cp01-09-2007 (special) c0
JOINT HUC / CITY MEETING
AGENDA
January 9, 2007
4:00 pm
Council Chambers
1. Approve Advertisement for Bids for Service Truck Replacement of Unit 643
2. "Utility Center"— Electric /GaslWater /Sewer
• What does outcome based budgeting mean as it relates to the water and
sewer utilities?
3. Natural Gas Customers Outside City Limits
4. Presentation of Operational and Financial Benchmarks
5. Discussion on the Following Items:
• Alternative Energy
• Tree Power Program — uses of money
• Highway 7 Project in 2007
• Update on CIP Program
• Update on Gas Pipeline Litigation and Condemnations
• Update on Gas Purchase Program
• Update on Big Stone II
• Update on Underground Conversions
Advertisement for Bids
for
Service Truck Replacement of Unit 643
Hutchinson Utilities Commission
Hutchinson, Minnesota
Notice is hereby given that the Hutchinson Utilities Commission of the City of
Hutchinson, Hutchinson, Minnesota, hereinafter referred to as the Owner, will receive
sealed Bids at the Hutchinson Utilities office until 11:00 a.m. on the 26 day of January
2007, and will publicly open and read aloud such Bids on the following equipment:
" Service Truck Replacement of Unit 643"
Proposals shall be properly endorsed and delivered in an envelope marked
"Service Truck Replacement of Unit 643" and shall be addressed to: Hutchinson Utilities
Commission of the City of Hutchinson, 225 Michigan Street SE, Hutchinson, Minnesota
55350.
All proposals shall be submitted in duplicate on the Bidder's own letterhead in
facsimile of the Proposal Form enclosed in the Specifications, or by utilizing the Proposal
Form enclosed with the Specifications by typing the official name of the Bidder at the top of
the form.
No Bidder may withdraw his Bid or Proposal for a Period of thirty (30) days after
date of opening of Bids.
At the aforementioned time and place, or at such latertime and Place as the Owner
then may fix, the Owner will act upon Proposals received and with its sole discretion may
award Contract(s) for the furnishing of said equipment.
Specifications and Plans are available at the Office of the Hutchinson Utilities, 225
Michigan Street, Hutchinson, Minnesota 55350.
0
C )
The Hutchinson Utilities Commission of the City of Hutchinson, Hutchinson,
Minnesota reserves the right to reject any and all bids, or bid irregularities.
, President
0
Date
ATTESTED
Secretary
0
0
Date
(1)
RESOLUTION 151
Adopted August 25, 1996
RESOLUTION OF HUTCHINSON UTILITIES COMMISSION
CITY OF HUTCHINSON
BE IT RESOLVED, by the Hutchinson Utilities Commission of the City
of Hutchinson, Minnesota, that said commission will not provide new
natural gas services outside the Hutchinson city limits after
August 26, 1996; said Commission will continue to provide natural
gas service outside the Hutchinson city limits if service was
installed before August 26, 1996.
Roger Gilmer, Secretary
ATTEST:
G. P. Cornell, President
•
• 302
Cal
• Fin ancial/Oaerational Performance Metrics — reviewed monthly
Positive Cash Flow —Both Combined Income Statement and Combined Balance Sheet
• This is a measurement of how well Utilities Staff manages the budget. This
should be reviewed monthly. Realistic cash flow numbers are established at
budget time between the Utility Commissioners and Staff of HUC.
Gross Margin— Electric Income Statement; Gas Income Statement
Electric —this calculation is performed to monitor power acquisition expenses to
total revenue. This should be calculated at budget time, and should also be
reviewed monthly.
Gas—this calculation is performed to monitor gas acquisition expenses to total
revenue. This should be calculated at budget time, and should also be reviewed
monthly.
Operating Income per Revenue Dollar— Electric Income Statement; Gas Income
Statement
• Electric —this calculation is performed to monitor total operation expenses to total
operating revenue. This should be calculated at budget time, and should also be
reviewed monthly.
• • Gas— this calculation is performed to monitor total operation expenses to total
operating revenue. This should be calculated at budget time, and should also be
reviewed monthly.
Net Income per Revenue Dollar — Electric Income Statement; Gas Income Statement
• Electrio -this calculation is performed to monitor total operating and non-
operating expenses to total operating and non - operating revenue. This should be
calculated at budget time, and should also be reviewed monthly.
• Gas— this calculation is performed to monitor total operating and non - operating
expenses to total operating and non - operating revenue. This should be calculated
at budget time, and should also be reviewed monthly.
Current Ratio — Combined Utilities Balance Sheet
This benchmark is a measure of the utilities short-term liquidity, that is the ability
to pay its bills. This ratio takes a snapshot of the utilities liquidity at a point in
time and will vary considerably at other times during the year. This benchmark is
useful when establishing a cash management policy. This should be reviewed
monthly.
•
(1)
Financial/ Operational Performance Metrics — reviewed annually
RONA — Electric Income Statement to Net Electric Utility Assets; Gas Income Statement
to Net Gas Utility Assets — useful on an annual basis. This benchmark reflects if rates are
sufficiently set. This benchmark should be used with Cash Flow to properly identify if
rate increases /decreases are needed. This should be reviewed annually.
Revenue (by rate class) per KWHR —this benchmark examines rates of comparable
utilities. This should be reviewed annually.
Revenue (by rate class) per CF— this benchmark examines rates of comparable utilities.
This should be reviewed annually.
Debt to Total Assets — Combined Utilities Balance Sheet
This benchmark measures the utilities ability to meet its current and long -term
liabilities based on the availability of assets. This should be reviewed annually,
and also prior to issuing debt.
E
0
�4�
•
W/o Transport. Rev.
With Transport Rev.
0
Cash Flow Combined
Utilities -2006
Month
Year to Date
January
$
(115,547.50)
$ (115,547.50) --
February
$
999,497.53
$ 883,950.03
March
$
299,443.29
$ 1,183,393.32
April
$
464,930.18
$ 1,648,323.50
May
$
290,107.72
$ 1,938,431.22
June
$
153,961.78
$ 2,092,393.00
July
$
512,708.57
$ 2,605,101.57
August
$
(699,405.88)
$ 1,905,695.69
September
$
758,708.52
$ 2,664,404.21
October
$
(308,069.99)
$ 2,356,334.22
November
$
August
$
December
$
30.8%
$
Budgeted-2006
25.7%
39.8%
$ 1,068,000.00
•
W/o Transport. Rev.
With Transport Rev.
0
Gross Marain(Cost of Goods
Sold)
Month - Electric
Year to Date - Electric
Month -Gas
Year to Date -Gas
January
25.2%
25.2%
23.0%
22.7%
February
29.7%
27.4%
26.0%
24.1%
March
23.1%
26.0%
34.2%
27.0%
April
29.3%
26.8%
37.5%
28.5%
May
28.9%
27.2%
32.5%
28.9%
June
28.1%
27.4%
36.4%
29.5%
July
16.0%
25.2%
43.6%
30.4%
August
29.0%
25.9%
36.2%
30.8%
September
24.5%
25.7%
39.8%
31.5%
October
27.3%
25.9%
41.9%
32.4%
November
December
Electric -End of Year
Gas -End of Year
Budgeted -2006
26%
15%
26%
•
W/o Transport. Rev.
With Transport Rev.
0
Electric -End of Year Gas -End of Year
7.9% 15%
Month -- Electric
Y ear to Date - Electric
Month -Gas
Year to Date -Gas
January
6.1%
6.1%
16.5%
16.5%
February
10.1%
8.1%
17.7%
17.1%
March
2.4%
6.1%
24.7%
19.4%
April
7.0%
6.3%
22.2%
19.8%
May
10.8%
7.3%
15.5%
19.4%
June
10.4%
7.9%
14.8%
18.9x/,
July
2.0%
6.8%
21.3%
19.1%
August
16.0%
8.4%
16.0%
18.9%
September
5.7%
8.1%
22.5%
19.2%
October
9.1%
8.2%
29.4%
20.1%
Electric -End of Year Gas -End of Year
7.9% 15%
Electric -End of Year Gas -End of Year
5% 5%
7T
0 • 0
Month - Electric
Year to Date - Electric
Month -Gas
Year to Date -Gas
January
3.5%
3.5%
16.2%
16.2%
February
7.3%
5.4%
11.1%
13.9%
March
-0.4%
3.4%
17.6%
15.0%
April
4.5%
3.7%
11.4%
14.4%
May
8.4%
4.7%
1.3%
13.0%
June
8.3%
5.4%
-0.7%
11.7%
July
0.0%
4.4%
4.2%
11.2%
August
29.0%
9.4%
0.0%
10.3%
September
3.6%
8.8%
9.1%
10.2%
October
6.6%
8.6%
19.4%
11.1%
Electric -End of Year Gas -End of Year
5% 5%
7T
0 • 0
Current Ratio--A hi nu m ber is better, data is throu 2005, 2006 is projected—this is a measure of a utility to pay its
bills.. Flu c is addressin this b increasin Its level of cash.
4.50
4.00
3.50
3.00
2.50
2.00
1.50
1.00
050
1 0 Curre Ratio I
'OP '(P rp lzp r�5 rp 1P re R
rp 0
Noe
In FW.2W6anb eYG2tralvn(W wu Wp4JwE for WN Vw NeIUeIGYUd Ebdw VYI6W
In Jam,vY 20W,O N.luml Gas D'iman bemmere po bk fm III the N P it ftyrom Wft ppAm.
In January 2008, tre Eb DN be9Y 46636 a urnn bn dIuWgYpm*wAb41,1W.WB amu*. TIY h*Wl Sbkwmmnd*WS e1 Via Pit pwWIL]Ya18 po" TM
wrspoNWnmp.lwewloWtl im the C nIe NYdae .
As W Wemm0npm0e.d'.m mmaban eW.w.04617 mll.ndwNq tlwbW W dNe fwW YI01nrYbl.aN IpY4wn%lfud ({}60.000)
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sv.+IVlmOrewu.w.dl. lam WMrYbYlwmw YaWna4 W0bm1Y 91a0wfmbtllaO47WYYa0450{�Mad NPWt
1MCa31Ylmnbtlr Gyw46pYw6 Yba4HwSY46u5,wIlMYfmPYAT,
Summaw 2007 Budoet
61aaYb aY aelefYla6
2pc6 ssp{
]pui
Errlm.rl Mbld 611maM
W
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fayN � .S11
wa
OPEMTING REVENUES
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L 19346.71= 4 YA62MW i 4ON4.#I A0
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$ 3OG661.i0
S 561.06.96
f 1,042,170.0
f tAn,161.i6
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f 600.462=
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f 16.305AW =
10. 11%,
6 M1}0.0
i M W,WOW
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s NA11.7I
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$ 4.31%0
$ 11.30=
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f 12000.7
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i -
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i
f 20=0.0
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s -
i 1.106.16130 i 2,136.14139
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Bwdantl lmx.d PaymM Fme
£ =0.000.0
EW Year CaM In Be CnnM1anYbkfwuetircJiga relesuE. fuN.'
BTt .06
Noe
In FW.2W6anb eYG2tralvn(W wu Wp4JwE for WN Vw NeIUeIGYUd Ebdw VYI6W
In Jam,vY 20W,O N.luml Gas D'iman bemmere po bk fm III the N P it ftyrom Wft ppAm.
In January 2008, tre Eb DN be9Y 46636 a urnn bn dIuWgYpm*wAb41,1W.WB amu*. TIY h*Wl Sbkwmmnd*WS e1 Via Pit pwWIL]Ya18 po" TM
wrspoNWnmp.lwewloWtl im the C nIe NYdae .
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1MCa31Ylmnbtlr Gyw46pYw6 Yba4HwSY46u5,wIlMYfmPYAT,
Debt to Total Assets--a lower num bar is better. HUC is addressin thi's b raisin its level of cash, so we reduce our need
of borrowin mone This ratio is a measure of utiltys abilit to meet its current and lon term 11abilifies based on its
13
assets.
%
45%
%
35%
30%
25%
20%
15%
10%
5%
%
0 Debt to Total Ass
gas r1m, r
_tK �47
rN
'e O P N 'q
rp
Times Interest. Earned, a hi number -is better—in 2006 we will exceed the benchmark. This r
. ago m eas ures the abi I j t
of a utilit to cover Interest char and Is indicative of the safet mar to lenders.
W
F4 M41
i VLO
A
0 M11
M
1■11mes Interest Fam
N
5§1
ZIP
$4,500,000.00
$4,OOOtGOO.00
$3,500,000-00
N NaWral Gas
1 .MEkecVlc I
i
$110500,000.00
$1700:01000-00
$5001000M
411
1999 2000 2dol 2002 2003 2004 2005 2006 2007
Forecast Budget
$6
$5,0000000M
$4,000,000.00
$3,0004000.00
$ZOM000-00
$1,000,000-00
s(1 t 000 0 000.00)
Operatin Income Chart
Year
ku
0 Operatin Income Natural Gas
■0pemdn Income Electric
0
Fuel /Power Cost Adjustment
Year 2006
L
0
Date Gas Electric
Jan 2006
$.00099
$.00000
Feb 2006
$.00000
$.00000
Mar 2006
$.00000
$.00000
Apr 2006
$.00000
$.00000
May 2006
($.00253)
$.00000
June 2006
($.00170)
$.00000
July 2006
($.00291)_
_ $.00000
Aug 2006
($.00060)
$.01062
Sept 2006
$.00000
$.00612
Oct 2006
$.00000
$.00000
Nov 2006
$.00000
$.00000
Dec 2006
$.00000
$.00000
(0)
APPENDIX - Definitions
System Average Interruption Frequency Index (Sustained Interruptions) — This is defined as the average
number of times that a customer is interrupted during a specified time period. It is determined by dividing the
total number of customers interrupted in a time period by the average number of customers served. The
resulting unit is "interruptions per customer ".
SAM = Total Number of Customer Interruptions
Total Number of Customers Served
System Average Interruption Duration Index — This is defined as the average interruption duration for
customers served during a specified time period. It is determined by summing the customer - minutes off for
each interruption during a specified time period and dividing the sum by the average number of customers
saved during that period, the unit is minutes. Ibis index enables the utility to report how many minutes
customers would have been out of service if all customers were out at one time.
• SAIDI = E Customer Interruption Du
Total Number of Customers Served
C'nctomer Average Interruption Duratio — Ibis is defined as the average length of an interruption,
lvdgbted by the number of customers affected, for customers interrupted durag a specific time period. h is
calculated by summing the customer minutes off during each interruption in the time period and dividing this
sum by the number of customers expmiendng one or more sustained interruptions during the timepe nod. The
resulting unit is minutes. The index enables utilities to report the average duration of a customer outage for
trace customas affected
CAIDI = I Customer Interruption Du
Total Number of Customer Inte"Vdons
E
Page 10 of 11 (
9
•
•
HUC Reliability Statistics for 2006
Event Event ID
1
111
2
113
3
114
4
124
5
125
6
127
7
128
8
131
9
134
10
_ 136
11
135
12
-
13
138
14
-
15
139
16
179
17
181
18
184
19
-
SAIFI = Customers Interrupted
Total Customers Served
SAIDI = Customer Interruption Duration
Total Customers Served
CAIDI = Customer Interruption Duration
Customers Interrupted
Comparison to Public Utilities:
Number of
Outage
Customer
Customers
Duration
Interruption
Interrupted
(min)
Duration
8
39
312
800
7
5600
10
155
1550
1
75
75
4
47
188
1
60
60
200
41
8200
10
105
1050
5
40
200
5
15
75
200
8
1600
100
43
4300
500
16
8000
800
14
11200
200
44
8800
5
90
450
1
20
20
1
53
53
100
60
6000
2951
57733
2951
0.42
I I
interruptions per
7092
customer /year
57733
8.14
min /year
7092
57733 19.56 min
2951
2006
200
HUC
Midwest
Nation
SAIFI = 0.42
0.85
3.24
SAIDI = 8.14
50.13
65.09
CAIDI = 19.56
55.64
65.91
CJ
SAIFI SAIDI CAIDI
1.19 143.19 120.45
•
(Q)
2,006 Investor Owned Reliability Goals
Xcel
Work Center
SAIFI
SAIDI
CAIDI
Metro East
1.19
121.14
101.39
Metro West
1.36
152.86
112.44
Northwest
1.06
106.03
99.68
Southeast
0.96
98.72
103.11
Interstate
Work Center
SAIFI
SAIDI
CAIDI
Winnebago
0.91
65.27
72.04 —
Albert Lea
0.93
67.75
73.17
Otter Tail
Work Center
SAIFI
SAIDI
CAIDI
Bemidji
1.25
70
56
Crookston
1.55
80
52
Fergus Falls
1.35
80
59.3
Milbank
2.1
115
55
Morris
1.55
90
58
Wahpeton
1.6
90
56.3
MN Power
SAIFI SAIDI CAIDI
1.19 143.19 120.45
•
(Q)