HomeMy WebLinkAbout9-9-2026 HUCM Special MeetingMINUTES
Special Meeting — Hutchinson Utilities Commission
Wednesday, September 9, 2026
Call to order — 7:00 a.m.
President Don Martinez called the meeting to order. Members present: President Don
Martinez; Vice President Tom Lambert; Secretary Matt Cheney; Commissioner Kathy
Silvernale; GM Jeremy Carter
Others Present: Jared Martig, Dave Hunstad, Mike Gabrielson, Angie Radke
Others Present Online: Dan Kasbohm from Utility Financial Solutions, LLC (UFS)
The purpose of the special meeting is to have a Cost -of -Service Study presentation by
Utility Financial Solutions.
Dan Kasbohm from UFS, thanked everyone for attending. Mr. Kasbohm reviewed the
Cost of Service (COS) process, projection assumptions, summaries, targets and results.
Discussion topics will be Financial Projection 1) Meet revenue requirements and 2)
Measure to key financial targets; Cost of Service 1) Monthly meter charge and 2)
Identify if one rate subsidizes another; and Guidance from Utility Commission 1) 2027
revenue adjustment and bandwidth and 2) Rate component adjustments towards cost of
service.
Project Assumption is based on 1) Using HUC 5-Year Budget Forecasted expenses for
operations and supply, 2) Using HUC 5-Year Budget Forecasted growth projections, 3)
Included bond 2026B issued in 2026 for $4.295M, 4) Includes data center load in 2027
and 5) PCA passes through purchase power changes.
First Projection Summary is without revenue adjustments with current rates. Years
2027-2031 shows HUC running at a loss and identifies need for rate adjustment. 2
Options with Rate adjustments were presented; A) 2027 rate adjustment of 6% and
2028 rate adjustment of 5%, 0% rate adjustment years 2029, 2030 and 2031, this
shows positive cash position in 2028; B) Rate adjustment of 4.1 % for years 2027, 2028
and 2029 which will take 3 years to have a positive cash position. Next Projection
Summary slide shows projection with current rates without Data Center, along with
Projection with proposed revenue adjustments without Data Center.
Three Projection Targets were reviewed along with the Cost -of -Service Summary. Cost
of Service Summary showed percent change required to move current rates to cost of
service for each customer rate class along with the Customer Charge per customer
class.
GM Carter noted past glide paths have done its job.
Mr. Kasbohm reviewed the Gas Financial projection and COS summary. Assumptions
are the same for inflation and growth. Projection Summary includes Projection with
current rates and Projection with optional rate track. Projection with optional rate track
shows a proposed revenue adjustment of 1 % for years 2030 and 2031. Cost of Service
Summary showed percent change required to move current rates to cost of service for
each customer rate class along with the Customer Charge per customer class.
Both rate designs will be developed using input from the Utility Commission.
Discussions were held on cash balances, transmission rate/costs, depreciation, cost of
projects, and the impacts to all classes for Electric and Gas divisions along with the
fundamental decisions that were made in the past with glide paths and the impact of how
those glide paths helped with decisions going forward.
Mr. Kasbohm left meeting at 7:40a.m
GM Carter is looking to have guidance from the Commission on rate track options to be
modeled by the UFS. Commissioners agree to look at 6%, 5% rate adjustment for years
2027 and 2028 for the Electric Division and rate adjustments based on UFS
recommendation while staying relatively neutral on revenues within the gas division. Mr.
Kasbohm would have a 2-week turnaround from the Commissions input. Looking to have
more discussion at the September Regular scheduled Commission meeting, take formal
action in September/ October which allows time to bring any changes to the City Council
in October. Implementation is expected November 1st but can change based on board
preference. GM Carter noted that the Council has the right to veto any rate changes.
There being no further business, a motion by Commissioner Cheney, second by
Commissioner Silvernale to adjourn the meeting at 7:59a.m. Motion carried unanimously.
att Cheney, Secretary
ATTEST:
i a ie n.)...
2