Loading...
08-25-2010 HUCMRegular Meeting August 25, 2010 Members present: President Dwight Bordson; Vice President Robert Hantge, Secretary Craig Lenz; Commissioner Donald H. Walser; Commissioner Paul Nordin; Attorney Marc Sebora; General Manager Michael Kumm President Bordson called the meeting to order at 3:00 p.m. The minutes of the July 28, 2010 regular meeting were reviewed. A motion was made by Secretary Lenz, seconded by Vice President Hantge to approve the minutes as written. Motion was unanimously. The July 2010 payables were discussed. A motion was made by Commissioner Walser, seconded by Secretary Lenz to ratify the payment of bills in the amount of $2,623,530.96 (detailed listing in payables book). Motion was unanimously carried. GM Kumm presented the July 2010 financial statements /budget year -to -date. After discussion, a motion was made by Vice President Hantge, seconded by Secretary Lenz to approve the financial statements /budget year -to -date. Motion was unanimously carried. GM Kumm presented changes to the exempt handbook. Changes recommended by staff are job title changes to the section Complaint /Grievance Procedure. After discussion a motion was made by Secretary Lenz, seconded by Commissioner Nordin to approve changes to the exempt handbook section Complaint /Grievance Procedure. Motion was unanimously carried. (Changes attached.) GM Kumm presented changes to the policies and requirements booklet, sections: deposit requirement for residential; deposit requirement for commercial /industrial; and cold weather rule. After discussion a motion was made by Commissioner Walser, seconded by Commissioner Nordin to approve the changes suggested by the Board, in providing more clarity to the sections: deposit requirement for residential, and deposit requirement for commercial /industrial. Motion was unanimously carried. There was no change for the cold weather rule for 2009; it reads the same as the Minnesota Statute for 2008. (Changes attached.) GM Kumm presented changes to the parallel generation policy. After discussion it was decided to table these changes and have legal counsel review the section on insurance to protect the interests of HUC. This will come back to the board for consideration at the September meeting. GM Kumm presented the parallel generation contract with Applied Kinetics, Inc. After discussion a motion was made by Commissioner Walser, seconded by Vice President Hantge to approve the parallel generation contract with Applied Kinetics, Inc. Motion was unanimously carried. (Contract attached.) GM Kumm presented the agreement with RW Beck to conduct a rate study. After discussion it was decided to table the agreement and to ask RW Beck for additional information in their rate study. Division reports Electric — Steve Lancaster • Working with LMCIT and MMUA on an operations and maintenance pilot program to offer to other communities. • Must comply with an EPA ruling — RICE (reciprocating internal combustion engines) to reduce toxic air emissions on all our engines by May 2013. This will be a costly undertaking for HUC unless efforts are successful in changing legislation. • The new transformer has been installed at plant 1. Will be in service September /October Gas — John Webster • Was appointed as second vice chairman at the annual MEA conference. • Just about finished with installing gas in the Industrial Park • Simonson's is no longer interested in have natural gas installed because they are the only ones who wanted it brought out to that area and it would be too costly for them. • Will have a requisition at next month's meeting for a new truck Business — Jan Sifferath • Our Health Insurance broker is getting quotes for 2011. Should have them by the middle of September; will present them at September's meeting. Finance — Jared Martig • The State is asking us to pay sales tax a month early; will estimate what it might be • Starting in 2012, the Health care reform legislation is requiring all payments in excess of $600 be reported to the IRS on a 1099 Form; will need to get tax ID numbers from all of our vendors. • Someone drove through our new sod at the MDC; City will be able to repair it. Discussion was held regarding being proactive on the RICE / EPA ruling and to start planning financially to comply with the ruling. Legal Update Nothing to report Unfinished Business Update on Pilot: GM Kumm gave an update on HUC's future operational plans and how that can provide financial benefits to both HUC and City; and at the same time maintain our objective which is to provide service for our customers without raising the rates. Employee Community Service: This will be added to our number 9 vision statement. New Business None There being no further business, a motion was made by Vice President Hantge, seconded by Commissioner Walser to adjourn the meeting at 5:44 p.m. Motion was unanimously carried. ATTEST: Dwight Bordson, President Craig Lenz, Secretary Regular Meeting August 25, 2010 Members present: President Dwight Bordson; Vice President Robert Hantge, Secretary Craig Lenz; Commissioner Donald H. Walser; Commissioner Paul Nordin; Attorney Marc Sebora; General Manager Michael Kumm President Bordson called the meeting to order at 3:00 p.m. The minutes of the July 28, 2010 regular meeting were reviewed. A motion was made by Secretary Lenz, seconded by Vice President Hantge to approve the minutes as written. Motion was unanimously. The July 2010 payables were discussed. A motion was made by Commissioner Walser, seconded by Secretary Lenz to ratify the payment of bills in the amount of $2,623,530.96 (detailed listing in payables book). Motion was unanimously carried. GM Kumm presented the July 2010 financial statements /budget year -to -date. After discussion, a motion was made by Vice President Hantge, seconded by Secretary Lenz to approve the financial statements /budget year -to -date. Motion was unanimously carried. GM Kumm presented changes to the exempt handbook. Changes recommended by staff are job title changes to the section Complaint/Grievance Procedure. After discussion a motion was made by Secretary Lenz, seconded by Commissioner Nordin to approve changes to the exempt handbook section Complaint/Grievance Procedure. Motion was unanimously carried. (Changes attached.) GM Kumm presented changes to the policies and requirements booklet, sections: deposit requirement for residential; deposit requirement for commercial /industrial; and cold weather rule. After discussion a motion was made by Commissioner Walser, seconded by Commissioner Nordin to approve the changes suggested by the Board, in providing more clarity to the sections: deposit requirement for residential, and deposit requirement for commercial /industrial. Motion was unanimously carried. There was no change for the cold weather rule for 2009; it reads the same as the Minnesota Statute for 2008. (Changes attached.) GM Kumm presented changes to the parallel generation policy. After discussion it was decided to table these changes and have legal counsel review the section on insurance to protect the interests of HUC. This will come back to the board for consideration at the September meeting. GM Kumm presented the parallel generation contract with Applied Kinetics, Inc. After discussion a motion was made by Commissioner Walser, seconded by Vice President Hantge to approve the parallel generation contract with Applied Kinetics, Inc. Motion was unanimously carried. (Contract attached.) GM Kumm presented the agreement with RW Beck to conduct a rate study. After discussion it was decided to table the agreement and to ask RW Beck for additional information in their rate study. Division reports Electric — Steve Lancaster • Working with LMCIT and MMUA on an operations and maintenance pilot program to offer to other communities. • Must comply with an EPA ruling — RICE (reciprocating internal combustion engines) to reduce toxic air emissions on all our engines by May 2013. This will be a costly undertaking for HUC unless efforts are successful in changing legislation. • The new transformer has been installed at plant 1. Will be in service September /October Gas — John Webster • Was appointed as second vice chairman at the annual MEA conference. • Just about finished with installing gas in the Industrial Park • Simonson's is no longer interested in have natural gas installed because they are the only ones who wanted it brought out to that area and it would be too costly for them. • Will have a requisition at next month's meeting for a new truck Business — Jan Sifferath • Our Health Insurance broker is getting quotes for 2011. Should have them by the middle of September; will present them at September's meeting. Finance — Jared Martig • The State is asking us to pay sales tax a month early; will estimate what it might be • Starting in 2012, the Health care reform legislation is requiring all payments in excess of $600 be reported to the IRS on a 1099 Form; will need to get tax ID numbers from all of our vendors. • Someone drove through our new sod at the MDC; City will be able to repair it. Discussion was held regarding being proactive on the RICE / EPA ruling and to start planning financially to comply with the ruling. Legal Update Nothing to report Unfinished Business Update on Pilot: GM Kumm gave an update on HUC's future operational plans and how that can provide financial benefits to both HUC and City; and at the same time maintain our objective which is to provide service for our customers without raising the rates. Employee Community Service: This will be added to our number 9 vision statement. New Business None There being no further business, a motion was made by Vice President Hantge, seconded by Commissioner Walser to adjourn the meeting at 5:44 p.m. Motion was unanimously carried. Craig Lenz, Secretary ATTEST: fight ffordson, President EXEMPT ONLY Complaint /Grievance Procedure It is the Commission's policy to provide an equitable process which employees may use to advance complaints and grievances. An employee may grieve any alleged violation of a written or verbal policy or procedure, disciplinary action other than an oral reprimand, or unsafe practice. Prior to initiating a grievance, an employee must discuss the complaint with the immediate Supervisor. If the complaint cannot be resolved informally through such discussion with the Director, Manager or Supervisor, the employee may choose to file a written grievance. The grievance must be filed with the appropriate Staff Pefse Customer/Human Relations Manager within ten (10) working days after the incident - giving rise to the grievance. The Staff Personnel Customer /Human Relations Manager shall attempt to resolve the grievance and shall provide the employee a written response no later than five (5) working days following receipt of the grievance. If the employee is dissatisfied with the Staff Personnel's Customer/Human Relations Manager's response, the employee may file the grievance with the General Manager within five (5) days of the Staff Per -se ne 's Customer /Human Relations Manager's response. The General Manager shall attempt to resolve the complaint or grievance and shall provide the employee a written response not later than five (5) days following the receipt of the complaint. If dissatisfied with the General Manager's response, the employee may request a hearing on the grievance before the Hutchinson Utilities Commission. The Hutchinson Utilities Commission may choose to appoint an independent hearing officer to hear the grievance. An employee presenting a complaint or grievance shall not be subject to retaliation or reprisal. DEPOSIT REQUIREMENT - RESIDENTIAL New Residential Customers: An application for service shall be filled out within 30 days of receiving service. The application for service shall be accompanied with identification, preferably photo identification. In addition, a deposit is required for all new residential customers, prior to the utilities being placed in their name. A deposit will only be waived if the customer provides information regarding their payment history from their current or previous provider supplier, and the payment history indicates the customer paid all of their bills on time with no late payment fees attached, and no dishonored checks. The customer is responsible for supplying a satisfactory credit reference to HUC. The payment history will look at the previous twelve months. An internal credit check is performed for all customers moving into HUC service territory. If the results of the credit check indicate the customer owes HUC due to previously provided services, then the outstanding balance shall be paid plus a deposit, prior to the customer receiving service. Existinq Residential Customers Moving Within Service Territory: A deposit will be waived if the customer has a twelve month payment history with HUC indicating the customer has not been disconnected or issued any dishonored checks. A deposit for existing residential customers moving within HUC service territory will be required prior to customer having utilities placed in their name for the following reasons: 1. If the customer has been disconnected or issued any dishonored checks in the previous twelve months. 2. Subsequent credit information indicates the initial application for service was falsified. 3. The customer has the ability to pay for the utility service, but during the cold weather rule months, had an arrears amount incurred during that period that was sixty days or more past due. If a deposit is required of a customer and; 1. If customer has no deposit with HUC, the customer will pay the deposit amount for the customer's new address. 2. If customer already has a deposit with HUC and this deposit amount is greater than the new deposit required for customer's new address, HUC will transfer the deposit from the customer's previous address to the customer's new address. The balance of the deposit at the customer's previous address will be applied to the customer's final bill for the customer's previous address. 3. If customer already has a deposit with HUC and this deposit amount is less than the new deposit required for customer's new address, HUC will transfer the deposit from the customer's previous address to the customer's new address. The customer will pay the balance of the deposit amount for the customer's new address, prior to the utilities being placed in their name. If a deposit is required of a customer, and the customer would like a written explanation as to why they need to make a deposit, then one will be provided. Amount of Deposit: If a deposit is required, it shall be equal to two times the average monthly bill, based on HUC rates. In the event of a new house, mobile home, or apartment building with no billing history, then similar construction will be used to establish the average monthly bill, based on HUC rates. Refusal or Disconnection of Service: Residential service may be refused or disconnected for failure to pay a deposit request. Interest: Interest earned on deposits is applied to the account as a credit on a calendar year basis. When customer moves out of our services, the account is finaled out with interest applied to the account as credit, and the deposit amount is applied to the final bill. If this results in a credit balance, a check is issued ended to the customer for that credit amount. The rate of interest is determined by the Minnesota Department of Commerce and HUC obtains that information annually. Refund: The utility shall refund the deposit of a residential customer after twelve consecutive months of pFornpt on time payments (no late payment fees). If a customer is late in making payment, then the deposit will be retained, until such time as the customer makes twelve consecutive monthly on -time payments (no late payment fees). If the customer provides a payment history from their previous provider euier, and the payment history indicates no late payment fees and no dishonored checks, then HUC will refund the deposit. HUC must receive this information from the customer within 30 days three mont of customer moving into our services. Method of Refund: Any deposit or portion thereof refunded to a residential customer shall be refunded by check. Any interest earned will be applied to customer's account as a credit. Refund at Termination of Service: On termination of residential service, and if the customer has a deposit with the utilities, the utility shall credit the deposit, with accrued interest, to the customer's final bill and return the balance within thirty days of issuing the final bill. DEPOSIT REQUIREMENT — COMMERCIAL /INDUSTRIAL Commercial /Industrial Customers: An application for service shall be filled out within 30 days of receiving service. The application shall be accompanied with identification, preferably photo identification, and their Federal Tax ID number. In addition, a deposit is required for all Commercial /Industrial customers, prior to the utilities being placed in their name. An internal credit check is performed for all customers moving into HUC service territory. If the results of the credit check indicate the customer owes HUC due to previously provided services, then the outstanding balance shall be paid plus a deposit, prior to the customer receiving service. Existing Commercial /Industrial Customers Moving Within Service Territory A deposit will be waived if the Commercial /Industrial customer has a 24 month payment history with HUC indicating the Commercial /Industrial customer has not been disconnected or issued any dishonored checks. A deposit for existing Commercial /Industrial customers moving within HUC service territory will be required prior to customer having utilities placed in their name for the following reasons: 1. If the customer has been disconnected or issued any dishonored checks in the previous 24 months. 2. Subsequent credit information indicates the initial application for service was falsified. If a deposit is required of a customer and, 1. If customer has no deposit with HUC, the customer will pay the deposit amount for the customer's new address. 2. If customer already has a deposit with HUC and this deposit amount is greater than the new deposit required for customer's new address, HUC will transfer the deposit from the customer's previous address to the customer's new address. The balance of the deposit at the customer's previous address will be applied to the customer's final bill for the customer's previous address. 3. If customer already has a deposit with HUC and this deposit amount is less than the new deposit required for customer's new address, HUC will transfer the deposit from the customer's previous address to the customer's new address. The customer will pay the balance of the deposit amount for the customer's new address, prior to the utilities being placed in their name. If a deposit is required of a customer, and the customer would like a written explanation as to why they need to make a deposit, then one will be provided. Amount of Deposit: The deposit shall be equal to one and one -half times the average monthly usage based on HUC rates. Average is defined as the average monthly customers usage based on HUC rates of the previous 12 months. The deposit may also be made by posting a performance bond. The performance bond will not earn any interest. The performance bond will be terminated after 24 consecutive months of timely payments. In the event of a new building with no billing history, then similar construction will be used to establish the average monthly usage. Refusal or Disconnection of Service: Commercial /Industrial service may be refused or disconnected for failure to pay a deposit request. Interest: Interest earned on deposits is applied to the account as a credit on a calendar year basis. When Commercial /Industrial customer moves out of our services, the account is finaled out with interest applied to the account as credit, and the deposit amount is applied to the final bill. If this results in a credit balance, a check is issued refunded to the customer for that credit amount. The rate of interest is determined by the Minnesota Department of Commerce and HUC obtains that information annually. RPfi inrl The utility shall refund the deposit of a Commercial /Industrial customer after 24 consecutive months of on time prempt payments (no late payment fees). If a customer is late in making payment, then the deposit will be retained, until such time as the customer makes 24 consecutive monthly on -time payments (no late payment fees). Method of Refund: Any deposit or portion thereof refunded to a Commercial /Industrial customer shall be refunded by check. Refund at Termination of Service: On termination of Commercial /Industrial service, and if the customer has a deposit with the utilities, the utility shall credit the deposit, with accrued interest, to the customer's final bill and return the balance within thirty days of issuing the final bill. 2009 Minnesota Statutes 21613.097 COLD WEATHER RULE; COOPERATIVE OR MUNICIPAL UTILITY. Subdivision 1.Application; notice to residential customer. (a) A municipal utility or a cooperative electric association must not disconnect and must reconnect the utility service of a residential customer during the period between October 15 and April 15 if the disconnection affects the primary heat source for the residential unit and all of the following conditions are met: (1) The household income of the customer is at or below 50 percent of the state median household income. A municipal utility or cooperative electric association utility may (i) verify income on forms it provides or (ii) obtain verification of income from the local energy assistance provider. A customer is deemed to meet the income requirements of this clause if the customer receives any form of public assistance, including energy assistance, that uses an income eligibility threshold set at or below 50 percent of the state median household income. (2) A customer enters into and makes reasonably timely payments under a payment agreement that considers the financial resources of the household. (3) A customer receives referrals to energy assistance, weatherization, conservation, or other programs likely to reduce the customer's energy bills. (b) A municipal utility or a cooperative electric association must, between August 15 and October 15 each year, notify all residential customers of the provisions of this section. Subd. 2.Notice to residential customer facing disconnection. Before disconnecting service to a residential customer during the period between October 15 and April 15, a municipal utility or cooperative electric association must provide the following information to a customer: (1) a notice of proposed disconnection; (2) a statement explaining the customer's rights and responsibilities; (3) a list of local energy assistance providers; (4) forms on which to declare inability to pay; and (5) a statement explaining available time payment plans and other opportunities to secure continued utility service. Subd. 3.Restrictions if disconnection necessary. (a) If a residential customer must be involuntarily disconnected between October 15 and April 15 for failure to comply with subdivision 1, the disconnection must not occur: (1) on a Friday, unless the customer declines to enter into a payment agreement offered that day in person or via personal contact by telephone by a municipal utility or cooperative electric association; (2) on a weekend, holiday, or the day before a holiday; (3) when utility offices are closed; or (4) after the close of business on a day when disconnection is permitted, unless a field representative of a municipal utility or cooperative electric association who is authorized to enter into a payment agreement, accept payment, and continue service, offers a payment agreement to the customer. Further, the disconnection must not occur until at least 20 days after the notice required in subdivision 2 has been mailed to the customer or 15 days after the notice has been personally delivered to the customer. (b) If a customer does not respond to a disconnection notice, the customer must not be disconnected until the utility investigates whether the residential unit is actually occupied. If the unit is found to be occupied, the utility must immediately inform the occupant of the provisions of this section. If the unit is unoccupied, the utility must give seven days' written notice of the proposed disconnection to the local energy assistance provider before making a disconnection. (c) If, prior to disconnection, a customer appeals a notice of involuntary disconnection, as provided by the utility's established appeal procedure, the utility must not disconnect until the appeal is resolved. Subd. 4.Application to service limiters. For the purposes of this section, "disconnection" includes a service or load limiter oi- any device that limits or interrupts electric service in any way. Contract for Parallel Generation facilities This contract is entered into August as of 12, 2010, by Hutchinson Utilities Commission (hereafter called "Utility ") and Applied Kinetics, Inc. (hereafter called "customer "). RECITALS The customer has installed electric generating facilities, consisting of a Grid Tied Photovoltaic System rated at 10 kilowatts of electricity, on property located at 1125 Highway 7 West, Hutchinson, MN. The customer is prepared to generate electricity in parallel with the Utility. The customer meets the requirements of the Utilities rules on parallel generation and any technical standards for interconnection the Utility has established that are authorized by those rules. The Utility is obligated under federal and Minnesota law to interconnect with the customer and to purchase electricity offered for sale by the customer. AGREEMENTS The customer and the Utility agree: 1. The Utility will sell electricity to the customer under the rate schedule in force for the class of customer to which the customer belongs. 2. Payment per KWH for Energy delivered to HUC, in Excess of Energy Used by the customer. $.054 per KWHR in 2010. see #3 in Parallel Generation (40KW or less). 3. The rates for sales and purchase of electricity may change over the time this contract is in force, due to actions of the Utility. The customer and the Utility agree that sales and purchases will be made under the rates in effect each month during the time this contract is in force. 4. The customer must operate its electric generating facilities within any rules, regulations, and policies adopted by the utility, which provide reasonable technical connection and operating specifications for the customer (Hutchinson Utility Commission's rules and regulations applicable to parallel generation are attached). f C r z F r J 5. The customer will operate its electric generating facilities so that they conform to the national, state, and local electric and safety codes, and will be responsible for the costs of conformance. 6. The customer is responsible for the actual, reasonable costs of interconnection which are estimated to be $40. The customer will pay the Utility in this way: HUC will invoice Applied Kinetics Inc. 7. The customer will give the Utility reasonable access to its property and electric generating facilities if the configuration of those facilities does not permit disconnection or testing from the Utility's side of the interconnection. If the Utility enters the customer's property, the Utility will remain responsible for its personnel. 8. The Utility may stop providing electricity to the customer during a system emergency. The Utility will not discriminate against the customer when it stops providing electricity or when it resumes providing electricity. 9. The Utility may stop purchasing electricity from the customer when necessary for the Utility to construct, install, maintain, replace, remove, investigate, or inspect equipment or facilities within its electrical system. The Utility will notify the customer before it stops purchasing electricity in this way: HUC will notify Applied Kinetics Inc. with a phone call 10. The customer shall keep in force liability insurance, of at least $300,000.00, against personal or property damage due to the installation, interconnection, and operation of its generating facility. 11. This contract becomes effective when signed by the customer and the utility. This contract will remain in force until either the customer or the Utility gives written notice to the other that the contract is canceled. This contract will be canceled 30 days after notice is given. 12. This contract contains all the agreements made between the customer and the Utility. The customer and the Utility are not responsible for any agreements other than those stated in this contract. 7-ol-3 Aib THE CUSTOMER AND THE UTILITY HAVE READ THIS CONTRACT AND AGREE TO BE BOUND BY ITS TERMS. AS EVIDENCE OF THEIR AGREEMENT, THEY HAVE EACH SIGHNED THIS CONTRACT BELOW ON THE DATE WRITTEN AT THE BEGINNING OF THIS CONTRACT. Customer APPOLD k1l'JM65 /IX- HUTCHINSON UTILITIES COMMISSION B Date:_ /a2 �oZO /b Date: ( i t OF 3