04-30-2014 HUCM MINUTES
Regular Meeting — Hutchinson Utilities Commission
Wednesday, April 30, 2014
Call to order— 3:00 p.m.
President Hanson called the meeting to order. Members present: President Anthony
Hanson; Vice President Monty Morrow; Commissioner Dwight Bordson; Commissioner
Donna Luhring; Attorney Marc Sebora; Interim General Manager John Webster.
Members Absent: Secretary Mark Girard
1. Approve Minutes of:
a. March 26, 2014 Regular Meeting
b. April 7, 2014 Special Meeting
c. April 11, 2014 Special Meeting
The minutes of the March 26, 2014 regular meeting, April 7, 2014 and April 11,
2014 special meetings were reviewed. A motion was made by Commissioner
Luhring, seconded by Commissioner Bordson to approve the minutes. Motion was
unanimously carried.
2. Ratify Payment of Bills for March 2014
The March 2014 payables were discussed. After discussion, a motion was made
by Commissioner Bordson, seconded by Vice President Morrow to ratify the
payment of bills in the amount of $4,387,507.16 (detailed listing in payables book).
Motion was unanimously carried.
3. Approve Financial Statements/Budget Year to Date
Jared Martig presented the March 2014 financial statements/budget year-to-date.
After discussion, a motion was made by Vice President Morrow, seconded by
Commissioner Bordson to approve the financial statements/budget year-to-date.
Motion was unanimously carried.
4. Consideration of General Manager Employment Agreement
President Hanson reported Commissioner Bordson has been negotiating the
employment agreement for HUC's new general manager. Commissioner Bordson
discussed some of the areas included on the latest copy of the agreement were
the salary within the targeted range, intellectual property and non-compete
verbiage, transition of vacation hours, and a 12-month probationary period.
Commissioner Bordson expressed thanks to City of Hutchinson Human Resource
Director, Brenda Ewing and Attorney Sebora for assisting in the negotiating
process.
After discussion, the Board decided to schedule a special meeting to discuss
further negotiations.
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5. Review Policies and Requirements Booklet
Interim GM Webster presented the policies and requirements booklet, sections:
• Natural Gas Service Requirements and Charges
• Temporary Service
• Locating Customer's Underground Utilities
There were no recommended changes to the policies and requirements booklet.
6. Approve Changes to Exempt and Non-Exempt Handbooks
Jan Sifferath presented changes to the exempt and non-exempt handbooks,
sections:
• Training and Education Assistance
• Workplace Accommodation
Changes to the Training and Education Assistance section were for clean-up
purposes.
There were no recommended changes to the Workplace Accommodation section.
After discussion, a motion was made by Commissioner Luhring, seconded by Vice
President Morrow to approve the changes to the exempt and non-exempt
handbooks. Motion was unanimously carried. (Changes attached.)
7. Approve Parallel Generation Policy — Greater than 40 kW
Interim GM Webster presented changes to the Parallel Generation Policy —
Greater than 40 kW. Changes were made by Attorney Sebora regarding insurance
and the rest of the changes were to provide clarity.
After discussion, a motion was made by Commissioner Bordson, seconded by
Commissioner Luhring to approve the Parallel Generation Policy — Greater than 40
kW. (Policy attached.)
8. Approve Requisition #5830 for 13.8kV Circuit Breaker Replacement
Dan Lang presented requisition #5830 for 13.8kV circuit breaker replacement,
explaining this was a continuation of a plan put in place to replace two breakers
per year for a total of 12 breakers in all. After this replacement, a total of seven will
be replaced to date. After discussion, a motion was made by Vice President
Morrow, seconded by Commissioner Luhring to approve requisition #5830 for
13.8kV circuit breaker replacement for $43,119.06 from Utilities Plus Energy
Services. Motion was unanimously carried. (Requisition attached.)
9. Approve Requisition #5842 for Hutchinson Substation Transformer Repair
Dave Hunstad presented requisition #5842 for Hutchinson substation transformer
repair. After discussion, a motion was made by Vice President Morrow, seconded
by Commissioner Bordson to approve requisition #5842 for Hutchinson substation
transformer repair for $38,250.00 from Waukesha. Motion was unanimously
carried. (Requisition attached.)
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10. Discuss Reliable Public Power Provider (RP3) Award
Dave Hunstad presented the Reliable Public Power Provider (RP3) Award and
explained HUC's scoring summary. President Hanson congratulated HUC staff and
commented receiving this award is outstanding and HUC should be proud. (Award
Letter attached.)
11. Discuss Electric Industrial Rate Changes
President Hanson explained this is to follow up on discussions held at the April 11
workshop regarding electric industrial rates. Commissioner Bordson abstained
from discussion due to conflict of interest. Discussion held regarding the next steps
needed to bring a rate change recommendation to the City Council. Vice President
Morrow mentioned to keep in mind the timeframe as HUC's 2015 budgeting time
nears. The Board decided a workshop will be scheduled in the next 30 days to
include City Council, Hutchinson Utilities Commissioners and staff members.
Attorney Sebora mentioned per the City Charter, if the Commission is requesting a
change in rates, the request needs to be presented to City Council for their review
and approval. City Council has 30 days to make their decision after presented with
a formal letter or resolution requesting the rate change.
12. Updates:
a. Compensation Subcommittee (Commissioner Luhring & Secretary Girard)
Commissioner Luhring received a list of companies for a compensation study
and is in the process of contacting them for information. Commissioner Luhring
will report back at the May regular commission meeting recommending one or
two companies for the study.
b. Joint Meeting Date with City (Commissioner Bordson)
Commissioner Bordson reported a date will be set in late May, September or
October.
13. Communication from the City Administrator
City Administrator Carter was absent.
14. Division Reports
Business — Jan Sifferath
• Sent the benchmarked sick leave accrual to Commissioner Bordson.
• Discussed a need to develop a policy for consistency in recognizing retiring
HUC employees. Jan will to research ideas and report to Board.
Electric — Dave Hunstad
• During this construction season, the goal is to do better in communicating to
customers where HUC will be working.
Electric — Dan Lang
• Next week, will resume commissioning of unit 1 controls project.
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Electric — Randy Blake
• New mechanic started this Monday.
• Combustion inspection on unit 8 turbine earlier this spring. Reliable Turbine
Services are repairing items needing to be addressed.
• Working with Wartsila on some warranty issues on unit 5.
• Center tower gear box is being moved to Plant 1.
Finance — Jared Martig
• Requested feedback on the 5-year plan he presented at the workshop.
Natural Gas — John Webster
Nothing to report
15. Legal Update
Nothing to report.
Unfinished Business
• Discuss Separate Business Unit for Wholesale Business
o Jared Martig working on separating out the generation from the rest of the
electrical.
New Business
None
There being no further business, a motion was made by Commissioner Luhring,
seconded by Vice President Morrow to adjourn the meeting at 4:05 p.m. Motion was
unanimously carried.
Mar Girard, Secretary
ATTEST: V/W Y'V
Anthony Ha son, Pr sident
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EXEMPT
Training and Education Assistance
The Commission HUC encourages its employees to seek individual and career development
through job-related training and education. The Commission HUC provides financial assistance
for successful completion of qualifying programs and courses. Tuition, registration fees and
other course-related fees would be reimbursed after successful completion of a course. To
apply for education assistance, employees must submit a request to their Director, Manager, or
Supervisor no later than five working days prior to registration. The Director, Manager or
Supervisor and the General Manager must approve the course, seminar, or program. Only
courses that are job-related and provide potential for career advancement with HUC are
eligible for reimbursement.
The following criteria must be met:
• The maximum amount of reimbursement will be $6,000 per calendar year. If
coursework or tuition exceeds this amount, then the Director or General Manager will
approach the Commission to request a waiver. To request a waiver, the coursework
must be directly related to the employee's position within the company, or if the degree
the employee is seeking is beneficial to the company; in other words, it would be
difficult to hire someone who already has that degree.
• Reimbursement is contingent on receiving a "pass" or minimum grade of"C".
• Employee must study on their own time. Use of HUC computers is allowed in
accordance with the IT policy.
• An employee must remain employed at HUC for twenty-four (24) calendar months after
completion of a course, or must repay HUC all reimbursements received for the course.
NON-EXEMPT
Training and Education Assistance
The Commission HUC encourages its employees to seek individual and career development
through job-related training and education. The Commission HUC provides financial assistance
for successful completion of qualifying programs and courses. Tuition, registration fees and
other course-related fees would be reimbursed after successful completion of a course. To
apply for education assistance, employees must submit a request to their Director, Manager, or
Supervisor no later than five working days prior to registration. The Director, Manager or
Supervisor and the General Manager must approve the course, seminar, or program. Only
courses that are job-related and provide potential for career advancement with HUC are
eligible for reimbursement.
The following criteria must be met:
• The maximum amount of reimbursement will be $6,000 per calendar year. If
coursework or tuition exceeds this amount, then the Director or General Manager will
approach the Commission to request a waiver. To request a waiver, the coursework
must be directly related to the employee's position within the company, or if the degree
the employee is seeking is beneficial to the company; in other words, it would be
difficult to hire someone who already has that degree.
• Reimbursement is contingent on receiving a "pass" or minimum grade of"C".
• Employee must study on their own time. Use of HUC computers is allowed in
accordance with the IT policy.
• An employee must remain employed at HUC for twenty-four (24) calendar months after
completion of a course, or must repay HUC all reimbursements received for the course.
Hutchinson Utilities Commission
Parallel Generation (Greater than 40 KW) — Net Energy Billing
1. Effective In
All territories served by Hutchinson Utilities Commission (HUC).
2. Availability
Available few to single-phase and three-phase customers where a part or all of
the electrical requirements of the customer are supplied by the customer's
generating facilities, where such facilities have a total generating capability of
greater than 40 kW and less than or equal to 100 KW, where such facilities are
connected in parallel with the utility. Customers not desiring to sell energy under
The energy rate indicated below is the minimum for electrical energy. Customers
with generating facilities greater than 100 kW can negotiate a buy back rate.
Should HUC be unwilling to pay the minimum rate for electrical energy,
the HUC shall agree to transport such electrical energy to another utility
that will is willing to pay a different rate. The utility HUC shall
recover actual costs of such transportation from the generating customer.
The budget payment plan will not be available to customers with parallel
generation
3. Rate
Customers shall receive monthly payments for all electricity delivered to the-utility
HUC and shall be billed invoiced by the utility HUC for metering and associated
billing expenses specified in the latest rates of the wholesale supplier unless the
latest rates of the wholesale supplier do not properly reflect avoided costs. In
such event, the Commission, upon request, may determine appropriate rates.
utgty HUC shall have on file a copy of the latest customer-owned generation
system rates for its wholesale supplier.
4. Minimum Charge
The monthly minimum charge paid by the customer shall be the customer
charge.
5. Power Factor
The customer shall operate on a net power factor of not less than 94 percent. A
power factor penalty will apply if the power factor drops below 94 percent.
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Hutchinson Utilities Commission
Parallel Generation (Greater than 40 KW) - Net Energy Billing
6. Negotiated Rates
back rate.
Customers with generation systems greater than 40 kW
100 kW have the right to negotiate a buy-back rate. The buy-back rate cannot
may not be greater than the full, avoided cost.
The following are the required procedure procedural guidelines:
a. The-utility HUC must respond to the customer-owned generating system
within 30 days of the initial written receipt of the customer-owned
generating system proposal and within 30 days of receipt of a subsequent
customer-owned generating system proposal,
b. The y's HUC's rejection of the customer-owned generating system
proposal must be accompanied by a counter-offer relating to the specific
subject matter of the customer-owned generating system proposal, and
c. If the-utility HUC is unable to respond to the customer-owned generating
system proposal within 30 days it shall inform the customer-owned
generating system of:
1) Specific information needed required to evaluate the customer-
owned generating system proposal.
2) The precise difficulty encountered in evaluating the customer-
owned generating system proposal.
3) The estimated date that it HUC will respond to the customer-owned
generating system proposal.
d. The Commission may become involved in the utility negotiations upon
showing by either utility HUC or the customer-owned generating system
that a reasonable conclusion cannot be reached under the above
guidelines. The Commission may provide a waiver to the guidelines and
order new negotiation requirements se such that a reasonable conclusion
san may be reached.
e. A copy of all negotiated buy-back rates shall be given provided to the
Commission. These rates shall not be effective in effect until; approved by
the Commission.
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Hutchinson Utilities Commission
Parallel Generation (Greater than 40 KW) — Net Energy Billing
7. Charges for Energy Supplied by the HUC
Energy supplied by the utility HUC to the customer shall be billed invoiced in
accordance with the standard applicable rate schedules of the utility.
8. Maintenance Rate
A customer-owned generation facility may be billed lower demand charges for
energy purchased during scheduled maintenance provided written approval is
obtained in advance from the utility HUC. Demand charges other than
"Distribution Demand" shall be prorated if in the event maintenance is scheduled
such that the utility HUC does not incur additional capacity costs. Said probation
proration shall be demand charge times the number of authorized days of
scheduled maintenance divided by the number of days in the billing period.
9. Contract Required
A contract is required between the utility HUC and the customer-owned
generation facility. The contract shall specify safety, system protection, and
power quality rules that generators must comply with. Contracts with customer
owned generation facilities selling energy under the standard (non negotiated)
rate have no specific term or length. Contracts with customer-owned generation
facilities selling energy under a negotiated rate shall contain performance
requirements and be of sufficient length to ensure the- ti-lity HUC avoids the
costs for which the customer-owned generation facility has been paid.
6. ( Customer Obligation
a. Metering Facilities
The customer shall furnish, install and wire the necessary service
entrance equipment, meter sockets, meter enclosure cabinets, or meter
connection cabinets that may be required by HUC to properly meter usage
and sales to HUC
b. Interconnection Costs
The owner of the generating facility shall be required to pay all
interconnection costs, incurred by HUC. The owner shall pay said costs
prior to the final service connection to the Utility's electrical system
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Hutchinson Utilities Commission
Parallel Generation (Greater than 40 KW) — Net Energy Billing
c. Insurance Hold Harmless and Government Approval
The customer shall keep in force a policy of liability insurance, of at least
$1 million, against personal or property damage to the
utility's Hutchinson Utilities Commission's system, equipment and
personnel arising from the installation, interconnection, and operation of
the customer's generating facility. The customer shall provide proof of
insurance to HUC on an annual basis with said policy specifically naming
HUC as an insured.
The customer shall indemnify and hold HUC harmless from all claims of
damage whatsoever.
The customer is responsible for obtaining all governmental permits and
approvals.
d. Interconnection and Operational (Safety and Power Quality) Requirements
Electric Service to a customer-owned electric generation installation may
be disconnected for failure to comply with the following requirements.
1) Interconnection of a generating facility with the HUC system shall
not be permitted until application has been made to and approval
received from HUC. The Utility may withhold approval only for good
reason such as failure to comply with applicable HUC or
governmental rules or laws. HUC shall require a contract specifying
reasonable technical connection and operating aspects for the
parallel generating facility.
2) HUC may require that for each generating facility there is provided,
between the generator/s and the utility system, a lockable load-
break disconnect switch. For installations interconnected at greater
than 600 volts, a fused cutout switch may be substituted, where
practicable. The switches shall be accessible to HUC for the
purpose of isolating the parallel generating facility from the HUC
system when necessary.
3) HUC shall require a separate distribution transformer, where
necessary, for a customer having a generating facility for reasons
of public and employee safety or where the potential exists for the
generating facility causing problems with the service of other
customers.
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Hutchinson Utilities Commission
Parallel Generation (Greater than 40 KW) — Net Energy Billing
4) HUC shall require that each generating facility have a system for
automatically isolating the generator from HUC's system upon loss
of the HUC supply, unless HUC desires that the local generation be
continued to supply isolated load.
5) HUC shall require that the customer discontinue parallel generation
operations when it so requests and HUC may isolate the generating
installation from its system at times. During such times, HUC shall
not be liable for revenue lost by the customer. Parallel generation
may be disconnected:
a) When considered necessary to facilitate maintenance or
repair of HUC's facilities.
b) When considered necessary during system emergencies.
c) When considered necessary during such times as the
generating facility is operating in a hazardous manner, or is
operating such that it adversely affects service to other
customers or to nearby communication systems or circuits.
6) The owner of the generating facility shall be required to make the
equipment available and permit entry upon the property by electric
and communication utility personnel at reasonable times for the
purpose of testing isolation and protective equipment, evaluating
the quality of power delivered to HUC's system and testing to
determine whether the local generating facility is the source of any
electric service or communication systems problems.
7) The power output of the generating facility shall be maintained such
that the frequency and voltage are compatible with normal HUC
service and do not cause that HUC service to fall outside the
prescribed limits of Commission rules and other standard
limitations.
8) The generating facility shall be operated so that variations from
acceptable voltage levels and other service impairing disturbances
do not result in adverse effects on the service or equipment of other
customers, and in a manner that does not produce undesirable
levels of harmonics in the HUC power supply. The customer agrees
to disconnect the generating facility from HUC's distribution system
or reimburse HUC for the cost of necessary system modifications if
operation of the generating facility causes radio, television, internet,
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Hutchinson Utilities Commission
Parallel Generation (Greater than 40 KW) — Net Energy Billing
or electrical service interference to other customers, or interference
with the operation of HUC's electrical system.
9) The owner of the generating facility shall be responsible for
providing protection for the owner's equipment and for adhering to
all applicable national, state and local codes.
10) Customer agrees to locate the generating facility so as to not
interfere with HUC's distribution system. Customer agrees that the
installation shall be in compliance with all applicable electric codes
and the generating facility shall be operated only after the
installation has been inspected and approved by appropriate
authorities. Customer agrees to obtain all required permits, abide
by all building and zoning requirements and applicable inspections.
11) The customer agrees to reimburse HUC for any addition,
modification, or replacement of distribution components made
necessary by the customer's installation.
12) Customer agrees to effectively install grounding and provide surge
arrestor protection to prevent lightning damage to HUC's
distribution system.
7.11. Utility Obligation
a. Metering Facilities
HUC shall own and install an appropriate meter in order to record all flows
of energy necessary to bill in accordance with the charges and credits of
the rate schedule.
b. Notice to Communication Firms
HUC shall notify telephone utility and cable television firms in the area
when it knows that a customer-owned generating facility is to be
interconnected with its system. This notification shall be as early as
practicable to permit coordinated analysis and testing in advance of
interconnection.
8.12. Right to Appeal
The owner of the generating facility interconnected, or proposed to be
interconnected, with HUC's system may appeal to the Commission should any
requirement of HUC's service rules or the required contract be considered to be
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Hutchinson Utilities Commission
Parallel Generation (Greater than 40 KW) — Net Energy Billing
excessive or unreasonable. Such appeal shall be reviewed and the customer
notified of the Commission's determination.
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Contract for Parallel Generation Facilities (40 kW or L ess Greater than
40 kW)
This contract is entered into , by Hutchinson Utilities
Commission (hereafter called "Utility") and
(hereafter called "Customer")
RECITALS
The Customer has installed electric generating facilities, consisting of
rated at kilowatts of electricity, on property
located at
The Customer is prepared to generate electricity in parallel with the Utility.
The Customer meets the requirements of the Utility's 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 shall 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 the Utility, in excess of energy used by
the Customer. $ see #3, Rate, Hutchinson Utilities
Commission Parallel Generation (410 kW or Leal Greater than 40 kW) — Net
Energy Billing policy.
3. The rates for sale 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 shall 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
1
Utility Commission's rules and regulations applicable to parallel generation are
attached).
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 $ . The customer shall pay the Utility in
this manner: .
7. The Customer shall provide the Utility reasonable access to its property and
electric generating facilities in the event the configurations of those facilities do
not permit disconnection or testing from the Utility's side of the interconnection. If
the Utility enters the Customer's property, the Utility shall remain responsible for
its personnel.
8. The Utility may discontinue providing electricity to the Customer during a system
emergency. The Utility shall not discriminate against the Customer when it
discontinues providing electricity or when it resumes providing electricity.
9. The Utility may discontinue 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 shall notify the Customer prior to discontinuing the purchase of electricity in
this manner: .
10. The customer shall keep in force a policy of liability insurance, of at least
$300,000 00 $1 million, against personal or property damage to the Utility's
Hutchinson Utilities Commission's system, equipment and personnel arising from
the installation, interconnection, and operation of customer's generating facility
and shall provide annual proof of the insurance to the Utility with said policy
specifically naming the Utility Hutchinson Utilities Commission as an insured. The
customer agrees to indemnify and hold harmless the Utility from all claims
whatsoever arising from customer's generating system.
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 provides
written notice to the other that the contract is canceled. This contract shall be
canceled 30 days after notice is given.
12. This contract does not serve as an approval of the Customer's generating system
for planning, zoning or permit purposes. The Customer shall have the
responsibility to obtain proper approval and permits from the City of Hutchinson
or other governmental entities pertaining to the construction and operation of the
Customer's generating system.
2
13. 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.
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 SIGNED THIS CONTRACT BELOW ON THE DATE WRITTEN AT
THE BEGINNING OF THIS CONTRACT.
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Hutchinson
Utilities
Commission For information: Tobias Sellier,APPA, 202/467-2927
Dave Hunstad,Hutchinson Utilities Commission, 320/234-0508
225 Michigan Street SE HUTCHINSON UTILITIES COMMISSION RECEIVES NATIONAL
Hutchinson, Minnesota RECOGNITION FOR RELIABLE ELECTRIC OPERATIONS
55350-1905
WASHINGTON,D.C.,April 7, 2014—Hutchinson Utilities Commission is one of 184 of
the nation's more than 2,000 public power utilities to earn the Reliable Public Power
Provider(RP3®)1 designation from the American Public Power Association for providing
consumers with the highest degree of reliable and safe electric service.Brent McKinney,
manager, electric transmission and distribution at City Utilities of Springfield,Mo., and
chair of APPA's RP3 Review Panel,presented the designees on April 7 during the
association's annual Engineering&Operations Technical Conference held in Oklahoma
City,Oklahoma.
The RP3 designation recognizes public power utilities that demonstrate proficiency in four
key disciplines: reliability, safety,workforce development and system improvement.
Criteria within each category are based on sound business practices and represent a utility-
wide commitment to safe and reliable delivery of electricity.The RP3 designation now lasts
for three years(up from two), so the 94 utilities that earned the designation this year join
the 90 that received it last year.
"RP3 utilities are providing a high level of service to communities all over the country,"
said McKinney,"These 94 designees stand out as models of safe,reliable and forward-
thinking utility operations."
"We're honored to receive the RP3 designation,"said Dave Hunstad, Electric Manager of
Hutchinson Utilities Commission."Our utility staff puts in a lot of hard work to serve this
community. RP3 represents a much appreciated recognition of this hard work."
Anthony Hanson
President This is the ninth year that RP3 recognition has been offered. APPA is the national
Monty Morrow organization representing more than 2,000 not-for-profit,community-and state-owned
Vice President electric utilities.It is located in Washington,D.C.
Mark Girard
Secretary 1 RP3®is a registered service mark of APPA.
Donna Luhring
Commissioner
Dwight Bordson
Commissioner
John Webster
Interim General Manager
Tel 320-587-4746
Fax 320-587-4721