02-28-2018 HUCCP
HUTCHINSON UTILITIES
COMMISSION
AGENDA
REGULAR MEETING
February 28, 2018
3:00 p.m.
1. CONFLICT OF INTEREST
2. APPROVE CONSENT AGENDA
a. Approve Minutes
b. Ratify Payment of Bills
3. APPROVE FINANCIAL STATEMENTS
4. OPEN FORUM
5. COMMUNICATION
a. City Administrator
b. Divisions
c. Legal
d. General Manager
6. POLICIES
a. Review Policies
i. Electric Service Requirements & Charges
ii. Temporary Service Electric
iii. Hiring
iv. Probationary Period Upon Hiring
v. Temporary Employees
b. Approve Changes
i. CIP Rebate Level of Authority
ii. Service Beyond City Limits of Hutchinson
iii. Purchasing Policy
7. UNFINISHED BUSINESS
a. Update on Pack Gas Discussions
8. NEW BUSINESS
a. Approval of Extension of Northern Natural Gas Transportation
Contract #102733
b. Approval of (2) 2018 GMC 1/2T Pickup Req#7461
c. Approval to Allow Purchase of Pipeline Repair Fittings for Inventory
Req#7473
d. Approval of new Bucket Truck Req#7482 & Req#7487
e. Discussion on Cost of Service Study
f. Review 2017 Annual Distributed Generation
9. ADJOURN
MINUTES
Regular Meeting Hutchinson Utilities Commission
Wednesday, January 31, 2018
Call to order 3:00 p.m.
President Morrow called the meeting to order at 3:00 p.m. Members present: President
Monty Morrow; Vice President Anthony Hanson; Secretary Mark Girard; Commissioner
Robert Wendorff; Commissioner Don Martinez; Others present: General Manager Jeremy
Carter; Attorney Marc Sebora.
1. Conflict of Interest
Commissioner Hanson declared a conflict of interest in voting on agenda item 2f -
Designate Depositories for Utility Funds as he is an employee of Citizens Bank &
Trust and agenda item 3b- Ratify Payment, as he is 50% owner on AM2K Properties.
Secretary Girard also declared a conflict of interest in voting on agenda item 2f, as
he is a director for Citizens Bank & Trust.
2. Commission Reorganization
President Morrow called for the annual Commission reorganization.
a. A motion was made by Commissioner Hanson, seconded by Commissioner
Martinez to re-elect Monty Morrow to the position of president. Motion was
unanimously carried.
b. A motion was made by Commissioner Martinez, seconded by Commissioner
Wendorff to elect Anthony Hanson to the position of vice president. Motion was
unanimously carried.
c. A motion was made by Commissioner Hanson, seconded by Commissioner
Girard to appoint Robert Wendorff as secretary. Motion was unanimously carried.
d. A motion was made by President Morrow, seconded by Commissioner Martinez
to appoint Marc Sebora as legal counsel. Motion was unanimously carried.
e. A motion was made by Commissioner Hanson, seconded by Commissioner
Martinez to appoint Angie Radke as recording secretary. Motion was
unanimously carried.
f. A motion was made by Commissioner Wendorff, seconded by Commissioner
Martinez, to designate Citizens Bank & Trust, Wells Fargo Bank, Wells Fargo
Advisors, Home State Bank, Morgan Stanley and Cetera Investment Services
as depositories for utility funds. Motion was unanimously carried.
3. Approve Consent Agenda
a. Approve Minutes
b. Ratify Payment of Bills
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A motion was made by Commissioner Martinez, seconded by Commissioner
Wendorff to approve the Consent Agenda. Motion was unanimously carried.
4. Approve Financial Statements
Mr. Martig presented the financial statements. Mr. Martig noted the Net Profit for
Dec 2017 decreased by $520K from Dec 2016. This is due to the additional gas
costs over the final three days of Dec, which caused a fuel cost adjustment of $879K.
HUC charged customers $433K while HUC absorbed the remaining, which will be
collected in the form of less credits, issued in 2018.
GM Carter stated for Electric Division, consumption tracked consistent throughout
the year. Natural Gas Division tracked pretty consistent except for the month of
December.
GM Carter reviewed the additional graphs that Mr. Lang included on Load Duration
Curve, Historical market, gas and HUC Energy pricing and HUC load profile. .
These give a good pictorial of the data being collected even though they are not
reported on every month.
After discussion, a motion was made by Commissioner Girard, seconded by
Commissioner Hanson to approve the financial statements. Motion was
unanimously carried.
5. Open Forum
6. Communication
a. City Administrator Matt Jaunich
i. For the year, August was a bad month for us with the aquatic center.
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ii. The City has two big projects this year 1) 2 Avenue Bridge to start in June
and 2) Century project.
b. Divisions
i. Dan Lange, Engineering Services Manager- Losing System Controller
today. Will be having interviews next month.
ii. Randy Blake, Production Manager- Had a mandatory pre-bid contractor
project meeting yesterday at plant 1 facility. This was a good turn out and
included local and Minneapolis contractors.
Cooling Tower Project is coming up, will be going out for bids to keep
moving and will be looking to have a special meeting.
Finished up unit 8- exciter project.
Maintenance Mechanic position is posted.
iii. John Webster, Natural Gas Division Manager- last Friday a gas marketer
placed a large quantity of gas on our pipeline and will pull out the month of
February; they are using our piping as storage.
Gas Welder position is posted
iv. Jared Martig, Financial Manger- Auditors are here. Will be looking for a
meeting in March possibly April.
v. Dave Hunstad, Electric Transmission/Distribution Manager- Transformer
Inspections are being done out in the field.
c. Brenda Ewing, Human Resources Nothing to report.
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d. Legal Attorney Marc Sebora- Nothing to report.
e. General Manager Jeremy Carter
i. Working on Year-end.
ii. Legislative meetings are coming up the week of February 20.
iii. Trying to keep Heartland Corn moving forward, hoping to accomplish in the
near future. Met with the new CEO- Gary. Had good conversations on what
to expect now and future for long-term use on our pipeline.
7. Policies
a. Review Policies
i. Administration of Personnel Policies & Procedures
ii. Savings Clause
iii. Equal Employment Opportunity
iv. Identity Theft- Red Flag Program
v. Minnesota Government Data Practices Act & Public Records Request
No changes were recommended at this time.
b. Approve Changes - None
8. Unfinished Business
a. Update on Pack Gas Discussions
GM Carter stated staff would be following up at the end of week with the attorney
to move the settlement forward.
9. New Business
a. ApprovGas Transportation Agreement- John Webster stated
May 1, 2020. HUC has not changed the transportation rate or daily balancing
fees from previous agreement.
Motion by Commissioner Hanson, second by Commissioner Girard, to approve
b. Approv- John Webster stated
1. This agreement provides
through January 1, 2020. HUC has not changed the transportation rate or daily
balancing fees from previous agreement.
Motion by Commissioner Girard, second by Commissioner Wendorff, to approve
c. - John Webster
stated the agreement allows 3M to continue to purchase base load natural gas
commodity through HUC. The agreement allows 3M to place segments of their
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base load commodity contracts into the Commodity Prepay Purchase Program
that is currently being put in place between HUC and its natural gas supplier.
Motion by Commissioner Martinez, second by Commissioner Hanson, to
unanimously.
President Morrow would like to take the time to touch base on the COS study.
The Board appreciates the good job and all that is done by staff. The Board is
not exposed to big bumps. Thank you and nice job that we do not see that. The
Board agreed.
d. Approve 3M CIP Rebate- Jared Martig presented the 3M CIP Rebate. HUC staff
is trying to get 3M to commit to having this done quarterly.
Commissioner Girard inquired if this number has been going down.
Mr. Martig and GM Carter stated that it has. It has been taking more projects to
get to the same level of energy efficiency savings. (Rebate analysis attached)
A motion was made by Commissioner Hanson, seconded by Commissioner
Girard to approve the 3M CIP Rebate. Motion was unanimously carried.
e. Discussion of PILOT Resolution
President Morrow recapped there is a subcommittee made of Commissioner
Girard, Commissioner Hanson, Mr. Steve Cook and Mr. Chad Czmowski.
Commissioner Hanson communicated the subcommittee looked at the 2.75%
contribution of HUC revenue. The subcommittee found the average
in this region is a 4.5% PILOT transfer. The subcommittee would like to be in
line with peers and feels comfortable with a 3-year phase in. Commissioner
Hanson added the subcommittee tried to simplify the PILOT transfer by
eliminating tree and street lighting.
GM Carter stated the approved 2018 budget already includes year 1 of the 3 year
phase-in. In addition, the COS study takes the increased PILOT into
consideration as part of the analysis. .
Commissioner Hanson noted specific verbiage was added to consider 1-time
requests when something comes up.
Mr. Jaunich communicated the Council did review this and is comfortable with
the language. Council wants what is close to its peer group and this is.
GM Carter mentioned right now the split is 60-40. However, each division is now
going to pay the PILOT percentage of their own operating revenue. There is also
a floor and ceiling added to the PILOT resolution to protect both organizations.
Mr. Morrow looked at the Board for any questions.
With no further discussion a motion was made by Commissioner Hanson,
seconded by Commissioner Girard to approve the PILOT Resolution. Motion
was unanimously carried.
f. Discussion of Cost of Service Study
President Morrow communicated the Commission had time to review the COS
study and now is the time to discuss our thoughts and ask further questions.
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GM Carter summarized this is the initial step in the process. The second step
would be to consider a rate track structure. It is important in this second step for
the Commission to be given time to review the information give their input and
make recommendations. Items for the Commission to consider 1) does the
Commission want to do anything . If yes,
what kind of a change; stay revenue neutral to the utility or generate addition
revenue? If the Commission desires to stay revenue neutral to the utility without
affecting the customer bill to much this can be done by having the revenue
generated restructured in a different format; have less of an energy charge and
more in the fixed charge. 2) Does the Commission want to move in a direction
to incrementally adjust the customer classifications towards more equitability? 3)
If the commission would like to realign the energy rate and fixed charge in
addition to moving the classification towards more equitability the commission
should consider how much, +/- 1% or +/- 2% bandwidth and also a glide path
over a certain length of time.
Commissioner Hanson inquired about time of day use and off peak pricing.
GM Carter noted that the Hutchinson community customer base has fairly
constant load with minimal large ups and downs. HUC is not a full-requirement
utility of MRES contract
structure, time of use is not as beneficial to HUC in addition to already being
sized infrastructure wise according to our peak load with some room for growth.
Although, there is more discussion going on in the industry about time of use
pricing or seasonal pricing in the future. MRES currently has in place as a
wholesale supplier seasonal pricing for its member utilities. Commissioner
Martinez inquired if the billing system could handle this.
GM Carter stated additional class rates would have to be set up; this would
become a more sophisticated billing system. Some communities are doing or
are considering time of use rate structures, but those communities typically have
more variability in loads, are purchasing their power based on more variable
pricing, or are looking to reduce the peak demand on their system through energy
conservation to reduce utility costs or additional infrastructure investments.
After further discussion, Commission asked what the next steps are.
4:05 Mrs. Ewing left
GM Carter noted if the Board would like to make a change, the Staff would
recommend Mr. Dan Kasbohm to send some recommendations.
Commissioner Hanson asked the staff if there is anything the Commission needs
to be aware of as far as any major costs that should be factored in now to account
for down the road.
GM Carter stated this is something the Staff can take a relook at.
President Morrow summarized by saying it does sound like we need to move
forward with receiving recommendations and asked the Staff to please review
any major costs that may be coming up in the future so the Commission can
consider any changes that may be done.
10. Adjourn
There being no further business, a motion was made by Commissioner Girard,
seconded by Commissioner Martinez to adjourn the meeting at 4:20 p.m. Motion
was unanimously carried.
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__________________________
Robert Wendorff, Secretary
ATTEST: _________________________
Monty Morrow, President
6
MINUTES
Special Meeting Hutchinson Utilities Commission
Wednesday, February 14, 2018
Call to order 8:30 a.m.
President Morrow called the meeting to order. Members present: President Monty
Morrow; Vice President Anthony Hanson; Secretary Robert Wendorff; Commissioner
Mark Girard; Commissioner Don Martinez; General Manager Jeremy Carter; Attorney
Marc Sebora
Others present: Dan Lange, Dave Hunstad, Jared Martig and Angie Radke.
The purpose of the special meeting is to have further discussion on the Cost of Service
(COS) Study.
President Morrow recapped that we had previously met on the COS study last month and
now before us we have additional information and summarization of different residential
customer scenarios available.
GM Carter communicated that this process started 8 months ago, looking at basic
classifications and costs to run the utilities. This study intent is to provide an unbiased
look at the utilities cost structure and revenue requirements. HUC has had past COS
studies done over the last decade and half. Dan Kasbohm from Utility Financial Solutions,
LLC (UFS) has put together different residential rate scenarios to give the commission
and idea on how one particular classification would be impacted based on varying
parameters and energy consumption levels. When a company is in a good financial
situation, such as HUC, that is the time to look at the appropriate rate structures and
equity between classes. This provides a proactive approach to maintaining integrity
between classes and ensure appropriate revenue requirement metrics are being
achieved. Presented before the Board is a look at different residential options, which
include different energy rates and incrementally moving towards a higher fixed charge to
cover the minimum fixed charges of Hutchinson Utilities. HUC is not looking to generate
additional revenue but is considering changing the rate schedule. HUC wants to stay
Revenue Neutral.
GM Carter reviewed the Electric Division Scenarios. The first table shows the cost of
service per class, what the projected revenue is and the percent change. This table also
shows removing 9.6% overall from the equation so HUC can stay revenue neutral. Right
now smaller customers are not paying proportionally their fair share of the costs to run
the utilities while larger customers are paying more. The second table shows staying
revenue neutral but balancing out the classifications by +/- 2% bandwidth on each rate
class. This starts shifting the classes towards more equitability based on the COS
service. HUC typically does 5-year financial projections, however Mr. Kasbohm
recommends only a 3-year rate track for consideration and approval. Even though HUC
has a lot of contracts locked up, there are too many variables within the industry and
Legislation that can change the financial forecasts for years 4 and 5.
Commissioner Girard inquired if that means having another rate study.
GM Carter explained it is recommended to look at this on a periodic basis every 3 to 5
years. However now HUC has a good benchmark and can continue to monitor things on
a monthly and yearly basis if a different rate path is considered.
Commissioner Girard asked if there are gaps from last study.
GM Carter informed the Board the trend was similar. However when we look at our peer
group studies we are significantly lower on the small user rates and within peer groups
with the larger customers.
Commission Martinez inquired if there is a balance between classes in our peer group.
GM Carter informed the Board there is the intent by the peer group to have a narrower
gap and better balance between classes. Generally speaking, municipally owned utilities
try to create as much equity as possible between classes. However, Municipals generally
favor the residential side some while Investor owned utilities favor the industrial
customers. Municipals try to create equity- try to be impartial; and try to view all
customers the same. This is why HUC also has a demand charge to cover those
incremental higher costs associated with select customers.
Commissioner Hanson noted our bandwidth of classes are wider than most since we have
not changed our rate in the last 10-12 years.
GM Carter added the longer we wait the larger the gap gets between the classifications
and the more concern there is when things change.
GM Carter continued to discuss the tables and pointed out the third table shows a +/-1%
change.
GM Carter explained another scenario available is having a $2 customer charge with a
zero percent adjustment; this reduces the energy charge to stay revenue neutral. The
table shows the general impact of customers based on usage. This scenario shows
customers are paying more through a fixed charge. HUC has about 6258 customers; the
usage(kwh) breakout per customer is as follows; up to 250kw hours-14% of residents fall
into class, 250-500kwh/23%, 500-750kwh/25%, 750-1000kwh/18%, 1000-1250kwh/10%,
over 1250kwh/10%. The majority of customers fall between the range of 250-1000kwh
which is 65-67%. This scenario is a 1.30 increase to a 70-cent decrease, which are not
significant changes.
GM Carter continued with the last scenario for the Electric Division. This scenario starts
to realign the classes with a $2 customer charge and 2% adjustment. This is a reduction
on the energy charge from the current rate but picks up revenue through a higher fixed
charge. This scenario looks to restructure fixed charges while starting to balance classes.
With the majority of customers falling between the range of 500-1000kwh this is an
increase of $1.20-$1.60 per month for majority of residential customers. With an increase
of $2 there is still a large portion of the bill that the customers can control.
GM Carter reviewed the Natural Gas Division Scenarios. The three tables show different
scenarios with a +/-2%, +/-1%, and +/-9%. GM Carter continued to summarize the
monthly customer bill impacts on the average usage of 6.9 MCF. HUC has about 5100
customers; the usage (MCF) breakout per customer is as follows; Less than or equal to
3mcf/15%, 3-5mcf/31%, 5-7mcf/28%, 7-9mcf/13%, 9-11mcf/6%, 11-13mcf/2%, 13-
15mcf/4%. The majority of customers fall between the range of 4-9mcf. Some customers
will see a small impact while other customers will see a decrease.
GM Carter explained another scenario available is restructuring the rate schedule with a
2% adjustment. These are not significant bill changes.
GM Carter mentioned at the last commission meeting, President Morrow asked staff to
re-look at the 5 year CIP and if there were any other projects coming up to be aware of
that were not part of the COS study that those get taken into consideration.. HUC is
looking to replace the SCADA system, which will be about $300K-$400K. The current
system is not supported anymore because the vendor is out of business. This is a huge
component runs all our
systems. This conversion would be done over a 3-4 year rollout period. Mr. Blake is also
looking to replace the tank farms downtown in 2020, which would be about $100k. HUC
does not foresee any other projects coming up in the transmission or distribution areas
unless some major developments take place.
After more discussion, GM Carter recommended to have a follow up discussion at the
Commission meeting on February 28. If the Board could give more direction on what they
are looking to do by moving from variable to fixed costs, or reclassification; further
analysis on all rate classes and appropriate glide path timeframes can be modeled for
future review and discussion.
There being no further business, a motion was made by Commissioner Martinez,
seconded by Commissioner Girard to adjourn the meeting at 9:50am Motion was
unanimously carried.
__________________________
Robert Wendorff, Secretary
ATTEST: _________________________
Monty Morrow, President
MINUTES
Special Meeting Hutchinson Utilities Commission
Wednesday, February 21, 2018
Call to order 7:30 a.m.
President Morrow called the meeting to order. Members present: President Monty
Morrow; Vice President Anthony Hanson; Secretary Robert Wendorff; Commissioner
Mark Girard; Commissioner Don Martinez; General Manager Jeremy Carter
Others present: Randy Blake, John Webster and Angie Radke.
The purpose of the special meeting is to Award the Bid on Foundation Work for Units 6 &
7.
GM Carter presented five bid proposals that were furnished by various contracting
companies on February 12, 2018. All proposals were reviewed and met bid
specifications. The completion times for all the contractors were fairly close and there
were no amendments for any of the contractors. After a few days of reviewing the bid
proposals, it came down to lowest bid. Staff would like to award the bid to Reiner
Contracting. If the project starts soon it looks like it will be completed by May.
Mr. Blake added the generators are still on track and if the foundation work is completed
in May this will be plenty of time to have pads cure.
Commissioner Hanson inquired what the next steps are.
Mr. Blake informed the Commission that the next step is breaking out the cooling tower
piping which will be part of the mechanical RFP now. This way staff can put unit 8 back
in operation without much disruption.
Commissioner Girard inquired- how the costs of the project are coming along. GM Carter
mentioned the latest project cost totals provided to the Commission are currently where
the project costs are at, there have been no other payments to date.
GM Carter noted the next large payment would be the second down payment on the
engines. The bulk of the larger charges will not be until late spring/early summer. Staff
will continue to send out the list periodically of the charges as they incur.
Without further discussion, a motion was made by Commissioner Girard, seconded by
Commissioner Hanson to approve Awarding the Bid on Foundation Work for Units 6 & 7
to Reiner Contracting. Motion was unanimously carried.
There being no further business, a motion was made by Commissioner Martinez,
seconded by Commissioner Wendorff to adjourn the meeting at 7:43am Motion was
unanimously carried.
__________________________
Robert Wendorff, Secretary
ATTEST: _________________________
Monty Morrow, President
HUTCHINSON UTILITIES COMMISSION
COMBINED DIVISIONS
FINANCIAL REPORT FOR JANUARY, 2018
January, 2018 MonthYear to Date 8.33% of Year Comp.
20182017Diff.% Chng20182017Diff.% Chng Full Yr Bud% of Bud
Combined Division
Customer Revenue$ 3,996,316$ 3,736,952 $ 259,3646.9%$ 3,996,316$ 3,736,952$ 259,3646.9%$ 35,763,605 11.2%
Sales for Resale$ 338,331$ 179,332$ 158,99888.7%$ 338,331$ 179,332$ 158,99888.7%$ 2,519,20013.4%
NU Transportation$ 70,844 $ 77,546$ (6,703)(8.6%)$ 70,844$ 77,546$ (6,703)(8.6%)$ 739,4409.6%
Electric Division Transfer$ 54,697 $ 54,308$ 3890.7%$ 54,697$ 54,308$ 3890.7%$ 656,3668.3%
Other Revenues$ 45,456 $ 49,418$ (3,962)(8.0%)$ 45,456$ 49,418$ (3,962)(8.0%)$ 492,8089.2%
Interest Income$ 27,293 $ 19,030$ 8,26343.4%$ 27,293$ 19,030$ 8,26343.4%$ 100,00027.3%
TOTAL REVENUES$ 4,532,937$ 4,116,587 $ 416,35010.1%$ 4,532,937$ 4,116,587$ 416,35010.1%$ 40,271,419 11.3%
Salaries & Benefits$ 550,210$ 529,678$ 20,5323.88%$ 550,210$ 529,678$ 20,532 3.9%$ 6,363,4298.6%
Purchased Commodities$ 2,445,828$ 2,266,975 $ 178,8537.9%$ 2,445,828$ 2,266,975$ 178,8537.9%$ 19,600,000 12.5%
Transmission$ 189,342$ 190,863$ (1,522)(0.8%)$ 189,342$ 190,863$ (1,522)(0.8%)$ 2,630,0007.2%
Generator Fuel/Chem.$ 104,395$ 66,660$ 37,73556.6%$ 104,395$ 66,660$ 37,735 56.6%$ 992,08210.5%
Depreciation$ 325,667$ 317,333$ 8,3332.6%$ 325,667$ 317,333$ 8,3332.6%$ 3,908,0008.3%
Transfers (Elect./City)$ 158,986$ 154,003$ 4,9843.2%$ 158,986$ 154,003$ 4,9843.2%$ 1,907,8358.3%
Operating Expense$ 193,291$ 175,297$ 17,99410.3%$ 193,291$ 175,297$ 17,994 10.3%$ 2,490,8097.8%
Debt Interest$ 103,551$ 63,382$ 40,16963.4%$ 103,551$ 63,382$ 40,169 63.4%$ 1,280,8638.1%
TOTAL EXPENSES$ 4,071,270$ 3,764,193 $ 307,0778.2%$ 4,071,270$ 3,764,193$ 307,0778.2%$ 39,173,018 10.4%
NET PROFIT/(LOSS)$ 461,667$ 352,394$ 109,27331.0%$ 461,667$ 352,394$ 109,27331.0%$ 1,098,40142.0%
Combined Divisions - Financial/Operating Ratios
JanuaryJanuaryYTD YTD 2018HUC
20182017Change20182017ChangeBudgetTarget
Gross Margin %33.7%32.3%1.4%33.7%32.3%1.4%32.2%26% - 28%
Operating Income Per Revenue $ (%)11.5%9.2%2.3%11.5%9.2%2.3%5.2%1%-4%
Net Income Per Revenue $ (%):10.2%8.6%1.6%10.2%8.6%1.6%2.7%0%-1%
Notes/Graphs:
HUTCHINSON UTILITIES COMMISSION
ELECTRIC DIVISION
FINANCIAL REPORT FOR JANUARY, 2018
January, 2018 MonthYear to Date 8.33% of Year Comp.
20182017Diff.% Chng20182017Diff.% Chng Full Yr Bud% of Bud
Electric Division
Customer Revenue$ 2,131,094$ 2,048,449$ 82,645 4.0%$ 2,131,094$ 2,048,449$ 82,6454.0%$ 25,325,1898.4%
Sales for Resale$ 338,331 $ 179,332$ 158,998 88.7%$ 338,331$ 179,332$ 158,99888.7%$ 2,519,20013.4%
Other Revenues$ 16,815$ 31,200$ (14,385)(46.1%)$ 16,815 $ 31,200$ (14,385) (46.1%)$ 208,8008.1%
Interest Income$ 15,041$ 9,515 $ 5,52658.1%$ 15,041 $ 9,515$ 5,52658.1%$ 50,000 30.1%
TOTAL REVENUES$ 2,501,280$ 2,268,497$ 232,784 10.3%$ 2,501,280$ 2,268,497$ 232,78410.3%$ 28,103,1898.9%
Salaries & Benefits$ 430,076 $ 408,246$ 21,830 5.3%$ 430,076$ 408,246$ 21,8305.3%$ 4,942,9648.7%
Purchased Power$ 1,372,360$ 1,247,715$ 124,644 10.0%$ 1,372,360$ 1,247,715$ 124,64410.0%$ 14,000,0009.8%
Transmission$ 189,342 $ 190,863$ (1,522) (0.8%)$ 189,342$ 190,863$ (1,522)(0.8%)$ 2,630,0007.2%
Generator Fuel/Chem.$ 104,395 $ 66,660$ 37,735 56.6%$ 104,395$ 66,660$ 37,73556.6%$ 992,08210.5%
Depreciation$ 241,667 $ 233,333$ 8,3333.6%$ 241,667$ 233,333$ 8,3333.6%$ 2,900,0008.3%
Transfers (Elect./City)$ 128,224 $ 119,110$ 9,1157.7%$ 128,224$ 119,110$ 9,1157.7%$ 1,538,6938.3%
Operating Expense$ 125,413 $ 119,504$ 5,9094.9%$ 125,413$ 119,504$ 5,9094.9%$ 1,613,8347.8%
Debt Interest$ 47,376$ 2,124 $ 45,252 2,130.6%$ 47,376 $ 2,124$ 45,2522,130.6%$ 606,7637.8%
TOTAL EXPENSES$ 2,638,853$ 2,387,555$ 251,297 10.5%$ 2,638,853$ 2,387,555$ 251,29710.5%$ 29,224,3369.0%
NET PROFIT/(LOSS)$ (137,572)$ (119,058)$ (18,514)15.6%$ (137,572)$ (119,058)$ (18,514) 15.6%$ (1,121,147) 12.3%
January, 2018 MonthYear to Date 8.33% of Year Comp.
20182017Diff.% Chng20182017Diff.% Chng Full Yr Bud% of Bud
Electric Division
Residential4,258,964 4,227,122 31,8420.75%4,258,9644,227,122 31,842 0.75% 50,432,7978.4%
All Electric358,586 339,959 18,6275.48%358,586339,959 18,627 5.48% 2,611,70513.7%
Small General1,628,145 1,573,523 54,6223.47%1,628,1451,573,523 54,622 3.47% 17,085,8539.5%
Large General6,463,380 5,957,138 506,2428.50%6,463,3805,957,138 506,242 8.50% 79,262,4998.2%
Industrial10,406,000 10,893,000 (487,000)(4.47%)10,406,00010,893,000 (487,000) (4.47%) 134,707,8567.7%
Total KWH Sold 23,115,075 22,990,742 124,3330.54% 23,115,075 22,990,742 124,3330.54% 284,100,7108.1%
Financial/Operating Ratios
JanuaryJanuaryYTD YTD 2018HUC
20182017Change20182017ChangeBudgetTarget
Gross Margin %23.9%23.1%0.8%23.9%23.1%0.8%24.0%24% - 28%
Operating Income Per Revenue $ (%)-4.3%-5.8%1.5%-4.3%-5.8%1.5%-2.0%0%-5%
Net Income Per Revenue $ (%):-5.5%-5.2%-0.3%-5.5%-5.2%-0.3%-4.0%0%-5%
Customer Revenue per KWH:$0.0922$0.0891$0.0031$0.0922$0.0891$0.0031$0.0886$0.0886
Total Power Supply Exp. per KWH:$0.0819$0.0754$0.0064$0.0819$0.0754$0.0064$0.0750$0.0750
Notes/Graphs:
Electric division loss in January 2018 increased by $18,514. The primary reason for this is increased expenses especially purchased power and bond
interest on the new generator bonds.
Sales for Resale of $338,331 consisted of $17,649 in market sales, $35,600 in the monthly tolling fee from Transalta, $189,082 in Transalta energy sales,
and $96,000 in capacity sales to SMMPA. January 2017 Sales for Resale of $179,332 consisted of $13,242 in market sales, $34,400 in monthly tolling
fees from Transalta, $65,190 in Transalta energy sales, and $66,500 in capacity sales to SMMPA. January 2016 Sales for Resale of $107,606 consisted
of $8,697 market sales, $34,400 in Transalta tolling fees, $22,509 in Transalta energy sales, and capacity sales to SMMPA for $42,000.
Overall Purchased Power increased by $124,644. MRES purchases decreased by $7,636 and market purchases/MISO costs increased by $132,280.
The power cost adjustment for January 2018 was $.00844/kwhr bringing in an additional $193,936 of revenue for the month.
Last year's power cost adjustment for January 2017 generated $129,829 in additional revenue.
HUTCHINSON UTILITIES COMMISSION
GAS DIVISION
FINANCIAL REPORT FOR JANUARY, 2018
January, 2018 MonthYear to Date 8.33% of Year Comp.
20182017Diff.% Chng20182017Diff.% Chng Full Yr Bud% of Bud
Gas Division
Customer Revenue$ 1,865,222$ 1,688,503$ 176,71910.5%$ 1,865,222$ 1,688,503$ 176,71910.5%$ 10,438,41617.9%
Transportation$ 70,844$ 77,546 $ (6,703)(8.6%)$ 70,844$ 77,546 $ (6,703)(8.6%)$ 739,440 9.6%
Electric Div. Transfer$ 54,697$ 54,308 $ 3890.7%$ 54,697$ 54,308 $ 3890.7%$ 656,366 8.3%
Other Revenues$ 28,641$ 18,217 $ 10,42357.2%$ 28,641$ 18,217 $ 10,42357.2%$ 284,008 10.1%
Interest Income$ 12,253$ 9,515$ 2,738 28.8%$ 12,253$ 9,515$ 2,73828.8%$ 50,00024.5%
TOTAL REVENUES$ 2,031,656$ 1,848,090$ 183,5679.9%$ 2,031,656$ 1,848,090$ 183,5679.9%$ 12,168,23016.7%
Salaries & Benefits$ 120,134 $ 121,433$ (1,299)(1.1%)$ 120,134$ 121,433 $ (1,299)(1.1%)$ 1,420,4658.5%
Purchased Gas$ 1,073,468$ 1,019,260$ 54,2085.3%$ 1,073,468$ 1,019,260$ 54,2085.3%$ 5,600,00019.2%
Operating Expense$ 67,878$ 55,794 $ 12,08521.7%$ 67,878$ 55,794 $ 12,08521.7%$ 876,975 7.7%
Depreciation$ 84,000$ 84,000 $ - 0.0%$ 84,000$ 84,000 $ -0.0%$ 1,008,0008.3%
Transfers (City)$ 30,762$ 34,893 $ (4,131)(11.8%)$ 30,762$ 34,893 $ (4,131)(11.8%)$ 369,142 8.3%
Debt Interest$ 56,175$ 61,258 $ (5,083)0.0%$ 56,175$ 61,258 $ (5,083)(8.3%)$ 674,100 8.3%
TOTAL EXPENSES$ 1,432,417$ 1,376,637$ 55,7804.1%$ 1,432,417$ 1,376,637$ 55,7804.1%$ 9,948,68214.4%
NET PROFIT/(LOSS)$ 599,239 $ 471,452$ 127,78727.1%$ 599,239$ 471,452 $ 127,78727.1%$ 2,219,54827.0%
January, 2018 MonthYear to Date 8.33% of Year Comp.
20182017Diff.% Chng20182017Diff.% Chng Full Yr Bud% of Bud
Gas Division
Residential81,792,71176,281,736 5,510,9757.22%81,792,71176,281,736 5,510,9757.22% 449,582,00018.2%
Commercial61,285,32054,704,042 6,581,27812.03%61,285,32054,704,042 6,581,27812.03% 420,183,00014.6%
Industrial108,615,282103,246,722 5,368,5605.20%108,615,282103,246,722 5,368,5605.20% 786,836,00013.8%
Total CF Sold 251,693,313 234,232,500 17,460,8137.45% 251,693,313 234,232,500 17,460,813 7.45% 1,656,601,00015.2%
Financial/Operating Ratios
JanuaryJanuaryYTD YTD 2018HUC
20182017Change20182017ChangeBudgetTarget
Gross Margin %45.9%43.6%2.3%45.9%43.6%2.3%51.4%37%-42%
Operating Income Per Revenue $ (%)31.1%27.7%3.3%31.1%27.7%3.3%22.1%11%-16%
Net Income Per Revenue $ (%):30.1%25.9%4.2%30.1%25.9%4.2%18.8%6%-11%
Contracted Customer Rev. per CF:$0.0042$0.0045-$0.0003$0.0042$0.0045-$0.0003$0.0035$0.0035
Customer Revenue per CF:$0.0098$0.0093$0.0005$0.0098$0.0093$0.0005$0.0088$0.0088
Total Power Supply Exp. per CF:$0.0043$0.0044($0.0001)$0.0043$0.0044($0.0001)$0.0035$0.0035
Notes/Graphs:
Net Profit for January 2018 increased by $127,787 in the gas division over January 2017. Increased revenues can be attributed to colder weather as well as
no fuel credits being issued.
No fuel cost adjustment for January 2018 due to depleting the rate stabilization fund in December. An additional $137,318.52 was added to the fund in
January. This brings the account to $337,345.81. Credits are issued once it surpasses $600,000. January 2017 credits to customers totalled $57,492.
HUTCHINSON UTILITIES COMMISSION
BALANCESHEET-CONSOLIDATED
JANUARY 31, 2018
ElectricGasTotalTotal Net Change
DivisionDivision20182017Total (YTD)
Current Assets
Cash 17,154,133.01 8,678,175.29 25,832,308.30 10,654,884.66 15,177,423.64
Petty Cash 680.00 170.00 850.00 850.00 -
Capital Expenditures - Current Yr. 2,750,000.00 700,000.00 3,450,000.00 2,699,000.00 751,000.00
Payment in Lieu of Taxes 882,327.00 369,142.00 1,251,469.00 1,196,331.00 55,138.00
Rate Stabilization - Electric 314,539.41 - 314,539.41 314,539.41 -
Rate Stabiliation - Gas - 337,345.81 337,345.81 646,058.37 (308,712.56)
Catastrophic Funds 400,000.00 100,000.00 500,000.00 500,000.00 -
Bond Interest Payment 2017 740,329.14 - 740,329.14 37,621.84 702,707.30
Bond Interest Payment 2012 - 328,183.30 328,183.30 488,774.95 (160,591.65)
Debt Service Reserve Funds 522,335.64 2,188,694.02 2,711,029.66 2,188,694.02 522,335.64
Total Current Assets 22,764,344.20 1 2,701,710.42 35,466,054.62 18,726,754.25 16,739,300.37
Receivables
Accounts (net of uncollectible allowances) 2,339,587.27 1,931,905.18 4,271,492.45 3,751,175.95 520,316.50
Interest 19,039.49 19,039.49 38,078.98 31,415.67 6,663.31
Total Receivables 2,358,626.76 1 ,950,944.67 4,309,571.43 3,782,591.62 526,979.81
Other Assets
1,230,293.88 408,685.54 1,472,746.04
Inventory 1,638,979.42 166,233.38
(12,927.63) 62,249.98 171,357.95
Prepaid Expenses 49,322.35 (122,035.60)
35,108.12 -
Sales Tax Receivable 35,108.12 147,588.76 (112,480.64)
Deferred Outflows - Electric 1,746,060.00 -
1,746,060.00 1,746,060.00 -
Deferred Outflows - Gas - 582,020.00
582,020.00 582,020.00 -
2,998,534.37 1 ,052,955.52 4,051,489.89 4,119,772.75 (68,282.86)
Total Other Assets
Total Current Assets 28,121,505.33 1 5,705,610.61 43,827,115.94 26,629,118.62 17,197,997.32
Capital Assets
Land & Land Rights 690,368.40 3,901,323.35 4,591,691.75 4,590,287.00 1,404.75
Depreciable Capital Assets 89,040,716.83 41,260,565.70 130,301,282.53 130,306,747.03 (5,464.50)
Accumulated Depreciation (53,047,592.08) (15,417,901.36) (68,465,493.44) (64,649,159.74) (3,816,333.70)
Construction - Work in Progress 4,438,856.53 298,093.55 4,736,950.08 24,859.28 4,712,090.80
Total Net Capital Assets 41,122,349.68 3 0,042,081.24 71,164,430.92 70,272,733.57 891,697.35
Total Assets 6 9,243,855.01 4 5,747,691.85 1 14,991,546.86 9 6,901,852.19 18,089,694.67
HUTCHINSON UTILITIES COMMISSION
BALANCESHEET-CONSOLIDATED
JANUARY 31, 2018
ElectricGasTotalTotal Net Change
DivisionDivision20182017Total (YTD)
Current Liabilities
Current Portion of Long-term Debt
Bonds Payable - 1,295,000.00 1,295,000.00 1,345,000.00 (50,000.00)
Bond Premium - 185,608.32 185,608.32 185,608.32 -
Accounts Payable 2,523,125.22 3,522,537.79 6,045,663.01 5,272,071.59 773,591.42
Accrued Expenses
Accrued Interest 137,929.12 112,350.04 250,279.16 126,764.60 123,514.56
Accrued Payroll 63,899.69 18,755.36 82,655.05 165,341.29 (82,686.24)
Total Current Liabilities 2,724,954.03 5 ,134,251.51 7,859,205.54 7,094,785.80 764,419.74
Long-Term Liabilities
Noncurrent Portion of Long-term Debt
2017 Bonds 16,675,000.00 - 16,675,000.00 - 16,675,000.00
2012 Bonds - 13,900,000.00 13,900,000.00 15,195,000.00 (1,295,000.00)
2003 Bonds - - - 465,000.00 (465,000.00)
Bond Premium 2012 663,563.04 1,453,931.47 2,117,494.51 1,639,539.79 477,954.72
Pension Liability - Electric 4,226,202.00 - 4,226,202.00 4,226,202.00 -
Pension Liability - Nat Gas - 1,408,734.00 1,408,734.00 1,408,734.00 -
Accrued Vacation Payable 323,735.99 102,774.05 426,510.04 378,943.50 47,566.54
Accrued Severance 73,739.62 28,580.99 102,320.61 92,050.32 10,270.29
Deferred Outflows - Electric 569,910.00 - 569,910.00 569,910.00 -
Deferred Outflows - Nat Gas - 189,970.00 189,970.00 189,970.00 -
Total Long-Term Liabilities 22,532,150.65 1 7,083,990.51 39,616,141.16 24,165,349.61 15,450,791.55
Net Position
Retained Earnings 43,986,750.33 23,529,449.83 67,516,200.16 65,641,716.78 1,874,483.38
Total Net Position 43,986,750.33 2 3,529,449.83 67,516,200.16 65,641,716.78 1,874,483.38
Total Liabilities and Net Position 69,243,855.01 4 5,747,691.85 114,991,546.86 96,901,852.19 18,089,694.67
Hutchinson Utilities Commission
Cash-Designations Report, Combined
1/31/2018
Change in
Financial Balance, Balance, Cash/Reserve
InstitutionAnnual InterestJanuary 2018 December 2017 Position
Current Interest Rate
Operating Funds:
Savings, Checking, Investmentsvariesvariesvaries 35,466,054.62 33,915,933.68 1,550,120.94
Total Operating Funds 35,466,054.62 33,915,933.68 1,550,120.94
Combined Division - Total Funds 35,466,054.62 33,915,933.68 1,550,120.94
Restricted Funds:
Debt Reserve RequirementsBond Covenants - sinking fund 1,068,512.44 350,798.14 717,714.30
Debt Reserve RequirementsBond Covenants -1 year Max. P & I 2,188,694.02 2,188,694.02 -
Total Reserve Requirement 3,257,206.46 2,539,492.16 717,714.30
Excess Reserves Less Restrictions, Combined 32,208,848.16 31,376,441.52 832,406.64
Designated Funds:
Operating ReserveMin 60 days of 2018 Operating Bud. 5,868,920.00 5,868,920.00 -
Rate Stabalization Funds 514,566.70 514,566.70 -
PILOT FundsCharter (Formula Only) 1,251,469.00 1,251,469.00 -
Catastrophic FundsRisk Mitigation Amount 500,000.00 500,000.00 -
Capital Reserves5 Year CIP ( 2018-2022 Fleet & Infrastructure Maintenance) 3,450,000.00 3,450,000.00 -
Total Earmarked Funds 11,584,955.70 11,584,955.70 -
Excess Reserves Less Restrictions & Designations, Combined 20,623,892.46 19,791,485.82 832,406.64
Financial/Operating Ratios
YEYEYEYEYTDHUC
20142015201620172018Target
Debt to Asset28.8%32.0%32.2%40.8%41.3%<50%
Current Ratio2.262.523.065.734.80>2.0
RONA0.05%1.31%2.17%1.80%0.46%>0%
Notes/Graphs:
Change in Cash Balance (From 12/31/14 to 1/31/2018)
Month End ElectricElec. ChangeNatural GasGas Change TotalTotal Change
1/31/2018 22,764,344 12,701,710 35,466,055
12/31/2017 23,213,245 (448,900) 10,702,689 1,999,021 33,915,934 1,550,121
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 Signifcant increase in cash balance is due to issuing bonds for the generator project.
Overall Cash increased signifcantly due to an error in BP's December invoice leading to not receiving the invoice until February. This amount was
$2,058,945 so cash would have decreased in January if this was paid in a normal time frame. Part of the reason for the decrease was December's
net income was close to breakeven and cash lags a month. HUC also paid the last of the consultant's fees for the generator project which was
$536,321.50.
Hutchinson Utilities Commission
Cash-Designations Report, Electric
1/31/2018
Change in
Financial Balance, Balance, Cash/Reserve
InstitutionAnnual InterestJanuary 2018 December 2017 Position
Current Interest Rate
Operating Funds:
Savings, Checking, Investmentsvariesvariesvaries 35,466,054.62 33,915,933.68 1,550,120.94
Total HUC Operating Funds 35,466,054.62 33,915,933.68 1,550,120.94
Electric Division - Total Funds 22,764,344.20 23,213,244.51 (448,900.31)
Restricted Funds:
Debt Restricted RequirementsBond Covenants - sinking fund 740,329.14 186,706.51 553,622.63
Excess Reserves Less Restrictions, Electric 22,024,015.06 23,026,538.00 (1,002,522.94)
Designated Funds:
Operating ReserveMin 60 days of 2018 Operating Bud. 4,387,223.00 4,387,223.00 -
Rate Stabalization Funds$400K-$1.2K 314,539.41 314,539.41 -
PILOT FundsCharter (Formula Only) 882,327.00 882,327.00 -
Catastrophic FundsRisk Mitigation Amount 400,000.00 400,000.00 -
Capital Reserves5 Year CIP ( 2018-2022 Fleet & Infrastructure Maintenance) 2,750,000.00 2,750,000.00 -
Total Designated Funds 8,734,089.41 8,734,089.41 -
Excess Reserves Less Restrictions & Designations, Electric 13,289,925.65 14,292,448.59 (1,002,522.94)
Financial/Operating Ratios
YEYEYEYEYTDAPPA RatioHUC
201420152016201720185K-10K Cust.Target
Debt to Asset Ratio (* w/Gen.)7.4%13.2%16.1%36.1%36.5%50.1%<50%
Current Ratio2.482.953.5710.709.222.43>2.0
RONA-3.1%-1.2%-0.4%-0.1%-0.2%NA>0%
Notes/Graphs:
Hutchinson Utilities Commission
Cash-Designations Report, Gas
1/31/2018
Change in
Financial Balance, Balance, Cash/Reserve
InstitutionAnnual InterestJanuary 2018 December 2017 Position
Current Interest Rate
Operating Funds:
Savings, Checking, Investmentsvariesvariesvaries 35,466,054.62 33,915,933.68 1,550,120.94
Total HUC Operating Funds 35,466,054.62 33,915,933.68 1,550,120.94
Gas Division - Total Funds 12,701,710.42 10,702,689.17 1,999,021.25
Restricted Funds:
Debt Restricted RequirementsBond Covenants - sinking fund 328,183.30 164,091.63 164,091.67
Debt Restricted RequirementsBond Covenants -1 year Max. P & I 2,188,694.02 2,188,694.02 -
Total Restricted Requirements 2,516,877.32 2,352,785.65 164,091.67
Excess Reserves Less Restrictions, Gas 10,184,833.10 8,349,903.52 1,834,929.58
Designated Funds:
Operating ReserveMin 60 days of 2018 Operating Bud. 1,481,697.00 1,481,697.00 -
Rate Stabalization Funds$200K-$600K 200,027.29 200,027.29 -
PILOT FundsCharter (Formula Only) 369,142.00 369,142.00 -
Catastrophic FundsRisk Mitigation Amount 100,000.00 100,000.00 -
Capital Reserves5 Year CIP ( 2018-2022 Fleet & Infrastructure Maintenance) 700,000.00 700,000.00 -
Total Earmarked Funds 2,850,866.29 2,850,866.29 -
Excess Reserves Less Restrictions & Designations, Gas 7,333,966.81 5,499,037.23 1,834,929.58
Financial/Operating Ratios
YEYEYEYEYTDHUC
20142015201620172018APGA RatioTarget
Debt to Asset55.6%54.8%51.5%48.1%48.6%TBD<50%
Current Ratio2.072.172.592.722.46TBD>2.0
RONA4.3%4.7%5.6%5.0%1.6%TBD>0%
Notes/Graphs:
ELECTRIC DIVISION
Operating Revenue
January 2018
CLASSAMOUNTKWH$/KWH
Street Lights$1.3124$0.05458
Electric Residential Service$446,462.424,258,964$0.10483
All Electric Residential Service$35,989.70358,586$0.10037
Electric Small General Service$168,250.911,628,145$0.10334
Electric Large General Service$630,957.056,463,380$0.09762
Electric Large Industrial Service$849,432.6410,406,000$0.08163
Total$2,131,094.03 23,115,099$0.09219
Power Adjustment$0.00844
Rate Without Power Adjustment$0.08375
Electric Division Year-to-Date
2018 $ Amount2017 $ Amount2018 KWH/102017 KWH/10
2,800,000
2,600,000
2,400,000
2,200,000
2,000,000
1,800,000
1,600,000
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
Street LightsResidentialAll Elec.Small Gen.Large Gen.LargeFor Resale Total
Resid.Srv.Srv.Industrial
NOTE: Sales for resale includes capacity sales, market sales and Transalta sales.
NATURAL GAS DIVISION
Operating Revenue
JANUARY 2018
CLASSAMOUNTMCF$/MCF
Residential$777,156.6081,793$9.50151
Commercial$574,857.4961,285$9.38007
Large Industrial$513,207.99108,615$4.72502
Total$1,865,222.08251,693$7.41070
Fuel Adjustment$0.00000
Rate Without Fuel Adjustment$7.41070
Natural Gas Division Year-to-Date
2018 $ Amount2017 $ Amount2018 MCF2017 MCF
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
Gas ResidentialGas CommercialLarge Industrial Total
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HUTCHINSON UTILITIES COMMISSION
Board Action Form
Agenda Item:
Review Policies
Presenter: Agenda Item Type:
Jeremy Carter
Review Policies
Time Requested (Minutes):
5
Attachments:
Yes
BACKGROUND/EXPLANATION OF AGENDA 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. Electric Service Requirements & Charges
ii. Temporary Service - Electric
iii. Hiring
iv. Probationary Period Upon Hiring
v. Temporary Employees
BOARD ACTION REQUESTED:
None
Fiscal Impact:
Included in current budget: Budget Change:
PROJECT SECTION:
Total Project Cost:
Remaining Cost:
Electric Service Requirements and Charges
HUC will require a 24-hour notice, a copy of the State Board of Electricity Certificate of
Inspection, and an established account prior to installing a meter and making the final
connection.
HUC shall not install any facilities until all affected properties are within 6 inches of final
grade.
Installation of Any Electric Services November 1 Through March 31
The final determination on installation of electric services shall be made by HUC.
New Single-Family Dwelling Service Size: 200 Amperes or less
Single-family dwelling customers will be 240/120 volt single-phase service.
HUC shall furnish and install the underground conductors to serve the single-family home
with a one-year warranty after installation date. The underground service is the property
of the homeowner at date of installation.
(4/0-2/0-4/0 URD): Minimum $300.00 Installation Charge up to 100 ft.; additional
$2.00/ft. in excess of 100 ft.
The customer or their contractor shall provide and install a 200A, ringless meter socket
with lever bypass (See meter requirement/placement section).
New Single-Family Dwelling Service Size: Greater than 200 Amperes
Single-family dwelling customers will be 240/120 volt single-phase service.
Current transformer metering is required. HUC shall furnish the current transformers,
meter socket and meter (See meter requirement/placement section). The customer or
their contractor shall provide the current transformer housing and facilities, install the
current transformers, mount the meter socket and provide an empty 1-¼ inch conduit to
the meter socket. HUC shall install the meter wiring and meter. No current transformer
metering will be allowed in the power transformer secondary compartment.
Bar type current transformers will be used. Provisions for voltage connections for the
meter must also be provided.
The customer will be responsible for installing the service to the utility transformer or
pedestal location. HUC will be responsible to make all secondary connections in the
transformer. Transformer secondary connections will be limited to a maximum of four
conductors per phase with a maximum size of 750 MCM per conductor. If additional
conductors are required per phase, the owner or contractor must provide an approved
.
New Multi-Family Dwelling, Commercial, or Industrial
The customer will be responsible for installing the service to the utility transformer or
pedestal location. For any services that require current transformer metering, the
customer will be responsible to install the conductor from the metering cabinet to the
transformer. For any three-phase services, the customer shall furnish the transformer pad
and ground grid. The transformer location shall be determined by HUC.
HUC will provide the following voltages:
120/208 volts three phase, not to exceed 3,000 amperes without prior approval.
277/480 volts three phase, not to exceed 3,000 amperes without prior approval.
7,970/13,800 volts three phase, with prior arrangements with HUC.
HUC will be responsible to make all secondary connections in the transformer.
Transformer secondary connections will be limited to a maximum of four conductors per
phase with a maximum size of 750 MCM per conductor. If additional conductors are
required per phase, the owner or contractor must provide an approved secondary
on may be contacted for further details.
On services greater than 200 amperes at 240/120volts, current transformer metering is
required. HUC shall furnish the current transformers, meter socket and meter. The
customer or their contractor shall provide the current transformer housing and facilities,
install the current transformers, mount the meter socket and provide an empty 1-¼ inch
conduit to the meter socket. HUC shall install the meter wiring and meter. No current
transformer metering will be allowed in the power transformer secondary compartment.
Any service greater than 240 volts, shall require current transformer metering.
Bar type current transformers will be used. Provisions for voltage connections for the
meter must also be provided. Approved multi-family dwelling meter stacks will be provided
by the customer or their contractor.
Primary metering at 7,970/13,800 volts will be by special arrangement and approval of
HUC.
Temporary Service
HUC shall bill the customer or their contractor for all related expenses.
EXEMPT
H IRING
rough internal employee promotion
and external recruitment if appropriate.
The General Manager has the authority to hire all employees and must approve all hiring
recommendations. Final interviews for the General Manager position will be conducted by the
Commissioner Board with the assistance of the Human Resources Director. Final interviews for
Director positions will be conducted by the General Manager, President of the Commission and
Human Resources Director.
NON-EXEMPT
H IRING
and external recruitment if appropriate.
The General Manager has the authority to hire all employees and must approve all hiring
recommendations. Final interviews for the General Manager position will be conducted by the
Commissioner Board with the assistance of the Human Resources Director. Final interviews for
Director positions will be conducted by the General Manager, President of the Commission and
Human Resources Director.
EXEMPT
P ROBATIONARY P ERIOD U PON H IRING
A newly hired exempt employee shall serve a nine (9) month probationary period during which
the employee shall have the opportunity to demonstrate abilities and work performance. During
this qualifying period, the Director, Manager or Supervisor should discuss with the employee, the
-workers. The General
at any time during the probationary period. The General Manager may choose to extend an
onths.
New full-time employees are required to sign the acknowledgement in Appendix B when they
begin employment.
NON-EXEMPT
P ROBATIONARY P ERIOD U PON H IRING
A newly hired non-exempt employee shall serve a six (6) month probationary period during which
the employee shall have the opportunity to demonstrate abilities and work performance. During
this qualifying period, the Director, Manager or Supervisor should discuss with the employee, the
-workers. The General
at any time during the probationary period. The General Manager may choose to extend an
New full-time employees are required to sign the acknowledgement in Appendix B when they
begin employment.
EXEMPT
T EMPORARY E MPLOYEES
Temporary employees are required to sign the acknowledgement in Appendix C when they begin
employment. The General Manager must approve employment of a temporary worker for longer
than 14 consecutive weeks. The responsible Director or Manager must inform the General
Manager of the desire to employ a temporary worker longer than 14 weeks.
NON-EXEMPT
T EMPORARY E MPLOYEES
Temporary employees are required to sign the acknowledgement in Appendix C when they begin
employment. The General Manager must approve employment of a temporary worker for longer
than 14 consecutive weeks. The responsible Director or Manager must inform the General
Manager of the desire to employ a temporary worker longer than 14 weeks
HUTCHINSON UTILITIES COMMISSION
Board Action Form
Agenda Item:
Approve Policy Changes
Presenter: Agenda Item Type:
Jeremy Carter
App Changes to Policies
Time Requested (Minutes):
5
Attachments:
Yes
BACKGROUND/EXPLANATION OF AGENDA ITEM:
As part of HUC's standard operating procedures, a continual policy review is
practiced. The following revisions to the policies below are recommended.
i. CIP Rebate Level of Authority
ii. Service Beyond City Limits of Hutchinson
iii. Purchasing Policy
BOARD ACTION REQUESTED:
Approve Policy Changes
Fiscal Impact:
Included in current budget: Budget Change:
PROJECT SECTION:
Total Project Cost:
Remaining Cost:
Adopted January 27, 2010
Conservation Improvement Program Rebate Level of Authority
All commercial and industrial Conservation Improvement Program rebates under
commercial and industrial with an in the amount of $25,000 or greater shall be reviewed
and approved by Hutchinson Utilities Commission board members for approval before
prior to the issuance of the rebate is issued to the recipient.
HUTCHINSON UTILITIES COMMISSION
Natural Gas
Service Beyond the
City Limits of
Hutchinson
Distribution Main Extension Policy
2017 8
John Webster
2/12/2018
This document sets forth the procedures to be observed when
extending a natural gas distribution main beyond the city limits of
Hutchinson.
Hutchinson Utilities Commission
Distribution Main Extension Policy
Service Beyond City Limits of Hutchinson
1. Definitions
Natural Gas Distribution Main
Natural gas distribution main is defined as that portion of the
facilities that are
intended to provide service to more than a single customer.
Such piping is normally located in public streets and their its
right-of-way or adjacent to property lines.
2. Individual Requests for Gas Main Extension
A. Application
Prospective customers currently without natural gas
service may request such service by submitting a written
application to Hutchinson Utilities Commission (HUC).
HUC shall investigate the possibility of installing gas
main to the customer and shall make an estimate of the
costs involved.
HUC is under no obligation to extend natural gas service
beyond the city limits of Hutchinson, MN.
B. Allowances
Each customer shall receive a construction allowance
based on projected marginal revenue.
1) Residential Customers - $915.00
2) Firm Commercial Customers
estimated annual revenue using the following
formula (based on seven year recovery):
Allowance = $(U x M) x 7
Page 1 of 5
Where:
U = Estimated long term annual usage in Mcf
M = Applicable margin per Mcf
calculating customer allowance, as this is a fixed
cost to HUC.
C. Customer Contributions
A contribution shall be required if the estimated
construction cost of main exceeds the main allowance(s)
for the customer(s) requesting the extension. This
payment is due as a single payment prior to the
installation of the main. However, if a residential
customer, with the approval of HUC, may elect to make a
single payment before construction begins or agree to
pay the contribution in twelve (12) equal installments,
including a finance charge based
weighted cost of capital. These installments shall be
billed with the utility bill and be payable on the same date
as the utility bill. All contributions shall be refundable
in accordance with Section 3. of this schedule.
3. Reapportionment and Refunds of Contributions
A. Reapportionment of Customer Contribution
When additional customers take service from a main
extension, which had required a customer contribution,
the original contribution and any new contribution will
be reapportioned among all customers on the extension if
the reapportionment does not cause an increase in any
contribution, the portion of new main facilities under
consideration will be considered as separate and new gas
main extension subject to all the gas extension rules.
B. Refunds of Customers with No Additional Contribution
The HUC shall make refunds to the customer(s) or
developer who contributed toward the extension of main
for a period of five (5) years from the installation date.
When the HUC connects new customers to this portion
of main extension, the refund shall be equal to the
change in the customer contribution value after
Page 2 of 5
reapportioning the contribution using the allowance in
effect at the time the extension was installed.
When the HUC makes an extension of main to subsequent
customer(s) that does not require a contribution from
the subsequent customer(s), the refund shall be equal to
the change in the customer using the allowance in effect
at the time the original extension was installed and the
allowance in effect for the new facilities less the
construction costs of all main.
C. Single Customer Payment of Contribution
If an individual customer agrees in writing before the main
extension is installed to pay the total required
contribution, that customer shall be eligible for all main
allowance refunds from all subsequent customers on
the extension during the refund period. Such a written
agreement will thereby preclude any reapportionment of
the contribution among subsequent customers.
1) If a further main extension off the original extension
is required to serve a subsequent customer and the
main cost is less than the total main allowance
available, the unused allowance shall be refunded to
the customer who made the single payment
contribution outlined above.
2) If a further main extension off the original extension
is required to serve a subsequent customer and the
main costs exceeds the total main allowance
available, the subsequent customers shall pay the
contribution for the new facilities.
4. Right to Refund
The right to receive a refund of any contribution held
hereunder will attach to the ownership of the premises for
which the original extension was made. Any refund shall be
made to the person who owns such premise(s) at the time the
refund is paid unless the contributor has reserved the right
to receive such refund in the conveyance of the premise(s) to
a subsequent owner and demonstrates that to the HUC.
In the case of a developer making a contribution to extend gas
into a development, the right to receive a refund shall attach
to the owner of the development at the time the refund
becomes due, unless, in the conveyance of the development,
the developer provides the HUC with a written agreement
reserving the right to receive such refunds.
Page 3 of 5
In no case shall the total refund(s) exceed the amount of the
contribution.
5. Clearing Rights and Costs
Customer requesting service shall furnish, without expense
to the HUC, right-of-way, easements, permits and additional
costs incurred to provide adequate clearing for the main
extension to serve the customer along a route approved by
the HUC after consulting with the customer.
If requested by the customer, the HUC will do the clearing at
the
estimated cost of clearing to be done by the HUC. Costs will
be adjusted to actual costs upon completion of the job.
6. Title
The title to all distribution main extensions made by the HUC
hereunder remains with the HUC. The HUC may at any time add
additional customers to or make new extensions to an existing
extension without the consent of any customer or customers
who contributed to the cost of the existing extension, and
without incurring any liability for refunding contributions
other that than as provided herein.
7. Construction Standards
All natural gas distribution system extensions constructed
hereunder shall conform to
construction, and shall meet the requirements of
governmental regulatory bodies having jurisdiction.
8. General Provisions
A.
vice to
customer, customer shall provide HUC with an easement
needs an easement or easements over property not owned
by customer in order to furnish service to customer,
customer shall obtain the easement(s) at no expense to
HUC.
B. No structures shall be placed over the route of the
be used for gardens and other purposes that will not
natural gas facilities.
C. Properties subject to an easement granted to HUC shall
be graded to a level, which shall not be above, or more
Page 4 of 5
than 6 inches below finished grade, prior to the time
installation of natural gas facilities is commenced by
HUC. The HUC shall be notified in advance of any changes
in grade after the natural gas facilities have been
installed by HUC, and HUC shall be reimbursed for all
costs incurred as a result of such change.
D. HUC shall not be liable for damage to trees, shrubs,
fences, sidewalks, driveways or other obstructions
incidental to the installations, maintenance or
replacement of natural gas facilities, unless such
damage is caused by its own negligence.
Page 5 of 5
Amended March 1, 2017 February 28, 2018
POLICY ON PURCHASING
State Statute 471:345
Hutchinson Utilities Commission hereby adopts a general policy on the purchasing of
equipment, supplies and services.
Inventory Agent is authorized to create requisitions and approve purchase orders for
are based on set order points and order quantities.
If requirements exceed current order quantities, either an approved Bill of Materials or an
approved requisition will be required.
All other purchases shall require supervisor permission. Emergency situations may
require a deviation from this policy to ensure electric and/or natural gas services to the
customers of the Hutchinson Utilities. Joint purchasing of materials, supplies and services
shall be considered with other departments only when net economic benefits can be seen
achieved. When a tie exists between low bids, preference will be given to a local supplier.
For purchases when the estimate is more than $100,000:
1. The Hutchinson Utilities Commission will request authorize permission to advertise
for bids.
2. Specifications shall be made available to all prospective bidders.
3. Bids will be opened at a public bid opening. Date will be set in the advertisement
for bids.
4. The staff will review bids and may recommend to the Hutchinson Utilities
Commission to accept the lowest responsible bidder meeting specifications.
5. Hutchinson Utilities Commission will enter into a contract with the responsible
bidder.
For purchases between $25,000 and $100,000:
1. The Hutchinson Utilities Commission staff will solicit written, informal quotations
from at least three (3) two (2) suppliers, if possible, and tabulate the results.
2. Fuel purchases for electrical generation is an exception, for additional exceptions
refer to Minnesota Statutes 2003 2017, 471.345 Uniform Municipal Contracting
Law.
3. Staff will recommend acceptance of the lowest responsible quote. Staff will
evaluate the quotes and, in its discretion, determine which quotation is most
suitable for HUC and make a recommendation thereon to the commission.
4. Hutchinson Utilities Commission will approve the quote.
For purchases up to $25,000:
1. General Manager authorized to approve purchases up to $25,000.
2. For purchases of $5,000 - $25,000, the Hutchinson Utilities Commission
staff will may solicit written, informal quotations from at least two (2)
suppliers and tabulate the results or, in the alternative purchase equipment,
supplies or services on the open market.
3. Staff will recommend acceptance of the lowest responsible quote of
purchases of $5,000 - $25,000 to the General Manager for approval.
For purchases up to $5,000:
Directors, Managers, and the City Attorney are authorized to approve requisitions via the
purchasing software for purchases requiring a purchase order number.
If purchase order numbers are not required each department may use their assigned
credit card.
1. Directors, Managers, or the City Attorney will approve all item requests prior to
purchasing the item.
2. Receipts will be given to each Director, Manager, or City Attorney as items are
purchased to initial, assign appropriate account number and give a description of
the item purchased; then forward to Accounting.
3. Accounting will keep a file for each department until monthly credit card
statements are received and reconciled.
Petty cash may be used for purchases less than $25.00.
Employees may make local purchases with prior approval from their
Director/Manager. The employee has the option of using a HUC credit card, paying
cash for the item, if less than $25.00, and being reimbursed from petty cash, or
making the purchase at a local retailer with whom we have an account established.
All receipts must to be turned in to the appropriate Director/Manager to initial, assign
appropriate account number and then forward to the financial manager.
CREDIT CARDS
A purchase by credit card must comply with all statutes and rules applicable to Hutchinson
Utilities Commission (HUC) purchases. Credit card purchases must comply with the
following requirements:
Minn. Stat. 412.271, subd. 2 and 471.38, subd.1. Claims presented to HUC for payment
must be in writing and itemized. Bills from credit card companies do not contain the detail
necessary to satisfy these requirements; therefore, HUC must retain invoices and
itemized receipts for items charged to a credit card.
The Office of the State Auditor strongly urges local government units to develop a
comprehensive credit card use policy to avoid misappropriation of funds or other misuse
of the credit card.
The following are authorized to make credit card purchases on behalf of HUC:
General Manager
Natural Gas Director
Electric Transmission/Distribution Manager
Production Manager
Engineering Services Manager
Inventory Agent
Company purchases up to $5,000 are allowed to be made with a credit card. No personal
purchases are to be made with the credit card. Receipts will be given to each department
Director/Manager as items are purchased to initial, assign appropriate account numbers
and give a description of the item purchased. The receipt then gets forwarded to the
financial manager.
The financial manager will keep a file for each department until monthly credit card
statements are received and reconciled. The financial manager has the authority to
approve and question all credit card purchases in so far as the policy applies. The full
amount of the statement must be paid each month.
FIXED ASSET CAPITALIZATION
The Hutchinson Utilities Commission (HUC) will regard fixed assets as capitalized when
all of the following criteria are met:
1. Assets purchased, built or leased have useful lives of one year or more.
2. The cost of the asset (including installation) is $5,000 or more, or work
order infrastructure assets whose cost is less than $5,000 individually
but the aggregate total is $5,000 or more.
3. The cost of repairing or renovating the asset is $5,000 or more and
prolongs the life of the asset.
Costs associated with purchasing and implementing software, software maintenance and
customer support are considered expenditures and will not be capitalized.
Other Considerations:
1. REPAIR is an expenditure that keeps the property in ordinary efficient
operating condition. The cost of the repair does not add to the value or
prolong the life of the asset. All repair expenditures are charged to the
appropriate department and fund.
2. IMPROVEMENTS are expenditures for additions, alterations and
renovations that appreciably prolong the life of the asset, materially
increase its value or adapt it to a different use. Improvements of the
nature are capitalized.
Examples of Repairs vs. Improvements
Repairs=Expenditures Improvements=Capitalized Assets
All items-life less than one year Life of more than one year
All items under $5,000 All items $5,000 or more
Property maintenance, wall repair Property rebuilding
Replacement of machine parts to keep Replacement of machine parts that
machine in normal operating condition prolong the useful life
Property restoration (rebuilding) for Property restoration for something
normal operations different or better
Existing building repairs Building regulation conformity
Replacement of small sections of wiring, Major replacement of wiring,
pipes or light fixtures lighting, pipes or sewer
Patching walls, minor repairs of floors, Installation of floor, wall, roof,
painting, etc. wall covering, etc.
Patching driveways New driveway or major repair
Cleaning drapery, carpet, furniture New drapery, carpets, furniture
Depreciation Method Straight Line over the following 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
HUTCHINSON UTILITIES COMMISSION
Board Action Form
Agenda Item:
ApprovalofExtensionofNorthernNaturalGasTransportationContractNo.102733
Presenter:Agenda Item Type:
JohnWebster
NewBusiness
Time Requested (Minutes):
2
Attachments:
Yes
BACKGROUND/EXPLANATION OF AGENDA ITEM:
HutchinsonUtilitiesmaintains50Dth/dayofcapacityontheNorthernNaturalGas
Company(NNG)transmissionsystem.MaintainingcapacityontheNNGsystem
providesforasecondarysupplyofnaturalgastotheCityofHutchinsonintheeventofa
catastrophicfailuretotheHutchinsonUtilities'naturalgastransmissionline.
BOARD ACTION REQUESTED:
Approvalof5yearextensionofNorthernNaturalGasContractNo.102733.
Fiscal Impact:
Approx$6,000
Included in current budget: Budget Change:
Yes
PROJECT SECTION:
Total Project Cost:
Remaining Cost:
HUTCHINSON UTILITIES COMMISSION
Board Action Form
Agenda Item:
ApproveRequisition7482andRequisition7487forNewBucketTruck
Presenter:Agenda Item Type:
Dave
NewBusiness
Time Requested (Minutes):
5
Attachments:
Yes
BACKGROUND/EXPLANATION OF AGENDA ITEM:
AspartofourFleetManagementprogramHUCwillbereplacinga200840'Bucket
Truck.
StaffisrecommendingtheAT41Mtelescoping/articulationArielplatformliftwith
fiberglassservicebodyfromAltecIndustries.ThisisStateBiditem
#MN-AT41M-412097-4
WearealsorecommendingtohavetheliftinstalledonaFordF5504X4SuperCab
DRWXLX5Htruck.Thisisstatebiditem#135919.
Thispurchasewillrequiretwoseparaterequisitions.
Requisition7487isfortheliftandservicebodyfromAltecIndustries.
Requisition7482isfortheCab/ChassisfromMidwayFord.
Wehave$140,000.00budgetedin2018forboththeArielLiftandtheCab/Chassis.The
StateContractbidpricefortheArielliftwithfiberglassbodyis$90407.00.The
StateContractbidpricefortheCab/Chassisis$53007.85.Thetotal
costwillbe$143414.85
Wewillbesellingthe2008BucketTruckintheFallof2018foranestimated$30,000.00
andwillusethosedollarstohelpfundtheFleetManagementProgram.
BOARD ACTION REQUESTED:
ApproveRequisition7482and7487
Fiscal Impact:
143414.85
Included in current budget: Budget Change:
Yes
Yes
PROJECT SECTION:
Total Project Cost:
Remaining Cost:
HUTCHINSON UTILITIES COMMISSION
Board Action Form
Agenda Item:
DistributedGeneration2017Report
Presenter:Agenda Item Type:
Dave
NewBusiness
Time Requested (Minutes):
2
Attachments:
Yes
BACKGROUND/EXPLANATION OF AGENDA ITEM:
In2017theStatelawchangedthatnowallowsforMunicipalsandCooperativesto
Governcustomergenerationinterconnectionsaslongastheyhaveofficiallyadoptedthe
appropriaterules,rates,andcontractforms.
HUChasalreadyformallyadoptedaDistributedGenerationinterconnectionpolicythat
meetsthisrequirementforboth,<40KWand>40KWinterconnections.
(seeattachments)
ThenewLawrequiresMunicipalUtilitiesthathaveadoptedDGinterconnectionspolicies
toreviewannuallyallNetEnergybilledqualifyingfacilities.(seeattachment)
Priortothelawchange,HUCwasrequiredtofilethisreportwiththeDepartmentof
CommerceandtheMinnesotaPublicUtilitiesCommission.
BOARD ACTION REQUESTED:
None
Fiscal Impact:
Included in current budget: Budget Change:
PROJECT SECTION:
Total Project Cost:
Remaining Cost:
Hutchinson Utilities Commission
Distributed Generation (Over 40 kW) Policy
Amended: July 29, 2015
1.Effective In
All territories served by Hutchinson Utilities Commission (HUC or Utility).
2.Availability
Available to single-phase and three-phase customers when:
(1) a part or all of the electrical requirements of the customer are supplied by the
customer’s generating facility that satisfies the requirements of qualifying facilities
under the federal Public Utility Regulatory Policies Act (Customer QF);
(2) the Customer QF has a total generating capability of greater than 40 kW; and
(3) the Customer QF is connected in parallel with HUC.
3.Approval Process
The customer shall provide information to HUC, as early as practicable,
concerning the proposed Customer QF, including, but not limited to:
1)The name plate capacity of the QF ____________________(kW)
2)The pre-incentive installed cost of the QF _____________
3)The energy source of the QF __________________(Solar, Wind, etc.)
4)Location of the QF_______________________________________(the
“Location”)
5)Sufficient technical information to evaluate the proposed interconnection of the
QF and how the QF will satisfy the HUC interconnection criteria;
6)Any additional information to evaluate the design, safety, financial factors, and
supporting detail for the proposed QF;
7)Other information reasonably requested by HUC.
HUC shall consider the customer’s application. HUC shall require a contract
specifying reasonable technical connection and operating aspects for the
Customer QF. The Customer QF shall not interconnect with HUC unless and
until HUC has issued its approval, and the Customer QF has obtained all
applicable governmental approvals.
Hutchinson Utilities Commission
Distributed Generation (Over 40 kW) Policy
4.Separate Contract Required
A separate contract is required between HUC and the customer concerning the
Customer QF. The contract shall specify safety, system protection, and power
quality rules that generators must comply with, as well as rate and financial
provisions.The contract shall otherwise comply with the requirements of this
Policy.
5.Financial Provisions
The separate contract shall address the appropriate payment terms for the
purchase of any electrical output supplied by the Customer QF to HUC, as well
as the customer’s purchase of power and energy, standby services, and other
services from HUC. At a minimum, the customer rate shall encompass the HUC
distribution rate components, the actual costs incurred by HUC under its
wholesale supplier rate(s), and applicable transmission rate(s), all of which will
be applied under the rates as they then exist, and shall be automatically updated
in the event of any changes. The contract shall consider all applicable costs of
HUC. The contract may include a minimum rate for delivery of power and energy
to the customer. The budget payment plan will not be available to customers
with distributed generation.
6.Other Customer Obligations
a.Metering Facilities
The customer shall furnish, install, and wire, at customer’s sole expense,
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 Customer QF shall berequired to pay all interconnection costs,
including actual costs incurred by HUC. The Customer QF shall pay said
costs prior to the final service connection to the Utility’s electrical system.
c.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.
Hutchinson Utilities Commission
Distributed Generation (Over 40 kW) Policy
d.Insurance Hold Harmless and Government Approvals
The customer shall keep in force a policy of liability insurance, of at least
$2 Million per occurrence, against personal or property damage to HUC’s
system, equipment, and personnel arising from the installation,
interconnection, and operation of the Customer QF. The customer shall
provide proof of insurance to HUC on an annual basis with said policy
specifically naming HUC as an additional insured.
The customer shall indemnify, defend, and hold HUC harmless from all
claims and loss whatsoever arising directly or indirectly from the Customer
QF.
The customer is responsible for obtaining and maintaining all
governmental permits and approvals for the construction and operation of
the QF, at customer’s sole expense.
e.Interconnection and Operational (Safety and Power Quality) Requirements
1)HUC may, in its discretion, disconnect electric service to a
Customer QF, for reasons of safety, system emergency, prudent
utility practices, or failure to comply with HUC policies, regulations,
and service rules.
2)Interconnection of a Customer QF with the HUC system shall not
be permitted until application has been made to and approval
received from HUC. HUC may withhold approval for good cause,
including, but not limited to failure to comply with applicable HUC or
governmental rules or laws, or failure to enter a separate
agreement concerning the Customer QF. HUC shall require a
contract specifying reasonable technical connection and operating
aspects for the Customer QF.
3)HUC may require that for each Customer QF 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.
4)HUC shall require a separate distribution transformer, where
necessary, for reasons of public and employee safety or where the
potential exists for the Customer QF causing problems with the
service of other customers.
Hutchinson Utilities Commission
Distributed Generation (Over 40 kW) Policy
5)HUC shall require that each Customer QF 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.
6)HUC shall require that the customer discontinue QF operations
when HUC so requests and HUC may isolate the generating
installation from its system at times. During such times, HUC shall
not be liable for any revenue lost by the customer. The Customer
QF 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 QF 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 Customer QF shall be required to make the equipment
available and permit entry uponthe 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 Customer QF is the source of any electric service or
communication systems problems.
7)The power output of the Customer QF 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 Customer QF 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 equipmentof 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 QF from HUC’s distribution system or reimburse
HUC for the cost of necessary system modifications if QF operation
causes radio, television, internet, or electrical service interference
to other customers, or interference with the operation of HUC’s
electrical system.
Hutchinson Utilities Commission
Distributed Generation (Over 40 kW) Policy
9)The Customer QF shall be responsible for providing protection for
its equipment and for adhering to all applicable national, state, and
local codes.
10)Customer agrees to locate the QF 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 QF shall be
operated only after the installation has been inspected and
approved by appropriate authorities. Customer agrees to obtain, at
customer’s sole cost, all required permits, as well as 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 QF.
12)Customer agrees to effectively install grounding and provide surge
arrestor protection to prevent lightning damage to HUC’s
distribution system.
13)Customer shall provide HUC reasonable access to the customer’s
property and the Customer QF for purposes of inspection, testing,
and disconnection.
7.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 separate contract.
b.Notice to Communication Firms
HUC shall notify telephone utility and cable television firms in the area
when it knows that a Customer QF 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.Right to Appeal
The customer 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 excessive or unreasonable.
Such appeal shall be reviewed and the customer notified of the Commission’s
determination.
Hutchinson Utilities Commission
Parallel Generation (40 kW or Less) Net Energy Billing
Amended February 25, 2015
1. Effective In
All territories served by Hutchinson Utilities Commission (HUC).
2. Availability
Available to single-phase and three-phase customers where a part or all of the
generating facilities, where such facilities have a total generating capability of 40
kW or less, where such facilities are connected in parallel with HUC and where
such facilities are approved by HUC.
The budget payment plan shall not be available to customers with parallel
generation.
3. Rate
The customer shall be billed monthly on a net energy basis and shall pay the
fixed charge and energy charge as specified in s rate schedule under which
the customer is served.
If, in any month, the C, the
amount shall be credited to subsequent bills until a debit balance is
reestablished. If the credit balance is more than $100, the utility shall reimburse
the customer by check upon request.
Monthly credits shall be computed by taking the net excess kilowatt-hours
produced times the average annual wholesale cost of power from the previous
year.
4. Metering and Services Facilities
HUC shall utilize an electric meter capable of measuring electric energy in both
the forward and reverse direction.
5. Contract Required
A contract (Contract for Parallel Generation Facilities (40 KW or Less)) is
required between HUC and the customer-owned generation facility. The contract
shall specify safety, system protection, and power quality requirements that
1
Hutchinson Utilities Commission
Parallel Generation (40 kW or Less) Net Energy Billing
generators must comply with. Contracts with customer-owned generation
facilities selling energy under the standard (non-negotiated) rate have no specific
term or length.
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 electrical system
c. Insurance Hold Harmless and Government Approval
The customer shall keep in force a policy of liability insurance, of at least
equipment and personnel arising from the installation, interconnection,
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
2
Hutchinson Utilities Commission
Parallel Generation (40 kW or Less) Net Energy Billing
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.
4) HUC shall require that each generating facility have a system for
automatically isolating the generator from 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
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 system and testing to
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Hutchinson Utilities Commission
Parallel Generation (40 kW or Less) Net Energy Billing
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 distribution system
or reimburse HUC for the cost of necessary system modifications if
operation of the generating facility causes radio, television, internet,
or electrical service interference to other customers, or interference
with the operation of electrical system.
9) The owner of the generating facility shall be responsible for
all applicable national, state and local codes.
10) Customer agrees to locate the generating facility so as to not
interfere with 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
12) Customer agrees to effectively install grounding and provide surge
arrestor protection to prevent lightning damage to
distribution system.
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Hutchinson Utilities Commission
Parallel Generation (40 kW or Less) Net Energy Billing
7. 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. Right to Appeal
The owner of the generating facility interconnected, or proposed to be
interconnected, with system may appeal to the Commission should any
requirement of service rules or the required contract be considered to be
excessive or unreasonable. Such appeal shall be reviewed and the customer
5
Contract for Parallel Generation Facilities (40 kW or Less)
This contract is entered into ____________________________, by Hutchinson Utilities
(hereafter .
RECITALS
Per MN Statute 216B.1611, the Utility shall request the following information for
interconnection of distributed renewable generation.
1) The name plate capacity of the facility ____________________(kW)
2) The pre-incentive installed cost of the generating facility _____________
3) The energy source of the facility __________________(Solar, Wind, etc.)
4) Location of the facility _________________________________________
The Customer is prepared to generate electricity in parallel with the Utility.
The Customer meets the requirements of the 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 (40 kW or Less) 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
1
technical connection and operating specifications for the customer (Hutchinson
Utility Comm
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
ion. If
the Utility enters the Cshall 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
equipment and personnel arising from the installation, interconnection, and
he
insurance to the Utility with said policy specifically naming the Utility as an
insured. The customer agrees to indemnify and hold harmless the Utility from all
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 C
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
C
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.
Customer ________________________ ____ HUTCHINSON UTILITIES COMMISSION
By __________________________________ By _____________________________
Date:________________________________ Date: ___________________________
3
00000000
40765119
186
(kWh)
purchased by the Utility
Total Net Metered electricity
6,097 4,511 5,133 3,120 4,329 4,411 5,272 4,795 4,373 3,813 4,392 4,460
54,706
January 1, 2017 - December 31, 2017
Total net imports
from Utility (kWh)
<40kW
Hutchinson
8979
159124230254119803118237187102
2,501
Utility (kWh)
Total net exports to
Reporting Period:Utility:
Jul 2017
Jan 2017
Jun 2017
Oct 2017
Apr 2017
Feb 2017Sep 2017
Dec 2017
Aug 2017
Nov 2017
Mar 2017
May 2017
Month
PV TOTAL ANNUAL
10.5
(kW)*
Installed Net
Metering Capacity
2
Number of Net
Metering Customers
Facility Type
Minn. Rules 7835.1400 NET ENERGY BILLED QUALIFYING FACILITIES
Distrubuted Generation Report
Photovoltaic Notes: AKI 10 KW and 37 5th Ave NW .5KW
0000000000000
(kWh)
purchased by the Utility
Total Net Metered electricity
278,140217,720247,790216,220268,590211,740220,140220,510195,700238,910237,430260,620
January 1, 2017 - December 31, 2017
2,813,510
Utility (kWh)
Total net Sales from
Hutchinson
170850150
1,7501,9302,5703,8203,3004,1603,1503,0302,300
27,180
Utility (kWh)
Total net Sales to
Reporting Period:Utility:
Jul 2017
Jan 2017
Jun 2017
Oct 2017
Apr 2017
Feb 2017Sep 2017
Dec 2017
Aug 2017
Nov 2017
Mar 2017
May 2017
Month
PV TOTAL ANNUAL
Hutchinson Utilities Commission
480
(kW)*
Installed Net
Metering Capacity
2
Number of Net
Metering Customers
Facility Type
Minn. Rules 7835.1400 NET ENERGY BILLED QUALIFYING FACILITIES
Distributed Generation Report
Photovoltaic Notes: Waste Water Treatment Plant 400KW and CG Properties 80 KW. All Exports are from CG properties only.