REIMBURSABLE EXPENSES OF EMPLOYEES
INCURRED IN CONJUNCTION WITH THE PERFORMANCE OF THE SPECIAL
SERVICES SHALL BE IN ADDITION TO THE CHARGES COMPUTED IN
ACCORDANCE WITH THE RATES PROVIDED IN EXHIBIT A AND SHALL BE
CALCULATED IN ACCORDANCE WITH SECTIONS 16.1 THROUGH 16.6
BELOW.
THE CHARGES FOR EMERGENCY SERVICES SHALL BE COMPUTED IN
ACCORDANCE WITH THE RATES PROVIDED IN EXHIBIT A. THE CHARGES
FOR ANY STANDBY EQUIPMENT, MATERIALS AND SUPPLIES,
CONTRACTED SERVICES, RENTALS AND REIMBURSABLE EXPENSES OF
EMPLOYEES INCURRED IN CONJUNCTION WITH THE PERFORMANCE OF
THE EMERGENCY SERVICES SHALL BE IN ADDITION TO THE CHARGES
COMPUTED IN ACCORDANCE WITH THE RATES PROVIDED IN EXHIBIT A
AND SHALL BE CALCULATED IN ACCORDANCE WITH SECTIONS 1 6. 1
THROUGH 16.6 BELOW.
16.1 STANDBY EQUIPMENT. THE CHARGES FOR EQUIPMENT
MOBILIZED AND STANDING BY FOR THE PROVISIONS OF SPECIAL
SERVICES OR EMERGENCY SERVICES SHALL BE COMPUTED
USING ONE-HALF 0 /2) THE RATES PROVIDED IN EXHIBIT A.
16.2 MATERIALS AND SUPPLIES. THE CHARGES FOR MATERIALS AND
SUPPLIES PURCHASED IN CONJUNCTION WITH THE PROVISION
OF ROUTINE SERVICES, SPECIAL SERVICES OR EMERGENCY
SERVICES SHALL BE THE ACTUAL COST OF SUCH MATERIALS
AND SUPPLIES PLUS 1 5% (FIFTEEN PERCENT) OF THE COST FOR
BILLING AND HANDLING.
16.3 CONTRACTED SERVICES. THE CHARGES FOR ANY PORTION OF
THE ROUTINE SERVICES, SPECIAL SERVICES, OR EMERGENCY
SERVICES THAT HUTCHINSON CONTRACTS FOR WITH OTHERS
SHALL BE THE ACTUAL COST OF SUCH SERVICES PLUS 15%
(FIFTEEN PERCENT) OF THE COST FOR BILLING AND HANDLING.
New Ulm Interconnect Agreement 7
April 1, 2026
CONJUNCTION16.4 RENTALS. THE CHARGES FOR ANY RENTALS USED IN
PROVISION
ii' SPECIAL
11:4 lli.'.ICES R
BILLINGEMERGENCY SERVICES SHALL BE THE ACTUAL COST OF SUCH
RENTAL PLUS 15% (FIFTEEN PERCENT) OF THE COST FOR
AND HANDLING.
16.5 REIMBURSABLE EXPENSESr REASONABLE
PERSONAL AND TRAVEL EXPENSES w
PERFORMANCE
rr ♦ :' SPECIAL
♦ OR
EMERGENCY SERVICES
MEALS,INCLUDE ♦ iD THE NECESSARY
OUT-017-
POCKET REIMBURSABLE EXwT ' w-w BY
EMPLOYEES PERFORMANCE
r-. ♦ THEIR
16.6 CALCULATION OF CHARGES USING THE RATES SET FORTH IN
EXHIBIT A. ALL RATES SET FORTH IN EXHIBIT A INCLUDE FUEL,
LABOR BURDENS AND r ;. THE NUMBER
SPECIALHOURS/MILES USED IN CALCULATING THE CHARGES FOR
SERVICES, EMERGENCY SERVICES,r
EQUIPMENT WILL BEGIN EQUIPMENT AND PERSONNEL
LEAVERHOMEBASE 1 AND 'THEIR
RETURN
r. OTHEIRHOMErr
17. NEW ULM SHALL REIMBURSE
,w a:"
OPERATION AND MAINTENANCE FEE AND OTHER CHARGES AS
PROVIDED
E ♦ D AND AND EXPENSES
r SPECIAL SERVICES AND r SERVICES AS PROVIDED
A16, ND OF THE A
OF AN INVOICE(S) REFLECTING THE AMOUNTS TO B REIMBURSED.
17.1 IF PAYMENT FOR ANY OF THE INVOICED AMOUNTS AS PROVIDED
IN THE PARAGRAPH ABOVE IS NOT
♦DE By ,
BUSINESS DAYS OF THE DATE;.:UNPAID
♦♦ BEAR INTERESTrO'THE 15TH BUSINESS ♦
AFTER
THE BILLING DATE UNTIL PAID
, ♦ AT THE RATE
♦ O 0PER
A. OR THE
LEGALLY AUTHORIZED MAXIMUM INTEREST
.. RATE,
WHICHEVER IS LOWER. ALL COMPUTATIONS OF INTEREST SHALL
BE MADEON i YEAR OF 360DAYS FOR THE
ACTUAL NUMBER OF DAYS.
;.AY, WITHIN -rwo CALENDAR
YEARS FROM
OF ANY INVOICE, TAKE w O ANY INVOICE,
BILLING OR STATEMENT RENDERED By HUTCHINSON FOR ANY
AMOUNT a r D. NEW ULM SHALL NEVERTHELESSPAY IN
FULL WHEN DUE ALL INVOICES, BILLINGS OR STATEMENTS
SUBMITTED By HUTCHINSON FOR ALL COSTS INCURRED BY
HUTCHINSON FOR WHICH NEW ULM IS REQUIRED TO REIMBURSE
New Ulm Interconnect Agreement 8
April 1, 2026
HUTCHINSON AS PROVIDED IN THIS AGREEMENT. IF, HOWEVER,
THE AMOUNT AS TO WHICH SUCH WRITTEN EXCEPTION IS TAKEN
OR ANY PART THEREOF IS ULTIMATELY DETERMINED BY THE
PARTIES NOT TO HAVE BEEN INCURRED IN ACCORDANCE WITH
THIS AGREEMENT OR NOT TO HAVE BEEN A PROPER EXPENSE OR
EXPENDITURE INCURRED IN GOOD FAITH WHEN MADE, SUCH
AMOUNT OR PORTION THEREOF (AS THE CASE MAY BE) SHALL BE
REFUNDED BY HUTCHINSON TO NEW ULM TOGETHER WITH
INTEREST THEREON AT THE RATE OF INTEREST PER ANNUM AS
DEFINED IN THE PRECEDING PARAGRAPH ABOVE FOR THE
PERIOD FROM THE DATE OF PAYMENT BY NEW ULM TO THE DATE
OF REFUND BY HUTCHINSON.
18. HUTCHINSON WILL INSPECT, TEST, AND MAINTAIN THE METERING
INSTRUMENTATION IN ACCORDANCE WITH HUTCHINSON'S OPERATING
PROCEDURES, WHILE NEW ULM WILL HAVE THE RIGHT TO WITNESS OR
REQUEST INSPECTION AND TESTING RESULTS. FUTURE METER
CALIBRATION REPORTS CAN BE PROVIDED TO NEW ULM UPON
REQUEST. HUTCHINSON SHALL GIVE NEW ULM PRIOR NOTICE OF ALL
SCHEDULED INSTRUMENTATION INSPECTIONS AND TESTING. NEW
ULM WILL ALSO HAVE THE RIGHT TO AUDIT THE RECORDS OF THE
MEASUREMENT EQUIPMENT AT THE METERING FACILITIES.
19 ALL METERING OF GAS QUANTITIES DELIVERED AND SUBSEQUENT
BILLING SHALL BE DONE BY HUTCHINSON USING EFM. FLOWING
VOLUMES WILL BE CALCULATED IN ACCORDANCE WITH INDUSTRY
STANDARDS AND ADJUSTED FOR TEMPERATURE AND PRESSURE (AT A
PRESSURE BASE OF 14.73 PSIG AND A TEMPERATURE BASE OF 602 F).
GAS QUALITY VALUES WILL BE PROVIDED AS DETERMINED BY
HUTCHINSON AND WILL BE UTILIZED FOR PURPOSES OF CALCULATING
FLOW PARAMETERS.
20. NEW ULM SHALL BE RESPONSIBLE FOR ANY GAS LOST DUE TO THE
FACILITIES IT OWNS. NEW ULM WILL BE RESPONSIBLE FOR ALL LOSS
AND DAMAGE TO HUTCHINSON'S PROPERTY WHICH RESULTS FROM
THE NEGLIGENT ACTS OR OMISSIONS OF NEW ULM OR ITS AGENTS,
EMPLOYEES, REPRESENTATIVE OR CONTRACTORS IN THE DESIGN,
CONSTRUCTION, OPERATION OR MAINTENANCE OF NEW ULM`S
FACILITIES.
21. HUTCHINSON SHALL BE RESPONSIBLE FOR ANY GAS LOST DUE TO THE
FACILITIES IT OWNS. HUTCHINSON WILL BE RESPONSIBLE FOR ALL
LOSS AND DAMAGE TO NEW ULM'S PROPERTY WHICH RESULTS FROM
THE NEGLIGENT ACTS OR OMISSIONS OF HUTCHINSON OR ITS AGENTS,
EMPLOYEES, REPRESENTATIVES OR CONTRACTORS IN THE DESIGN,
CONSTRUCTION, OPERATION OR MAINTENANCE OF HUTCHINSON'S
New Ulm Interconnect Agreement 9
April 1, 2026
FACILITIES.
22. IN THE EVENT OF HUTCHINSON OR NEW ULM BEING RENDERED
UNABLE, WHOLLY OR IN PART, BY FORCE MAJEURE TO CARRY OUT ITS
OBLIGATIONS UNDER THIS AGREEMENT, EXCEPT PAYMENT OF MONEY,
IT IS AGREED UPON BY SUCH PARTY GIVING NOTICE AND REASONABLY
FULL PARTICULARS OF SUCH FORCE MAJEURE IN WRITING, EMAIL,
FACSIMILE OR TELEPHONE FOLLOWED BY WRITTEN CONFIRMATION TO
THE OTHER PARTY WITHIN A REASONABLE TIME AFTER THE
OCCURRENCE OF THE CAUSE RELIED ON, THEN THE OBLIGATIONS OF
THE PARTY GIVING SUCH NOTICE, SO FAR AS IT IS AFFECTED BY SUCH
FORCE MAJEURE, SHALL BE SUSPENDED DURING THE CONTINUANCE
OF ANY LIABILITY SO CAUSED, BUT FOR NO LONGER PERIOD, AND SUCH
CAUSE SHALL SO FAR AS POSSIBLE BE REMEDIED WITH ALL
REASONABLE DISPATCH.
THE TERM ITFORCE MAJEURE" AS USED HEREIN, SHALL MEAN ANY ACTS
OF GOD, STRIKES, LOCKOUTS OR OTHER LABOR DISPUTES OR
INDUSTRIAL DISTURBANCES, ACTS OF THE PUBLIC ENEMY, WARS,
TERRORISM, BLOCKADES, INSURRECTIONS, RIOTS, EPIDEMICS,
PANDEMICS, LANDSLIDES, LIGHTNING, EARTHQUAKES, FIRES,
HURRICANES, TORNADOES, OTHER STORMS, FLOODS, WASHOUTS OR
OTHER ACT OF NATURE, CIVIL DISTURBANCES, EXPLOSIONS,
BREAKAGE, ACCIDENT OR REPAIRS TO MACHINERY OR LINES OF PIPE,
TEMPORARY OR PERMANENT FAILURE OF GAS SUPPLY, INABILITY TO
OBTAIN OR UNAVOIDABLE DELAY IN OBTAINING PIPE, MATERIALS OR
OTHER EQUIPMENT, ACTS OR BINDING ORDERS OF ANY COURT OR
OTHER GOVERNMENTAL AUTHORITY WHETHER OR NOT HAVING
JURISDICTION, AND ANY OTHER CAUSE, WHETHER SIMILAR OR
DISSIMILAR TO ANY ABOVE ENUMERATED, NOT REASONABLY WITHIN
THE CONTROL OF THE PARTY CLAIMING RELIEF FROM LIABILITY AND
WHICH SUCH PARTY WAS OR WOULD HAVE BEEN UNABLE TO PREVENT
BY THE EXERCISE OF DUE DILIGENCE. FAILURE TO PREVENT OR SETTLE
ANY STRIKE OR STRIKES OR ANY DISPUTE LEADING TO A LOCKOUT
SHALL NOT BE CONSIDERED TO BE MATTER WITHIN THE CONTROL OF
THE PARTY CLAIMING RELIEF.
23. NEW ULM SHALL DEFEND, PROTECT, INDEMNIFY, AND HOLD HARMLESS
HUTCHINSON, ITS MEMBERS, DIRECTORS, OFFICERS, EMPLOYEES AND
AGENTS FROM AND AGAINST ALL LIABILITY, CLAIMS, LIENS, COSTS,
EXPENSES, DEMANDS, SUITS AND CAUSES OF ACTION OF EVERY KIND
AND CHARACTER ARISING IN FAVOR OF ANY PERSON OR PARTY,
INCLUDING THE PARTIES HERETO, AND THEIR EMPLOYEES AND
REPRESENTATIVES, ON ACCOUNT OF PERSONAL INJURIES OR DEATH,
OR DAMAGES TO PROPERTY (INCLUDING WITHOUT LIMITATION, CLAIMS
FOR POLLUTION AND ENVIRONMENTAL DAMAGE) IN ANY WAY DIRECTLY
New Ulm Interconnect Agreement 10
April 1, 2026
RESULTING FROM THE NEGLIGENT ACTS OR OMISSIONS OF NEW ULM,
ITS AGENTS, EMPLOYEES, REPRESENTATIVES OR CONTRACTORS. THIS
INDEMNITY INCLUDES NEW ULM'S AGREEMENT TO PAY ALL COSTS OF
DEFENSE, INCLUDING WITHOUT LIMITATION ATTORNEYS' FEES,
INCURRED BY ANY PERSON OR PARTY INDEMNIFIED HEREIN.
24. EXCEPT AS PROVIDED IN SECTION 6, HUTCHINSON SHALL DEFEND,
PROTECT, INDEMNIFY, AND HOLD HARMLESS NEW ULM, ITS MEMBERS,
DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS FROM AND AGAINST
ALL LIABILITY, CLAIMS, LIENS, COSTS, EXPENSES, DEMANDS, SUITS AND
CAUSES OF ACTION OF EVERY KIND AND CHARACTER ARISING IN FAVOR
OF ANY PERSON OR PARTY, INCLUDING THE PARTIES HERETO, AND
THEIR EMPLOYEES AND REPRESENTATIVES, ON ACCOUNT OF
PERSONAL INJURIES OR DEATH, OR DAMAGES TO PROPERTY
(INCLUDING WITHOUT LIMITATION, CLAIMS FOR POLLUTION AND
ENVIRONMENTAL DAMAGE) IN ANY WAY DIRECTLY RESULTING FROM
THE NEGLIGENT ACTS OR OMISSIONS OF HUTCHINSON, ITS AGENTS,
EMPLOYEES, REPRESENTATIVES OR CONTRACTORS. THIS INDEMNITY
INCLUDES HUTCHINSON'S AGREEMENT TO PAY ALL COSTS OF
DEFENSE, INCLUDING WITHOUT LIMITATION ATTORNEYS' FEES,
INCURRED BY ANY PERSON OR PARTY INDEMNIFIED HEREIN.
25. NEW ULM AGREES THAT THE OBLIGATIONS OF INDEMNIFICATION
HEREUNDER INCLUDE, BUT WITHOUT LIMITATION, LIENS BY THIRD
PERSONS AGAINST HUTCHINSON AND ITS PROPERTY BECAUSE OF
LABOR, SERVICES, MATERIALS, OR ANY OTHER SUBJECT OF LIEN,
FURNISHED TO NEW ULM, ITS ASSIGNEES OR SUBCONTRACTORS, IN
CONNECTION WITH THE WORK PERFORMED BY NEW ULM HEREUNDER.
26. HUTCHINSON AGREES THAT THE OBLIGATIONS OF INDEMNIFICATION
HEREUNDER INCLUDE, BUT WITHOUT LIMITATION, LIENS BY THIRD
PERSONS AGAINST NEW ULM AND ITS PROPERTY BECAUSE OF LABOR,
SERVICES, MATERIALS, OR ANY OTHER SUBJECT OF LIEN, FURNISHED
TO HUTCHINSON, ITS ASSIGNEES OR SUBCONTRACTORS, IN
CONNECTION WITH THE WORK PERFORMED BY HUTCHINSON
HEREUNDER.
27. NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY
INDIRECT, CONSEQUENTIAL, SPECIAL, EXEMPLARY OR PUNITIVE
DAMAGES OF ANY NATURE WHATSOEVER ARISING OUT OF OR RELATED
TO ACTIONS TAKEN OR OMISSIONS OF SUCH PARTY IN CONNECTION
WITH THIS AGREEMENT.
28. AT ALL TIMES DURING THIS AGREEMENT, EACH PARTY SHALL OBTAIN
AND MAINTAIN THE FOLLOWING INSURANCE:
New Ulm Interconnect Agreement 11
April 1, 2026
(A) WORKER'S COMPENSATION INSURANCE FOR ALL OF ITS
EMPLOYEES IN ACCORDANCE WITH THE STATUTORY
REQUIREMENTS OF THE STATE OF MINNESOTA. NEW
ULM SHALL ALSO CARRY EMPLOYER'S LIABILITY
COVERAGE WITH MINIMUM LIMITS AS FOLLOWS:
• $500,000 -- BODILY INJURY BY DISEASE PER
EMPLOYEE
• $500,000 -- BODILY INJURY BY DISEASE
AGGREGATE
• $500,000 - BODILY INJURY BY ACCIDENT
(B) COMMERCIAL GENERAL LIABILITY INSURANCE IN A
MINIMUM AMOUNT OF $ 1 ,500,000 PER OCCURRENCE;
$2,000,000 ANNUAL AGGREGATE.
(C) AUTOMOBILE LIABILITY INSURANCE COVERING OWNED,
NON -OWNED, AND HIRED VEHICLES WITH MINIMUM
COMBINED SINGLE LIABILITY LIMIT OF $ 1,000,000 PER
OCCURRENCE.
(D) EXCESS LIABILITY INSURANCE COVERAGE IN A MINIMUM
AMOUNT OF $2,000,000.
MAXIMUM LIABILITY IS LIMITED TO A COMBINED SINGLE LIMIT OF
$ 1 ,500,000 BY MINNESOTA STATUTE.
THE INSURANCE REQUIRED IN (B), (C) AND (D) SHALL REFLECT THAT
THE OTHER PARTY IS AN ADDITIONAL INSURED. WITHIN THIRTY (30)
DAYS OF EFFECTIVE DATE OF THIS AGREEMENT, EACH PARTY SHALL
FURNISH TO THE OTHER PARTY CERTIFICATES AS EVIDENCE SHOWING
THAT THE INSURANCE POLICIES TO BE CARRIED IN ACCORDANCE WITH
THIS PROVISION HAVE BEEN OBTAINED. ALL INSURANCE TO BE
CARRIED PURSUANT TO THE ABOVE SHALL BE ENDORSED TO REQUIRE
THE INSURER TO FURNISH 30 DAYS' WRITTEN NOTICE PRIOR TO
EFFECTIVE DATE OF ANY MODIFICATION OR CANCELLATION OF SUCH
INSURANCE TO THE CERTIFICATE HOLDER.
29. DELIVERY OF NATURAL GAS VOLUMES TO THE NEW ULM
INTERCONNECT FACILITIES WILL BE MADE PURSUANT TO THE NATURAL
GAS FIRM TRANSPORTATION CAPACITY AGREEMENT (THE
"TRANSPORTATION AGREEMENT") EXECUTED BETWEEN HUTCHINSON
AND NEW ULM. SHOULD ANY CONFLICT ARISE BETWEEN ANY
PROVISION OF THIS INTERCONNECT AGREEMENT AND THAT OF
TRANSPORTATION AGREEMENT, THE PROVISIONS OF HUTCHINSON'S
TRANSPORTATION AGREEMENTS SHALL CONTROL.
New Ulm Interconnect Agreement 12
April 1, 2026
30. HUTCHINSON SHALL HAVE THE RIGHT TO INSPECT AND AUDIT ALL
BOOKS, RECORDS OR ANY OTHER SUPPORTING EVIDENCE OF NEW
ULM THAT HUTCHINSON DEEMS NECESSARY IN ORDER TO DETERMINE
NEW ULM'S COMPLIANCE WITH THIS AGREEMENT, HUTCHINSON
POLICIES AND PROCEDURES, REGULATORY AUTHORITIES OR OTHER
LAWS AND REGULATIONS. HUTCHINSON SHALL HAVE THE RIGHT TO
RECEIVE COPIES OF ANY SUCH DOCUMENTATION REQUESTED.
HUTCHINSON'S RIGHT TO AUDIT SHALL EXTEND THROUGHOUT THE
TERM OF THIS AGREEMENT AND FOR A PERIOD OF THREE YEARS
THEREAFTER, OR LONGER IF REQUIRED BY LAW.
31. THIS AGREEMENT SHALL NOT BE ASSIGNED OR TRANSFERRED BY
EITHER PARTY IN ANY MANNER, BY OPERATION OF LAW OR OTHERWISE,
WITHOUT THE WRITTEN CONSENT OF THE OTHER PARTY, WHICH
CONSENT SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED;
PROVIDED HOWEVER, EITHER PARTY MAY WITHOUT THE NEED FOR
CONSENT FROM THE OTHER PARTY (AND WITHOUT RELIEVING THE
ASSIGNING PARTY FROM LIABILITY HEREUNDER) TRANSFER OR ASSIGN
ITS RIGHTS AND OBLIGATIONS HEREUNDER TO ANY PARENT, AFFILIATE
OR SUBSIDIARY OF SUCH PARTY; PROVIDED, HOWEVER, THAT IN EACH
SUCH CASE ANY SUCH ASSIGNEE SHALL AGREE IN WRITING TO BE
BOUND BY THE TERMS AND CONDITIONS HEREOF. SUBJECT THERETO,
THIS AGREEMENT SHALL INURE TO THE BENEFIT OF; AND BE BINDING
UPON, THE SUCCESSORS, ASSIGNS, AND LEGAL REPRESENTATIVES OF
THE RESPECTIVE PARTIES.
32. THIS AGREEMENT SHALL RUN CONCURRENTLY WITH THE NATURAL GAS
FIRM TRANSPORTATION CAPACITY AGREEMENT ENTERED INTO BY THE
PARTIES ON THE SAME DATE AS THIS AGREEMENT. IN THE EVENT THE
NATURAL GAS FIRM TRANSPORTATION CAPACITY AGREEMENT IS
TERMINATED, THIS AGREEMENT SHALL AUTOMATICALLY BE
TERMINATED; IN THE EVENT THE NATURAL GAS FIRM TRANSPORTATION
CAPACITY AGREEMENT IS EXTENDED BEYOND ITS INITIAL TERM, THIS
AGREEMENT SHALL BE AUTOMATICALLY EXTENDED FOR THE IDENTICAL
EXTENDED TERM. THIS PROVISION SHALL NOT PREVENT THE PARTIES
FROM ENTERING INTO A NEW, EXTENDED, OR AMENDED
INTERCONNECT AGREEMENT TO REPLACE THIS AGREEMENT, PROVIDED
THAT SUCH NEW, EXTENDED, OR AMENDED AGREEMENT IS IN WRITING,
SPECIFICALLY PROVIDES THAT IT IS A MODIFICATION OF THIS
AGREEMENT, AND IS EXECUTED BY BOTH PARTIES.
New Ulm Interconnect Agreement 13
April 1, 2026
IN WITNESS WHEREOF, NEW ULM AND HUTCHINSON HAVE EXECUTED
THIS AGREEMENT IN TWO (2) DUPLICATE ORIGINALS, EFFECTIVE AS OF THE DATE
FIRST WRITTEN ABOVE.
HUTCHINSON UTILITIES COMMISSION
40
NAME:
TITLE:, COMMISSIONPRESIDENT
DATE:
WITNESS:
DATE:
NEW ULM PUBLIC UTILITES
BY'„
NAME:
TITLE:
10
DATE a
WITNESS:,.,,,
New Ulm Interconnect Agreement 14
April 1, 2026
EXHIBIT A
HUTCHINSON UTILITIES COMMISSON
2026 EQUIPMENT RATES
'NOTE: ALL AVERAGE BILLABLE HOURLY RATES MAY BE ADJUSTED ANNUALLY
PURSUANT TO HUTCHINSON'S LABOR AGREEMENT AND BENEFIT COSTS.
New Ulm Interconnect Agreement 15
April 1, 2026
HUTCHINSON UTILITIES COMMISSION
^I'�xP61Tti'°"
Board Action Form
Agenda Item: Approve Req #10521- Close Interval Survey
Presenter: Byron Bettenhausen
Agenda Item Type:
Time Requested (Minutes): 5
New Business
Attachments: Yes
BACKGROUND/EXPLANATION OFAGENDA ITEM:
Lake Superior Consulting, LLC was requested to provide a quote to complete
approximately 20-miles of interrupted close interval survey (CIS) for the HUC.
A close interval survey is conducted on pipelines to assess the entire structure's cathodic
protection status by recording the pipe -to -soil potential profile. What sets a close interval
survey apart from other surveys is it communicates the protection levels along the entire
structure, rather than just sections or specific points on it. They identify otherwise hidden
risk areas so that the issues can be resolved and prevented from becoming larger.
They're typically performed at the system's inception to act as a starting line of
information. Then, they're followed up on every five years to compare the data to look for
early signs of corrosion or other issues. This is the industry standard for transmission
lines. It can be done more frequent if issues arise but the 5 year mark is industry best
practice.
Our transmission line has been in service for over 20 years and we have never done this
type of survey. Our goal would be to complete 1/5 of our Transmission line annually
going forward (20 miles each year).
see packet for both bids - Cost of Project:
CIS survey 20 miles of Transmission line $29,455
Management of the reporting and survey results $2,839
Total cost $32,294
We did receive a second quote from NIS do complete the same work in the same
location and their Proposal cost is $34,990.
BOARD ACTION REQUESTED:
Approve Req# 10521
Fiscal Impact: $32,294
Included in current budget: Yes El Budget Change: No
PROJECT SECTION:
Total Project Cost: $32,294 Remaining Cost:
IHI UT iU H II HI S U HII
UT'IIILIITIIIE'S
a I(,� ii'JG 11�p Ili II I! � �a II ii';� If1i
PURCHASE REQUISITION
HUTCHINSON UTILITIES COMMISSION
225 MICHIGAN ST SE
HUTCHINSON, MN 55350
Phone:320-587-4746 Fax:320-587-4721
LAKE SUPERIOR CONSULTING LLC
130 W SUPERIOR ST STE 500
DULUTH, MN 55802
Note
Description:
Cl survey 20 miles of transmission line
Date
Requisition No.
03/02/2026
010521
Required by:
04/01/2026
Requested by:
bbettenhausen
Item
No.
Part No.
Description
Qty
Unit
Due Date
Unit Price
Ext. Amount
COMPLETE CI SURVEY ON 20M
TRANSMISSION -
1
MFG. PART:
1.00
$32,294.000
$32,294.00
Total: 32,294.00
Date Printed: 03/20/2026 Requisitioned By: bbettenhausen Page: 1/1
%% LAKE SUPERIOR
% ,-CONSULTING
PROPOSAL
2026 Close Interval Survey
LSC Project #: 76926250140
1/15/2026
CLIENT INFORMATION
Client
Hutchinson Utilities
Commission
LSC INFORMATION
Department: Integrity Management
Point of Contact: Bryce Rusch Project Manager: Kara Falkowski
Point of Contact 320.583.9146 Project Manager 218.780.3471
Phone Number: Phone Number:
PROJECT INFORMATION
Project Location: Hutchinson, MN Travel Required: Yes
PROJECT SCHEDULE
Estimated Project Start: April 20, 2026 Estimated Project End: May 29, 2026
PROJECT SCOPE AND WORK PLAN
Lake Superior Consulting, LLC (LSC) was requested to provide a quote to complete approximately 20-miles of
interrupted close interval survey (CIS) for the Hutchinson Utilities Commission (Hutchinson). The following points
describe LSC's general scope and work plan as part of this project:
• LSC will mobilize experienced technicians, led by an Association for Materials Protection and Performance
(AMPP)-certified cathodic protection I (CP1) technician at a minimum, to the project site and begin onsite work
immediately upon arrival.
• All CIS will be completed in accordance with AMPP SP0207.
• Each CP system will be interrupted on a 12-second ON/4-second OFF, or 9-second ON/3-second OFF cycle for
the duration of survey each day. No other cycle will be used without prior approval.
o Prior to commencing CIS data collection, a direct current (DC) waveform will be recorded at various
locations and analyzed to ensure synchronized interruption and to check for the presence of dynamic
influence and capacitance. Waveforms will be recorded throughout the day to ensure quality CIS data is
collected.
• Stationary data loggers (SDLs) will be placed upstream, downstream, or within the survey segment as a means
of quality control to monitor for interruption changes and dynamic influence throughout the survey duration.
o A minimum of one SDL will be used during all survey.
o Data collected can also be reviewed to identify dynamic influence from foreign sources, as well as
compensate for telluric current influence if encountered.
• Pipe -to -soil (P/S) potential data will be obtained using the Allegro Data Logger with a backpack capable of auto-
chainage, a direct metallic contact to the pipeline, and calibrated Cu/CuSO4 reference electrodes.
o The OFF -delay time will be set such that reads are collected prior to significant depolarization. Reads will
not be collected during any identified spiking.
o AMPP SP0169 instant -OFF criteria will be utilized.
o Copper Copper -Sulfate reference electrodes will be used. They will be calibrated each day prior to
survey execution in accordance with AMPP TM0497. All surveys will be executed with reference cells
that are within 10 mV.
• ON and OFF P/S potentials will be taken at 10-foot intervals, directly over the pipeline when possible. Offset
reads will be collected as necessary and documented as such.
Project # 76926250140 2026 Close Interval Survey Page 1
o All areas along the pipeline will be surveyed unless physically impassible areas are encountered. These
could include waterways more than knee-deep, paved roads, and high fences.
o If depth of cover decreases to a point where a shorter spacing is required, LSC will adjust survey spacing
to 5-foot intervals.
• Depth of cover measurements will be gathered at intervals not to exceed 100 feet.
• To ensure accurate data alignment, GPS equipment will be used to record every P/S potential measurement
corresponding with the Allegro Data Logger.
• When encountered, changes in direction of the pipeline (PI), terrain, aboveground appurtenances, road
centerlines, line markers, fences, foreign line crossings, buildings, etc. will be documented in the data logger with
GPS location.
• Each P/S potential measurement will be recorded with a preset delay from the time the current interrupter
switches on and off to avoid inaccurate measurements resulting from anodic and/or cathodic voltage spiking.
• Upon completing a survey section and whenever possible, the surveyor will obtain the far -ground reading, near -
ground reading, alternating current voltage on the pipeline, and IR drop between test points. Any applicable
casings and foreign line measurements will also be recorded.
• Collected data will be processed daily throughout the survey to verify accuracy and completeness.
• Upon completion of all surveys, LSC will demobilize from the project site.
Office support will be provided by a project manager, engineering personnel, and data technicians as required to
efficiently execute the project, process the data, and generate LSC's final report. LSC's final report will describe the
survey completed, obstacles encountered, skipped sections, problem areas/troubleshooting encountered, present the
findings, and provide recommendations, if applicable. Included within the final report will be the following:
• Data deliverables.
o Waveprints.
o Post -processed data.
■ Raw files in .csv and .svy format.
■ Processed data in Excel format.
o Two-line CIS graphs.
• Daily reports.
• Equipment calibration certificates.
• Personnel and operator qualifications.
DELIVERABLES
1 Final Report
ASSUMPTIONS AND EXCEPTIONS
SCHEDULE
Within 45 days of field work completion
1. Hutchinson will set interruption and coordinate foreign interruption, if applicable.
2. Paved crossings will be skipped, and drilling will not be required.
3. Hazardous crossings which could compromise crew safety or damage equipment will be skipped.
4. The right-of-way is brushed and accessible. Dense brush areas will either be skipped or offset surveyed
depending on pipe depth and crossing conditions.
5. LSC takes no exceptions to this project.
TERMS AND CONDITIONS
This proposal, and in particular the pricing contained herein, is subject to the parties reaching mutually agreeable terms
of a contract or purchase order.
Project # 76926250140 2026 Close Interval Survey Page 2
STATEMENT OF FEES
Our best estimate for the overall cost of this project, on a time and materials basis, is $32,294.
Table 1: Statement of Fees
# Description Rate Unit Qty Total
1 Table A.1: Survey and Mobilization $29,455.00 Each 1 $29,455.00
2 Table A.2: Data Management and Reporting $2,839.00 Each 1 $2,839.00
Total $32,294.00
Approved By �,Date 1 /15/2026
Project # 76926250140 2026 Close Interval Survey Page 3
APPENDIX -1 DETAILED COST ESTIMATE
Table A.1: Survey and Mobilization
#
Description
Rate
Unit
Qty
Total
1
Cathodic Protection Technician II, AMPP Certified
$140.00
Hour
80
$11,200.00
2
Cathodic Protection Technician
$100.00
Hour
84
$8,400.00
3
CIS Equipment Package
$415.00
Day
8
$3,320.00
4
Per Diem (x2)
$200.00
Day
16
$3,200.00
5
4x4 Vehicle (x2)
$145.00
Day
16
$2,320.00
6
Mileage (IRS Published Rate)
$0.725
Mile
1400
$1,015.00
Total $29,455.00
Table A.2: Data Manaaement and Re
# Description Rate Unit Qtv Total
1 Project Manager $185.00 Hour 3 $555.00
2 Data Technician $98.00 Hour 8 $784.00
3 Engineer $150.00 Hour 10 $1,500.00
Total $2,839.00
Project # 76926250140 2026 Close Interval Survey Page 4
CLIENT INFORMATION DATE: 2/27/2026
COMPANY: Hutchinson Utilities
REPRESENTATIVE: Byron Bettenhausen
EMAIL: Bbettenhausen@hutchinsommn.gov
PROPOSAL #: 26-369P
Project Name: 20 Mile Close Interval Survey
Project Locations: Trimont, MN
43.758413,-94.750431 to 44.008326,-94.637985
SCOPE OF WORK
Close interval survey (CIS) 20 miles of pipeline
• Hutchinson MN Utilities to notify surrounding landowners of the CIS
• Mobilize to project location
• Set all rectifiers to interrupt on a 3 second ON and 1 second OFF starting in the OFF position
• Verify interruption daily
• Hutchinson MN Utilities to notify any foreign operators of the planned CIS and request interruption on
the same cycle
• Perform CIS/DOC over the line
• Wire to be removed daily
• Provide final report at the conclusion of the project to include survey data, waveforms, graphical plots,
and summary
SUBMITTALS
• Final report
CLIENT TO PROVIDE
• Access to site
• ROW and environmental review and approval
• All permitting (state, local, and internal)
• Existing CP records and drawings
• Landowner notification
ITEMS NOT INCLUDED
• Troubleshooting and/or repair of the CP system
SCHEDULE
• Work will be scheduled upon receipt of signed proposal and work order
• Estimated duration is (5) days plus reporting time; final report package to be provided within 30 days of
project completion
TOTAL LUMP SUM PROPOSAL $34,990.00
TERMS & CONDITIONS
• Tariff Adjustment Clause: The prices quoted herein are based on current tariffs and duties. In the event
of any changes in tariffs, duties, or other governmental charges imposed on the goods and services
quoted, we reserve the right to adjust the prices accordingly
• Mobilization is quoted using travel rates with 7 days advanced notice - failure to provide the minimum
advance notice specified in this section may result in additional charges
• Payment terms are Net 30 days from the date of NIS invoice
• No provisions have been made for retention in this proposal
• Any change in the scope of work as detailed in this proposal, will allow NIS to revise its quotation
• Any changes to the contracted scope of work shall be reported to NIS management prior to the start of
the work
• NIS overtime rates apply after eight (8) hours in a day and for all hours worked on Saturday, Sunday or
statutory holiday
• Standby hours for labor and equipment will be charged for a minimum of eight (8) hours per shift, per
day, per Time and Material rate sheet
• Shut down with less than 72-hour notice will result in twenty-four (24) hours billing for all personnel and
equipment on site
• Shutdown due to inclement weather may be billed at eight (8) hours plus per diem each day
• Daily travel time is charged portal to portal at the applicable rate at the time the travel occurs
• Site specific orientation, testing and/or examination at the direction of the client or the facility owner, will
be charged at the applicable labor rate. Fees for training will be billed at cost
• Progress invoices may be issued to assist Client in cost tracking for this project
• Should NIS be required to provide any item not specified in the sections "Scope of Work," additional
charges shall apply
• All NIS Terms and Conditions will apply unless otherwise stated herein
• NIS personnel reserve the right not to work in any areas or conditions deemed unsafe
Thank you,
NIS Representative
THIS PROPOSAL EXPIRES ON:
Date
4/13/2026
Client Representative Date
2 of 2
HUTCHINSON UTILITIES COMMISSION
^I'�xP61Tti'°"
Board Action Form
Agenda Item: Blasting and Recoat at MLBV 212 Site
Presenter: Byron Bettenhausen
Agenda Item Type:
Time Requested (Minutes): 5
New Business
Attachments: Yes
BACKGROUND/EXPLANATION OFAGENDA ITEM:
The coating at MLBV 212 is in need of removal and replacement. We will blast any
above ground piping or equipment and apply new coatings to keep our equipment safe
and in compliance. The project should take approx. 6 days to complete depending on
weather conditions.
NIS has submitted a bid for work related to MLBV 212 blast and recoat.
Total Labor Quote For the services listed above $33,265
Second Ave properties has submitted a bid for work related to MLBV 212 blast and
recoat. Total Labor Quote For the services listed above $35,465
BOARD ACTION REQUESTED:
Approval Req #10519
Fiscal Impact: $33,265
Included in current budget: Yes El Budget Change: No
PROJECT SECTION:
Total Project Cost: $33,265 Remaining Cost:
w� IHI UT U H II HI S U HII
UT'IIILIITIIIE'S
PURCHASE ORDER
HUTCHINSON UTILITIES COMMISSION
225 MICHIGAN ST SE
HUTCHINSON, MN 55350
Phone:320-587-4746 Fax:320-587-4721
SUPPLIER
VENDOR: 007554 NORTHERN INSPECTION
SERVICES LL
95 CENTER DR
GILBERTS, IL 60136
SHIP TO:
Hutchinson Utilities Commission
175 Michigan Street SE
Hutchinson, MN 55350
email: huc-ap@hutchinsonmn.gov
DATE P.O. No.
03/02/2026 I 010519
Supplier Phone: (847) 844-0602 Fax:
Email:
Terms - N30
Ship Via -
BILL TO:
Hutchinson Utilities Commission
225 Michigan Street SE
Hutchinson, MN 55350
email: huc-ap@hutchinsonmn.gov
Item No.
No.
Description
Qty
Unit
Due Date
Unit Price
Lead Time
Ext. Amount
1
SANDBLAST AND RECOAT AT MLBV 212 -
1.00
33,265.00
00
33,265.00
MFG. PART:
W.O. NUM: NONE
RCVD QTY & DATE:
Acct: 2-05-402-863-0200 33,265.00
Subtotal
$33,265.00
Sales Tax (6.875%)
$2,286.97
Freight
$0.00
Total
$35,551.97
Date Printed: 03/20/2026 Requisitioned By: bbettenhausen Page: 1/1
CLIENT INFORMATION
COMPANY:
Hutchinson Utilities
REPRESENTATIVE:
Byron Bettenhausen
EMAIL:
Bbettenhausen@hutchinsommn.gov
PROPOSAL #:
26-504P
Project Name:
212 Block Valve Blast and Recoat
Project Locations:
Hutchinson, MN
44.7025,-94.4369
SCOPE OF WORK
Blast and recoat
• Mobilize to project location and stage equipment
• Mask off piping for abrasive blasting
• Abrasive blast
• Unmask and clean up from blasting
• Re -mask for painting
• Apply first coat for above grade piping and allow for cure time
• Apply coating for below grade piping and allow for cure time
• Apply second coat for above grade piping and allow for cure time
• Apply top coat for above grade and below grade piping and allow for cure time
• Unmask and clean up
• Remediate site as necessary
DATE: 2/16/2026
*Atmospheric readings will be taken and documented throughout the project
** Wet and dry film thickness readings will be taken and documented throughout the project
***Daily coating report will be filled out
NOTE: All transitions will be excavated by Hutchinson Utilities prior to NIS being on site
SUBMITTALS
• Daily reports
CLIENT TO PROVIDE
• Access to site
• Independent inspector
• All permitting (state, local, and internal)
ITEMS NOT INCLUDED
• Restoration beyond native spoils
SCHEDULE
• Work will be scheduled upon receipt of signed proposal and work order
• Estimated duration is (6) days plus administrative set up
TOTAL LUMP SUM PROPOSAL (BUDGETARY - 2026) $33,265.00
TERMS & CONDITIONS
• Tariff Adjustment Clause: The prices quoted herein are based on current tariffs and duties. In the event
of any changes in tariffs, duties, or other governmental charges imposed on the goods and services
quoted, we reserve the right to adjust the prices accordingly
• Mobilization is quoted using travel rates with 7 days advanced notice - failure to provide the minimum
advance notice specified in this section may result in additional charges
• Payment terms are Net 30 days from the date of NIS invoice
• No provisions have been made for retention in this proposal
• Any change in the scope of work as detailed in this proposal, will allow NIS to revise its quotation
• Any changes to the contracted scope of work shall be reported to NIS management prior to the start of
the work
• NIS overtime rates apply after eight (8) hours in a day and for all hours worked on Saturday, Sunday or
statutory holiday
• Standby hours for labor and equipment will be charged for a minimum of eight (8) hours per shift, per
day, per Time and Material rate sheet
• Shut down with less than 72-hour notice will result in twenty-four (24) hours billing for all personnel and
equipment on site
• Shutdown due to inclement weather may be billed at eight (8) hours plus per diem each day
• Daily travel time is charged portal to portal at the applicable rate at the time the travel occurs
• Site specific orientation, testing and/or examination at the direction of the client or the facility owner, will
be charged at the applicable labor rate. Fees for training will be billed at cost
• Progress invoices may be issued to assist Client in cost tracking for this project
• Should NIS be required to provide any item not specified in the sections "Scope of Work," additional
charges shall apply
• All NIS Terms and Conditions will apply unless otherwise stated herein
• NIS personnel reserve the right not to work in any areas or conditions deemed unsafe
Thank you,
NIS Representative
THIS PROPOSAL EXPIRES ON:
Date
11/21/2025
Client Representative Date
2 of 2
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" If, 44 , ' 'fr I
S , 4 1I 'If, f �� y
HUTCHINSON UTILITIES COMMISSION
^I'�xP61Tti'°"
Board Action Form
Agenda Item: Selling of Surplus Equipment
Presenter: Dave
Agenda Item Type:
Time Requested (Minutes): 3
New Business
Attachments: Yes
BACKGROUND/EXPLANATION OFAGENDA ITEM:
The 2006 John Deere 310SG tractor backhoe is in need of a new transmission. We have
received a quote of $30,622.39 for a re -manufactured transmission, including installation.
Given the age of the equipment and the significant cost of repair, staff is recommending
that we sell the unit as -is rather than proceed with the replacement. The backhoe is
already scheduled for disposal in 2027 and planned to be replaced with a different type
of equipment at that time.
Attachment:
Quote for repair
BOARD ACTION REQUESTED:
Approve selling 2006 John Deere Backhoe
Fiscal Impact:
Included in current budget: No Budget Change:
PROJECT SECTION:
Total Project Cost: Remaining Cost:
RDO Equipment Co.
12500 Dupont Ave. S.
;Iq 901 RD
Burnsville, MN 55337
952-890-8880
o
Fax: 952-890-7046
EQUIPMENT CO.
www.rdoequipment.com
HUTCHINSON UTILITIES
Ship to:
COMMISSION
225 MICHIGAN ST SE
HUTCHINSON MN 55350-1905
Invoice to. HUTCHINSON UTILITIES COMMISSION
225 MICHIGAN ST SE
HUTCHINSON MN 55350-1905
********* Segment 01 *********
For Billing Inquiries or to receive
invoices via E-mail or MyDealer
website, please contact
RDOAR@rdoequipment.com
Branch
01 - BURNSVILLE-CE
Date Time Page
03/12/2026 14:06:29 (0) 1
Account No. Phone No. InvoiceOlt4o.
4746008 3205874746 033007
Ship Via Purchase Order
NEED
Tax Exemption Number Federal ID Number
Salesperson
CWG
ESTIMATE EXPIRY DATE: 04/11/2026
Stock #: X033171 BACKHOE MS #: T031OSG959441
Make: JD Model: 31OSG F
Is to have the following work done
TRANSMISSION ASSEMBLY, REPLACE -POWER SHIFT WITH MFWD
CONDITION:
Remove and replace transmission
Part#
PG200163
Transmission Reman
CRPG200163
TY26101
Cleaning Solvent
TY22028
T113128
CRPG200163
MISCELLANEOUS CHARGES:
Authorization:
Description
Otv
Price
Amount
TRANSMISSION
1
21326.55
21326.55
TRANSMISSION
1500.00
1500.00
BRAKE CLEA
4
6.99
27.96
HY-GARD
30
5.50
165.00
CAP SCREW
12
1.76
21.12
TRANSMISSION
1-
1500.00
1500.00-
Description
SRV ACCESSORIES
HAZARDOUS MTL
********* Segment 02 *********
HYDRAULIC/TRANSMISSION OIL COOLER, REPLACE
CONDITION:
Replace transmission cooler after transmission failure
Price Amount
Parts:
21540.63
Labor:
4182.00
Miscellaneous:
310.00
Subtotal:
26032.63
Stocked parts can be returned within 30 days with copy of invoice. Special SIGNATURE
order parts $20.00 and up may be returned within 30 days with copy of
invoice. 25% restock charge will apply to all special order parts. All sales TERMS AND CONDITIONS: All invoices are due Net-20 days from the
are final on special order non -returnable parts. All parts must be new, invoice date or in accordance with the terms of your account agreement.
uninstalled and in original packaging. No returns on electrical components. Please refer to your finance agreement for details.
No refunds on freight charges.
RDO Equipment Co.
12500 Dupont Ave. S.
;Iq 901 RD
Burnsville, MN 55337
952-890-8880
o
Fax: 952-890-7046
EQUIPMENT CO.
www.rdoequipment.com
HUTCHINSON UTILITIES
Ship to:
COMMISSION
225 MICHIGAN ST SE
HUTCHINSON MN 55350-1905
Invoice to. HUTCHINSON UTILITIES COMMISSION
225 MICHIGAN ST SE
HUTCHINSON MN 55350-1905
Part#
SUBLETLABOR
FUEL
Authorization:
For Billing Inquiries or to receive
invoices via E-mail or MyDealer
website, please contact
RDOAR@rdoequipment.com
Branch
01 - BURNSVILLE-CE
Date Time Page
03/12/2026 14:06:29 (0) 2
Account No. Phone No. InvoiceOlt4o.
4746008 3205874746 033007
Ship Via Purchase Order
NEED
Tax Exemption Number Federal ID Number
Salesperson
CWG
ESTIMATE EXPIRY DATE: 04/11/2026
Description Otv Price Amount
OIL COOLER 1 600.00 600.00
OFF ROAD RED 5 4.05 20.25
Parts: 20.25
Labor: 615.00
Sublet: 600.00
Subtotal: 1235.25
********* Segment 03 *********
Transmission lines
CONDITION:
Replace transmission lines Trans to cooler
Part#
X611HT-12
TY22466
T185089
Authorization:
Description
Otv
Price
Amount
Bulk Hose
22
1.52
33.44
CLAMP
6
1.68
10.08
SLEEVE
20
42.78
855.60
Parts:
899.12
Labor:
615.00
Subtotal:
1514.12
Parts:
22460.00
Labor:
5412.00
Sublet:
600.00
Miscellaneous:
310.00
HUTCHINSON City
116.85
MCLEOD CO TR Special
116.85
MN STATE TAX
1606.69
TOTAL:
30622.39
Stocked parts can be returned within 30 days with copy of invoice. Special SIGNATURE
order parts $20.00 and up may be returned within 30 days with copy of
invoice. 25% restock charge will apply to all special order parts. All sales TERMS AND CONDITIONS: All invoices are due Net-20 days from the
are final on special order non -returnable parts. All parts must be new, invoice date or in accordance with the terms of your account agreement.
uninstalled and in original packaging. No returns on electrical components. Please refer to your finance agreement for details.
No refunds on freight charges.
HUTCHINSON UTILITIES COMMISSION
^I'�xP61Tti'°"
Board Action Form
Agenda Item: Approve Sterling Energy LLC Contract 1st Amendment
Presenter: Mike Gabrielson
Agenda Item Type:
Time Requested (Minutes): 5
New Business
Attachments: Yes
BACKGROUND/EXPLANATION OFAGENDA ITEM:
HUC is requesting the commission approve an amendment to the original agreement
entered into between HUC and Sterling Energy. This 1 st Amendment states Sterling
Energy agrees to Remove 1968 Worthington Unit #3, 1968 Worthington Unit #4 and the
1971 GE Combined Cycle STAG Unit #8 from HUC's Facility no later than December
31 st, 2026.
Any Generating Set and Auxiliary Equipment still left on the premise as of December
31st, 2026 will resort back in rights, title and possession to HUC.
BOARD ACTION REQUESTED:
Approve Sterling Energy LLC Contract 1st Amendment
Fiscal Impact: $0
Included in current budget: No Budget Change: No
PROJECT SECTION:
Total Project Cost: Remaining Cost:
Equipment Removal Agreement
This agreement is entered into between Sterling Energy, LLC ("the contractor") and the Hutchinson
Utilities Commission ("HUC") as of the last date below written. The purpose of this agreement is to state
the terms and conditions by which the contractor will be removing and taking possession of equipment of
HUC namely, a 1968 Worthington generating set from HUC plant #3, a 1968 Worthington generating set
from HUC plant #4, and the 1971 GE combined cycle stag unit from HUC plant #8 along with all
apparatus connected to those respective units.
Pursuant to this agreement the parties shall have the following rights and responsibilities:
Rights and responsibilities of the contractor:
1. The contractor shall pay HUC $2500 and upon payment, the contractor shall obtain all right, title
and possession of the above enumerated equipment and apparatus.
2. The contractor shall have in full force and effect a policy of general liability insurance in an
amount of not less than $1.5 million and other such insurance coverage such as worker's
compensation, motor vehicle liability and other insurance and in amounts as is typical for a
project of this scope. It is also the responsibility of the contractor to insure the equipment against
damage as coverage will no longer be provided by HUC.
3. The contractor shall furnish the labor and materials for the equipment removal and the equipment
will be removed from HUC's facilities in a professional manner with minimal disruption to
HUC's day-to-day activities at those locations. Contractor shall be responsible for any damage to
buildings especially to overhead cranes and hoists.
4. Should the generating sets be removed as complete units, the contractor shall be responsible for
the cost of alteration of building entrances to accomplish this.
5. The contractor is taking the equipment and apparatus in an "as is" "where is" condition. HUC
s tecifically disclaims all express and implied warranties of merchantahilit: y and
fitness for a:)articular puEeRse.
Rights and responsibilities of HUC:
1. HUC shall obtain and pay for any and all building permits required by the City of Hutchinson.
2. Should building alterations be required to allow contractor to remove complete generating sets,
HUC shall pay the cost of the engineering and plans for such building alterations.
3. HUC shall grant access to the buildings and grounds at all reasonable times in order for the work
to proceed in a timely manner.
4. Except for what is contained in the equipment, HUC shall be responsible for proper containment
and disposal of oils or other lubricants which may be present as part of the equipment removal.
HUC shall be responsible for any repair of the foundation/floor of the respective plants after the
equipment is removed.
Sterling Energy, )[. LC
By:
It's: President
Dated: July 29, 2022
Hutchinson Utilities Commission
President
Dated:
Secretary
Dated:
,�ySCwIN��H
Hutchinson
Utilities
Commission
1 ST AMENDMENT TO EQUIPMENT REMOVAL AGREEMENT
1 . THIS AMENDMENT (THE "AMENDMENT") IS MADE AND ENTERED INTO THIS
25TH DAY OF MARCH, 2026 BY STERLING ENERGY, LLC ("STERLING"),
LOCATED AT 532 CONNECTICUT ST, GARY, INDIANA, 46402 AND
HUTCHINSON UTILITIES COMMISSION ("HUC") A MINNESOTA MUNICIPAL
UTILITY LOCATED AT 225 MICHIGAN ST SE, HUTCHINSON, MINNESOTA,
55350, PARTIES TO THE AGREEMENT DATED AUGUST 10, 2022.
2. THE AGREEMENT IS AMENDED AS FOLLOWS:
EFFECTIVE MARCH 25TH, 2026 STERLING AGREES TO REMOVE A 1968
WORTHINGTON GENERATING SET (UNIT #8), A 1968 WORTHINGTON
GENERATING SET (UNIT #4) AND THE 1971 GE COMBINED CYCLE STAG UNIT
(UNIT #8) FROM HUC'S FACILITY NO LATER THAN DECEMBER S 1 ST, 2®26.
ANY GENERATING SET AND AUXILIARY EQUIPMENT STILL ON THE PREMISE AS
OF DECEMBER 8 1ST, 2026 WILL RESORT BACK IN RIGHTS, TITLE AND
POSSESSION TO HUC.
EXCEPT AS SET FORTH IN THIS AMENDMENT, THE AGREEMENT IS
UNAFFECTED AND SHALL CONTINUE IN FULL FORCE AND EFFECT IN
ACCORDANCE WITH ITS TERMS AND CONDITIONS. IN THE EVENT THERE IS A
CONFLICT BETWEEN THIS AMENDMENT AND THE AGREEMENT, THE TERMS
OF THIS AMENDMENT SHALL PREVAIL.
THIS AMENDMENT SETS FORTH ALL TERMS AGREED UPON BETWEEN THE
PARTIES, AND NO PRIOR ORAL AMENDMENTS SHALL BE BINDING. THIS
AMENDMENT SHALL NOT BE ALTERED, AMENDED OR MODIFIED EXCEPT AS IN
WRITING AND EXECUTED BY BOTH PARTIES.
HUTCHINSON UTILITIES COMMISSION STERLING ENERGY LLC
BY: BY:
NAME:
NAME:
TITLE:
TITLE:
DATE:
DATE:
WITNESS:
TITLE:
DATE:
HUTCHINSON UTILITIES COMMISSION
^I'xP61Tti'°"
Board Action Form
Agenda Item: Approve GE Stage 2 LPT Blade Warranty Replacement Proposal 1725355 and Req
010531 0
Presenter: Mike Gabrielson
Agenda Item Type:
Time Requested (Minutes): 5
New Business
Attachments: Yes
BACKGROUND/EXPLANATION OFAGENDA ITEM:
Approve proposal 1725355 for the warranty repair of the LPT stage 2 blades for LM6000
185-186. The work will be done by GE. $383,308.43 might be covered under warranty
after investigation and $197,350.86 will be for field service cost.
Please Approve Req #010531.
BOARD ACTION REQUESTED:
Approve GE Stage 2 LPT Blade Warranty Replacement Proposal 1725355 and Req
010531
Fiscal Impact: $580,659.29
Included in current budget: No El Budget Change: Yes
PROJECT SECTION:
Total Project Cost: Remaining Cost:
IHI UT iU H II HI S U HII
UT'IIILIITIIIE'S
a I(,� ii'JG 11�p Ili II I! � �a II ii';� If1i
GE PACKAGED POWER LLC
GE ENERGY PRODUCTS LLC
16415 JACINTOPORT BLVD.
HOUSTON, TX 77015
Note
PURCHASE REQUISITION
HUTCHINSON UTILITIES COMMISSION
225 MICHIGAN ST SE
HUTCHINSON, MN 55350
Phone:320-587-4746 Fax:320-587-4721
Description:
Stage 2 LPT Blade Warrenty Replacement
Date
Requisition No.
03/18/2026
010531
Required by:
Requested by:
mgabrielson
Item
No.
part No.
Description
Qty
Unit
Due Date
Unit Price
Ext. Amount
LPT STG 2 BLADE REPLACEMENT SECTION
1.1 - GE PROPOSAL 1725355 RO
1
MFG. PART:
1.00
EA
01/12/2027
$383,308.430
$383,308.43
FIELD SERVICE SECTION 1.4 -
MFG. PART:
2
1.00
EA
01/12/2027
$197,350.860
$197,350.86
Total: 580,659.29
Date Printed: 03/19/2026 Requisitioned By: mgabrielson Page: 1/1
LPT Blade
i
Unit Hutchinson Utility Commission
l: 185-186
GE Vernova Operations LLC.
1725355 R1
Daniel Cadena
19 March 2026
l
This entire commercial and technical proposal and the correspondence and communications
concerning this proposal collectively the "Proposal" developed by Power Services-Aero
(hereinafter to referred as Seller), is the property of GE Vernova Operations LLC, a wholly owned
subsidiary of GE Vernova and provided to Hutchinson Utility Commission (hereinafter to referred
as Buyer) are the property of GE Vernova.
This quotation document is proprietary to GE Vernova Operations LLC and is furnished in
confidence solely for use in considering the merits of the quotation and for no other direct or
indirect use. By accepting this document from GE Vernova Operations LLC, the recipient agrees:
• To use this document, and the information it contains, exclusively for the above stated
purpose and to avoid use of the information for performance of the proposed work by the
recipient or disclosure of the information to, and use by, competitors of GE Vernova
Operations LLC on behalf of the recipient.
• To avoid publication or other unrestricted disclosure of this document or the information it
contains.
• To make no copies of any part thereof without the prior written permission of GE Vernova
Operations LLC.
• To return this document when it is no longer needed for the purpose for which furnished,
or upon request of GE Vernova Operations LLC.
ProprietaryStatement.............................................................................................................................2
Tableof Contents.....................................................................................................................................3
ExecutiveSummary..................................................................................................................................4
Section1 - Technical Summary.............................................................................................................5
1.1 LPT Stage 2 Blade Warranty Replacement..............................................................................5
1.4 Field Service Support....................................................................................................................7
1.5 Changes............................................................................................................................................7
1.6 Compliance......................................................................................................................................8
1.7 Technical Assumptions and Exclusions....................................................................................8
Section2- Commercial............................................................................................................................9
2.1 Pricing................................................................................................................................................9
2.2 Proposal Basis................................................................................................................................9
2.3 Material Delivery and Title Transfer..........................................................................................9
2.4 Payment Terms and Schedule................................................................................................
10
2.5 Termination..................................................................................................................................
10
2.6 Covid-19, Geopolitical Conflicts, And Responding Government Actions .....................
11
2.7 Terms and Conditions................................................................................................................
11
2.8 Scrap Disposition........................................................................................................................
12
2.9 Proposal Validity.........................................................................................................................
12
2.10 Purchase Order Instructions..................................................................................................
12
2.11 Purchase Order Submittal and Acceptance.......................................................................
13
Section 3 — List of Attachments.........................................................................................................
14
3.1 Attachment 1: Field Service Rate Sheet................................................................................
14
(Qqiml G 1E V IE IR N OVA
Executive Summary
19 March 2026
Attn: Mike Gabrielson
Production Manager
Hutchinson Utility Commission
Subject: LPT Blade Replacement for LM6000PA
Dear Mike Gabrielson,
Daniel Cadena
Sr. Sales Manager
M: 404-788-6706
Daniel.Cadena@gevernova.com
GE Vernova Operations LLC (hereinafter referred to as "Seller") is pleased to offer Hutchinson
Utility Commission (Hereinafter referred to as "Buyer" or "Customer") with this firm proposal for
LPT Blade Replacement and disassembly scopes on a unit of LM6000PA (ESN: 185-186) at Site.
This proposal replaces all previous offers to the Buyer in their entirety and becomes the only valid
offer to the Buyer at present, subject to prior sale.
I look forward to discussing this proposal with you soon. If you have any questions about this
proposal, please feel free to contact me.
Sincerely,
Daniel Cadena
Sr. Sales Manager
cc:
Juan Herrera — Commercial Manager
Alexey Beketov — Buyer Service Leader
(Qqiml G 1E V IE IR N OVA
Section I - Technical Summary
The Workscope proposed herein is at the depot in Houston (Jacintoport) for the replacement of
the LPT Blade LM6000PA (ESN: 185-186) at Site per the scope recommended by GE Vernova.
1.1LIFT Stage 2 B11adeWarranty Replacement
The workscope of this repair is specifically only to replace the unserviceable components within
the engine. The warranty will cover the replacement of the unserviceable blade, the Buyer is
responsible for the work required to disassemble and reassemble the unit and the materials that
may be required.
This workscope ensures that the issue presented in the BSI is addressed. The quantities are for
items that are planned replacements due to condition or one-time use parts.
1. External inspection and photograph for warranty repair per GEK 98493and/or OEM Engineering
standard shop procedures la. Perform incoming inspection 2a. Flow Check Sump 2. Disassembly
of PT into Modules la. Prior to any PT Module D/A tag all lines and Air -pipes, 12a. Move modules
to module workstations 3. Requote once all modules are inspected
1. Disassemble into piece part level to gain access to stage 1 disk assembly 2. Clean, NDT &
inspect all components as required. 3. Clean and inspect as applicable in-house. 4. Inspect all
Honeycomb sealing surfaces. 5. Requote after inspections complete 6. Clean and Inspect Stator
Case. 7. Reassemble stator case
Part Number
Description
I Services Rendered I SB
..'Clean.
Inspect
•��ESEAL,AIR,STG4
'Clean and Inspect inhouse�i
'Clean and Inspect inhouse�i
:0M72GO7-1
'Clean and Inspect inhouse�i
2118M56POl
NOZZLE,STG.-
�i
��
•ZZLE,LPTS,STG 4
'Clean and Inspect inhouse�i
(Qqiml G 1E V IE IR N OVA
L38047G02
NOZZLE,STG 5
Clean and Inspect inhouse
0
1862M61G08
SHROUD,STG 1
Clean and Inspect inhouse
0
1862M62G02
SHROUD,LP TURB,STG2
Clean and Inspect inhouse
0
L47753G03
SHROUD,STAGE 3
Clean and Inspect inhouse
0
L47754G02
SHROUD,STG 4
Clean and Inspect inhouse
0
L47755G02
SHROUD,LPT,STAGE 5
Clean and Inspect inhouse
0
1862M80G01
SEAL, BALANCE, PRESSURE
Clean and Inspect inhouse
0
1380M71G19-2
Stg 1 Nozzle
Clean and Inspect inhouse
0
1380M72G07-2
Stg 2 Nozzle
Clean and Inspect inhouse
0
Level 2 Work Scope - Warranty Repair 1. Disassemble to the extent of stage 1 disk assembly ( DO
NOT DE -BLADE DISK ASSEMBLES 2, 3, 4, and 5 unless required per NSR findings and Approved
by PMO) 2. Clean, NDT & inspect all components as required per O&M 3. Route parts as required
per scope, 4. Requote after inspections complete 5. Static balance disk 6. Reassemble rotor 7.
Balance module after full reassembly
(Part Number (Description Pty
LM6LPTR I Rotor Kit 10.5
11536M21P03 IStg 1 Blade I11
Part Number
Description I Services Rendered I SB
04
and Inspect Inhouse
1536M21PO3
'Clean and Inspect Inhouse
9373M62PO3
'Clean and Inspect Inhouse
9373M63PO3
SEAL, INN ER,STG3,LPT ROTOR
'Clean and Inspect Inhouse
9373M64PO3
'Clean and Inspect Inhouse
���MSEAL,LOW
PRESSURE
'Clean and Inspect Inhouse
���MBALANCE
PISTON
'Clean and Inspect Inhouse
•�
.
and Inspect Inhouse
(Qqiml G 1E V IE IR N OVA
TURBINE REAR FRAME
Level 1 Work Scope 1. Visual inspect per 0&M 2
Part (Description
Number
uote after inspections complete
Qty
ILM6TRFK ITRF Kit 10.2 1
1 IFiild Service Support
GE proposes to provide the following field service support:
4 Field Representatives for 2 shifts, working 12-hour shifts
Engine Removal at Buyer's Site
Four (4) GE technicians per shift, working two (2) 12-hour shifts for removal
• Gas Turbine lift fixture, and tooling
Engine Transportation to GE Houston Service Center
• One (1) engine shipping container
Transportation of engine to and from GE Houston Service Center — Risk of Loss
remains with the Buyer
• Consumable kit required for the scope of work are included. Any parts used from
the kit for engine installation (Buyer's scope) will be invoiced upon completion of
the work scope.
Engine transport from GE Houston to Hutchinson site
• Transport container
• Risk of Loss remains with the Buyer
Engine installation in the package at Buyer's Site
• Four (4) GE technicians per shift, working three (3) 12-hour shifts for installation
• Gas Turbine lift fixture, and tooling
Commissioning and start-up
Demobilization.
General Field Services Notes
• Scaffolding, Lifting Equipment, and/or Crane rentals are not included.
• Pricing includes travel expenses, T&L, tooling, tooling freight, labor and per diem.
• A Field Service report will be provided at completion of work scope, which will include a
description of all work performed.
• Additional field service work caused by any delays or other extra work not specifically the
fault of GE, or any extra work beyond the workscope described in the proposal, shall be
invoiced using standard Seller's Field Service Rates at the time of work. Refer to Attachment
1: Field Service Rate Sheet for details
1.5 Changes
• The Price shall be adjusted as necessary to take account of (a) Change Orders, or (b) other
adjustments specifically provided for in this Proposal.
(Qqiml G IE V IE IR N OVA
Changes to specifications, drawings, services, or hardware will be evaluated by Seller for
a Change in Scope to the Proposal. Seller will quote the changes and a customer Change
Order must be received before work is to proceed.
Storage Costs, additional travel, delays at work, unit restart delays and overtime work out
of scope of the project will be considered additional work and will be charged according to
Seller's published rates at time of execution and in lieu of any pre-existing agreement
1.6 CompIliance
Compliance and certifications are within current Seller's design practices and standards.
The price presented here does not include compliance with any state or local codes
unless expressly defined by Customer prior to sale.
1.7 Technicall Assumptions and Exclusions
The following technical assumptions and/or exclusions apply to the quoted price:
• All local, regional, or special permits (environmental, construction, installation) or
certifications for local or regional codes are excluded from the Scope of this proposal.
• Seller assumes the Customer will supply consumables (fuel, site power, water, and
compressed air) as needed to support the installation and commissioning, which may
include multiple startups for troubleshooting.
• Seller assumes the Customer will supply rental tools including forklifts and craning if
necessary.
• No modification to any third -party equipment is included in the Seller's scope in this
proposal, including modifications to the Customer's existing DCS for Modbus
communication and interface with the package control system.
(Qqiml G 1E V IE IR N OVA
WINUM
1 1 LPT STG 2 Blade Replacement $ 383,308.43 Under Warranty
- Per Scope in Section 1.1 Claim
above Investigation
2 1 Seller's Field Services $ 197,350.86
- Per Services in Section
1.4 above
Note: The above price is in 2026 US Dollars, and does not include applicable sales, excise, value added, use or similar taxes.
Warranty Investigation Requirement
Given that the scope quoted in this proposal is subject to a warranty investigation, the following
procedure must be followed to initiate the investigation process:
The customer is requested to issue a Purchase Order with a value of $0 to authorize the
commencement of the warranty investigation.
Once the investigation is completed, if it is determined that the cause of the warranty claim falls
outside the coverage of the contract, a Change Order will be requested to proceed with
invoicing for the scope included in this proposal.
2.2 lProposal lBasis
• Price quoted herein is firm for 30 days. GE reserves the right to modify prices herein after
date specified.
• Parts and Services are subject to prior sale.
• The prices are exclusive of any Taxes, Local Taxes, VAT, Withholding Taxes, Levies or
Import Duties for the Seller's Part(s) or Materials.
• GE supplied repairs has a 12 Month Warranty
• Cycle time will be confirmed upon receipt of a purchase order. Estimated cycle time is 340
days.
• Price quoted is per the Terms and Conditions stated herein. The offering quoted price is
based on the Scope of Supply in Section 1.
• Pricing assumes that Buyer's asset contains all GE OEM Hardware and / or GE OEM
Hardware with authorized repairs only.
• GE Field Service support and special tooling are included.
• Package consumable parts required for installation of Buyer's power turbine are included.
Along with tooling, GE will bring to site a comprehensive package consumable kit required
for the outage. Any parts used from the kit for engine installation (Buyer's scope) will be
invoiced upon completion of the work scope.
2.3 ri II Delivery andTulle Transfer
• Delivery of the asset ("Parts/Engine") will be CPT, "Carriage Paid To" (Incoterms 2020) to
Buyer's site
(Qqiml G 1E V IE IR N OVA
• Title to Products shall pass to Buyer upon Delivery
• For repair services to be performed on Buyer's equipment at Seller's facility, Buyer shall be
responsible for and shall retain risk of loss of such equipment at all times, except that Seller
shall be responsible for damage to the equipment while at Seller's facility to the extent such
damage is caused by Seller's negligence.
• Delivery and title transfer for Field Services labor and material shall transfer as work is
performed.
• Freight charges are not included, and, in the event, Buyer would like Seller to transact CPT
this will be invoiced back at Cost +10%. Buyer is responsible for any export taxes and duties
Payment2.4 Terms and Schedulle
Payment will be due in U.S. Dollars no later than 30 days from receipt of Seller's invoice without
any setoff (including, without limitation, setoff under other contracts with Seller or with General
Electric Company or its affiliates). These terms will take precedence over any conflicting payment
terms referenced.
Seller will invoice Buyer after the completion of each installment for the percentage amount due.
Payment terms from invoice date are shown in the tables below.
For Item 1
Upon PO Acceptance 25% of Initial Estimate - due Net. 30 days
.............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
Upon Shipment from Seller Service Center 65% of Revised Final Scope/Estimate - due Net. 30 days
.............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
Upon Receipt of Asset at Customer's Site 10% of Revised Final Scope/Estimate - due Net. 30 days
For Item 2
Upon Completion of Services 100% Upon Completion of Services Net 30
..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
*NOTE: Completion of TA Services is defined as material completion of the installation of GE Vernova
Scope of supplied equipment under this purchase order. It does not imply the absence of any punch
list or warranty items.
2.5 Termination
Should Customer decide to cancel the order, they may do so only upon written notice. There will
be a termination for convenience charge imposed if the Customer decides to cancel after the
engineering and manufacturing has initiated to cover accrued expenses and the loss of
manufacturing capacity.
Order Receipt 50%
.............................................................................................................................................................................................................................................................................................................................................................................................................
Readv to Shib 75%
(Qqiml G 1E V IE IR N OVA
2.6 OViid.-'1, Geopollitical Conflicts, And Responding Government
Actions
The parties acknowledge that the ongoing COVID-19 pandemic, geopolitical conflicts, and
government actions in response thereto are affecting and will continue to affect Seller's ability to
deliver goods and services around the world, including, but not limited to, impacts arising from
materials shortages, transportation shortages and delays, sanctions preventing receipt or delivery
of materials, etc. (an "ONGOING IMPACT"). In the event that an ONGOING IMPACT affects Seller's
ability to deliver on time or at the bid price, Seller shall be entitled to an equitable adjustment in
schedule and price as appropriate, subject to Seller's obligation to work in good faith with Buyer
to mitigate the impact on schedule and/or cost.
2.7'Terims and Conditions
Seller's offer is in accordance with Terms and Conditions by and between GE PACKAGED POWER,
LLC, a corporation organized under the laws of Delaware ("GE"), and Hutchinson Utilities
Commission, a utility owned by the City of Hutchinson, MN organized under the laws of Minnesota
("Owner"). In the event of any conflict in the Terms and Conditions between this proposal and the
GE Packaged Power, LLC & Hutchinson Utilities Commission Terms & Conditions, the GE Packaged
Power, LLC & Hutchinson Utilities Commission Terms & Conditions negotiated on March 2023 shall
govern.
The warranty obligations will be consistent with the terms outlined in proposal 1673976.
With respect to (i) non -OEM material or OEM Material that has been repaired with a process or by
a service provider, that is not authorized by the OEM for those specific parts ("Alternate Material"),
(ii) OEM material that has been previously operated in conjunction with Alternate Material, or (iii)
any material, whether OEM, or Alternate Material or OEM material that has been previously
operated in conjunction with Alternate Material, that is provided by the Buyer to install as part of
the Parts or Services supplied herein ("Buyer Supplied Material"), the Parties hereby acknowledge
and agree that Seller shall not be obligated to install, reinstall or reuse any of the types of material
mentioned in (i), (ii) or (iii) above as part of any Services or Parts supplied herein. If Seller does
agree, however, to incorporate any of the types of material mentioned in (i), (ii) or (iii) above as
part of any Services or Parts supplied herein, those material will not be covered by any warranty
conditions, either express or implied. Buyer further acknowledges and agrees that Seller shall be
released from any and all liability associated with the types of material mentioned in (i), (ii) or (iii)
above and Buyer shall indemnify, defend, and hold the Seller harmless from and against any and
all liability arising out of claims made by a third party related to the types of material mentioned in
(i), (ii) or (iii) above. Notwithstanding the foregoing, to the extent that Seller, in its sole discretion,
is able to re -repair OEM Material that has previously been repaired with a process or by a service
provider that is not authorized by the OEM for those specific parts, then Seller's normal warranty
shall apply to only those parts that have been re -repaired and reused.
(Qqiml G 1E V IE IR N OVA
2.8 Scrap IisosiiiiO
All materials replaced as a result of the repair processes in the Service Centers will be
appropriately disposed of upon approval of revised work scope, after Gate 1 close. If specific
instructions are received in writing with acceptance of the revised work scope for these large
parts, GE will return the scrap items as directed, otherwise, these materials will be disposed of
appropriately. Costs associated with preservation, crating, shipment or storage for items
dispositioned as scrap, which the Buyers retains or wants returned will be the responsibility of
the Buyer.
2.9 rOOS II Validity
This proposal document, together with the price contained herein, is valid for 30 days from date
of issuance and assumes delivery on or before December 2026 based upon an PO acceptance
no later than January, 23 2026. Upon expiration of this proposal document, or for an induction
date or delivery beyond the above date(s), a new proposal will be provided upon request.
2.10 PurchaseOrder has ructions
Upon the "Customer's" decision to submit a purchase order, address the Purchase order in US
Dollars to:
GE Vernova Operations LLC
16415 Jacintoport Blvd
Houston, TX 77015 e-mail to: Daniel.Cadena@gevernova.com
:,. GE f,j i
i
2.11 Purchase Order Submittal and Acceptance
In order to help us expedite acceptance of your purchase order, we have found that if the following
information is incorporated it will prove to expedite the order acceptance process:
• The GE business entity and address as stated in the proposal
• Annotate the Proposal Number on face of purchase order
• Acceptance of Terms and Conditions per this proposal
This proposal submitted by:
Name: Daniel Cadena
Aero Services Sales
Title: Leader
GE Vernova Operations
For: LLC
Date: March 19 2026
Upon acceptance, this Proposal shall constitute the entire agreement between the parties and any
understanding, promise, representation, warranty, or conditions not incorporated herein shall not
be binding on either party:
This Proposal is accepted by:
Name:
Title:
For:
Date:
Signatur
e:
0 GE VERNOVA
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