03-27-2013 HUCMMINUTES
Regular Meeting — Hutchinson Utilities Commission
Wednesday, March 27, 2013
Call to order — 3:00 p.m.
President Bordson called the meeting to order. Members present: President Dwight
Bordson; Vice President Leon Johnson; Secretary Monty Morrow; Commissioner
Anthony Hanson; Commissioner Craig Lenz; Attorney Marc Sebora; General Manager
Michael Kumm.
Guest: Paul Harvego of Conway, Deuth & Schmiesing
1. Approve Minutes of: February 21, 2013 Special Meeting and February 27,
2013 Regular Meeting
The minutes of the February 21, 2013 special meeting and February 27, 2013
regular meeting were discussed. A motion was made by Commissioner Hanson,
seconded by Secretary Morrow, to approve the February 21, 2013 special meeting
and February 27, 2013 regular meeting minutes. Motion was unanimously carried.
2. Approve Financial Audit for 2012, Presentation by Paul Harvego of Conway,
Deuth & Schmiesing
Paul Harvego of Conway, Deuth & Schmiesing was welcomed to the meeting. Mr.
Harvego presented the 2012 financial audit. Overall, HUC is in a net positive
position even with decreased revenues in 2012. A motion was made by Vice
President Johnson, seconded by Commissioner Lenz to approve the 2012 financial
audit. Motion was unanimously carried. (Audit attached.)
3. Ratify Payment of Bills for February 2013
The February 2013 payables were discussed. A motion was made by
Commissioner Lenz, seconded by Commissioner Hanson to ratify the payment of
bills in the amount of $3,112,758.58 (detailed listing in payables book). Motion was
unanimously carried.
4. Approve Financial Statements /Budget Year to Date
GM Kumm presented the February 2013 financial statements /budget year -to -date.
After discussion, a motion was made by Commissioner Hanson, seconded by Vice
President Johnson to approve the financial statements /budget year -to -date. Motion
was unanimously carried.
5. Approve O & M Agreement for McLeod 230/115 kV Transmission Substation
and Glencoe Delivery Facilities
GM Kumm presented the O & M Agreement for McLeod 230/115 kV Transmission
Substation and Glencoe Delivery Facilities explaining this does not impact HUC.
HUC is only a signatory. GM Kumm recommended approval, pending attorney
review. A motion was made by Commissioner Lenz, seconded by Commissioner
Hanson. Motion was unanimously carried. (Agreement attached.)
1
6. Review Policies and Requirements Booklet
GM Kumm presented the policies and requirements booklet, sections:
• Meter Testing — Electric
• Other Employment
• Tree Removal or Trimming
This is part of HUC's policy review and no changes are requested at this time.
7. Approve Changes to Exempt and Non - Exempt Handbooks
GM Kumm presented changes to the exempt and non - exempt handbooks,
sections:
• Conflict of Interest
• Other Employment
• License Requirements for Utility Vehicle Operation
Changes were made to sections: conflict of interest and other employment for
clean -up purposes only. Discussion held regarding the proposed changes to
section: license requirements for utility vehicle operation. The Board recommended
Jan further review this section in regard to new hires. After discussion, the Board
tabled agenda item 7 until the April regular commission meeting.
8. Rescind Exempt and Non - Exempt Handbooks, Section: Firearms
Jan Sifferath reported back to the Board after her further review of the discipline
policy and reviewing other utilities' policies regarding zero tolerance. Jan's
recommendation was to rescind the Firearms policy to be replaced with the
Violence in the Workplace policy. The Board recommended adding firearms
verbiage to the new policy, Exempt and Non - Exempt Handbooks, Section:
Violence in the Workplace. After discussion, the Board tabled the Firearms policy
until the next regular commission meeting.
9. Approve Exempt and Non - Exempt Handbooks, Section: Violence in the
Workplace
After discussion, the Board tabled this policy until the next regular commission
meeting.
10. Approve Requisition #5241 — Unit 1 Controls Upgrade
Steve Lancaster presented requisition #5241 — unit 1 controls upgrade. This was a
2013 budgeted item. After discussion, a motion was made by Secretary Morrow,
seconded by Commissioner Hanson to approve requisition #5241 — unit 1 controls
upgrade for $1,090,013.00, from General Electric. Motion was unanimously
carried. (Requisition attached.)
11. Approve Requisition #5254 — Plant 2 Cooling Tower Screens
Steve Lancaster presented requisition #5254 — plant 2 cooling tower screens. This
was a 2013 budgeted item. After discussion, a motion was made by Commissioner
Lenz, seconded by Vice President Johnson to approve requisition #5254 — plant 2
cooling tower screens for $32,383.13, from Midwest Towers, Inc. Motion was
unanimously carried. (Requisition attached.)
2
12. Discuss HUC Adjacent Land
GM Kumm presented a plat map and history of the land for sale adjacent to HUC.
This is for review as a consideration if the land fits HUC's current needs. (Plat
attached.)
13. Discuss PILOT Workshop
Discussion held regarding another PILOT workshop to be held mid -April to review
the six alternative recommendations GM Kumm provided for the PILOT. The
Board's goal is to come to a consensus as to what is the best alternative to present
to the City of Hutchinson.
14. Declare April 10, 2013 Breakfast Meeting as an Open Meeting
A motion was made by Commissioner Lenz, seconded by Commissioner Hanson
to declare the HUC Open House scheduled for April 10, 2013, at 7:00 a.m. as an
open meeting. Motion was unanimously carried.
15. Communication from the City Administrator
City Administrator Carter was absent.
16. Division Reports
Finance — Jared Martig
• Finished up 2012 filings.
• Received $33,300 for RUC's mutual aid with Superstorm Sandy; $3,700 yet to
be received.
Electric — Steve Lancaster
• Received custody of unit 5; working on punch list items.
• Will run unit 5 and conduct a heat rate test the week of April 15.
• HUC operator retiring the end of April; advertised to fill position.
• MMUA has generation workshop which HUC will be featured in to include
touring both plants.
Business — Jan Sifferath
• New HUC electrician starts March 28.
• Working on HUC succession plan.
Natural Gas — John Webster
• Northern Border Pipeline is running pigs over their pipeline April 3 and 4;
should not have a great impact on HUC.
• Transportation and O & M agreements between HUC and City of Brownton
being reviewed by McGrann Shea Carnival Straughn & Lamb.
• Meeting with Mike Kumm, City of Brownton and United Farmers Coop next
Tuesday.
• Met with Ryan Ellenson and Great River Energy regarding the cathodic
protection study from GRE conducted on HUC's gas transmission line.
K7
• The HUC- sponsored Damage Prevention meeting on March 7 had an all -time
high of over 220 people and 28 attending.
• Annual drug and alcohol program review being conducted at HUC on April 3.
• Attending Midwest Energy Conference in Denver on April 10 and 11.
• Submitted EPA greenhouse gas emission report.
GM Kumm reported:
• MMUA will write an article about the City of Brownton forming a municipal natural
gas utility. Also, the transportation and O & M agreements between HUC and the
City of Brownton will be completed by Summer 2013.
• The summary of the legal opinion provided regarding the possibility of HUC
generating electricity into the market.
• The Energy Omnibus Bill on the house side is catering to solar power.
• The total cost of unit 5 project is approximately 10 percent under budget.
17. Legal Update
Nothing to report
Unfinished Business
• Discuss Pre -Pay for Natural Gas
Nothing to report.
• Discuss Credit Card Payments
Nothing to report.
• Discuss Criteria for New Commissioner Candidates
President Bordson will modify the matrix Attorney Sebora distributed. He also
requested that Commissioners and HUC staff send names of potential
candidates to Kim Koski. Using the matrix, the candidates will be value ranked
then presented to the City Council with HUC's recommendation.
New Business
None
There being no further business, a motion was made by Commissioner Hanson,
seconded by Commissioner Lenz to adjourn the meeting at 5:03 p.m. Motion was
unanimously carried.
ATTEST:
Dwight Bordson, President
11
Monty Morrow, Secretary
MINUTES
Regular Meeting — Hutchinson Utilities Commission
Wednesday, March 27, 2013
Call to order — 3:00 p.m.
President Bordson called the meeting to order. Members present: President Dwight
Bordson; Vice President Leon Johnson; Secretary Monty Morrow; Commissioner
Anthony Hanson; Commissioner Craig Lenz; Attorney Marc Sebora; General Manager
Michael Kumm.
Guest: Paul Harvego of Conway, Deuth & Schmiesing
Approve Minutes of: February 21, 2013 Special Meeting and February 27,
2013 Regular Meeting
The minutes of the February 21, 2013 special meeting and February 27, 2013
regular meeting were discussed. A motion was made by Commissioner Hanson,
seconded by Secretary Morrow, to approve the February 21, 2013 special meeting
and February 27, 2013 regular meeting minutes. Motion was unanimously carried.
2. Approve Financial Audit for 2012, Presentation by Paul Harvego of Conway,
Deuth & Schmiesing
Paul Harvego of Conway, Deuth & Schmiesing was welcomed to the meeting. Mr.
Harvego presented the 2012 financial audit. Overall, HUC is in a net positive
position even with decreased revenues in 2012. A motion was made by Vice
President Johnson, seconded by Commissioner Lenz to approve the 2012 financial
audit. Motion was unanimously carried. (Audit attached.)
3. Ratify Payment of Bills for February 2013
The February 2013 payables were discussed. A motion was made by
Commissioner Lenz, seconded by Commissioner Hanson to ratify the payment of
bills in the amount of $3,112,758.58 (detailed listing in payables book). Motion was
unanimously carried.
4. Approve Financial Statements /Budget Year to Date
GM Kumm presented the February 2013 financial statements /budget year -to -date.
After discussion, a motion was made by Commissioner Hanson, seconded by Vice
President Johnson to approve the financial statements /budget year -to -date. Motion
was unanimously carried.
5. Approve O & M Agreement for McLeod 230/115 kV Transmission Substation
and Glencoe Delivery Facilities
GM Kumm presented the O & M Agreement for McLeod 230/115 kV Transmission
Substation and Glencoe Delivery Facilities explaining this does not impact HUC.
HUC is only a signatory. GM Kumm recommended approval, pending attorney
review. A motion was made by Commissioner Lenz, seconded by Commissioner
Hanson. Motion was unanimously carried. (Agreement attached.)
6. Review Policies and Requirements Booklet
GM Kumm presented the policies and requirements booklet, sections:
• Meter Testing — Electric
• Other Employment
• Tree Removal or Trimming
This is part of HUC's policy review and no changes are requested at this time.
7. Approve Changes to Exempt and Non - Exempt Handbooks
GM Kumm presented changes to the exempt and non - exempt handbooks,
sections:
• Conflict of Interest
• Other Employment
• License Requirements for Utility Vehicle Operation
Changes were made to sections: conflict of interest and other employment for
clean -up purposes only. Discussion held regarding the proposed changes to
section: license requirements for utility vehicle operation. The Board recommended
Jan further review this section in regard to new hires. After discussion, the Board
tabled agenda item 7 until the April regular commission meeting.
8. Rescind Exempt and Non - Exempt Handbooks, Section: Firearms
Jan Sifferath reported back to the Board after her further review of the discipline
policy and reviewing other utilities' policies regarding zero tolerance. Jan's
recommendation was to rescind the Firearms policy to be replaced with the
Violence in the Workplace policy. The Board recommended adding firearms
verbiage to the new policy, Exempt and Non - Exempt Handbooks, Section:
Violence in the Workplace. After discussion, the Board tabled the Firearms policy
until the next regular commission meeting.
9. Approve Exempt and Non - Exempt Handbooks, Section: Violence in the
Workplace
After discussion, the Board tabled this policy until the next regular commission
meeting.
10. Approve Requisition #5241 — Unit 1 Controls Upgrade
Steve Lancaster presented requisition #5241 — unit 1 controls upgrade. This was a
2013 budgeted item. After discussion, a motion was made by Secretary Morrow,
seconded by Commissioner Hanson to approve requisition #5241 — unit 1 controls
upgrade for $1,090,013.00, from General Electric. Motion was unanimously
carried. (Requisition attached.)
11. Approve Requisition #5254 — Plant 2 Cooling Tower Screens
Steve Lancaster presented requisition #5254 — plant 2 cooling tower screens. This
was a 2013 budgeted item. After discussion, a motion was made by Commissioner
Lenz, seconded by Vice President Johnson to approve requisition #5254 — plant 2
cooling tower screens for $32,383.13, from Midwest Towers, Inc. Motion was
unanimously carried. (Requisition attached.)
2
12. Discuss HUC Adjacent Land
GM Kumm presented a plat map and history of the land for sale adjacent to HUC.
This is for review as a consideration if the land fits HUC's current needs. (Plat
attached.)
13. Discuss PILOT Workshop
Discussion held regarding another PILOT workshop to be held mid -April to review
the six alternative recommendations GM Kumm provided for the PILOT. The
Board's goal is to come to a consensus as to what is the best alternative to present
to the City of Hutchinson.
14. Declare April 10, 2013 Breakfast Meeting as an Open Meeting
A motion was made by Commissioner Lenz, seconded by Commissioner Hanson
to declare the HUC Open House scheduled for April 10, 2013, at 7:00 a.m. as an
open meeting. Motion was unanimously carried.
15. Communication from the City Administrator
City Administrator Carter was absent.
16. Division Reports
Finance — Jared Martig
• Finished up 2012 filings.
• Received $33,300 for HUC's mutual aid with Superstorm Sandy; $3,700 yet to
be received.
Electric — Steve Lancaster
• Received custody of unit 5; working on punch list items.
• Will run unit 5 and conduct a heat rate test the week of April 15.
• HUC operator retiring the end of April; advertised to fill position.
• MMUA has generation workshop which HUC will be featured in to include
touring both plants.
Business — Jan Sifferath
• New HUC electrician starts March 28.
• Working on HUC succession plan.
Natural Gas — John Webster
• Northern Border Pipeline is running pigs over their pipeline April 3 and 4;
should not have a great impact on HUC.
• Transportation and O & M agreements between HUC and City of Brownton
being reviewed by McGrann Shea Carnival Straughn & Lamb.
• Meeting with Mike Kumm, City of Brownton and United Farmers Coop next
Tuesday.
• Met with Ryan Ellenson and Great River Energy regarding the cathodic
protection study from GRE conducted on HUC's gas transmission line.
3
• The HUC- sponsored Damage Prevention meeting on March 7 had an all -time
high of over 220 people and 28 attending.
• Annual drug and alcohol program review being conducted at HUC on April 3.
• Attending Midwest Energy Conference in Denver on April 10 and 11.
• Submitted EPA greenhouse gas emission report.
GM Kumm reported:
• MMUA will write an article about the City of Brownton forming a municipal natural
gas utility. Also, the transportation and O & M agreements between HUC and the
City of Brownton will be completed by Summer 2013.
• The summary of the legal opinion provided regarding the possibility of HUC
generating electricity into the market.
• The Energy Omnibus Bill on the house side is catering to solar power.
• The total cost of unit 5 project is approximately 10 percent under budget.
17. Legal Update
Nothing to report
Unfinished Business
• Discuss Pre -Pay for Natural Gas
Nothing to report.
• Discuss Credit Card Payments
Nothing to report.
• Discuss Criteria for New Commissioner Candidates
President Bordson will modify the matrix Attorney Sebora distributed. He also
requested that Commissioners and HUC staff send names of potential
candidates to Kim Koski. Using the matrix, the candidates will be value ranked
then presented to the City Council with HUC's recommendation.
New Business
None
There being no further business, a motion was made by Commissioner Hanson,
seconded by Commissioner Lenz to adjourn the meeting at 5:03 p.m. Motion was
unanimously carried.
Monty Morrow, Secretary
ATTEST: &M��
Dwi' t B rdson, President
4
HUTCHINSON UTILITIES COMMISSION
HUTCHINSON, MINNESOTA
MANAGEMENT LETTER
DECEMBER 31, 2012
Conway, Deuth & Schmiesing, PLLP
Certified Public Accountants
Litchfield, Minnesota
HUTCHINSON UTILITIES COMMISSION
TABLE OF CONTENTS
YEAR ENDED DECEMBER 31, 2012
PAGE
Required Communications 1 -3
Comparative Financial Data
Graphical Information 5 -12
Schedule of Findings on Accounting Issues and Internal Controls 13 -14
L""
-- Conway, Dcuth
Schuriesing,m.ix
(sniCu� 1'ublr ,1a.,�unun�., iF (imulunu
REQUIRED COMMUNICATIONS
March 27, 2013
Members of the Hutchinson Utilities Commission
Hutchinson, Minnesota
We have audited the financial statements of Hutchinson Utilities Commission, a fund of the City of Hutchinson,
Minnesota, as of and for the year ended December 31, 2012. Professional standards require that we provide you with
information about our responsibilities under generally accepted auditing standards and Government Auditing Standards,
as well as certain information related to the planned scope and timing of our audit. We have communicated such
information in our letter to you dated January 4, 2013. Professional standards also require that we communicate to you
the following information related to our audit.
Significant Audit Findings
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting
policies used by Hutchinson Utilities Commission, are described in Note 1 to the financial statements. As described in
Note 1, the Commission implemented Governmental Accounting Standards Board Statement No. 63. Adoption of the
provisions of this statement results in significant changes to net asset classification within the financial statements. We
noted no transactions entered into by Hutchinson Utilities Commission during the year for which there is a lack of
authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the
proper period.
Accounting estimates are an integral part of the financial statements prepared by management and are based on
management's knowledge and experience about past and current events and assumptions about future events. Certain
accounting estimates are particularly sensitive because of their significance to the financial statements and because of
the possibility that future events affecting them may differ significantly from those expected. The most sensitive
estimates affecting the financial statements were:
Management's estimate of the allowance for doubtful accounts is based on historical electric and natural gas revenues,
historical loss levels, and an analysis of the collectability of individual accounts. We evaluated the key factors and
assumptions used to develop the allowance in determining that it is reasonable in relation to the financial statements
taken as a whole.
Management's estimate of depreciation is based on the number of years an asset is in service. We evaluated the key
factors and assumptions used to develop the depreciation estimate in determining that it is reasonable in relation to the
financial statements taken as a whole.
Members: American Institute of Certified Public Accountants, Minnesota Society of Certified Public Accountants
Hutchinson Utilities Commission
Hutchinson, Minnesota
Page 2
The financial statement disclosures are neutral, consistent, and clear.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than
those that are clearly trivial, and communicate them to the appropriate level of management. Management has corrected
all such misstatements.
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter,
whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor's report. We
are pleased to report that no such disagreements arose during the course of our audit.
Management Representations
We have requested certain representations from management that are included in the management representation letter
dated March 27, 2013.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters,
similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting
principle to the Commission's financial statements or a determination of the type of auditor's opinion that may be
expressed on those statements, our professional standards require the consulting accountant to check with us to
determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other
accountants.
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with
management each year prior to retention as the Commission's auditors. However, these discussions occurred in the
normal course of our professional relationship and our responses were not a condition to our retention.
Other Information in Documents Containing Audited Financial Statements
With respect to the supplementary information accompanying the financial statements, we made certain inquiries of
management and evaluated the form, content, and methods of preparing the information to determine that the
information complies with accounting principles generally accepted in the United States of America, the method of
preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit
of the financial statements. We compared and reconciled the supplementary information to the underlying accounting
records used to prepare the financial statements or to the financial statements themselves.
2
Hutchinson Utilities Commission
Hutchinson, Minnesota
Page 3
This information is intended solely for the use of the Commission and management of Hutchinson Utilities Commission
and is not intended to be and should not be used by anyone other than these specified parties.
Very truly yours,
", ; , kLP
CONWAY, DEUTH & SCHMIESING, PLLP
Certified Public Accountants
Litchfield, Minnesota
March 27, 2013
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HUTCHINSON UTILITIES COMMISSION
ELECTRIC DIVISION
Operating Revenues & Expenses and Net Nonoperating Revenues (Expenses)
$35,000,000
$28258949 $30,197,371 $30,679,150
, ,
$30,000,000 $29,193,987
$26,808,732 $27,679,311 $27,708,122
$25,557,305 $27,005,321 $27,309,636
$25,130,487 $25,781,013 $26,535,524
$25,000,000 $25,063,230
$20,000,000
$15,000,000
I
I
$10,000,000
$5,000,000
$852,948 $775,934 $780,678 $(727.681) $(329,483)
$0
$837,126 LL
$(1,082,723)
- $5,000,000
2006 2007 2008 2009 2010 2011 2012
§Total Operating Revenues WTotal Operating Expenses ■Net Nonoperating Revenues (Expenses)
Change in Net Position
$4,000,000
$3,500,000
$3,371,008
$3,000,000
$2,500,000
$2287,343
$2,261,097
$2,000,000
$1,500,000
$1,199,428
$1,207,496
$1,000,000
$859,368
$500,000
444,629
$
$0
2006 2007 2008 2009 2010 2011 2012
•Change in Net Position
5
$14,000,000
$13,000,000
$12,000,000
$11,000,000
$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
2006 2007 2008 2009 2010 2011
■Residential •General Service olndustrial
HUTCHINSON UTILITIES COMMISSION
ELECTRIC DIVISION
Major Revenue by Source
$35,000,000 F_
$30,000,000
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
$0
2006 2007
Purchased Power & Fuel Costs Compared to Total Sales
2008 2009 2010 2011
•Purchased Power -Electric •Total Electric Sales
0
2012
2012
HUTCHINSON UTILITIES COMMISSION
ANALYSIS OF OPERATIONS
ELECTRIC DIVISION
YEARS ENDED DECEMBER 31, 2012 AND 2011
The Statement of Revenues and Expenses set forth the results of the operations in detail for the years ended December
31, 2012 and 2011. Operating revenues, kilowatt hours (KWH) sold, and average revenue per kilowatt hour sold by class
of service are as follows:
7
Year Ended December 31, 2012
Revenue Per
Amount
KWH Sold
KWH
CLASS
Residential
$
4,972,887
50,726,492 $
0.0980
All Electric
229,672
2,340,244
0.0981
Small General Service
1,723,012
18,027,490
0.0956
Large General Service
7,541,929
82,193,045
0.0918
Industrial
10,763,758
129,470,000
0.0831
Sale for Resale
1,618,582
35,092,000
0.0461
Street Lighting
148,968
104,320
1.4280
$
26,998,808
317,953,591
0.0849
Year Ended December 31, 2011
Revenue Per
Amount
KWH Sold
KWH
CLASS
Residential
$
5,000,155
50,985,858 $
0.0981
All Electric
255,178
2,630,355
0.0970
Small General Service
1,706,669
17,816,222
0.0958
Large General Service
7,369,142
80,125,637
0.0920
Industrial
11,692,880
140,065,000
0.0835
Sale for Resale
1,234,285
17,820,000
0.0693
Street Lighting
143,378
107,445
1.3344
$
27,401,687
309,550,517
0.0885
7
HUTCHINSON UTILITIES COMMISSION
ANALYSIS OF OPERATIONS
ELECTRIC DIVISION
YEARS ENDED DECEMBER 31, 2012 AND 2011
KWH Sold
Average $ /KWH
Industrial
Large General Service
Small General Service
All Electric
Residential Ir
S0.08
$0.09 $0.10 $0.11
02012 Revenue Per KWH 02011 Revenue Per KWH
0
HUTCHINSON UTILITIES COMMISSION
NATURAL GAS DIVISION
Operating Revenues & Expenses and Net Nonoperating Revenues (Expenses)
$20,000,000
$17,918,263
$16,877,242
$15,652,921
$15,000,000 $13,343
$14,448,613 _ $14,646,836 $14,330,101
$14,2$211,916
1 $13,311,332 12,965,630 2,123
,271 $11,530,359
I 9,727 ,396 $10,000,000 $,
$5,000,000
—�(I 993,672) $(930,225) $(966,136) (1,007,145) —I 880) (929,711) $(989,
$0 164)
t
- $5,000,000 '
2006 2007 2008 2009 2010 2011 2012
Total Operating Revenues WTotal Operating Expenses ■Net Nonoperating Revenues (Expenses)
$1,400,000
$1,200,000 $1.146,848
$1,000,000
$800,000
$600,000
$400,000
$200,000
$0 -
2006
Change in Net Position
$813,799
2007 2008 2009 2010 2011 2012
■Change in Net Position
HUTCHINSON UTILITIES COMMISSION
NATURAL GAS DIVISION
Major Revenue by Source
$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
2006 2007 2008 2009 2010 2011 2012
■Residential ■Commercial Olndustrial
$18,000,000
$16,000,000
$14,000,000
$12,000,000
$10,000,000
$8,000,000
$6,000,000
$4,000,000
$2,000,000
$0
Purchased Gas Compared to Total Sales
2006 2007 2008 2009 2010
■Purchased Power - Gas ■Total Gas Revenues
10
2011 2012
HUTCHINSON UTILITIES COMMISSION
ANALYSIS OF OPERATIONS
NATURAL GAS DIVISION
YEARS ENDED DECEMBER 31, 2012 AND 2011
The Statement of Revenues and Expenses set forth the results of the operations in detail for the years ended December
31, 2012 and 2011. Operating revenues, cubic feet sold, and average revenue per thousand cubic feet sold by class of
service are as follows:
CLASS
Residential
Commercial
Large industrial
CLASS
Residential
Commercial
Large industrial
Year Ended December 31, 2012
11
Revenue Per
Thousand
Amount
CF Sold
MCF
$
3,697,538
364,652,428
$
10.1399
3,150,925
325,027,042
9.6943
2,826,424
731,565,000
3.8635
$
9,674,887
1,421,244,470
$
6.8073
Year Ended
December 31,
2011
Revenue Per
Thousand
Amount
CF Sold
MCF
$
4,327,788
434,536,606
$
9.9595
3,823,161
399,760,773
9.5636
4,246,780
821,329,000
5.1706
$
12,397,729
1,655,626,379
$
7.4882
11
HUTCHINSON UTILITIES COMMISSION
ANALYSIS OF OPERATIONS
NATURAL GAS DIVISION
YEARS ENDED DECEMBER 31, 2012 AND 2011
CF Sold
731,565,000
Large industrial
821,329, 000
325, 027, 042
Commercial 399.760.773
364,652,428
Residential 34,536,606
pp pp0 p p0 5 E 1 pp p p0 app gpp 30,3 p p p p
app p p pp0 pp pp0 p p p
■2012 CF Sold 02011 CF Sold
Large industrial
Commercial
Residential
Average $ /MCF
$5.00 $6.00 $7.00 $8.00 $9.00 $10.00 $11.00
02012 Revenue per 1000 MCF 02011 Revenue Per 1000 MCF
12
HUTCHINSON UTILITIES COMMISSION
SCHEDULE OF FINDINGS ON ACCOUNTING ISSUES AND INTERNAL CONTROLS
We noted certain matters involving the internal control structure and its operation that we consider being deficiencies in
internal control under standards established by the American Institute of Certified Public Accountants. A deficiency in
internal control exists when the design or operation of a control does not allow management or employees, in the normal
course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis.
INTERNAL CONTROL
The objective of internal accounting control is to provide reasonable, but not absolute, assurance as to the safeguarding
of assets against loss from unauthorized use or disposition, and the reliability of financial records for preparing financial
statements and maintaining accountability for assets. The concept of reasonable assurance recognizes that the cost of a
system of internal accounting control should not exceed the benefits derived and also recognizes that the valuation of
these factors necessarily requires estimates and judgments by management.
It should be recognized that within the Commission, an inherent risk is present with certain positions. It is very common
for entities such as Hutchinson Utilities Commission, to assign many major responsibilities to a few key individuals in an
attempt to operate within limited budgets. The inherent risk is again addressed only to maintain the awareness of the
internal control structure and to encourage the Commission's continual review of financial information at monthly
meetings.
GENERAL RECOMMENDATIONS
WITHHOLDING AFFIDAVIT
The Commission did not obtain the contractor withholding affidavit called Form IC 134 from all contractors who performed
work for the Commission in 2012 before final payment was made as required by Minnesota Statute § 270C.66. This form
is completed by the contractor and then is submitted to the Commissioner of Revenue. The contractor will then provide
the Commission a copy of this form allowing for final payment to be made.
SAFEKEEPING AGREEMENT
The Safekeeping Agreement with one of the Commission's banks with deposits over the FDIC insurance coverage limit,
did not state within the agreement that upon default of the bank, collateral would be released on the Commission's
demand. The Safekeeping Agreement called for a three day written notice and opportunity to cure the default before the
collateral would be released.
GASB 65 ITEMS PREVIOUSLY REPORTED AS ASSETS AND LIABILITIES
GASB No. 63 was implemented this year. GASB No. 63 provided guidance on financial reporting related to deferred
outflows of resources and deferred inflows of resources.
The objective of this statement was to improve financial reporting by standardizing the presentation of deferred outflows
of resources and deferred inflows of resources and their effects on government's net position. It alleviated uncertainty
about reporting those financial statement elements by providing guidance where none previously existed.
"Deferred inflows" and "deferred outflows" are defined as follows:
Deferred Inflows - An acquisition of net assets by the government that is applicable to a future reporting
period.
Deferred Outflows - A consumption of net assets by the government that is applicable to a future reporting
period.
13
HUTCHINSON UTILITIES COMMISSION
SCHEDULE OF FINDINGS ON ACCOUNTING ISSUES AND INTERNAL CONTROLS
GASB 65 ITEMS PREVIOUSLY REPORTED AS ASSETS AND LIABILITIES (Cont'd)
Upon implementation, the Commission's net assets on the balance sheet became net position. Components of the
balance sheet now include assets, deferred outflows of resources, liabilities, deferred inflows of resources, and net
position. Net position will continue to be reported in three categories, which will include net investment in capital assets,
restricted, and unrestricted.
The GASB was careful at the time GASB No. 63 was issued to state that nothing on the balance sheet could be classified
as a deferred inflow or deferred outflow until specifically proscribed by the GASB. It made none of those decisions in the
GASB No. 63, opting instead to delve into the issue more specifically under a different standard.
GASB No. 65 is the final standard that was issued to close the loop on the concepts of deferred inflows and deferred
outflows as a result of the issuance of GASB Statement No. 63. GASB No. 65 reclassifies, as deferred outflows or
deferred inflows of resources, certain items that were previously recorded as assets and liabilities. In addition, the GASB
also found certain items that it felt should not hit the balance sheet at all; as a result, this statement requires recognition
of those items as either an outflow (expense) or inflow (revenue) of resources.
One other important provision in GASB Statement No. 65 relates to the use of the term "deferred ". Under this
pronouncement, the GASB has restricted the use of this terminology only to items reported as deferred inflows or
deferred outflows. Items which had previously been termed "deferred revenue" will now be called "unavailable revenue"
or "unearned revenue ".
We recommend that management of the Commission begin the process of evaluating the impact of implementation of
this standard. Changes will be necessary to your financial records and will benefit the Commission to begin this process
now. If requested, Conway, Deuth and Schmiesing, PLLP will assist in the implementation. These services will be billed
separate from, and in addition to, your annual audit engagement fees. Please contact us with any questions.
14
HUTCHINSON UTILITIES COMMISSION
AUDITED FINANCIAL STATEMENTS AND
SUPPLEMENTARY INFORMATION
YEAR ENDED DECEMBER 31, 2012
Conway, Deuth & Schmiesing, PLLP
Certified Public Accountants
Litchfield, Minnesota
HUTCHINSON UTILITIES COMMISSION
TABLE OF CONTENTS
YEAR ENDED DECEMBER 31, 2012
PAGE
ORGANIZATIONAL DATA 1
INDEPENDENT AUDITOR'S REPORT 2 -4
REQUIRED SUPPLEMENTARY INFORMATION
Management's Discussion and Analysis
5 -9
BASIC FINANCIAL STATEMENTS
Statement of Net Position
10
Statement of Revenues, Expenses and Changes in Net Position
11
Statement of Cash Flows
12 -13
Notes to the Financial Statements
14 -26
SUPPLEMENTARY INFORMATION
Combining Statement of Net Position
27
Combining Statement of Revenues and Expenses
28
Statement of Net Position - Electric Division
29
Detailed Statement of Revenues and Expenses - Budget and Actual - Electric Division
30 -32
Statement of Net Position - Natural Gas Division
33
Detailed Statement of Revenues and Expenses - Budget and Actual - Natural Gas Division
34 -36
COMPLIANCE SECTION
Independent Auditor's Report on Minnesota Legal Compliance
37
Independent Auditor's Report on Internal Control Over Financial
Reporting and on Compliance and Other Matters Based on an
Audit of Financial Statements Performed in Accordance with
Government Auditing Standards
38 -39
HUTCHINSON UTILITIES COMMISSION
ORGANIZATIONAL DATA
YEAR ENDED DECEMBER 31, 2012
A Light and Power Commission was formed under the provisions of an amendment to the Hutchinson City Charter in
1936; the Commission was charged with the operation of the Municipal Electric Plant. Charter amendments approved
December 17, 1954, provided for a change in the name to Hutchinson Utilities Commission. Additional duties under that
amendment provided for the control and management of a municipal gas distribution system.
A revised city charter was adopted at a special election September 17, 1987. Some of the pertinent sections of this new
charter are briefly summarized in the following paragraphs.
The Commission shall have control and management of the Light Plant, the Light Plant distribution system, the Gas Plant
and the Gas Plant distribution system.
The Commission shall consist of five persons, qualified voters of the City, who shall be appointed by the Council. A
member shall be appointed every year for a term of five years, to fill the place of the member whose term has expired.
No member shall be appointed to more than two successive terms. The members of the Commission shall receive
compensation for their services as determined annually by the Council.
The Commission shall provide for its own organization and rules of procedure and annually shall elect a president and
vice president from among its members. It shall also appoint a secretary who may or may not be a member of the
Commission.
The Commissioners at December 31, 2012, and their official titles were as follows:
Dwight Bordson
Craig Lenz
Leon Johnson
Monty Morrow
Anthony Hanson
President
Vice President
Secretary
Commissioner
Commissioner
mom
Conway, Deuth
Schmiesing,ri,i.r
��it.E;tiEi�L` ( i. }C +:�i..:i ".'it „, lt't?i:e- � +.1•'
INDEPENDENT AUDITOR'S REPORT
Members of the Hutchinson Utilities Commission
Hutchinson, Minnesota
Report on the Financial Statements
We have audited the accompanying financial statements of Hutchinson Utilities Commission, a fund of the City of
Hutchinson, Minnesota, as of and for the year ended December 31, 2012, and the related notes to the financial
statements, which collectively comprise the Commission's basic financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with
accounting principles generally accepted in the United States of America; this includes the design, implementation, and
maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from
material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in
accordance with auditing standards generally accepted in the United States of America and the standards applicable to
financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the
auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in
order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluating the overall presentation of the financial statements.
2
Mamben: Amerkan Instkute of Certified Publk
Accountants. Minnesota Society of Certified Public Accountants
Hutchinson Utilities Commission
Hutchinson, Minnesota
Page 2
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial
position of Hutchinson Utilities Commission, a fund of the City of Hutchinson, Minnesota, as of December 31, 2012, and
the respective changes in financial position, and cash flows thereof for the year then ended in accordance with
accounting principles generally accepted in the United States of America.
Emphasis of Matter
As discussed in Note 1 to the basic financial statements, for the year ended December 31, 2012, the Commission
adopted the new accounting guidance of Governmental Accounting Standards Board Statement No. 63, Financial
Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position. Our opinion is not
modified with respect to this matter.
Report on Partial Comparative Information
We have previously audited the Commission's 2011 financial statements, and we expressed unmodified audit opinions
on those audited financial statements in our report dated March 28, 2012. In our opinion, the partial comparative
information presented herein as of and for the year ended December 31, 2011 is consistent, in all material respects, with
the audited financial statements from which it has been derived.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management's Discussion and
Analysis as listed in the table of contents be presented to supplement the basic financial statements. Such information,
although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who
considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. We have applied certain limited procedures to the required supplementary
information in accordance with auditing standards generally accepted in the United States of America, which consisted of
inquiries of management about the methods of preparing the information and comparing the information for consistency
with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during
our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information
because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
Supplementary and Other Information
Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the
Commission's basic financial statements. The statements listed in the table of contents as supplementary information are
presented for purposes of additional analysis and are not a required part of the basic financial statements.
Hutchinson Utilities Commission
Hutchinson, Minnesota
Page 3
The supplementary information is the responsibility of management and was derived from and relates directly to the
underlying accounting and other records used to prepare the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional
procedures, including comparing and reconciling such information directly to the underlying accounting and other records
used to prepare the basic financial statements or to the basic financial statements themselves, and other additional
procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the
supplementary information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
The Organizational Data section has not been subjected to the auditing procedures applied in the audit of the basic
financial statements and, accordingly, we do not express an opinion or provide any assurance on the information
presented.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated March 27, 2013 on our
consideration of the Commission's internal control over financial reporting and on our tests of its compliance with certain
provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to
describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing,
and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part
of an audit performed in accordance with Government Auditing Standards in considering Hutchinson Utilities
Commission's internal control over financial reporting and compliance.
", ` ' , PLO
CONWAY, DEUTH & SCHMIESING, PLLP
Certified Public Accountants
Litchfield, Minnesota
March 27, 2013
4
REQUIRED SUPPLEMENTARY INFORMATION
HUTCHINSON UTILITIES COMMISSION
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2012
Overview of the Financial Statements
Hutchinson Utilities Commission is a fund of the City of Hutchinson, Minnesota, and is responsible for the full operation
and management of the electric and natural gas systems of the City. The annual report of Hutchinson Utilities
Commission includes the financial statements, the independent auditor's report, and notes detailing the financial
statements and this management's discussion and analysis report. The report also includes supplementary information
for each of Hutchinson Utilities Commission's divisions.
Financial Statements Required
The financial statements report information about Hutchinson Utilities Commission using accounting methods similar to
those used by private sector companies. These statements offer short-term and long -term financial information about its
activities.
The Statement of Net Position includes all of the Commission's assets, liabilities, and net position and provides
information regarding the nature and amount of investments in various assets and obligations to the Commission's
creditors. They also provide the basis for computing rate of return, evaluating the capital structure, and determining the
liquidity and financial flexibility of the Commission.
The Statement of Revenues, Expenses and Changes in Net Position accounts for all the current year's revenues and
expenses. This statement measures the success of operations over the past year and can be used to determine whether
all costs are recovered through user fees and other charges. This statement measures the Commission's profitability
and credit worthiness.
The Statement of Cash Flows provide information about the Commission's cash receipts and cash payments during the
reporting period. This statement reports cash receipts, cash payments, and net changes in cash resulting in cash
balances during the reporting period.
Financial Statement Analvsis
Total gross investment in capital assets increased to $128,688,606 in 2012 from $119,974,190 in 2011. Capital assets
increased in 2012 primarily because of construction in progress related to the downtown engine upgrade and building
modification project, which increased by $7,010,039. The total cost to date for this project is $9,227,975. All other
additions were for typical upgrades and improvements to the generating plant and distribution systems as well as
equipment purchases.
Operating revenues and expenses decreased from 2011 by $3,090,043 and $1,641,364, respectively. Operating income
decreased from 2011 by $1,448,679. The primary decrease in operating revenue was due to decreased gas sales in the
amount of $2,722,842 from 2011 because of a warmer than average winter.
The primary area of the decrease in expenses was due to a decrease of $617,516 for purchased power in the electric
division and a decrease of $2,627,866 in purchased natural gas in the gas division.
Transmission operating expense increased by $969,843 in the electric division due to current cost structure agreements.
5
HUTCHINSON UTILITIES COMMISSION
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2012
Significant Transactions
In 2012, the Commission transferred $1,285,309 to the City of Hutchinson. This transfer represents 2.75% of the
Commission's audited operating revenue for 2010, and it also includes $148,585 to pay the City of Hutchinson's roadway
lighting.
Condensed Financial Statements
A summary of the Statement of Net Position is presented in Table 1.
Table 1
Condensed Statement of Net Position
Net Capital Assets
Restricted Assets
Current Assets
Other Assets
Total Assets
Current Liabilities
Long -Term Liabilities
Total Liabilities
Net Position
Net Investment in Capital Assets
Restricted
Unrestricted
Total Net Position
Total Liabilities and Net Position
Increase
2012 2011 Decrease
$ 79,003,622 $ 73,185,826 $ 5,817,796
23,497,597 380,755 23,116,842
12,140,524 18,115,822 (5,975,298)
2,162,675 2,491,276 328,601
$ 116,804,418 $ 94,173,679 $ 22,630,739
$ 6,695,319 $ 5,264,348 $ 1,430,971
43,911,116 23,969,776 19,941,340
50,606,435 29,234,124 21,372,311
58,284,860
51,084,880
7,199,980
194,548
380,755
(186,207)
7,718,575
13,473,920
5,755,345
66,197,983
64,939,555
1,258,428
$ 116,804,418 $ 94,173,679 $ 22,630,739
HUTCHINSON UTILITIES COMMISSION
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2012
Condensed Financial Statements (Cont'd)
A summary of the Statement of Revenues, Expenses and Changes in Net Position is presented in Table 2.
Table 2
Condensed Statement of Revenues, Expenses and Changes in Net Position
Operating Revenues
Operating Expenses
Cost of Operations
Depreciation
Total Operating Expenses
Operating Income (Loss)
Nonoperating Revenues (Expenses)
Change in Net Position
Net Position, Beginning of Year
Net Position, End of Year
Budgetary Highlights
2012
$ 38,839,995
Increase
2011
41,930,038 $ (3,090,043)1
32,930,487
34,577,443
(1,646,956)
3,332,433
3,326,841
5,592
36,262,920
37,904,284
1,641,364
2,577,075
4,025,754
(1,448,679)
(1,318,647) (1,657,392)
1,258,428 2,368,362
64,939,555 62,571,193
$ 66,197,983 $ 64,939,555
338,745
(1,109,934)
The Commission adopts an annual Operating Budget and a Capital Improvement Budget. Because of its enterprise
nature and in order to comply with Federal Energy Regulatory Commission accounting and reporting requirements, the
budgets are not operated as statutory budgets. The Commission and Utilities staff review budget results monthly and the
budget is used as a financial management tool. A summary of the 2012 Budget Analysis is presented in Table 3.
7
HUTCHINSON UTILITIES COMMISSION
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2012
Budgetary Highlights (Cont'd)
Operating Revenues
Operating Expenses
Cost of Operations
Depreciation Expense
Total Operating Expenses
Operating Income (Loss)
Nonoperating Revenues (Expenses)
Change in Net Position
Net Position, Beginning of Year
Net Position, End of Year
Table 3
Condensed Budget Analysis
2012 Budget
2012 Actual
Over Under
$ 44,235,633
$ 38,839,995
$ (5,395,638)
36,175,639
32,930,487
(3,245,152)
3,450,000
3,332,433
117,567
39,625,639
36,262,920
3,362,719
4,609,994
2,577,075
(2,032,919)
(2,119,401) (1,318,647) 800,754
2,490,593 1,258,428 (1,232,165)
64,939,555 64,939,555
$ 67,430,148 $ 66,197,983 $ (1,232,165)
Actual operating revenues were $5,395,638 under budgeted revenues while operating income (loss) was under budget by
$2,032,919. This is mainly due to gas utility sales revenues coming in under budget by $4,030,313. The electric division
also experienced a negative variance of $1,420,797 for operating revenues. Overall the actual operating revenues had a
negative variance of approximately 12.20 %. This was mostly caused by a depressed economy and a warmer than
average winter.
Operating expenses were $3,362,719 lower than budgeted. This is mainly due to lower natural gas expenses associated
with the lower retail natural gas sales and also lower purchased power expense.
In 2007, the Commission established a formula approach to the Payment in Lieu of Taxes (PILOT). The formula is
2.75% of the audited operating revenue from the previous year. The Commission approved an additional $250,000 in
2013. In addition, we are also counting monies paid to the City for the Roadway Lighting as a PILOT.
For calendar year 2007, the Commission reallocated its common expenses between the two divisions. Formulas were
developed and used to establish the common expenses between the two utilities, in particular, Customer Service and
Collection Accounts and the Administrative and General Accounts.
Finally, the Commission "bundled" its wholesale electric rates beginning in July 2007. This was done in a fashion
whereby the operating income generated from the sales for resale was applied to the wholesale electric rates charged to
its retail customers.
HUTCHINSON UTILITIES COMMISSION
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2012
Capital Assets and Lona -Term Debt Activit
The Commission's investment in capital assets increased to $128,688,606 in 2012 from $119,974,190 in 2011. Capital
additions /expenditures included $7,010,039 for the downtown engine upgrade and building modification project. This
project accounted for 76% of all increase in capital assets in 2012. Refer to Note 4 of the Notes to the Financial
Statements for the Commission's 2012 capital asset activity.
At year -end, the Commission had $42,050,000 in bonds outstanding including an issuance in 2012 in the amount of
$20,720,000 for a revenue refunding bond. Refer to Note 6 of the Notes to the Financial Statements for a schedule
showing the Commission's long -term debt activity.
Economic Factors and Next Year's Budget
The Commission considered many factors when setting the fiscal year 2013 budget, rates, and fees that will be charged
to the users. Of particular significance for 2007 was the City and also the Commission used a formula approach to the
General Funds Transfer. In the past, the General Funds Transfer has been accounted for like a transfer. Beginning in
2007, the Commission began accounting for the General Funds Transfer like a Payment in Lieu of Taxes (PILOT). This
was done so that the Commission came into compliance with its by -laws. The practical result of this is the PILOT will
show as an expense item above the Operating Income. This practice continued in 2012 and will continue into 2013.
In addition, the Commission "bundled" its electric wholesale rate to its retail customers. What this means is the operating
income the Commission receives from its wholesale KWHR sales will be applied to the wholesale rate it charges its retail
customers to stabilize the rate it charges its retail customers.
Finally, in 2013, the Commission's electric division will realize $112,000 for a capacity contract sale to the Southern
Minnesota Municipal Power Agency.
Contact Information
Any questions regarding information contained in this report and requests for additional information should be addressed
to the Hutchinson Utilities Commission, 225 Michigan Street SE, Hutchinson, MN 55350 or by phone at (320) 587 -4746.
N
BASIC FINANCIAL STATEMENTS
HUTCHINSON UTILITIES COMMISSION
STATEMENT OF NET POSITION
DECEMBER 31, 2012
WITH PARTIAL COMPARATIVE AMOUNTS AS OF DECEMBER 31, 2011
2012 2011
ASSETS
Current Assets
Cash and Investments
$ 6,898,291 $
13,122,915
Accounts Receivable (Net of Allowance for Doubtful Accounts of
$77,601 and $75,985, Respectively)
3,580,941
3,331,171
Inventory
1,417,189
1,513,490
Sales Tax Receivable
205,517
118,708
Prepaid Items
38,586
29,538
Total Current Assets
12,140,524
18,115,822
Noncurrent Assets
Restricted Assets
Cash and Investments
23,497,597
380,755
Other Assets
Deferred Charges
611,238
409,054
MRES Agreement
1,551,437
2,082,222
Total Other Assets
2,162,675
2,491,276
Capital Assets
Assets Not Being Depreciated
13,818,262
6,902,428
Other Capital Assets, Net of Depreciation
65,185,360
66,283,398
Net Capital Assets
79,003,622
73,185,826
Total Noncurrent Assets
104,663,894
76,057,857
Total Assets
$ 116,804,418 $
94,173,679
LIABILITIES AND NET POSITION
Current Liabilities
Current Portion of Long -Term Debt
$ 3,393,045 $
2,124,228
Accounts Payable
2,495,738
2,493,152
Customer Deposits
364,912
303,342
Accrued Expenses
Interest
152,957
81,036
Salaries Payable
288,667
262,590
Total Current Liabilities
6,695,319
5,264,348
Long -Term Liabilities
Noncurrent Portion of Long -Term Debt
43,911,116
23,969,776
Total Liabilities
50,606,435
29,234,124
Net Position
Net Investment in Capital Assets 58,284,860 51,084,880
Restricted 194,548 380,755
Unrestricted 7,718,575 13,473,920
Total Net Position 66,197,983 64,939,555
Total Liabilities and Net Position $ 116,804,418 $ 94,173,679
See Accompanying Notes to the Financial Statements
10
HUTCHINSON UTILITIES COMMISSION
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
YEAR ENDED DECEMBER 31, 2012
WITH PARTIAL COMPARATIVE AMOUNTS FOR THE YEAR ENDED DECEMBER 31, 2011
OPERATING REVENUES
Electric Energy Sales
Natural Gas Sales
Other Operating Revenues
Total Operating Revenues
OPERATING EXPENSES
Production
Operations
Maintenance
Purchased Power /Gas
Other Power Supply
Transmission
Operations
Maintenance
Distribution
Operations
Maintenance
Customer Accounts Expense
Sales Expense
Administrative and General
Depreciation
Contribution to City of Hutchinson
Total Operating Expenses
Operating Income (Loss)
NONOPERATING REVENUES (EXPENSES)
Interest Income
Merchandise and Contract Work, Net
Miscellaneous Income
Gain (Loss) on Disposal of Assets
Bond Service Fees
Amortization of Development Study
Amortization of Bond Discount and Issuance Costs
Interest Expense - Customer Deposits
Interest Expense - Bonds
Total Nonoperating Revenues (Expenses)
Change in Net Position
NET POSITION, BEGINNING OF YEAR
NET POSITION, END OF YEAR
See Accompanying Notes to the Financial Statements
11
2012 2011
$ 26,998,808 $ 27,401,687
9,674,887 12,397,729
2,166,300 2,130,622
38,839,995 41,930,038
2,961,378
2,757,855
452,915
325,634
21,224,245
24,469,627
356,366
334,033
1,205,401 225,326
84,500 15,460
958,780
924,972
493,626
418,607
303,179
421,996
274,113
227,685
3,330,675
3,207,635
3,332,433
3,326,841
1,285,309
1,248,613
36,262,920
37,904,284
2,577,075
4,025,754
133,589
55,734
20,955
14,422
521,743
29,988
4,702
157,997
(1,850)
(1,850)
(473,196)
(725,078)
(38,051)
(31,067)
(351)
(847)
(1,486,188)
(1,156,691)
(1,318,647)
(1,657,392)
1,258,428
2,368,362
64,939,555 62,571,193
$ 66,197,983 $ 64,939,555
HUTCHINSON UTILITIES COMMISSION
STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 2012
WITH PARTIAL COMPARATIVE AMOUNTS FOR THE YEAR ENDED DECEMBER 31, 2011
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from Customers
Payments Received from Other Sources
Payments to Suppliers
Payments to Employees
Net Cash Provided (Used) by Operating Activities
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Other Noncapital Income
Development Study Income
Other Noncapital Expenses
Net Cash Provided (Used) by Noncapital Financing Activities
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Additions to Utility Plant
Principal Payments on Long -Term Debt
Bond Service Fees
Proceeds from Sale of Assets
Net proceeds from Debt Issuance
Interest Paid on Long -Term Debt
Net Cash Provided (Used) by Capital and Related Financing Activities
CASH FLOWS FROM INVESTING ACTIVITIES
Interest Income
Net Increase (Decrease) in Cash and Cash Equivalents
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS, END OF YEAR
RECONCILIATION OF CASH AND CASH EQUIVALENTS
Current Assets - Cash and Investments
Restricted Assets - Cash and Investments
Total Cash and Cash Equivalents
See Accompanying Notes to the Financial Statements
12
2012 2011
$ 36,485,495 $ 40,402,032
2,079,491 2,081,771
(28,722,744) (30,964,937)
(4,078,580) (3,932,526)
5,763,662 7,586,340
542,698 44,410
57,589 21,109
(351) (847)
599,936 64,672
(9,150,229) (3,827,934)
(2,106,138) (2,019,882)
(1,850) (1,850)
4,702
23,140,150
(1,414,267) (1,160,222)
10,472,368 (7,009,888)
56,252 55,734
16,892,218 696,858
13,503,670 12,806,812
$ 30,395,888 $ 13,503,670
$ 6,898,291 $ 13,122,915
23,497,597 380,755
$ 30,395,888 $ 13,503,670
HUTCHINSON UTILITIES COMMISSION
STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 2012
WITH PARTIAL COMPARATIVE AMOUNTS FOR THE YEAR ENDED DECEMBER 31, 2011
RECONCILIATION OF OPERATING INCOME (LOSS) TO CASH FLOWS FROM
OPERATING ACTIVITIES
Operating Income (Loss)
Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided (Used) by
Operating Activities
Depreciation
(Increase) Decrease in Assets
Accounts Receivable
Inventory
Sales Tax Receivable
Prepaid Items
Increase (Decrease) in Liabilities
Accounts Payable
Customer Deposits
Salaries Payable
Compensated Absences
Net Cash Provided (Used) by Operating Activities
See Accompanying Notes to the Financial Statements
13
2012 2011
$ 2,577,075 $ 4,025,754
3,332,433 3,326,841
(249,770)
602,616
96,301
14,370
(86,809)
(48,851)
(9,048)
355
2,586
(465,118)
61,570
48,872
26,077
80,892
13,247
609
$ 5,763,662 $ 7,586,340
HUTCHINSON UTILITIES COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2012
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. REPORTING ENTITY
Hutchinson Utilities Commission, a fund of the City of Hutchinson, Minnesota, is governed by five
members who are appointed by the Council of the City of Hutchinson, Minnesota. The accompanying
financial statements present only the Hutchinson Utilities Commission fund and are not intended to
present fairly the financial position of the City of Hutchinson, Minnesota.
The financial statements present the Commission and its component units. The Commission includes all
funds, account groups, organizations, institutions, agencies, departments and offices that are not legally
separate from such. Component units are legally separate organizations for which the appointed officials
of the Commission are financially accountable and are included within the financial statements of the
Commission because of the significance of their operational or financial relationships with the
Commission.
The Commission is considered financially accountable for a component unit if it appoints a voting majority
of the organization's governing body and is able to impose its will on the organization by significantly
influencing the programs, projects, activities or level of services performed or provided by the organization
or there is a potential for the organization to provide specific financial benefits to or impose specific
financial burdens on the Commission.
As a result of applying the component unit definition criteria above, it has been determined the
Commission has no component units.
B. FUND ACCOUNTING
The operations of the Commission are recorded as a proprietary fund. The proprietary fund is used to
account for operations (a) that are financed and operated in a manner similar to private business
enterprises - where the intent of the governing body is that the costs (expenses, including depreciation) of
providing goods or services to the general public on a continuing basis be financed or recovered primarily
through user charges; or (b) where the governing body has decided that periodic determination of
revenues earned, expenses incurred, and /or net income is appropriate for capital maintenance, public
policy, management control, accountability or other purposes.
C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION
The financial statements include the operations of the City of Hutchinson Municipal Utilities. The Electric
and Natural Gas divisions are treated as a single enterprise fund of the City of Hutchinson, Minnesota.
The Utilities are governed by the Hutchinson Utilities Commission, which is appointed by the City Council.
No other operations are controlled by the Hutchinson Utilities Commission. The accounts of the
Commission are organized on the basis of fund accounting. The operation of the fund is accounted for
with a separate set of self - balancing accounts that comprise its assets, liabilities, net position, revenues,
and expenses. Government resources are allocated to and accounted for in the individual fund based
upon the purposes for which they are to be spent and the means by which spending activities are
controlled.
Basis of accounting refers to when revenues and expenses are recognized in the accounts and reported
in the financial statements. Basis of accounting relates to the timing of the measurements made,
regardless of the measurement focus applied.
14
HUTCHINSON UTILITIES COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2012
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION
(Cont'd)
The proprietary fund is accounted for using the accrual basis of accounting and economic resources
measurement focus. Revenues are recognized when earned, and expenses are recognized when
incurred. Revenue from electricity and gas sales is reflected in the accounts only at the time such
revenue is actually billed to customers. Accordingly, no recognition is given in the accounts for revenue
from sales between established cycle billing dates.
The proprietary fund distinguishes operating revenues and expenses from nonoperating items. Operating
revenues and expenses generally result from providing services and producing and delivering goods in
connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the
enterprise funds are charges to customers for sales and services. Operating expenses for enterprise
funds include the cost of sales and services, administrative expenses, and depreciation of capital assets.
All revenues and expenses not meeting this definition are reported as nonoperating revenues and
expenses.
It is generally the Commission's policy to use restricted resources first, then unrestricted resources as
they are needed when an expense is incurred for purposes for which both restricted and unrestricted net
position is available.
D. DEPOSITS AND INVESTMENTS
The Commission's cash and cash equivalents are considered to be cash on hand, deposits and highly
liquid debt instruments purchased with original maturities of three months or less from the date of
acquisition.
Minnesota Statutes authorize the Commission to invest in obligations of the U.S. Treasury, agencies and
instrumentalities, shares of investment companies whose only investments are in the aforementioned
securities, obligations of the State of Minnesota or its municipalities, bankers' acceptances, future
contracts, repurchase and reverse repurchase agreements and commercial paper of the highest quality
with a maturity of no longer than 270 days and in the Minnesota Municipal Investment Pool. Investments
are stated at fair value.
Cash and investments at December 31, 2012, were comprised of deposits, money market accounts and
a U.S. Treasury note.
The Commission does not have an investment policy that further limits its investment choices.
Custodial Credit Risk - Deposits: For deposits, this is the risk that in the event of bank failure, the
Commission's deposits may not be returned to it. Minnesota Statutes requires that all Commission
deposits be protected by insurance, surety bond, or collateral. The market value of collateral pledged
must equal 110 percent.
Interest Rate Risk: This is the risk that market values of securities in a portfolio would decrease due to
changes in market interest rates.
15
HUTCHINSON UTILITIES COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2012
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
D. DEPOSITS AND INVESTMENTS (Cont'd)
Credit Risk: Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its
obligations. State law limits investments in commercial paper and corporate bonds to the top two ratings
issued by nationally recognized statistical rating organizations.
Concentration of Credit Risk: This is the risk of loss attributed to the magnitude of an investment in a
single issuer. Investments should be diversified to avoid incurring unreasonable risk inherent in over
investing in specific instruments, individual financial institutions or maturities. The Commission places no
limit on the amount the Commission may invest in any one issuer.
Custodial Credit Risk - Investments: For an investment, this is the risk that in the event of the failure of
the counterparty, the Commission will not be able to recover the value of its investments or collateral
securities that are in the possession of an outside party.
E. RECEIVABLES AND OPERATING REVENUES AND EXPENSES
An allowance for doubtful accounts is recorded based on historical electric and natural gas revenues,
historical loss levels, and an analysis of the collectability of individual accounts.
Meters are read throughout the month and revenues are recognized when utility services are billed to
customers. Hutchinson Utilities Commission did not accrue revenues for services provided but not billed
at the end of the year.
Monthly billings from the wholesale power and natural gas suppliers, which are for power and natural gas
costs to the last day of the month, are reflected in the accounts.
F. INVENTORY
Inventories of materials and supplies are recorded at average cost, which does not exceed market.
G. PREPAID ITEMS
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as
prepaid items in the financial statements.
16
HUTCHINSON UTILITIES COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2012
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
H. CAPITAL ASSETS
Capital assets, both tangible and intangible, are recorded at cost. The cost of additions to capital assets
includes contracted work, direct labor, and materials. Repairs, replacement, and the renewal of items
determined to be less than units of property are charged to maintenance.
Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest
incurred during the construction phase of capital assets is included as part of the capitalized value of the
assets constructed. During the current period, the Commission did not have any capitalized interest.
Depreciation of capital assets is computed using the straight -line method over the estimated service lives
of the various assets as follows:
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
I. COMPENSATED ABSENCES
A liability for compensated absences is accrued and recorded as compensation in the period earned.
Nonunion employees can accrue a maximum of 200 hours per year of vacation pay, with a maximum
carryover of 200 hours. Vacation pay is 100% payable at severance of employment. A maximum of 720
hours can be accrued for sick leave. After accumulation of 720 hours, a payback of one -third of the
amount over 720 hours will be made annually. Upon retirement or death before retirement, a payback of
one -third of the amount over 240 hours will be made.
Union employees can accrue a maximum of 200 hours per year of vacation pay, with a maximum
carryover of 40 hours. Vacation pay is 100% payable at severance of employment. A maximum of 1,264
hours of sick leave can be accrued. Upon retirement, union employees shall be paid one hour of sick
leave per eight hours of unused sick leave at the rate of pay upon retirement.
J. POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS
Employees of the Commission pay premiums based on a negotiated schedule. Since the insurance rate
is not based on age, the Commission has an implicit rate subsidy factor in postemployment health care
expenses. Additionally, Minnesota Statutes require the Commission to allow retired employees to stay on
the health care plan with the retiree responsible to pay the entire premium for continuation coverage. The
Commission's bargaining agreement and personnel policy do not provide for any contributions upon
employee retirement. Any liability for other postemployment benefits is considered immaterial and not
recognized in the financial statements.
17
HUTCHINSON UTILITIES COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2012
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
K. LONG -TERM OBLIGATIONS
Long -term debt and other long -term obligations are reported as liabilities in the financial statements.
Bond issuance costs, bond discounts, and bond premiums are amortized over the terms of the related
bond issues.
L. BUDGETS AND BUDGETARY ACCOUNTING
The General Manager is responsible for preparing and submitting an annual budget. Budgets are
adopted on a basis consistent with accounting principles generally accepted in the United States of
America.
M. NET POSITION
The Commission adopted the provisions of Governmental Accounting Standards Board Statement No.
63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net
Position for the year ended December 31, 2012. This standard changed the net asset classifications in
the financial statements.
N. USE OF ESTIMATES
The preparation of the financial statements in conformity with U.S. generally accepted accounting
principles requires management to make estimates and assumptions that affect the reported amount of
assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
O. PRIOR YEAR INFORMATION
The basic financial statements include certain prior -year partial comparative information in total but not at
the level of detail required for a presentation in conformity with U.S. generally accepted accounting
principles. Accordingly, such information should be read in conjunction with the government's financial
statements for the year ended December 31, 2011, from which the partial information was derived.
18
NOTE 2.
HUTCHINSON UTILITIES COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2012
DEPOSITS AND INVESTMENTS
A. DEPOSITS
In accordance with applicable Minnesota Statutes, Hutchinson Utilities Commission maintains deposits at
depository banks authorized by the Commission.
Custodial Credit Risk - Deposits: As of December 31, 2012, the Commission's bank balances were not
exposed to custodial credit risk because they were fully insured through the FDIC as well as collateralized
with securities held by the pledging financial institution's trust department or agent in the Commission's
name.
Deposits in Bank
Petty Cash
Amounts with Escrow Agent
Total Deposits
B. INVESTMENTS
$ 9,086,135
850
666,585
$ 9,753,570
As of December 31, 2012, the Commission had the following investment:
Weighted
Fair Average Credit
Value Maturity (Years) Ratings
U.S. Treasury Note $ 20,642,318 0.42 AA+
Concentration of Credit Risk: As of December 31, 2012, the Commission was exposed to concentration
of credit risk due to the fact 100% of the Commission investments were in one investment.
The following is a summary of total deposits and investments:
Deposits (Note 2.A.) $ 9,753,570
Investments with Escrow Agent 20,642,318
Total Deposits and Investments $ 30,395,888
Deposits and investments are presented in the December 31, 2012 basic financial statements as follows:
Current Assets
Cash and Investments $ 6,898,291
Noncurrent Assets
Restricted Assets
Cash and Investments 23,497,597
Total Deposits and Investments $ 30,395,888
19
HUTCHINSON UTILITIES COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2012
NOTE 3. DEPOSITS AND INVESTMENTS - RESTRICTED
Restricted cash and investments are designated by bond covenants for specific purposes. At December 31,
2012 and 2011, restricted cash consisted of the following:
2012 2011
Public Utility Revenue Bond Sinking Fund - 2003
Funds designated under bond resolution which require monthly
deposits of amounts necessary to meet annual principal and interest
payments with an escrow agent. $ 666,585 $ 380,755
Escrow Agent
Funds appropriated for the principal and interest payments to
become due on the portion of the 2003 bonds that are callable on
December 1, 2013. 20,642,318
Reserve Accounts
Funds required to be held in amount equal to the maximum amount
of principal and interest to become due on the bonds during the year. 2,188,694
Total Cash and Investments - Restricted $ 23,497,597 $ 380,755
The following items have been designated by the Commission for the following purposes:
2012 2011
Rate Stabilization - Electric $
Rate Stabilization - Gas
Payment in Lieu of Taxes
Catastrophic
Development Study
Expansion and Development Reserve Account
320,008 $
374,464
309,089
601,867
1,403,076
1,136,724
500,000
500,000
286,123 790,629
Funds designated for the expansion and development of the utility 1,576,183 2,659,700
$ 4,394,479 $ 6,063.384
The above Commission designated amounts are included in the Current Assets -Cash and Investments total.
20
HUTCHINSON UTILITIES COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2012
NOTE 4. CAPITAL ASSETS
Capital asset activity for the year ended December 31, 2012, was as follows:
Capital Assets, Not Being
Depreciated
Land
Construction in Progress
Easements
Total Capital Assets,
Not Being Depreciated
Capital Assets, Being Depreciated
Structures and Improvements
Equipment
Software
Total Capital Assets,
Being Depreciated
Less Accumulated Depreciation for
Structures and Improvements
Equipment
Software
Total Accumulated
Depreciation
Total Capital Assets, Being
Depreciated, Net
Net Capital Assets
Beginning
Balance
$ 559,527 $
2,312,141
4,030,760
6,902,428
Increase Decrease
7,028,539 (112,705)
7,028,539 (112,705)
Ending
Balance
$ 559,527
9,227,975
4,030,760
13,818,262
98,456,003
1,638,198
100,094,201
14,137,407
559,197
(435,813)
14,260,791
478,352
37,000
515,352
113,071,762
2,234,395
(435,813)
114,870,344
39,348,079
2,724,694
42,072,773
7,136,650
539,861
(435,813)
7,240,698
303,635
67,878
371,513
46,788,364
3,332,433
(435,813)
49,684,984
66,283,398
(1,098,038)
0
65,185,360
$ 73,185,826
$ 5,930,501
$ (112,705)
$ 79,003,622
21
HUTCHINSON UTILITIES COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2012
NOTE 5. INVENTORY
Inventory consists of the following:
Electric Division
Fuel Oil and Lubricants
Plant Systems Material
Engine Parts
Distribution Materials
Transformers
Total Electric Division
Natural Gas Division
Fittings
Transmission Line Gas
Total Natural Gas Division
Total Inventory
NOTE 6. LONG -TERM DEBT
A. COMPONENTS OF LONG -TERM DEBT
2012 2011
$ 89,363 $
125,043
13,100
13,100
305,796
369,068
448,424
425,146
127,733
142,813
984,416
1,075,170
129,203
134,750
303,570
303,570
432,773
438,320
$ 1,417,189 $ 1,513,490
Total Long -Term Debt $ 47,304,161 $ 26,094,004
On March 31, 2003, the Hutchinson Utilities Commission issued Public Utility Revenue Bonds of 2003 for
$31,725,000. $3,340,000 of the issue was used for the refunding of the Temporary Public Utility Revenue
Bonds of 2001, and $28,385,000 was used for the natural gas pipeline project.
On March 31, 2010, Hutchinson Utilities Commission signed a repayment agreement with Missouri River
Energy Services (MRES) for the Big Stone II Plant. The Commission will pay equal monthly installments
beginning April 1, 2010 and ending March 1, 2015.
On July 19, 2012, Hutchinson Utilities Commission issued Public Utility Revenue Refunding Bonds,
Series 2012A for $20,720,000, with an interest rate of 4.00% to 5.00 %. The Commission issued the
bonds to advance refund a portion of the 2013 through 2025 maturities of the Public Utility Revenue
Bonds, Series 20038. The Commission completed the refunding to reduce its debt service payment over
the next 14 years by $1,638,277. This results in an economic gain (difference between the present
values of the debt service payments on the old and new debt) of $1,245,620.
22
Interest
Final
Balance Outstanding
Rates
Maturity
2012
2011
Public Utility Revenue Bonds,
Series 2003B
3.750 - 4.625%
12/1/2025
$ 21,330,000
$ 22,510,000
Public Utility Revenue Refunding
Bonds, Series 2012A
4.00 -5.00%
12/1/2026
20,720,000
Bond Premium
2,583,049
MRES Agreement
4.00%
3/1/2015
2,224,115
3,150,253
Compensated Absences
446,997
433,751
Total Long -Term Debt $ 47,304,161 $ 26,094,004
On March 31, 2003, the Hutchinson Utilities Commission issued Public Utility Revenue Bonds of 2003 for
$31,725,000. $3,340,000 of the issue was used for the refunding of the Temporary Public Utility Revenue
Bonds of 2001, and $28,385,000 was used for the natural gas pipeline project.
On March 31, 2010, Hutchinson Utilities Commission signed a repayment agreement with Missouri River
Energy Services (MRES) for the Big Stone II Plant. The Commission will pay equal monthly installments
beginning April 1, 2010 and ending March 1, 2015.
On July 19, 2012, Hutchinson Utilities Commission issued Public Utility Revenue Refunding Bonds,
Series 2012A for $20,720,000, with an interest rate of 4.00% to 5.00 %. The Commission issued the
bonds to advance refund a portion of the 2013 through 2025 maturities of the Public Utility Revenue
Bonds, Series 20038. The Commission completed the refunding to reduce its debt service payment over
the next 14 years by $1,638,277. This results in an economic gain (difference between the present
values of the debt service payments on the old and new debt) of $1,245,620.
22
NOTE 6
HUTCHINSON UTILITIES COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2012
LONG -TERM DEBT (Cont'd)
B. MINIMUM DEBT PAYMENTS
Annual debt service requirements to maturity for bonded debt and the MRES agreement are as follows:
Year Ending
December 31
Revenue Bonds, Series 2003B
Principal Interest
2013
$ 1,230,000
$ 928,189
2014
1,280,000
881,449
2015
1,335,000
831,529
2016
1,400,000
778,129
207
1,465,000
720,729
2018 -2022
8,455,000
2,600,069
2023 -2026
6,165,000
579,975
$ 21,330,000
$ 7,320,069
Year Ending
MRES Agreement
December 31
Principal
Interest
2013
$ 963,869
$ 71,421
2014
1,003,139
32,152
2015
257,107
1,716
$ 2,224,115 $ 105,289
C. CHANGES IN LONG -TERM LIABILITIES
Beginning
Balance Additions
Revenue Bonds $ 22,510,000 $
Revenue Refunding
Bonds 20,720,000
Bond Premium 2,660,386
MRES Agreement 3,150,253
Compensated
Refunding Bonds, Series 2012A
Principal Interest
$ 995,000
$ 907,300
1,050,000
867,500
1,100,000
825,500
1,160, 000
781,500
1,220,000
735,100
7,415,000
2,727,000
7,780,000
919,350
$ 20,720,000 $ 7,763,250
Ending Due Within
Reductions Balance One Year
(1,180,000) $ 21,330,000 $ 1,230,000
20,720,000 995,000
(77,337) 2,583,049 185,604
(926,138) 2,224,115 963,869
Absences 433,751 322,870 (309,624) 446,997 18,572
$ 26,094,004 $ 23,703,256 $ (2,493,099) $ 47,304,161 $ 3,393,045
23
HUTCHINSON UTILITIES COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2012
NOTE 7. RISK MANAGEMENT
The Commission purchases commercial insurance coverage through the League of Minnesota Cities
Insurance Trust (LMCIT), which is a public entity risk pool currently operating as a common risk management
and insurance program, with cities in the state. The Commission pays an annual premium to the LMCIT for
its insurance coverage. The LMCIT is self- sustaining through commercial companies for excess claims.
The Commission is covered through the pool for any claims incurred but unreported, but retains risk for the
deductible portion of its insurance policies. The amount of these deductibles is considered immaterial to the
financial statements.
There were no significant reductions in insurance from the previous year or settlements in excess of
insurance coverage for any of the past three fiscal years.
The Commission's workers' compensation insurance policy is retrospectively rated. With this type of policy,
final premiums are determined after loss experience is known. The amount of premium adjustment for 2012
is estimated to be immaterial based on workers' compensation rates and salaries for the year.
At December 31, 2012, there are no other claims liabilities reported in the funds based on the requirements
of accounting standards, which requires that a liability for claims be reported if information prior to the
issuance of the financial statements indicates it is probable that a liability has been incurred at the date of the
financial statements and the amount of the loss can be reasonably estimated.
NOTE 8. DEFINED BENEFIT PENSION PLANS - STATEWIDE
A. PLAN DESCRIPTION
All full -time and certain part-time employees of the Commission are covered by defined benefit plans
administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers
the General Employees Retirement Fund (GERF), which is a cost - sharing, multiple - employer retirement
plan. This plan is established and administered in accordance with Minnesota Statutes, Chapters 353
and 356.
GERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are
covered by Social Security and Basic Plan members are not. All new members must participate in the
Coordinated Plan.
PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors
upon death of eligible members. Benefits are established by state statute, and vest after three years of
credited service. The defined retirement benefits are based on a member's highest average salary for
any five successive years of allowable service, age, and years of credit at termination of service.
Two methods are used to compute benefits for PERA's Coordinated and Basic Plan members. The
retiring member receives the higher of a step -rate benefit accrual formula (Method 1) or a level accrual
formula (Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2 percent of
average salary for each of the first 10 years of service and 2.7 percent for each remaining year. The
annuity accrual rate for a Coordinated Plan member is 1.2 percent of average salary for each of the first
10 years and 1.7 percent for each remaining year. Under Method 2, the annuity accrual rate is 2.7
percent of average salary for Basic Plan members and 1.7 percent for Coordinated Plan members for
each year of service. For GERF members hired prior to July 1, 1989 whose annuity is calculated using
Method 1, a full annuity is available when age plus years of service equal 90.
24
HUTCHINSON UTILITIES COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2012
NOTE 8. DEFINED BENEFIT PENSION PLANS - STATEWIDE (Cont'd)
A. PLAN DESCRIPTION (Cont'd)
Normal retirement age is 65 for Basic and Coordinated members hired prior to July 1, 1989. Normal
retirement age is the age for unreduced Social Security benefits capped at 66 for Coordinated members
hired on or after July 1, 1989. A reduced retirement annuity is also available to eligible members seeking
early retirement.
There are different types of annuities available to members upon retirement. A single -life annuity is a
lifetime annuity that ceases upon the death of the retiree -no survivor annuity is payable. There are also
various types of joint and survivor annuity options available which will be payable over joint lives.
Members may also leave their contributions in the fund upon termination of public service in order to
qualify for a deferred annuity at retirement age. Refunds of contributions are available at any time to
members who leave public service, but before retirement benefits begin.
The benefit provisions stated in the previous paragraphs of this section are current provisions and apply
to active plan participants. Vested, terminated employees who are entitled to benefits but are not
receiving them yet are bound by the provisions in effect at the time they last terminated their public
service.
PERA issues a publicly available financial report that includes financial statements and required
supplementary information for GERF. That report may be obtained on the Internet at www.mnpera.org,
by writing to PERA at 60 Empire Drive #200, St. Paul, Minnesota, 55103 -2088 or by calling (651) 296-
7460 or 1- 800 - 652 -9026.
B. FUNDING POLICY
Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. These statutes
are established and amended by the state legislature. The Commission makes annual contributions to
the pension plans equal to the amount required by state statutes. GERF Basic Plan members and
Coordinated Plan members were required to contribute 9.10% and 6.25 %, respectively, of their annual
covered salary in 2012. In 2012, the Commission was required to contribute the following percentages of
annual covered payroll: 11.78% for Basic Plan members and 7.25% for Coordinated Plan members.
The Commission's contributions to the Public Employees Retirement Fund for the years ending
December 31, 2012, 2011, and 2010 were $293,317, $288,923, and $270,265, respectively. The
Commission's contributions were equal to the contractually required contributions for each year as set by
state statute.
NOTE 9. DEFERRED COMPENSATION PLAN
The Commission offers its employees a deferred compensation plan created in accordance with Internal
Revenue Code Section 457. The plan, available to all Commission employees, permits them to defer a
portion of their salary into future years. Participation in the plan is optional. The deferred compensation is
not available to employees until termination, retirement, death or unforeseeable emergency.
Investments are managed by the plan's trustee under one of four investment options, or a combination
thereof. The choice of the investment option(s) is made by the participants.
25
HUTCHINSON UTILITIES COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2012
NOTE 10. COMMITMENTS
The Commission has the following project in progress as of December 31, 2012:
Project
Original
Contract Remaining
Amounts Commitments
Downtown Engine Upgrade and Building Modification Project $ 9,449,682 $ 1,145,204
The Commission is committed to purchase 25 MW of its power requirements from Missouri River Power
Company pursuant to the Power Sale Agreement dated April 28, 2010. This contract is effective through
January 1, 2046.
NOTE 11. MAJOR CUSTOMERS
For the years ended December 31, 2012 and 2011, the Electric Division derived approximately 46% and 50%
respectively, of utility revenue from the top five major industrial customers.
For the years ended December 31, 2012 and 2011, the Natural Gas Division derived approximately 32% and
38% respectively, of its utility revenue from the top five major industrial customers.
NOTE 12. NET POSITION
2012 2011
Net Investment in Capital Assets
Net Capital Assets $ 79,003,622 $ 73,185,826
Deferred Charges 611,238 409,054
Revenue Bonds Payable (21,330,000) (22,510,000)
$ 58.284,860 $ 51,084,880
Restricted
Cash and Investments Designated by Bond Covenants for Specific
Purposes $ 23,497,597 $ 380,755
Revenue Refunding Bonds Payable (20,720,000)
Bond Premium (Unamortized) (2,583,049)
$ 194,548 $ 380,755
NOTE 13. RECLASSIFICATIONS
Certain prior year financial statement amounts have been reclassified to conform to the current year's
presentation. There was no affect on total Net Position.
26
SUPPLEMENTARY INFORMATION
HUTCHINSON UTILITIES COMMISSION
COMBINING STATEMENT OF NET POSITION
DECEMBER 31, 2012
ASSETS
Current Assets
Cash and Investments
Accounts Receivable (Net of Allowance for Doubtful Accounts of
$77,601 and $75,985, Respectively)
Inventory
Sales Tax Receivable
Prepaid Items
Total Current Assets
Noncurrent Assets
Restricted Assets
Cash and Investments
Other Assets
Deferred Charges
MRES Agreement
Total Other Assets
Capital Assets
Assets Not Being Depreciated
Other Capital Assets, Net of Depreciation
Net Capital Assets
Total Noncurrent Assets
Total Assets
LIABILITIES AND NET POSITION
Current Liabilities
Current Portion of Long -Term Debt
Bonds Payable
Bond Premium
MRES Agreement
Accrued Vacation
Accounts Payable
Customer Deposits
Accrued Expenses
Interest
Salaries Payable
Total Current Liabilities
Long -Term Liabilities
Noncurrent Portion of Long -Term Debt
Bonds Payable
Bond Premium
MRES Agreement
Accrued Vacation
Accrued Severance
Total Long -Term Liabilities
Total Liabilities
Net Position
Net Investment in Capital Assets
Restricted
Unrestricted
Total Net Position
Total Liabilities and Net Position
Supplementary Information - See Auditor's Report
27
Natural
Electric Gas
Division Division Total
6,032,493 $ 865,798 $ 6,898,291
2,018,199
1,562,742
3,580,941
984,416
432,773
1,417,189
205,517
57,411,176
205,517
19,000
19,586
38,586
9,259,625
2,880,899
12,140,524
33,329
23,464,268
23,497,597
22,679
588,559
611,238
1,551,437
64,466
1,551,437
1,574,116
588,559
2,162,675
9,918,343
35,726,930
3,899,919
29,458,430
13,818,262
65,185,360
45,645,273
33,358,349
79,003,622
47,252,718
57,411,176
104,663,894
$ 56,512,343 $ 60,292,075 $ 116,804,418
$ 135,000 $
2,090,000 $
2,225,000
33,329
185,604
185,604
963,869
1,457,334
963,869
14,466
4,106
18,572
1,507,418
988,320
2,495,738
237,193
127,719
364,912
3,786
149,171
152,957
224,201
64,466
288,667
3,085,933
3,609,386
6,695,319
960,000
38,865,000
39,825,000
2,397,445
2,397,445
1,260,246
1,260,246
278,955
73,905
352,860
59,687
15,878
75,565
2,558,888
41,352,228
43,911,116
5,644,821
44,961,614
50,606,435
44,572,952
13,711,908
58,284,860
33,329
161,219
194,548
6,261,241
1,457,334
7,718,575
50,867,522
15,330,461
66,197,983
$ 56,512,343 $ 60,292,075 $ 116,804,418
HUTCHINSON UTILITIES COMMISSION
COMBINING STATEMENT OF REVENUES AND EXPENSES
YEAR ENDED DECEMBER 31, 2012
OPERATING REVENUES
Electric Energy Sales
Natural Gas Sales
Other Operating Revenues
Total Operating Revenues
OPERATING EXPENSES
Production
Operations
Maintenance
Purchased Power /Gas
Other Power Supply
Transmission
Operations
Maintenance
Distribution
Operations
Maintenance
Customer Accounts Expense
Sales Expense
Administrative and General
Depreciation
Contribution to City of Hutchinson
Total Operating Expenses
Operating Income (Loss)
NONOPERATING REVENUES (EXPENSES)
Interest Income
Merchandise and Contract Work, Net
Miscellaneous Income
Gain (Loss) on Disposal of Assets
Bond Service Fees
Amortization of Development Study
Amortization of Bond Discount and Issuance Costs
Interest Expense - Customer Deposits
Interest Expense - Bonds
Total Nonoperating Revenues (Expenses)
Change in Net Position
Supplementary Information - See Auditor's Report
28
2012
Electric Natural Gas
Division Division Total
$ 26,998,808 $ $ 26,998,808
9,674,887 9,674,887
310,828 1,855,472 2,166,300
27,309,636 11,530,359 38,839,995
2,961,378
2,961,378
452,915
452,915
14,823,407
6,400,838
21,224,245
356,366
356,366
1,099,669
105,732
1,205,401
72,590
11,910
84,500
566,646
392,134
958,780
267,201
226,425
493,626
166,748
136,431
303,179
205,585
68,528
274,113
2,386,363
944,312
3,330,675
2,289,200
1,043,233
3,332,433
887,456
397,853
1,285,309
26,535,524
9,727,396
36,262,920
774,112
1,802,963
2,577,075
28,126
105,463
133,589
(20,360)
41,315
20,955
294,300
227,443
521,743
4,582
120
4,702
(1,850)
(1,850)
(473,196)
(473,196)
(1,864)
(36,187)
(38,051)
(351)
(351)
(159,221)
(1,326,967)
(1,486,188)
(329,483)
(989,164)
(1,318,647)
$ 444,629 $ 813,799 $ 1,258,428
HUTCHINSON UTILITIES COMMISSION
STATEMENT OF NET POSITION
ELECTRIC DIVISION
DECEMBER 31, 2012
WITH PARTIAL COMPARATIVE AMOUNTS AS OF DECEMBER 31, 2011
ASSETS
Current Assets
Cash and Investments
Accounts Receivable (Net of Allowance for Doubtful Accounts of
$50,441 and $41,494, Respectively)
Inventory
Sales Tax Receivable
Prepaid Items
Total Current Assets
Noncurrent Assets
Restricted Assets
Cash and Investments
Other Assets
Deferred Charges
MRES Agreement
Total Other Assets
Capital Assets
Assets Not Being Depreciated
Other Capital Assets, Net of Depreciation
Net Capital Assets
Total Noncurrent Assets
Total Assets
LIABILITIES AND NET POSITION
Current Liabilities
Current Portion of Long -Term Debt
Bonds Payable
MRES Agreement
Accrued Vacation
Accounts Payable
Customer Deposits
Accrued Expenses
Interest
Salaries Payable
Total Current Liabilities
Long -Term Liabilities
Noncurrent Portion of Long -Term Debt
Bonds Payable
MRES Agreement
Accrued Vacation
Accrued Severance
Total Long -Term Liabilities
Total Liabilities
Net Position
Net Investment in Capital Assets
Restricted
Unrestricted
Total Net Position
Total Liabilities and Net Position
Supplementary Information - See Auditor's Report
29
2012 2011
6,032,493 $ 12,317,656
2,018,199
1,822,125
984,416
1,075,170
205,517
118,708
19,000
14,118
9,259,625
15,347,777
33,329 22,845
22,679 24,543
1,551,437 2,082,222
1,574,116 2,106,765
9,918,343
35,726,930
3,002,460
36,565,108
45,645,273
39,567,568
47,252,718
41,697,178
$ 56,512,343 $ 57,044,955
$ 135,000 $
135,000
963,869
926,137
14,466
13,923
1,507,418
1,516,615
237,193
182,005
3,786
4,207
224,201
206,345
3,085,933
2,984,232
960,000
1,095,000
1,260,246
2,224,116
278,955
264,544
59,687
54,170
2,558,888
3,637,830
5,644,821
6,622,062
44,572,952
38,362,111
33,329
22,845
6,261,241
12,037,937
50,867,522
50,422,893
$ 56,512,343 $ 57,044,955
HUTCHINSON UTILITIES COMMISSION
DETAILED STATEMENT OF REVENUES AND EXPENSES
BUDGET AND ACTUAL - ELECTRIC DIVISION
YEAR ENDED DECEMBER 31, 2012
WITH PARTIAL COMPARATIVE AMOUNTS FOR THE YEAR ENDED DECEMBER 31, 2011
Other Operating Revenues
Penalties /Fees
220,000
2012
79,693
295,586
Security Lights
15,000
11,002
Over (Under)
2011
Pole Rental
Budget
Actual
Budget
Actual
OPERATING REVENUES
238,000
310,828
72,828
306,435
Utility Revenues
28,730,433
27,309,636
(1,420,797)
27,708,122
Residential
$ 5,550,000
$ 5,202,559
$ (347,441)
$ 5,255,333
General Service
10,150,000
9,264,941
(885,059)
9,075,811
Industrial
11,872,432
10,763,758
(1,108,674)
11,692,880
Street Lighting
120,001
148,968
28,967
143,378
Resale
800,000
1,618,582
818,582
1,234,285
Total Utility Revenues
28,492,433
26,998,808
(1,493,625)
27,401,687
Other Operating Revenues
Penalties /Fees
220,000
299,693
79,693
295,586
Security Lights
15,000
11,002
(3,998)
10,585
Pole Rental
3,000
133
(2,867)
264
Total Other Operating Revenues
238,000
310,828
72,828
306,435
Total Operating Revenues
28,730,433
27,309,636
(1,420,797)
27,708,122
OPERATING EXPENSES
Production
16,752,019
14,823,407
(1,928,612)
15,440,923
Operations
Supervision and Engineering
868,100
906,836
38,736
893,740
Other Employee Benefits
70,000
86,397
16,397
85,732
Fuels
30,500
37,213
6,713
42,857
Station
90,650
111,917
21,267
71,478
Gas for Generation
585,600
697,922
112,322
549,970
Transportation
1,100,000
1,100,000
1,100,000
Waste Disposal
15,000
21,093
6,093
14,077
Total Operations
2,759,850
2,961,378
201,528
2,757,855
Maintenance
Structures
1,000
822
(178)
526
Generating Units
190,000
291,684
101,684
212,140
Other Equipment
98,000
160,409
62,409
112,968
Total Maintenance
289,000
452,915
163,915
325,634
Total Production
3,048,850
3,414,293
365,443
3,083,488
Power Costs
Purchased Power
16,752,019
14,823,407
(1,928,612)
15,440,923
Supplementary Information - See Auditor's Report
30
HUTCHINSON UTILITIES COMMISSION
DETAILED STATEMENT OF REVENUES AND EXPENSES
BUDGET AND ACTUAL - ELECTRIC DIVISION
YEAR ENDED DECEMBER 31, 2012
WITH PARTIAL COMPARATIVE AMOUNTS FOR THE YEAR ENDED DECEMBER 31, 2011
OPERATING EXPENSES (Cont'd)
Other Power Supply
Supervision and General Salaries
Training
Professional Services
Total Other Power Supply
Transmission
Operations
Transmission
Station
Total Operations
Maintenance
Plant and Equipment
Total Transmission
Distribution
Operations
Supervision and Engineering
Line
Meter
Territory Service Agreement
Other
Total Operations
Maintenance
Station Equipment
Underground Lines
Lines Transformers
Street Lighting
Other Equipment
Total Maintenance
Total Distribution
Customer Accounts Expense
Meter Reading
Collection
Other Employee Benefits
Uncollectible Accounts
Customer Services
Meetings and Training
Total Customer Accounts Expense
Supplementary Information - See Auditor's Report
2012
Over (Under) 2011
Budget Actual Budget Actual
$ 260,000 $ 278,664 $ 18,664 $ 272,056
4,721 4,721 12
65,000 72,981 7,981 61,965
325,000 356,366 31,366 334,033
969,927 969,927
141,000 129,742 (11,258) 129,826
141,000 1,099,669 958,669 129,826
68,000 72,590 4,590 12,498
209,000 1,172,259 963,259 142,324
331,000
331,147
147
314,012
48,000
71,222
23,222
61,163
21,000
30,932
9,932
12,947
26,763
26,763
23,513
118,000
106,582
(11,418)
111,453
518,000
566,646
48,646
523,088
12,000
6,786
(5,214)
14,596
105,000
131,927
26,927
95,883
9,000
10,595
1,595
6,633
75,000
71,247
(3,753)
68,667
37,500
46,646
9,146
43,995
238,500
267,201
28,701
229,774
756,500
833,847
77,347
752,862
30,250
30,835
585
83,901
110,000
81,055
(28,945)
115,041
4,785
5,343
558
4,729
11,000
3,191
(7,809)
3,734
43,450
44,819
1,369
44,086
1,100
1,505
405
1,707
200,585
166,748
(33,837)
253,198
31
HUTCHINSON UTILITIES COMMISSION
DETAILED STATEMENT OF REVENUES AND EXPENSES
BUDGET AND ACTUAL - ELECTRIC DIVISION
YEAR ENDED DECEMBER 31, 2012
WITH PARTIAL COMPARATIVE AMOUNTS FOR THE YEAR ENDED DECEMBER 31, 2011
Change in Net Position
Supplementary Information - See Auditor's Report
$ 358,989 $ 444,629 $ 85,640 $ 1,199,428
32
2012
Over (Under)
2011
Budget
Actual
Budget
Actual
OPERATING EXPENSES (Cont'd)
Sales Expense
Salaries
$ 53,040
$ 51,712
$ (1,328)
$ 50,632
Conservation
152,625
153,873
1,248
120,132
Total Sales Expense
205,665
205,585
(80)
170,764
Administrative and General
Supervision and General Salaries
474,750
486,057
11,307
501,609
Office Supplies
280,846
256,262
(24,584)
238,663
Outside Services Employed
138,000
150,240
12,240
157,132
Property Insurance
117,150
104,135
(13,015)
112,988
Medical Insurance
637,500
627,506
(9,994)
670,987
Other Employee Benefits
548,250
559,286
11,036
577,817
Regulatory
27,500
52,925
25,425
28,750
Commissioners Salaries
14,300
15,874
1,574
14,197
Travel
16,500
8,611
(7,889)
12,692
Miscellaneous Expense
79,750
77,111
(2,639)
74,147
Maintenance of General Plant
48,180
48,356
176
45,908
Total Administrative and General
2,382,726
2,386,363
3,637
2,434,890
Depreciation
2,400,000
2,289,200
(110,800)
2,284,770
Contribution to City of Hutchinson
Payment in Lieu of Taxes
738,871
738,871
740,761
Roadway Lighting
148,585
148,585
143,000
Total Contribution to City of Hutchinson
887,456
887,456
0
883,761
Total Operating Expenses
27,167,801
26,535,524
(632,277)
25,781,013
Operating Income (Loss)
1,562,632
774,112
(788,520)
1,927,109
NONOPERATING REVENUES (EXPENSES)
Interest Income
22,500
28,126
5,626
27,867
Merchandise and Contract Work, Net
4,319
(20,360)
(24,679)
(12,841)
Miscellaneous Income
20,000
294,300
274,300
28,627
Gain (Loss) on Disposal of Assets
(25,000)
4,582
29,582
157,997
Bond Service Fees
(3,000)
(1,850)
1,150
(1,850)
Amortization of Development Study
(1,041,962)
(473,196)
568,766
(725,078)
Amortization of Bond Discount and Issuance Costs
(24,500)
(1,864)
22,636
(1,864)
Interest Expense - Bonds
(156,000)
(159,221)
(3,221)
(200,539)
Total Nonoperating Revenues (Expenses)
(1,203,643)
(329,483)
874,160
(727,681)
Change in Net Position
Supplementary Information - See Auditor's Report
$ 358,989 $ 444,629 $ 85,640 $ 1,199,428
32
HUTCHINSON UTILITIES COMMISSION
STATEMENT OF NET POSITION
NATURAL GAS DIVISION
DECEMBER 31, 2012
WITH PARTIAL COMPARATIVE AMOUNTS AS OF DECEMBER 31, 2011
ASSETS
Current Assets
Cash and Investments
Accounts Receivable (Net of Allowance for Doubtful Accounts of
$27,160 and $34,491, Respectively)
Inventory
Prepaid Items
Total Current Assets
Noncurrent Assets
Restricted Assets
Cash and Investments
Other Assets
Deferred Charges
Capital Assets
Assets Not Being Depreciated
Other Capital Assets, Net of Depreciation
Net Capital Assets
Total Noncurrent Assets
Total Assets
LIABILITIES AND NET POSITION
Current Liabilities
Current Portion of Long -Term Debt
Bonds Payable
Bond Premium
Accrued Vacation
Accounts Payable
Customer Deposits
Accrued Expenses
Interest
Salaries Payable
Total Current Liabilities
Long -Term Liabilities
Noncurrent Portion of Long -Term Debt
Bonds Payable
Bond Premium
Accrued Vacation
Accrued Severance
Total Long -Term Liabilities
Total Liabilities
Net Position
Net Investment in Capital Assets
Restricted
Unrestricted
Total Net Position
Total Liabilities and Net Position
Supplementary Information - See Auditor's Report
33
2012 2011
865,798 $ 805,259
1,562, 742 1,509,046
432,773 438,320
19,586 15,420
2,880,899 2,768,045
23,464,268 357,910
588,559 384,511
3,899,919
29,458,430
3,899,919
29,718,339
33,358,349
33,618,258
57,411,176
34,360,679
$ 60,292,075 $ 37,128,724
$ 2,090,000 $
1,045,000
185,604
357,910
4,106
4,168
988,320
976,537
127,719
121,337
149,171
76,829
64,466
56,245
3,609,386
2,280,116
38,865,000
20,235,000
2,397,445
357,910
73,905
79,182
15,878
17,764
41,352,228
20,331,946
44,961,614
22,612,062
13,711,908
12,722,769
161,219
357,910
1,457,334
1,435,983
15,330,461
14,516,662
$ 60,292,075 $ 37,128,724
HUTCHINSON UTILITIES COMMISSION
DETAILED STATEMENT OF REVENUES AND EXPENSES
BUDGET AND ACTUAL - NATURAL GAS DIVISION
YEAR ENDED DECEMBER 31, 2012
WITH PARTIAL COMPARATIVE AMOUNTS FOR THE YEAR ENDED DECEMBER 31, 2011
OPERATING REVENUES
Utility Revenues
Residential
Commercial
Industrial
Total Utility Revenues
Other Operating Revenues
Gas Transportation Contract - New Ulm
Transportation - Electric Division
Total Other Operating Revenues
Total Operating Revenues
OPERATING EXPENSES
Purchased Natural Gas
Transmission
Operations
Supervision and Engineering
Other
Total Operations
Maintenance
Supervision and Engineering
Other
Total Maintenance
Total Transmission
Distribution
Operations
Supervision and Engineering
Other Employee Benefits
Mains and Services
Meters
Other
Total Operations
Maintenance
Mains and Services
Meters
Other Equipment
Total Maintenance
Total Distribution
Supplementary Information - See Auditor's Report
48,000
2012
5,317
47,580
56,000
52,415
Over (Under)
2011
Budget
Actual
Budget
Actual
1,100
1,091
(9)
1,476
$ 4,800,000
$ 3,697,538
$ (1,102,462)
$ 4,327,788
4,771,100
3,150,925
(1,620,175)
3,823,161
4,134,100
2,826,424
(1,307,676)
4,246,780
13,705,200
9,674,887
(4,030,313)
12,397,729
700,000
755,472
55,472
724,187
1,100,000
1,100,000
49,425
1,100,000
1,800,000
1,855,472
55,472
1,824,187
15,505,200
11,530,359
(3,974,841)
14,221,916
9,112,780
6,400,838
(2,711,942)
9,028,704
48,000
53,317
5,317
47,580
56,000
52,415
(3,585)
47,920
104,000
105,732
1,732
95,500
1,100
1,091
(9)
1,476
11,000
10,819
(181)
1,486
12,100
11,910
(190)
2,962
116,100
117,642
1,542
98,462
169,100
137,175
(31,925)
162,935
114,000
151,968
37,968
108,446
90,000
67,667
(22,333)
79,809
3,500
61
(3,439)
984
53,500
35,263
(18,237)
49,710
430,100
392,134
(37,966)
401,884
107,000
147,998
40,998
108,664
15,000
20,779
5,779
13,015
55,000
57,648
2,648
67,154
177,000
226,425
49,425
188,833
607,100
618,559
11,459
590,717
34
HUTCHINSON UTILITIES COMMISSION
DETAILED STATEMENT OF REVENUES AND EXPENSES
BUDGET AND ACTUAL - NATURAL GAS DIVISION
YEAR ENDED DECEMBER 31, 2012
WITH PARTIAL COMPARATIVE AMOUNTS FOR THE YEAR ENDED DECEMBER 31, 2011
OPERATING EXPENSES (Cont'd)
Customer Accounts Expense
Meter Reading
Collection
Other Employee Benefits
Uncollectible Accounts
Customer Services
Other
Total Customer Accounts Expense
Sales Expense
Salaries
Conservation
Total Sales Expense
Administrative and General
Supervision and General Salaries
Office Supplies
Outside Services Employed
Property Insurance
Medical Insurance
Other Employee Benefits
Regulatory
Commissioners Salaries
Travel
Miscellaneous
Maintenance of General Plant
Total Administrative and General
Depreciation
Contribution to City of Hutchinson
Payment in Lieu of Taxes
Total Operating Expenses
Operating Income (Loss)
Supplementary Information - See Auditor's Report
2012
Over (Under) 2011
Budget Actual Budget Actual
$ 24,750
$ 25,229
$ 479
$ 55,934
90,000
66,318
(23,682)
76,694
3,915
4,372
457
3,153
9,000
2,611
(6,389)
2,489
35,550
36,670
1,120
29,390
900
1,231
331
1,138
164,115
136,431
(27,684)
168,798
17,680
17,237
(443)
16,877
50,875
51,291
416
40,044
68,555
68,528
(27)
56,921
158,250
162,019
3,769
125,402
93,615
85,421
(8,194)
59,666
46,000
50,080
4,080
39,283
95,850
85,202
(10,648)
92,445
212,500
209,169
(3,331)
167,747
182,750
186,429
3,679
144,454
22,500
43,302
20,802
23,523
11,700
12,988
1,288
11,616
13,500
7,046
(6,454)
10,384
65,250
63,091
(2,159)
60,665
39,420
39,565
145
37,561
941,335
944,312
2,977
772,746
1,050,000
1,043,233
(6,767)
1,042,071
397,853
397,853
364,852
12,457,838
9,727,396
(2,730,442)
12,123,271
3,047,362
1,802,963
(1,244,399)
2,098,645
35
HUTCHINSON UTILITIES COMMISSION
DETAILED STATEMENT OF REVENUES AND EXPENSES
BUDGET AND ACTUAL - NATURAL GAS DIVISION
YEAR ENDED DECEMBER 31, 2012
WITH PARTIAL COMPARATIVE AMOUNTS FOR THE YEAR ENDED DECEMBER 31, 2011
NONOPERATING REVENUES (EXPENSES)
Interest Income
Merchandise and Contract Work, Net
Miscellaneous Income
Gain (Loss) on Disposal of Assets
Amortization of Bond Discount and Issuance Costs
Interest Expense - Customer Deposits
Interest Expense - Bonds
Total Nonoperating Revenues (Expenses)
Change in Net Position
Supplementary Information - See Auditor's Report
2012
Over (Under) 2011
Budget Actual Budget Actual
$ 22,500 $ 105,463
34,181 41,315
1,000 227,443
120
(36,187)
(1,000) (351)
(972,439) (1,326,967)
(915,758) (989,164)
$ 82,963 $ 27,867
7,134 27,263
226,443 1,361
120
(36,187) (29,203)
649 (847)
(354,528) (956,152)
(73,406) (929,711)
$ 2,131,604 $ 813,799 $ (1,317,805) $ 1,168,934
COMPLIANCE SECTION
CDS
Conway, Deuth
6 Schmiesing,riri -P
Q u;,O3k,X i !..lr. (l {, wy
INDEPENDENT AUDITOR'S REPORT ON MINNESOTA LEGAL COMPLIANCE
Members of the Hutchinson Utilities Commission
Hutchinson, Minnesota
We have audited the financial statements of Hutchinson Utilities Commission, a fund of the City of Hutchinson,
Minnesota, as of and for the year ended December 31, 2012, and have issued our report thereon dated March 27, 2013.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and
the provisions of the Minnesota Legal Compliance Audit Guide for Political Subdivisions, promulgated by the State
Auditor pursuant to Minn. Stat. § 6.65. Accordingly, the audit included such tests of the accounting records and such
other auditing procedures as we considered necessary in the circumstances.
The Minnesota Legal Compliance Audit Guide for Political Subdivisions covers seven categories of compliance to be
tested: contracting and bidding, deposits and investments, conflicts of interest, public indebtedness, claims and
disbursements, miscellaneous provisions, and tax increment financing. Our study included all of the listed categories,
except that we did not test for compliance in tax increment financing because Hutchinson Utilities Commission does not
have any tax increment financing.
The results of our tests indicate that for the items tested, Hutchinson Utilities Commission complied with the material
terms and conditions of applicable legal provisions, except as described below.
The Commission did not obtain Form IC 134 from all contractors before final payment was made as required by
Minnesota State Statute § 270C.66 and a Safekeeping Agreement with one depository did not call for pledged collateral
to be released on the Commission's demand in case of a default as required by Minnesota State Statute § 118A.03.
This report is intended solely for the information and use of the Commission, management, and the State Auditor's Office
and is not intended to be and should not be used by anyone other than those specified parties.
", &a& i : , PLO
CONWAY, DEUTH & SCHMIESING, PLLP
Certified Public Accountants
Litchfield, Minnesota
March 27, 2013
37
Members:American Institute of Certified Public Accountants, Minnesota Society of Certified Public Accountants
wo
Ie
�Conway, uth
Schmiesing,mLP
C"akd Puhk Aw�ta,. & Owtums
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN
AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
Members of the Hutchinson Utilities Commission
Hutchinson, Minnesota
We have audited in accordance with auditing standards generally accepted in the United States of America and the
standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General
of the United States, the financial statements of Hutchinson Utilities Commission, a fund of the City of Hutchinson,
Minnesota, as of and for the year ended December 31, 2012, and the related notes to the financial statements, which
collectively comprise the Commission's basic financial statements and have issued our report thereon dated March 27,
2013.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Commission's internal control over
financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the
purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the
effectiveness of the Commission's internal control. Accordingly, we do not express an opinion on the effectiveness of the
Commission's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements
on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that
there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or
detected and corrected on a timely basis. A significant deficiency is a deficiency, or combination of deficiencies, in
internal control that is less severe than a material weakness, yet important enough to merit attention by those charged
with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was
not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies.
Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be
material weaknesses. However, material weaknesses may exist that have not been identified.
38
Members: American Institute of Certified Public Accountants, Minnesota Society of Certified Public Accountants
Hutchinson Utilities Commission
Hutchinson, Minnesota
Page 2
Compliance and Other Matters
As part of obtaining reasonable assurance about whether Hutchinson Utilities Commission's financial statements are free
of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and
grant agreements, noncompliance with which could have a direct and material effect on the determination of financial
statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our
audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of
noncompliance or other matters that are required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the result
of that testing, and not to provide an opinion on the effectiveness of the Commission's internal control or on compliance.
This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering
the Commission's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
", &.ILOL , PLLP
CONWAY, DEUTH & SCHMIESING, PLLP
Certified Public Accountants
Litchfield, Minnesota
March 27, 2013
39
TABLE OF CONTENTS
Page
ARTICLE1 Definitions ...................................................................... ..............................2
ARTICLE 2 Scope and General Responsibilities ................................. ..............................8
Section 2.1
Scope and Purpose ............................................... ..............................8
Section 2.2
Responsibilities in General .................................. ..............................8
Section 2.3
Access Rights ...................................................... ..............................8
Section 2.4
Switching and Tagging Rules .............................. ..............................9
Section 2.5
Emergency Condition .......................................... ..............................9
Section 2.6
Section 2.7
Abnormal Conditions .. .....................z ;.. ..............................9
Coordination and Cooperation .......... ? °.............................9
Section 2.8
Compliance with Related Agreement... ..............................9
ARTICLE 3 Specific Operational Responsibilities .......'........... 9
Section 3.1 Control Area and Balancing Authorit !y ............. 9
Section 3.2 Operation ............................ ........................9
Section 3.3 Operational Authority an ystem Control ............... . .................10
Section 3.4 Reserved ..................... .... .............. ......................... ............10
Section 3.5 Operating Expenses ............. ...... .........................1 .................10
Section 3.6 Protection and System Quality. .................... .............................10
Section 3.7 Outages, Inte = tions, and Discon tion ........ ............................... l l
Section 3.8 Continuity of ........................ ............ .............................12
Section 3.9 Operational Cha ........................... . ...... .............................13
Section 3.10 Reserved ............... .......... .. m ................... .... .............................13
ARTICLE 4 Specific
Section 4.1
Section 4.2 D
Section 4.3
Section 4.4
1 enance Re sp ' sib ities "1..4, .... .............. .............................13
ce of NSP = M Fa( . Fes
ce of Hutch ' on O &M Facilities ....... .............................13
en ce of Glencoe exconnect Facilities .. .............................13
ie Metering ommunications .......... .............................14
do bligations ..................... .............................14
entalRele es ...................................... .............................14
enEx enses ........................................ .............................14
tionsTesting ...................................... .............................14
to O erve Testing .................................... .............................14
vation of Deficiencies ................................ .............................15
Ra' e ................................................................ .............................15
ect of Force Majeure ...................................... .............................15
Notification........................................................ .............................15
Removal............................................................. .............................15
ARTICLE 6 Liability, Indemnification and Insurance ........................ .............................16
Section 6.1 Insurance, Indemnity And Liability .................... .............................16
ARTICLE 7 Term and Termination .................................................... .............................19
Section7.1 Term ................................................................... .............................19
Section 7.2 Default and Termination ..................................... .............................19
ARTICLE8 Arbitration ..................................................................... .............................20
TABLE OF CONTENTS
(continued)
Page
Section8.1
Disputes ............................................................. .............................20
Section 8.2
Initial Referral .................................................... .............................20
Section 8.3
Binding Arbitration ............................................ .............................20
Section 8.4
Arbitration Decision ........................................... .............................20
Section 8.5
Arbitration Costs ................................................ .............................20
Section 8.6
FERC Dispute Resolution ................................... .............................20
ARTICLE 9 Standards of Conduct and Confidentiality ................ •,... .............................21
Section 9.1 FERC Standards of Conduct ................. ...�i......:, ..........................21
Section 9.2 Confidentiality ...... ............................... ........ .............................21
Section 9.3 Nondisclosure ... ............................... .:,...... .............................21
Section 9.4 Standard of Care .........................j. .............................21
Section 9.5 Use of Confidential Informatio •..... .......................21
Section 9.6 Damages ............................. : . ............................... ......................21
Section 9.7 Rights to Confidential Info ation .., } ......................... . .................21
Section 9.8 Notification ................ ..... .............22
Section 9.9 Survival . ............................... ,, ,......,,.:.:.......... .............................22
ARTICLE 10 Miscellaneous .......................E................................... .............................22
Section 10.1 Governing La ' ............................: ...... .............................22
Section 10.2 Counterparts .... .............................. . .. z< 22
Wt . z
Section 10.3 Assignment ......... ........ .�:................ .. ..... ............................... 22
Section 10.4 No Third -Party Be fici .. ....... ........... .............................22
Section 10.5 Re atory Authori .......... .................... .............................22
Section10.6 . . .................. . ............ ....... �................................................. 22
Section 10.7 Repres ions ................. ............................... .............................22
Section 10.8 omple greement..... .............................. .............................23
Section 10.9 ici . ` ority ...... ................................... .............................23
Sectio0 Re d......... ,; ....................................... .............................23
Sect.. Upda ' bits .................................................. .............................23
ction10.12 dit s ... , ................................................ .............................23
`G ion 10.13 orting... .................................... .............................23
EXHIBIT Matrix of erslup, Operation, & Maintenance Responsibility For
the McLeo ubstation Date: 10/ 05/ 05 ........................... .............................25
EXHIBIT B erconn . tion Diagram ................................................ .............................27
EXHIBIT C App le Regional Reliability Council, Control Areas and Balancing
Au1orities ..................................................................... .............................28
EXHIBIT D Substation As Built Drawings ........................................ .............................29
EXHIBIT E Designated Representatives ............................................ .............................30
EXHIBIT F Switching and Tagging Rules ......................................... .............................31
EXHIBIT G Substation Site Description ............................................ .............................45
THIS OPERATION AND MAINTENANCE AGREEMENT ( "Agreement ") is dated
as of this day of 9eteber, 201 -2306, between the CITY OF HUTCHINSON,
MINNESOTA, a Minnesota municipal corporation and its statutory Hutchinson Utilities
Commission (hereinafter referred to as "Hutchinson "), the CITY OF GLENCOE, MINNESOTA,
a Minnesota municipal corporation and its GLENCOE LIGHT AND POWER COMMISSION
(hereinafter referred to as "Glencoe "), and Northern States Power Company, a Minnesota
corporation and wholly owned subsidiary of Xcel Energy Inc. (hereinafter referred to as "NSP ").
Hutchinson, Glencoe and NSP as parties hereto may hereinafter be referred individually as a
"Party" or to collectively as the "Parties" to this Agreement. 'Ah,#
RECITALS
1. WHEREAS, NSP is an electric utility
transmitting, distributing, and selling
services principally in the States of M'
subject to the jurisdiction of the r t
Federal Energy Regulatory Cornnl "
2. WHEREAS, Hutchinson owns and opera%'
the business of dist 'b ting and selling
Hutchinson's incorporate • ,end environs;
3. WHEREAS, Glencoe owns
the business of generating,
within GlenciacIsdncorvorate
4. WHE � 5, the a'� missi
NSP are er the nctio;
System Op r, d "
NSP's
en
in " usiness of generating,
ower energy and related
orth Da d South Dakota
e regulatory sions and
and or
ial electric utility engaged in
power and energy within
Felectric utility engaged in
electric power and energy
at a voltage level of 100 kV and above of
of the Midwest Independent Transmission
the MISO Transmission- Owning Parties'
is presently located within NSP's Control Area and
ned under the MISO Tariff, and
6. EREAS, 1 Energy Sery ices Inc. ( "XES ") is authorized to act as agent for
pursuant written agreements between NSP and XES that are approved by
ap ble re latory authorities an d accordingly, XES employees may perform
or a certain aspects of this Agreement on behalf of NSP; and
7. WHEREAS, NSP and Hutchinson are parties to a McLeod Substation Tap
Construction Agreement dated March 29, 2002, (the "Construction Agreement ")
which provided for construction of a in- and -out 230 kV transmission tap
( "Transmission Tap ") from NSP's existing 230 kV Black Dog to Panther 230 kV
transmission line #0900 to the Substation which results in a new point of
interconnection (Point of Interconnection ") with Hutchinson; and
8. WHEREAS, NSP and Hutchinson are concurrently negotiating with MISO and
intend to contemporaneously enter into a new Transmission Interconnection
Agreement for the Point of Interconnection; and
9. WHEREAS, Hutchinson and GRE are parties to the Restated Operation and
Maintenance Agreement dated July 31, 2005 which provides for GRE to operate
certain breakers within the Substation pending an interconnection by Glencoe
within the Substation and for GRE to maintain certain meters within the
Substation; and
10. WHEREAS, Hutchinson will update and suppl*^,entthje 'GRE Operat ion and
Maintenance Agreement as deemed appropni t tchinson to reflect the
Glencoe interconnection and other currents e and the arrangements
Hutchinson has made under this Agreement san `,
11. WHEREAS, Glencoe has
transmission line —an and
appFeximately Aily 1, 2006.
NOW THEREFORE, Parties
In addition to the
following initially capit
below when used in thi`"
"Abnormal Con(
Facilities, the Sacili or the tran that fac' es are o
excel ut which has r
is not r d to, high
Hutchinson,
amended, su
and
a 115 kV interconne and delivery
as follows:
,9''and plir"d`s s defined in this Agreement, the
shall have the respective meanings set forth
mean any cdi$idition on the Hutchinson Facilities, Glencoe
" owned portions of the Transmission System,
ilities, ich is outside normal operating parameters such
x normal ratings or reasonable operating limits have been
emergency. An Abnormal Condition may include, but
Cations in voltage, frequency, power flow, equipment
other equipment and operating parameters.
n this_ Operating and Maintenance_ Agreement by and among
NSP, including all Exhibits attached hereto, as the same may be
altered, changed or restated in accordance with its terms.
"Applicable Laws and Regulations" shall mean all applicable federal, state and local
laws, ordinances, rules and regulations, and all duly promulgated orders and other duly
authorized actions of any Governmental Authority having jurisdiction over the Parties, their
respective facilities and/or the respective services they provide.
"Applicable Reliability Council" shall mean the regional reliability council of NERC or
successor electric reliability organization in which the Substation is located identified on
Exhibit C.
"Balancing Authority" shall mean the entity responsible to maintain resource to load
interchange balance within a Balancing Authority Area and supports interconnection and
frequency in real -time identified on Exhibit C.
"Balancing Authority Agreement" shall mean the Agreement between MISO and the
Balancing Authorities within the MISO approved by FERC by order issued February 18, 2005,
and any amendment thereto from time to time approved by FERC.
"Balancing Authority Area" shall mean the collection of . resources, transmission
system, and loads within the metered boundaries of Balancing Autho ' ttlentified on Exhibit C.
"Claims" shall have the meaning given under Section 6.. .
"Confidential Information" shall mean any co i tial, p o 'etary or trade secret
information of a plan, specification, pattern, prociontlb'y u a esign, device, ng, list, concept,
customer information, policy or compilation rela o the present or pla business of a
Party, which is designated as Confidential Infoi� the arty supplying °formation,
whether conveyed orally, electronically, in wri thr .gh inspection, otherwise.
Confidential Information shall include, without limita tq '1 inf rmation relatmg to a Party's
technology, research and development business affair , d pricing, and any information
supplied by a Party to another Party confidential bas . rior to the execution of this
Agreement. Confidential Information sha dude informa i at the receiving Party can
demonstrate: (i) is generally available to t e pu t r than as esult of a disclosure by the
receiving Party; (ii) was in the lawful possession o " ce' g Party on a non confidential
basis before receiving it he disclosing y; (iii) - supplied to the receiving Party
without restriction by a i who, to the owledge f the receiving Party, was under no
obligation to the of arty to ep such information confidential; (iv) was independently
developed by the recei arty out referenc iConfidential Information of the disclosing
Party; or (v) is, or beco own, through no wrongful act or omission of the
receiving Pa , . e ch of gree e o nation designated as Confidential Information
will no to - e onfi ' 1 if the Party that designated the information as Confidential
Information notifies th a Parti at ch information no longer is confidential. Finally, for
the p s of this Agre ent, in ation is Confidential Information only if it is clearly
designate k marked in mg a confidential on the face of the document, or, if the
information Y nveyed ora - or by inspection, if the Party providing the information orally
informs the P the information that the information is confidential.
shall have the meaning given in the Recitals.
"Control Arei" shall mean an electric power system or combination of electric power
systems bounded by interconnection metering and telemetering to which a common generation
control scheme is applied in order to balance the power output of generation resources within the
electrical power system(s) and energy delivered from or to entities outside the electric power
system(s) with the load within the electric power system(s); maintain scheduled interchanges
with other Control Areas and maintain the frequency of the electric power system(s) within
reasonable limits in accordance with applicable NERC and the Applicable Regional Reliability
council criteria.
"Control Area Operator" shall mean the entity with responsibility for operating a
Control Area consistent with applicable NERC and MRO policies and procedures and MISO
policies and procedures.
"Coordination Contact" shall have the meaning given in Section 2.7.
"Default" shall mean the failure of a Party in breach of this Agreement to cure such
breach in accordance with the provisions of Section 7.2.
"Emergency Condition" shall mean a condition or situatioa1).that in the reasonable
judgment of the Party making the claim is imminently likely to anger,' or is contributing to
the endangerment of, life or property, or public health and sae (2) that, in the case of a
Party, is imminently likely (as determined in a non- discri ry nner) to cause a material
adverse effect on the security of, or damage to, the Hutc ' okFacilities lencoe Facilities, the
NSP Facilities or the Transmission System, or the elec ; c s stems of othe `, which the Parties
are directly connected.
"FERC" shall mean the Federal Energy Regu'l ' -. Co ' '''sssion, or its sud` essor.
"Force Majeure" shall mean any cause beyond asonable control of and without
fault or negligence of the Party claiming' o cc Majeure, incl but not limited to acts of God,
strike, flood, earthquake, storm, fire, li ', xplosion, epi ' .c war, riot, terrorism, civil
disturbance, sabotage, changes in Applica le nd Regula i s subsequent to the date
hereof, and action or inaction by any Govern ' entaI <
"Glencoe Facili i can the Gl coe Intercq ection Facilities and the Glencoe
Line.
"Glencoe Interco t F H 'es" shall me,ri the 115 kV dead end insulators which are
owned by Gle c e as depic :lion diagram attached hereto in Exhibit B.
". ' lencoe Line' 11 mea , 115 kV local distribution line that originates at Glencoe's
Arm C ygate sub and t aces at the Substation dead end insulators as depicted by
the own r `'p line on the i _ connec' iaQram attached hereto in Exhibit B.
"Good ' ity Prac `fie" shall mean any of the applicable practices, methods and acts
engaged in or ap d by a . gnificant portion of the electric utility industry during the relevant
time period, or an practices, methods and acts which, in the exercise of reasonable
judgment by a Party 1 1 t of the facts known at the time the decision was made, could have
been expected to accomplish the desired result at a reasonable cost consistent with good business
practices, reliability, safety and expedition, giving due regard to the requirements of
governmental agencies having jurisdiction. Good Utility Practice is not intended to be limited to
the optimum practice, method, or act to the exclusion of all others, but rather includes all
acceptable practices, methods, or acts generally accepted in the region as they may be applicable
to the Parties as transmission system owners and/or operators.
"Government Authority" shall mean any federal, state, local, or other governmental
agency, court, commission, department, board, or other governmental subdivision, legislature,
rulemaking board, tribunal, or other governmental authority having jurisdiction over a Party.
"GRE O &M Agreement" shall have the meaning given in the Recitals.
"Hazardous Substances" shall mean any chemicals, materials or substances defined as
or included in the definition of "hazardous substances," "hazardous wastes," "hazardous
materials, hazardous constituents, restricted hazardous materials "extremely hazardous
substances," "toxic substances," "radioactive substances," "conta * R s " "pollutants," "toxic
pollutants" or words of similar meaning and regulatory fect under any applicable
environmental law, or any other chemical, material or sll�i exposure to which is
m
prohibited, limited or regulated by any applicable environer law. s.
"Hutchinson Facilities" shall mean the
Hutchinson O &M Facilities, Substation and Substatig
"Hutchinson Interconnection Facilities" i
Transmission Tap owned by NSP, as depicted by
diagram attached hereto in Exhibit B. t,,
"Hutchinson O &M Facilities"
Hutchinson commencing from, and incNpoir
115 kV power transformer, 115 kV bu
equipment, and associated invent to a
insulators where the 1 pers are con
ownership line on th terconne . ' n diagram
Site which is owned tchinso
"I &I
March
Substation
line on the
Facilities,
to the
that porti the Substation owned by
NV bus, kV breakers, 230 kV to
cep. trol house, communications
me side of the 115 kV dead end
I to th Glencoe Line as depicted by the
ied hereto in Exhibit B, and the Substation
and Interchange Agreement dated
tioNa" eemen hull mean the Transmission Interconnection Agreement
NS f Mi west ISO in effect and accepted by FERC.
"MISS` all mean a Midwest Independent Transmission System Operator, Inc. or
successor region smiss' organization.
"MISO Tarif all mean the open access transmission and energy market tariff of the
MISO, on file with Fu RC and in effect, as amended or superseded from time to time, under
which transmission service is provided on the Transmission System by MISO.
"MPUC" shall mean the Minnesota Public Utilities Commission.
"MRO" or "Midwest Reliability Organization" shall mean the Midwest Reliability
Organization, or its successor entity.
"NERC" shall mean the North American Electric Reliability Council, or its successor
electric reliability organization assuming or charged with similar responsibilities related to the
operation and reliability of the North American electric interconnected transmission grid.
"NSP Facilities" shall mean the NSP Interconnection Facilities, NSP O &M Facilities and
NSP's portion of the Transmission System.
"NSP Interconnection Facilities" shall mean the Transmission Tap which is owned by
NSP and is as depicted by the ownership line on the interconnection d�'a,g�ram attached hereto in
Exhibit B and all facilities and equipment owned and/or contAtifigin r "aced and maintained by
NSP on the NSP's side of the Point of Interconnection as ideExhibit A, including any
modifications, additions or upgrades made to such facilities aent, that are necessary to
p hysically and electrically interconnect the Substation to the -9,Systern.
"NSP O &M Facilities" shall mean the
operated by NSP.
"OASIS" shall mean the open access s-,
pursuant to the requirements and standards of
No. 2004.
"Operational Authority" shall r
and coordinating operation of system eq
voltage control, equipment loading, and
to the equipment limitations
mean
practices or proced
or the NSP Transmission
or unplanned ogteor an
Tradsn -u -s ion Tap o e maintained, and
hme info tin system of O developed
[QC's o. $89, as superseded by Order
arty in charg =responsible for directing
C ' cludes corm ete authority of switching,
as "i ertin, to proper operation, subject
material change in the day -to -day routine,
E either the Hutchinson Transmission System
change in connection with either a planned
if I I asonable s" sli ean, with respect to any action required to be made,
atte 41 . or taken by a y m " `f Agreement in the exercise of "Reasonable Efforts,"
such effos are timely a `consist t with Good Utility Practices that would be undertaken
for the pro n of its own. terests under the conditions affecting such action, including but
not limited to mount of tice of the need to take such action and the duration and type of
such action.
"Regulatory uirements" shall mean any of the applicable practices, methods and
acts required by FER as implemented by NERC, Applicable Reliability Council, MISO or
another entity having authority over the Parties with regard to the subject matter of this
Agreement, or the successor of any of them.
"RTU" shall have the meaning given in Section 4.4.
"SCADA" shall mean supervisory control and data acquisition equipment.
"Secondary Systems" shall mean control or power circuits that operate below 600 volts,
AC or DC, including, but not limited to, any hardware, control or protective devices, cables,
conductors, electric raceways, secondary equipment panels, transducers, batteries, chargers, and
voltage and current transformers.
"Senior Representative" shall mean -be the representative of a Parties and of the Parties
shown on Exhibit E.
"Substation" shall mean Hutchinson's 230/115 kV McL
-eod ctrical transmission
substation facilities located in McLeod County, Minnesota identife tl e "as built" drawings
provided by Hutchinson to NSP itemized in Exhibit D hereof w e NSP's Black Dog Panther
230 kV transmission line is tapped and where the Hutchinso a- 'es and Glencoe Facilities
are interconnected.
"Substation Site" shall mean those parts of t rea pioperty own , . Hutchinson upon
which the McLeod Substation is constructed an d. ocated in McLeod Hutchinson,
Minnesota. The legal description of the land con ti McLe d Substation Si i'shown on
Exhibit G. .L �.
"Switching and Tagging Rules" shall mean the s 'ng and tagging procedures of the
respective parties, as set forth in Exhibit as they may b . ended from time to time.
"System Protection Facilities" shaT ea Nelays, circu' ieakers, switches and other
equipment required to protect (i) the NSP �ce ®rt, i n Fa cilities and the Glencoe
Facilities (and any generat esources connct fl'to the smission System) from faults or
other electrical disturbCe ng at the S station, aii) the Substation from faults or
other electrical syste isturban ccurring on a Transmission System or on other delivery
systems and/or oth r ' rating sources to w > the Transmission System is directly or
indirectly connected. Sy P Facilitie all include such protective and regulating
devices as are ' ied in ter • b5i uidelines or that are required by Applicable
Law and a i s are rwise necessary to protect personnel and equipment and to
minimiz , deleterious s to Transmission System arising from the operation and
mainte ce of the Substa ; the son Facilities and Glencoe Facilities.
shall have the same meaning as assigned to such term in the
MISO Tariff.
"Transmissi - ing Parties' Agreement" shall mean the Agreement of
Transmission Faciliti wners to Organize the Midwest Independent Transmission System
Operators, Inc. as originally accepted by FERC Order dated September 16, 1998, as amended
and accepted for filing by FERC from time to time thereafter.
"Transmission System" shall mean the facilities controlled or operated by the MISO that
are used to provide transmission service under the MISO Tariff. The Transmission System
includes facilities, the operational control of which has been transferred to the MISO by NSP and
GRE, with FERC approval under section 203 of the Federal Power Act.
"Transmission Tap" means the in- and -out 230 kV transmission line commencing from
the dead end insulators where they attach to the Substation structural steel to the 230 kV Black
Dog to Panther line #0900 tap structures all of which are owned by NSP and are as depicted by
the ownership line on the interconnection diagram attached hereto in Exhibit B.
Tariff.
Any capitalized terms not defined herein shall have the meaning set forth in the MISO
ARTICLE 2
SCOPE AND GENERAL RED
Section 2.1 Scope and Purpose. The scope and purpose Agreement is to allocate
operation and maintenance responsibilities for the Substation, e N P cilities, the Hutchinson
Facilities and the Glencoe Facilities. This Agreement i Iso 'ntende contemplated to be
consistent, and not conflict with the Interconnection went , the I , � eement and the
GRE O &M Agreement. In the event any such con ' should occur, the Pa "e_ eed that this
Agreement shall take precedence, but only for kI time to Ilow Parties a I ortunity to
negotiate in good faith to amend the various other agr ments r is Agreement o remove any
inconsistent or conflicting provisions. In the event that , O &M Agreement is amended or
terminated for any reason, Hutchinson ees to consult i SP and allow NSP to promptly
review any proposed replacement or a ed agreement son may enter into and take
into account the provisions of this Agree d.. ' pacts onbntrol Area or Balancing
Authority Area.
Section 2.2 Responsibili ' in General. xvbit A inc es a matrix outlining the various
operations and mainten ce abilities for each Party ap licable under this Agreement. The
Parties shall cause . NSP F es, Hutchi on Facilities and Glencoe Facilities to be
operated, maintaindd a ontrol (i) in a safe d' reliable manner; (ii) in accordance with
Good Utility Practice; t
..n
a with he Interconnection Guidelines, applicable
operational a d -- 'ability
c; a, p
I d directives, including those of the Applicable
Reliabili _ ouncil 3
ac o :dance with Applicable Laws and Regulations; and (v) in
a with ith the p "
Mons o s Agreement. Hutchinson and Glencoe understand that
Nu ,O a responsibi '
o prove functional control and direction of the NSP and GRE
portions a Transmissio
stem, and that NSP and GRE shall have direct control of their
assets within Transmissio
System. This responsibility and control requires that, from time
to time, MISO rovide
o rating instructions consistent with this MISO Tariff, Good Utility
Practice, applicab' perat
nal and/or reliability criteria, protocols, and directives, including
those of the NERC,
pplicable Reliability Council and Applicable Laws and Regulations.
To the extent that the: ISO
or NSP is assessed any penalties or other costs by NERC, the
Applicable Reliability Council or any Control Area and such penalties or other costs are due to
Hutchinson or Glencoe's action
or inaction, such Party shall reimburse the MISO and/or NSP for
such penalties or other costs promptly at the time NSP is required to pay such penalties or costs.
Section 2.3 Access Rights. The Parties shall provide each other with access rights to the
property of the providing Party as may be necessary for a Party's performance of their respective
operational and maintenance obligations under this Agreement; provided that, notwithstanding
anything stated herein, a Party performing operational or maintenance work within the
Substation or within the boundaries of the other Party's facilities must abide by any specific
safety or work rules applicable and provided by the Party owing the facilities.
Section 2.4 Switching and Tagging Rules. The Parties shall abide by the applicable
Switching and Tagging Rules for obtaining clearances for work or for switching operations on
equipment. Such Switching and Tagging Rules are as set forth in Exhibit E.
Section 2.5 Emergency Condition. A Party will notify the other Parties as soon as possible
of any Emergency Condition, occurring on the NSP Facilities&Pi Hutchinson Facilities or the
Glencoe Facilities and GRE Interconnection Facilities anall coordinate with
MISO the most appropriate cour se of action in accordance wy Practice, including
but not limited to, taking necessary steps to keep the tram in operation and
making any required reports to FERC and on the OASIS ency Condition that
results in any deviation from FERC's standards of conducaooviders.
Section 2.6 Abnormal Conditions. Any Party ' periencing an Abnorm ondition on its
Facilities subject to this Agreement shall prof otify tli`e other Part ies o eAbnormal
Conditions and follow a MISO and/or Applicable R a '
it cil approved erating guide
for such Abnormal Condition.
Section 2.7 Coordination and Coop` " 'on. To coordina uch operation and maintenance
responsibilities under this Agreement, the ' s hall each ide 11 o e representative to serve
as a "Coordination Contact" to be the initia o ontact and coordinate the communication
between the Parties in implementing this A eeme s ated on Exhibit E. The Parties
shall cooperate hereunder ' eir performaneo operatio nd maintenance responsibilities.
Each Party shall notify o arties in wn g of any ange of its Coordination Contact.
The Parties shall en or to ke xhibit E c ent at all times for ease of reference by the
Parties. Each Pa sh ' ovide a vance notice t e other Party before undertaking any work
in these areas, especially ec cuits inv . ving circuit breaker trip and close contacts,
current transformerswor vote a ; trans o . 1 1
the GRE -OW Agreement.
ents. NSP and Hutchinson shall also comply
shall comply and cause GRE to comply with
ARTICLE 3
OPERATIONAL RESPONSIBILITIES
Section 3.1 ControjXiea and Balancing Authority. The Substation and Transmission Tap
shall be within NSP's ontrol Area and Balancing Authority Area for which NSP is the Control
Area Operator and Balancing Authority and NSP shall be the Operational Authority for both the
230 kV and 115 kV equipment and portions of the Substation and Transmission Tap. In
addition, the Glencoe Facilities shall be within NSP's Control Area and Balancing Authority
Area.
Section 3.2 Operation. NSP and GRE will operate the Facilities as specified in the Operating
Agent column in Exhibit A. *Ten •lit f- Sub- tatie a the T« ..s,.., Tap, t the
z�' ux ztsoracxco- vrcxxc��avoc rscarnr-m�xccnoT =Ri.��assv.,..,.. � »l., � ... .....
exeeptien of the 230 W s. nsf '...er- high side .7iseep eet and its .,
- ---------------- - - - - -- ----- - - - - -- ---------- -------------------n - -------------------
, a the GRE � .ne --Hutchinson wil . ° °
work with infemi -NSP and GRE when planning any maintenance activity at the of the breake
°a by r'Di n the Substation. GREiVx7t may operate the Glencoe Facilities b,
material agreement between GRENSP- and Glencoe.
Section 3.3 Operational Authority and System Control. Each Control Area Operator an
Balancing Authority shall have Operational Authority as defined under Exhibit A, and shall b
responsible for the operation, control and monitoring of that portion of the Transmission Syster
within their respective Control Area pursuant to the MISO Tariff. Each Party or its agent actin
as a Control Area Operator will endeavor or will cause its agent to im 'ze service outages t
Hutchinson, Glencoe, and NSP and GRE customers on a rriio - discriminatory basis whil
following Good Utility Practice when performing those actin . Each Party will utiliz
approved MISO operating guides with respect to operation o : uch Fa ties. NSP and GRE ar
parties to the Balancing Authority Agreement; and Hutc ' on and Glen shall cooperate an
take action with respect to the Glencoe Facilities or utchinson Fa' s as reasonabl
requested by NSP or GRE in accordance with Goo ' tility Practices to fulfi i at(ons unde
the Balancing Authority Agreement or the MISO, °a ' ; P
Section 3.4 Reserved.
Section 3.5 Operating Expenses.
maintain records of all expenses assoc
arty shall b onsible to account for an
grating their Fa` ,'tae's within the Substation.
I o e ith applicable Interconnectio
I Y ity Co # requirements, Hutchinson an
d operate, t their expense, System Protectio
coed Facilities and the Interconnection Facilities
re ed on NSP's side of the Interconnectio
ith the operation of the Substation shall b
System ' ' . T si and operation of the Substation and Transmissio
Tap shall no ause a sive voltage excursions nor cause the voltage to dro
below or ris e. ove th range specified in the planning criteria defined in th
terconnectio . Guidelines and consistent with NSP's obligation to meet th
e sche a specified by the MISO. The Substation shall not taus
ex e e v ge flicker nor introduce excessive distortion to the sinusoids
volta ent waves as defined by ANSI Standard C84.11989, in accordant
with IE : Standard 519, or any applicable superseding electric industry standar
including the Interconnection Guidelines. In the event of a conflict betwee
ANSI Standard C84.1 -1989, or any applicable superseding electric industr
standard and the Interconnection Guidelines, ANSI Standard C84.1 -1989 or tb
applicable superseding electric industry standard, shall control.
(b) MISO and NSP Right to Inspect. NSP shall have the right, but shall have n
obligation or responsibility to (i) observe Hutchinson's or Glencoe's tests andh
inspection of any of System Protection Facilities and other protective equipmen
10
(ii) review the settings of such System Protection Facilities and other protective
equipment; and (iii) review Hutchinson's or Glencoe's maintenance records
relative to the Substation, and/or System Protection Facilities and other protective
equipment. The foregoing rights may be exercised by NSP (whether under MISO
direction or its own) from time to time as deemed necessary by NSP upon
reasonable notice to Hutchinson or Glencoe. However, the exercise or non
exercise by NSP of any of the foregoing rights of observation, review or
inspection shall be construed neither as an endorsement or confirmation of any
aspect, feature, element, or condition of the Subst.t' n's System Protection
Facilities or other protective equipment or the operati reof, nor as a warranty
as to the fitness, safety, desirability, or reliability ( ne.
(c) Hutchinson /Glencoe Right to Inspect. Hutc son a Nlencoe hall have the
right, but shall have no obligation or r on �iliry NSP's tests
and/or inspection of any of NSP I roniiection d associated
protective equipment; (ii) review the ttings of such e equipment;
and (iii) review NSP's maintenan os r tive a cr onpection
Facilities and associated protective eq en a he foregoing
rights may be exercised by Hutchinson o + ncoe from time to time as deemed
necessary by Hutchinson r Glencoe upon r . " "able notice to NSP. However,
the exercise or nonexerci utchinson or i coe of any of the foregoing
rights of observation, revs ection sha `construed neither as an
endorsement or confirmation f an feature, lement, or condition of the
NSP Interconnection Faciliti an, a o at t 'protective equipment or the
operation o' or as a w arty as to , e fitness, safety, desirability, or
reliabili f sam ,
Section 3.7 Outages, rrup ons, and Disco ction.
(a) li utho nd o a 'on. Absent the existence or imminence of an
E= e . ` Con 'o , each Party may, after notifying the other Parties in
accordan 'th ility Practice, and in cooperation with each other,
remove fro rvice i acilities that may impact the other Party's facilities as
ecessary to orm aintenance or testing or to install or replace equipment.
e Party sch uling a removal of a facility from service shall use Reasonable
s to sc We such removal on a date mutually acceptable to all Parties, in
acc �. ice Good Utility Practice.
(b) Transmission Derates. The Parties shall promptly notify the other Parties of any
transmission facility derating and the Control Area operator of such facilities shall
post on OASIS and follow the MISO Outage Coordination Process under the
MISO Business Practice Manuals as applicable. If the transmission derate is not
caused by an outage, then the Control Area operator shall follow and comply with
the MISO Rating Change Process, and Hutchinson and Glencoe shall cooperate
with NSP and GRE with respect to any such derates on the Glencoe Facilities and
Hutchinson Facilities.
11
(c) Outage Restoration.
(1) Unplanned Outage. In the event of an unplanned outage of a Party's
facility that adversely affects the other Party's f4eilities,- facilities- the Party
that owns or controls the facility out of service shall post such outage on
OASIS use Reasonable Efforts to promptly restore that facility to service.
(2) Planned Outage. In the event of a planned outage of a Party's facility that
adversely affects the other Party"s €asilities.facilities• the Party that owns
or controls the facility shall post such pla a o, tage on OASIS use
Reasonable Efforts to promptly restore thatfa ility to service.
(d) Disconnection.
(1) Disconnection after Agreement e1
Agreement by its terms, th raw
Substation from the Trans s n S
disconnection upon which the e:
(2) Disconnection after Under Frequency
under frequency s& disturbance,
to automatically ac i - a load
Interconnection Gui ine en
Transmission System, utchi on '
fregWH_ relay set poi t for tl
(a)
S. UpS ermination of this
Owner disconnect the
in accordance plan for
Shed Event. In the event of an
ansmission System is designed
m as described in the
i e ough" capability of the
i'oe shall implement an under
station as described in the
e. Subject to"4 R tprovisions of this Section, if required by
to do so, P may invoice transmission loading relief
n - tricity if such delivery of electricity adversely
to perfo such activities as are necessary to safely and
stem or interconnected sub- transmission or distribution
a apply to any curtailment, interruption or reduction
interruption, or reduction shall continue only for so long as
ary under Good Utility Practice;
(b) Any su .curtailment, interruption, or reduction shall be made on an equitable,
non -di riminatory basis with respect to all generators directly connected to the
Transmission System;
(c) When the transmission loading relief, curtailment, interruption, or reduction must
be made under circumstances which do not allow for advance notice, the Control
Area Operator shall notify Hutchinson and Glencoe by telephone as soon as
practicable of the reasons for the curtailment, interruption, or reduction, and, if
known, its expected duration. Telephone notification shall be followed by written
notification as soon as practicable;
12
(d) Except during the existence of an Emergency Condition, when the curtailment,
interruption, or reduction can be scheduled, the Control Area Operator shall notify
Hutchinson and Glencoe in advance regarding the timing of such scheduling and
further notify Generator of the expected duration after receiving notice from
MISO; and
(e) The Parties shall cooperate and coordinate with each other to the extent necessary
in order to restore the Substation, Interconnection Facilities, and the Transmission
System to their normal operating state, consistent with system conditions and
Good Utility Practice. ,,
Section 3.9 Operational Change. In the event any Party l
operational changes to its Facilities that reasonably may be e!
Facilities, the initiating Party shall provide the other i
advance notice of the desired modifications or ope .ti na
schedule of work for performing such modificati or ubject to review and written acceptanc(;Ib coord
which review and acceptance shall not be untie u
Subject to all applicable requirements imposed by Ni MISO, ,"
the safe and adequate design, operatio nd maintenance o
be and remain the sole obligation of the
ti g Party.
Section 3.10 Reserved.
ARTIGUE 4
Section 4.1 Mai en ,_npe of N$Y O &M
(a)
i'si \,wnithh odifications or
ctey other Party's
witnety (90) days
angure of and the
tartional changes
ioer Parties,
nor delayed.
ability and the responsibility for
initiating Party's facilities shall
and repair the NSP O &M Facilities in
Q P sh �`pect the NSP O &M Facilities in accordance with this
(c) ement Notification. If any of the Parties identifies a problem
Facilities which requires replacement the identifying Party shall
NSP and the other Parties. The Party will notify NSP of such
telephone and follow up in writing by U.S. mail or e-mail.
(d) Equipment Ownership. NSP is the owner of the Transmission Tap as depicted by
the ownership line on the interconnect diagram attached hereto in Exhibit B.
Section 4.2 Maintenance of Hutchinson O &M Facilities. The Hutchinson O &M Facilities
shall be subject to the GRE O &M Agreement.
Section 4.3 Maintenance of Glencoe Interconnect Facilities.
13
(a) Routine Maintenance. GRENSR shall maintain and repair the Glencoe
Interconnect Facilities, at Glencoe's cost, in accordance with this Agreement.
(b) Inspections. Glencoe shall inspect the Glencoe Facilities at intervals determined
by Glencoe and acceptable to GRENSF, at Glencoe's cost.
(c) Facilities Replacement. Glencoe is responsible for replacement of Glencoe
Facilities, as determined by Glencoe.
Section 4.4 Telemetry and Metering Communications. Hutchi s . all be responsible for
the operating and maintenance costs of the remote terminal u s ( "R Us ") and associated
communications circuits that are required for NSP's system o ' s control and monitoring
purposes and to incorporate the Substation into the NSP trol a Hutchinson will use
RTUs and associated communications circuits that patib e 'th GRE and NSP
communications protocols. Hutchinson shall be respone#fo the opera and maintenance
costs of the RTUs and associated communications c', uits. GRE, Hutchins0 , NSP agree to
share Substation and associated transmission lined 'th eat" other, includin , ymot limited
to, real time breaker status, voltage, current, real p re �i�e� power and e , ergy metering
data.
Section 4.5 Information Reportini O ligations. S'W"'" t to applicable Regulatory
Requirements and/or confidentiality azure .each Party sh k with the other Parties
regarding the transfer of information w Bch sonably necessary to support the
reliability of any other Party's facilities.
Section 4.6 Environmen a eases. Eacli arty shall otify the other Parties, first orally
and then in writing, a releas any Hazar s Substances, any asbestos or lead abatement
activities, or any t e medi n activities re ed to the Substation or any Party's O &M
Facilities which may reas b y t✓ • e ted to of ect another Party. The notifying Party shall:
(i) provide th as soo rac ided such Party makes a good faith effort to
provide the o t ter t wenty-four hours after such Party becomes aware of the
oc cu. rre e; and (ii) pr fu t ' t e other Party copies of any publicly available reports
filet( . 'any governm autho addressing such events. The Party releasing such
Hazardou stance shall esponst le for any required clean up or remediation.
Section 4.7 tenance , xpenses. The Parties shall be responsible for all expenses
associated with m _dining _ 'eir Facilities at the Substation.
Section 4.8 Inspections and Testing. Each Party shall perform routine inspection and testing
of their Facilities and Equipment in accordance with this Agreement.
Section 4.9 Right to Observe Testing. Each Party shall, at its own expense, have the right to
observe the maintenance testing of any of the other Party's Facilities whose performance may
reasonably be expected to affect the reliability of the observing Party's Facilities and equipment.
Each Party shall notify the other Party in advance of its performance of tests of its Facilities, and
the other Party may have a representative attend and be present during such testing.
14
Section 4.10 Observation of Deficiencies. If a Party observes any deficiencies or defects on,
or becomes aware of a lack of scheduled maintenance and testing with respect to, the other
Party's facilities and equipment that might reasonably be expected to adversely affect the
observing Party's facilities and equipment, the observing Party shall provide notice to the other
Party that is prompt under the circumstance, and the other Party shall make any corrections
required in accordance with Good Utility Practice. Any Party's review, inspection, and approval
related to the other Party's facilities and equipment shall be limited to the purpose of assessing
the safety, reliability, protection and control of the Transmission System and shall not be
construed as confirming or endorsing the design of such facilities nd equipment, or as a
warranty of any type, including safety, durability or reliability Vi e . ,Notwithstanding the
foregoing, the inspecting Party shall have no liability whatsoever � failure to give a deficiency
notice to the other Party and the Party owning the Interconne , io ilities shall remain fully
liable for its failure to determine and correct deficiencies. and a in its facilities and
equipment.
FORCE Mai F
Section 5.1 Effect of Force Majeure. No Party s 1 considered in default as to any
obligation under this Agreement if pre ected from fulfills a obligation due to an event of
Force Majeure. Notwithstanding the for , the occurren a Force Majeure event shall
not excuse any Party from any obligati amounts d ereunder. A Party whose
performance under this Agreement is hin ed en t of ce Majeure shall make all
reasonable efforts to perform its obligations uder tai e� t.
Section 5.2 Notifica *W._'"`l ' re is a Fore Majeure 4event affecting a Party's ability to
perform its obligation der this Bement, the y shall forthwith (and in any event no later
than five (5) busini'ss a after first becomes re that an occurrence constitutes a Force
Majeure event) notify the '' i . ' iting� the reasons why it believes the occurrence
constitutes a o jeure iden g ' nature of the event, its expected duration, and
the parts s i ation ' ected by the event, and furnish to the other Parties verbal
report ith respect to Force a e event at such intervals as the other Parties may
reas a equest during ontimi a of the Force Majeure event.
Section 5.3 a oval. T - Parties shall be excused from performing their respective
obligations un e, s Agree nt and shall not be liable in damages or otherwise if and to the
extent that they ar ble to so perform or are prevented from performing by a Force Majeure,
provided that:
(i) the non - performing Party, as promptly as practicable after the Party reasonably
determines that a Force Majeure event has occurred and such Force Majeure event
will adversely impact the Party's ability to perform its obligations hereunder,
gives the other Parties written notice describing the particulars of the occurrence;
(ii) the suspension of performance is of no greater scope and of no longer duration
than is reasonably required by the Force Majeure; and
1 15
(iii) the non - performing Party uses all Reasonable Efforts to remedy its inability to
perform.
ARTICLE 6
LIABILITY, INDEMNIFICATION AND INSURANCE
Section 6.1 Insurance, Indemnity And Liability.
(a) Indemnity. Each Party ( "Indemnifying Party ") agrees to defend, indemnify, and
hold harmless the other Parties ( "Indemnified Pa "'..` as the case may be,
against any and all claims, liability, losses, damages dgments costs or expenses,
including reasonable attorney's fees ( "Claims ") ' extent such Claims were
caused by or resulted from the willful miscon- t or a 'gent acts or omissions
of the Indemnifying Party, its employees o gents arisi n > u of or related to this
Agreement. A Party shall promptly noti , e ther Parties he case may be, of
the assertion of any Claim against su h Party which is poten i , indemnifiable
by the other Party. The Parties sh ' "ue the fhdemnifying Pa pportunity
to defend such a Claim. The claiming ¢ ''' ies shallot settle such laim without
the approval of the Indemnifying Party, approval shall not be unreasonably
denied.
(b) Limitation on Damages. anding anythl o the contrary contained in
this Agreement, the Parties aiv s again a other (and against each
other's parent company, affili es, dire )•icgrs, contractors, subcontractors,
employees d ents) for is
anyequen incidental, indirect, special, or
exempla , a ag � (including, t not limited to, loss of actual or anticipated
profits venues product; los by reason of shutdown or non - operation;
increase ense ;operation; co rreplacement power; interest charges; cost
of capital; or ' ai cnstome, o which service is made), and regardless of
e an y s laima'1s 76f breach of contract or warranty, tort, product
is i 1de ontribustrict liability r any other legal theory. The
above h ons s ' . of trued as a limitation on death, bodily injury or
third party ' S.
(c) sk V��Ch Party shall have the full risk of loss for its own equipment and
Party shall require all contractors, subcontractors, engineers, and
equi' liers or manufacturers to maintain adequate insurance. Said
insurbe with carriers and shall be in policy amounts determined
appre Party, and shall cover workers' compensation, public liability,
contractors' liability, and such other hazards as shall be deemed necessary by such
Party. Each Party shall require that all liability insurance policies name the other
Parties as additional insureds.
(d) No Personal Liability. In no event shall any commissioner, public official,
member, partner, shareholder, owner, officer, director, employee, or affiliate of a
Party be personally liable to the other Parties for any payments, obligations, or
16
performance under this Agreement, or any breach or failure to perform any of
their Party's respective obligations under this Agreement.
(e) Insurance. At a minimum, each Party shall, at its own expense, maintain in force
throughout the term of this Agreement, the following minimum insurance
coverages, with insurers authorized to do business or an approved surplus line
carrier in Minnesota:
(1) Employers' Liability and Workers' Con
statutory benefits in accordance with
Minnesota. The minimum limits for the
shall be one million dollars ($1,000,00.,
accident, one million dollars ($1,000,01))
disease, and one million dollars ($ 0 ,0
disease. '
(2) Commercial General Liar t Insui
operations, personal injury, b fo
blanket contractual liability c
contractual inde ification) produc
coverage for exp collapse and
contractors covera i ge for p
available and puniti da o the
cross liability endorse ent, , th
($1 00 0) per occur one rml
c in � ale limit fo ersonal iniu
(3)
and Glencoe.
Insurance providing
and regulations of
Liability insurance
lent bodily injury by
)yee bodily injury by
imit bodily injury by
ice including a —ses and
� Tperty dama�, -, broad form
(including coverage for the
completed operations coverage,
t ound hazards, independent
V ' Ito the extent normally
xt normally available and a
On limits of one million dollars
dollars ($1,000,000) aggregate
bodily injury, including death
omobileIiability Insurance for coverage of owned
{ed ehicles, trailers or semi - trailers designed for
roads, with a minimum, combined single limit of one
U 900,000) per occurrence for bodily injury, including
damage.
Liability Insurance over and above the Employers' Liability
ieneral Liability and Comprehensive Automobile Liability
erage, with a minimum combined single limit of one million
)0,000) per occurrence /one million dollars ($1,000,000)
he highest limit allowed by statute in the case of Hutchinson
(5) The Commercial General Liability Insurance, Comprehensive Automobile
Insurance and Excess Public Liability Insurance policies shall name the
other Parties as an additional insured for the negligent acts of the insuring
Party under this Agreement to the extent available. All policies shall
contain provisions whereby the insurers waive all rights of subrogation in
accordance with the provisions of this Agreement against the other Parties
17
and endeavor to provide thirty (30) days written notice, prior to the
anniversary date, of cancellation or any material change in coverage or
condition.
(6) The Commercial General Liability Insurance, Comprehensive Automobile
Liability Insurance and Excess Public Liability Insurance policies shall
contain provisions that specify that the policies are primary and shall
apply to such extent without consideration for other policies separately
carried and shall state that each insured is provided coverage as though a
separate policy had been issued to each, exce , usurer's liability shall
not be increased beyond the amount for ch the insurer would have
been liable had only one insured been d. Each Party shall be
responsible for its respective deductible, or rete ns.
(7) The Commercial General Liabil' - insurance, Comp sive Automobile
Liability Insurance and Exc s Public Liability In a policies, if
written on a claims first ma Noftaill s, shad be maintained ll�force and
effect for two (2) years not this Agr4, ment, which
coverage may be in the form ' rage or extended reporting period
coverage if agree4 by the Parties.
(8) The requirements i " herein as types and limits of all
insurance to be main 'ne a artier ar of intended to and shall not
in any manner, limit o quali , t e 'h i t}es and obligations assumed by
the Parties; under this Agreement.
(9) requ ", each Part shall provide certification of all insurance
,,%o, ed in is Agreement, tuted by each insurer or by an authorized
withst g the foregoing, each Party may self-insure to that extent it
ins a e ..-in, ance program; provided that, such Party's senior
sec debt nhanced by third party support) is rated at investment
grade, better y Standard & Poor's or Moody's. For any period of time
that a 's senior secured debt (not enhanced by third party support) is
unrate y Standard & Poor's and Moody's or is rated at less than
ve ent grade by Standard & Poor's and Moody's, such Party shall
y with the insurance requirements applicable to it under this Article.
n the event that a Party is permitted to self - insure pursuant to this Article,
it shall not be required to comply with the insurance requirements
applicable to it under the applicable Sections to the extent it self - insures
such losses and occurrences.
(11) The Parties agree to report to each other in writing as soon as practical all
accident or occurrences resulting in injuries to any person, including
death, and any property damage arising out of this Agreement or
associated with the Substation.
18
ARTICLE 7
TERM AND TERMINATION
Section 7.1 Term. The Agreement shall become effective on Weber- _, 201206,
and remain in effect year to year thereafter until terminated by at least ninety (90) days written
notice, subject to any jurisdictional acceptance for filing required from FERC.
Section 7.2 Default and Termination.
(a) Events of Default. A Default occurs if any Party 'ils;,to fulfill its material
obligations under this Agreement and such failure ontinues for thirty (30) days
after receipt of written notice thereof from the o y. A Party shall not be in
Default of this Agreement provided, however,, a na f the failure is such that
it cannot with due diligence be cured wit ' sald thirty day period, and the
breaching Party shall have diligently pos c ted the cure uch failure within
said thirty (30) days and thereafter d' igently prosecutes such c ntil the failure
is remedied, the time for cure sh, e extended by such pen dime as is
reasonably necessary to cure such brea fore efault occurs.
(b) Termination. Notwithstand
the occurrence of any Vd`
Agreement (i) upon six (�,
appealable order regarding
associated with this Agree
sixty (60) a ' written i
at their'!
notice if
following ci
(6) months'
any other pr ''on in this Agreement and without
It NSP at its a option may terminate this
ith�' written note UC issues a final non-
pr e, the O &M
this t�ement and
6 that
treatmen the costs and/or revenues
s e illy adverse to NSP, or (ii) on
tC ' es an order terminating NSP's
hereunder. Notwithstanding any other
the occurrence of any default, the Parties
Agreement on sixty (60) days' written
,ority directs or makes such termination
tio1 , This Agreement may only be terminated in the
..e y(1) upon mutual agreement of the Parties, (2) upon six
k m any Party to NSP that it desires to terminate this
a written determination by an arbitrator in accordance with
is in Default of this Agreement and such Default has not
d herein.
(d) Paymennipon Termination. In the event of any termination of this Agreement,
NSP shall be entitled to receive payment for all work and services performed
hereunder to the effective date of termination, in addition to all other remedies
available at law and in equity.
(e) Continuity of Operation. Prior to the effectiveness of termination for any reason,
any Party shall be responsible for putting in place a plan and any contractual
arrangements acceptable to the other Parties as necessary to properly operate and
maintain the Substation and Interconnection Facilities in compliance with
19
Applicable Law and Regulations. No party shall contract with a third party
(subject to the Parties prior written consent, not to be unreasonably withheld) to
provide any such operations and maintenance services relating to the Substation
or the Glencoe or Hutchinson Facilities or the NSP Interconnection Facilities.
ARTICLE 8
ARBITRATION
Section 8.1 Disputes. Any contested Default or dispute between th Parties arising out of or
relating to this Agreement shall be referred to the Senior Represses of the Parties for
resolution on an informal basis as promptly as practicable and pri o referral for arbitration. In
the event the Senior Representatives are unable to resolve the ithin a reasonable period
of time, not to exceed thirty (30) days or such other period s the Q 'es may agree upon in
writing or via e-mail, such dispute may be submitted itration ' ,accordance with the
arbitration procedures set forth below.
Section 8.2 Initial Referral. If the Parties a able to "resolve a dispufl Tovided in
Sections 6. 1, any Party may request binding arbitration , prov ,herein.
Section 8.3 Binding Arbitration. Any arbitration shall a onducted before a single neutral
arbitrator appointed by the Parties unde a Commercial i ation Rules of the American
Arbitration Association ( "AAA "). If the 1 to agree up single arbitrator within ten
(10) days of the referral of the dispute to a bitr AAA sh designate an arbitrator. In
either case, the arbitrator shall be lmowledg ble i e t atter of the dispute, and shall
not have any current or past tantial busin s r fmancia ationships with any Party to the
arbitration (except prior i ). The itrator slid provide provide each of the Parties an
opportunity to be he Viand, ex as otherwis provided herein, shall generally conduct the
arbitration in accordan e ;ith Co ercial Rules ofthe AAA.
Section 8.4 it ation I I -lion. rWar "erwise agreed, the arbitrator shall render a
decision (lun day ' appointment and shall notify the Parties in writing of such
decisio ' nd the reason fore. e d cision of the arbitrator shall be final and binding upon
the P i and judgmen the a 'A ay be entered in any court having jurisdiction. The
decision a arbitrator s be appealed solely on the grounds that the conduct of the
arbitrator, or ecision its violated the standards set forth in the AAA Commercial Rules.
Section 8.5 Arb' tion sts. Each Party shall be responsible for its own legal, expert and
other costs incurred resolving any dispute under this Article, and the arbitration fees and
expenses of the arbitra r or arbitrator tribunal and any applicable dispute resolution organization
shall be shared equally by the Parties to the arbitration.
Section 8.6 FERC Dispute Resolution. Nothing herein shall preclude any Party from
requesting FERC's Dispute resolution service to provide its services prior to requesting
arbitration as provided above.
20
ARTICLE 9
STANDARDS OF CONDUCT AND CONFIDENTIALITY
Section 9.1 FERC Standards of Conduct. All information supplied by a Party to another
Party shall be subject to FERC's standards of conduct for transmission providers and shall not be
disclosed by the receiving Party in violation of such standards as set forth in Part 358 of FERC's
rules and regulations.
Section 9.2 Confidentiality. Any information not available to the ublic and supplied under
this Agreement and marked or otherwise designated by the Party d' Hosing the information as
Confidential Information.
Section 9.3 Nondisclosure. No Party shall disclose any G, ffiden `' ion of the other
Party obtained pursuant to or in connection with the perfo ante of tlu Bement to any third
party without the express written consent of the other , except that Na y may produce
Confidential Information in response to a subpoe a' discovery request o *er ompu lsory
process issued by a judicial body or Govermp Autho ' or as requir flaw upon
reasonable notice to the Party whose Confidential ati ti }is and the, hing of an
�.,
applicable written legal opinion if the information is req o be produced by Hutchinson as a
public body and instrumentatility of the sState of Minnesota. ,,
Section 9.4 Standard of Care. All P i 11 use at lea same standard of care to
protect Confidential Information it receives it o _rotect its Confidential Information
from unauthorized disclosure, publication or , sserru;It o,�i�q.4.i , '
Section 9.5 Use of C $fin a Informatio Any Party may use Confidential Information
solely to fulfill its ob a ions to e' ther Party o arties under this Agreement or its Regulatory
Requirements, or iri" roceedi . under Articl r 10.5, subject either to a confidentiality
agreement with all partic s g if app able, arbitrator(s)) or to a protective order.
Notwithstandi a�the absen a e order or waiver, a Party may disclose such
Confiden 'S: o ' whic, i the opinion of its counsel, the Party is legally compelled to
disclos . n the event a rec .i Party is legally requested or required (by oral questions,
intern g Ties, requests forma r documents, subpoena, civil investigative demand or
similar p " s or; in the o on of s counsel, by federal or state securities or other statutes,
regulations o s) to disclo jany Confidential Information, the receiving Party shall promptly
notify the dis Party such request or requirement prior to disclosure, so that the
disclosing Party eek n appropriate protective order and/or waive compliance with the
terms of this Agree m shall request confidential treatment of any such disclosure.
Section 9.6 Damages. The Parties agree that monetary damages by themselves may be
inadequate to compensate a Party for the other Party's breach of its obligations under this
Section. Each Party accordingly agrees that the other Parties are entitled to equitable relief, by
way of injunction or otherwise, if it breaches or threatens to breach its obligations under this
Article.
Section 9.7 Rights to Confidential Information. All Confidential Information, unless
specified otherwise in writing by the disclosing Party, shall remain the exclusive property of the
21
disclosing Party, including any and all reproductions of any of the Confidential Information, and
shall be returned at the request of the disclosing Party.
Section 9.8 Notification. Each recipient Party shall provide notice to the disclosing Party of
any demands to disclose or provide any Confidential Information by a Governmental Authority,
tribunal or third party prior to disclosing or furnishing the Confidential Information so as to
afford the disclosing Party an opportunity to seek injunctive relief or protection from the demand
to disclose or to seek confidential treatment upon disclosure.
Section 9.9 Survival. The confidentiality provisions of this Artic sh "alt continue and survive
for a period of six (6) years after the termination of this Agreement.,.,
ARTICLE 10 p
MISCELLANE0%
Section 10.1 Governing Law. This Agreement s l "be governed by, con , and enforced
in accordance with the laws of the State of Mi ota, without regard to con . ibtsobf interest
principles. � kh, ,w ,A
Section 10.2 Counterparts. This Agreement may be ez Aced in any number of counterparts,
each of which shall constitute but one Aithe same documenT ,
Section 10.3 Assignment. This Agreemlt slid;
successors and assigns, on and after the e e t i v e
Agreement, whether in who e. r in part, shall 'e ae
the written consent of th ies, which s alp]
Party may assign this eemen affiliated e�
or transfer of substa all of i electric transn
consent of the other P pr that such
conditions herao d shall a ea l. 'rations i
t,,j,binding up� the respective Parties, their
I- of. one of the provisions of this
3igned1Party to any third party without
not be2nasonably withheld. However, any
:ity or in the event of a merger, reorganization
fission property to another entity, without the
ccessor shall be bound by all terms and
f the assignor.
rciary. No provision of this Agreement shall in any way
%inluding the public at large) so as to constitute any such
It is Agreement or of any one or more of the terms hereof,
action in any person not a party hereto.
1ority. This Agreement is subject to all valid laws, order, rules,
duly constituted authorities having jurisdiction over the subject
and MPUC and any successor agencies.
Section 10.6 Notice. Any notice required under this Agreement shall be mailed or delivered by
facsimile with telephone confirmation to the representatives designated on Exhibit E.
Section 10.7 Representations. Hutchinson, Glencoe and NSP each represent that they have all
necessary authority and have met all federal, state, and municipal requirements necessary to
enter into this Agreement.
22
Section 10.8 Complete Agreement. This Agreement, including Exhibits, constitutes the sole
and entire agreement between the Parties hereto and supersedes any previous written or oral
agreements. No other terms or conditions shall be binding upon Hutchinson, Glencoe or NSP
unless accepted by them in writing. No modification or amendment of this Agreement shall be
valid unless reduced to writing signed by all Parties.
Section 10.9 Municipal Authority. Hutchinson and Glencoe also represent and warrant that
all necessary Governmental Authority has approved the execution, performance and delivery of
this Agreement, and that Hutchinson and Glencoe represent and arrant that they have
conducted all necessary due diligence and that this Agreement is s ' 4or the subject matter
hereof with respect to the Substation and the Hutchinson and Glene, Facilities.
Section 10.10 Intentionally left blank.ReseFved
Section 10.11 Update Exhibits. The Exhibits are}n
Agreement. The Parties shall endeavor to update t'e
however, no Exhibit shall be amended wit, e
Representatives of the Parties.
Section 10.12 Audit Rights. Upon reasonable advance
Party shall allow a requesting Party acce such accour
the requirements of this Agreement are g rigs' isfied
Agreement.° }�e
in an or,in a part of this
Exhibits as require�'lc d appropriate;
unanimous approva " e Senior
n Me, a requesting Party, any other
stins as are needed to verify that
aned in accordance with this
Section 10.13 Reporting. n request by a��fy any JParty shall cooperate in making
available to informati be reasona ly require for compliance with reporting
requirements of duly " nstitute thorities ha&g jurisdiction over the subject matter herein,
including the MP k C, C, ApplicabWIC cessor , eliability Council, Balancing Authority,
Control Area Operator or 0 y€, spective organizations thereto.
INN', e RA V is Agr`e`ement is entered into as of the day and year first
and is a ed in riginal copies, one of which is to be delivered to NSP, the
CITY OF HUTCHINSON, MINNESOTA, AND
HUTCHINSON UTILITIES COMMISSION, a
Minnesota Municipal Corporation
By:
Its:
23
CITY OF GLENCOE, MINNESOTA, AND
THE GLENCOE LIGHT AND POWER
COMMISSION, a Minnesota Municipal
Corporation
By:
Its:
COMPANY
Name: Teres= . Mo eg nsenDeugk
Title: Vice PrA %96yices t, Transmission
blu,,, Xcel Ener Inc.
�uthorizec gent for,Nbrthem States Power
&mpa y, a 898ta corporation and wholly
oked subsidia of Xcel Energy Inc., on behalf of
its Transmission Function
24
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EXHIBIT B
Interconnection Diagram
27
EXHIBIT C
Applicable Regional Reliability Council, Control Areas and Balancing Authorities
Regional Reliability Council — Midwest Reliability Organization
Control Area — NSP
Con
Bale
Bale
28
EXHIBIT D
Substation As Built Drawings
Hutchinson Drawing No. Date Certifying Professional Engineer and Firm
29
EXHIBIT E
Designated Representatives
Coordinating Representatives:
For Hutchinson:
Systems Controller
Hutchinson System Operations Center
General Manager
225 Michigan Street SE
Hutchinson, MN 55350 -1940
T: (320) 587 -4746
F: (320) 587 -4721
For Glencoe:
Attention: Manager
305 11th Street East
Glencoe, MN 55336
Senior Representatives for purposes
Section 8.1.
For Hutchinson:
Systems Controller
Hutchinson System '
General Mar.ager
225 Michigan Street SE
Hutchinson ' 4` = 0 -1
T: (320 -4746
F: (32®- 87 -4721
For Glenc5 .
Attention:
305 11th Street
Glencoe, MN 5
30
For NSP:
Mark C. Moeller
Transmission Business Relations
Xcel Energy
250 Marque tt laza
Suite 800 ,
(6
Section 9.8 �y�ispute Resolution Under
Mark C. Moeller
Transmission Business Relations
Feel Energy
250 Marquette Plaza
Suite 800
Minneapolis, MN
(612) 330 -6773
EXHIBIT F
Switching and Tagging Rules
31
NSP SPAR
Issue #20.2 Equipment Control — Safety Tags
Issued: 10 101184 Revised. 9101191
Subject: EQUIPMENT CONTROL - SAFETY TAGS
(All Business Units except the Gas Utility or unless more stringent standards
apply)
1.0 Purpose:
To establish a program for the control of equipment tq Thainntain personnel and
equipment safety by avoiding unauthorized and inadvertent operation of
equipment. A , k".
2.0 Background:
NSP presently does not have a uniform `' 1icy covering control A equipment to
maintain personnel and equipment ety by avoiding un sized and
inadvertent operation of equipment. It i ''` orta� o have a uni m policy as
employees are, from time to time, either to }k'o arily or permanently reassigned
work locations in which case different policiesSlead to confusion, frustration
and injury. The uniform poi 'ay enables them oid misunderstanding or
misapplying an unfamiliar proc eat a new or gtmork location. Also, a
uniform system enables employee tr ihi g: and s�ograms to function more
effectively.
Federal and St te0S14° requires a9 CFR 1926.951(d) that "all switches and
disconnecter re plain aaaed indicatina that men are at work ".
The National Elec local S ,je(,yrpode at 442E describes Tagging as follows:
Ruipment or crr s tha o be treated as de- energized shall have suitable
ag-us- attached to I oints . here such equipment or circuits can be energized.
Co d that are t e de- activated during the course of work on energized or
de -ene ed equip , ent or circuits also shall be tagged. The tags shall be
placed o entify lainly the equipment or circuits on which work is being
The NSP Safety Manual briefly describes safety tags at PART I, 12 -5 and 12 -6.
Also at PART III, Section 4, Safety Tags (34 -5), and Hold Cards (34 -6), Request
for Outage (34 -3), Dispatching (34 -4) describe Electrical Transmission and
Distribution clearance methods. PART IV describes the need for hold tags in
Power Plant Operations.
CAUTION: Any hard copy reproductions of this policy should be verified against the on -line system for
current revisions.
spar20_2.doc Safety Policy and Regulation System
32
NSP SPAR
Issue #20.2 Equipment Control — Safety Tags
Issued: 10 101184 Revised. 9101191
3.0 Action:
NSP's Equipment Control Program shall be used at all power plants, substations,
on all transmission and distribution lines, all other equipment within the NSP
electrical system, and all other operating areas excluding the Gas Utility. This
Equipment Control Program is excepted only where more stringent requirements
apply. The Equipment Control Program consists of two parts as follows:
A. An overall policy which outlines the necessar, . tems�for discussion and
application in Region /Plant/Department proce e.
B. Individual Business Unit procedures which address a overall policy with
requirements specific to the operation$phe entity fo �ich it is written.
Part A (overall policy) includes the following
11. Definitions:
WORK AREA: The physical territory over which work extends.
CLEARANCE: Authorization by the proper authority that a specified line or piece
of equipment is de- energized, drained, purged, depressurized or whatever is
necessary to make equipment safe to work on or in, and that the control of the
line or equipment is being turned over to the person in charge.
CAUTION: Any hard copy reproductions of this policy should be verified against the on -line system for
current revisions.
spar2O -2.doc Safety Policy and Regulation System
33
NSP SPAR
Issue #20.2 Equipment Control — Safety Tags
Issued. 10 101184 Revised., 9101191
SAFETY TAGS: Tags which are attached to equipment to prevent its operation.
They are of four types:
A. Hold Card: (See Attachment #1 for Facsimile)
A card attached to a switch, a device serving as a switch, or to a valve
when it is required that the switch or valve be maintained in a specified
position to safeguard human life. A switch or valy referred to as being
"Held Open" or "Held Closed" when it is in that ppsitionnand a Hold Card is
lar
attached. An example would be when it is necessary to open and hold a
switch while working on an electric motor.
B. Secure Card: (See Attachment #2 fo csimile)
A card attached to a switch, a d "ce serving as a switc o a valve to
protect equipment, to prevent ice interruption, but vier where
protection of people is involved. A ch erred to as being "Secured
Open" or "Secured Closed" when it is t position and a Secure Card is
attached. An example ould be when it rs ecessary to open and secure
a switch when a bypass r is being use
C. Unsafe Card: (See Attach ` ent 3 '` . acsimile.
A card use e'quipmen�oc�ls or de ices to inform personnel that the
equipmen'f for use. `tj
D. Info to. Tags:
sed eci icnns r"cions in particular circumstances. These are
o n. z ation and are not to be used to safeguard life or property.
Some pies '�e: green "Grounded" tags, black "Manual" tags,
"Future Jo nder ristruction" tags, "Caution Vehicle Under Limited
Duty" tags. i
SUPER t ; , OR (peon in charge): A qualified employee who has been
authorize d d�eslgnated to be locally in charge of Company work. (A person
who is in ch a work or other employees, regardless of his /her usual title.)
AUTHORIZED PERSON: A person approved or assigned by the employer to
perform specific duties or to be at a specific location at the job site. This
authorized person includes but is not limited to such job classifications as shift
supervisor or watch engineer, lineman, substation electrician, trouble foreman,
system operator, region or area dispatcher, region or area construction manager
or superintendent, etc.
CAUTION: Any hard copy reproductions of this policy should be verified against the on -line system for
current revisions.
spar20_2.doc Safety Policy and Regulation System
34
NSP SPAR
Issue #20.2 Equipment Control — Safety Tags
Issued. 10 101184 Revised: 9101191
COMPETENT PERSON: A person who through training and experience, is
capable of safely performing the work assigned.
QUALIFIED PERSON: A person who is familiar with the construction or
operation of the lines, switch or equipment with which he /she works and who is
fully aware of the hazards involved. A person who has successfully
demonstrated his /her ability and is recognized by management as qualified to
perform the duties to which he /she has been assigned.
CARD PROTECTOR: Plastic, 5" x 9 1/2" - NSP any Stock #18 -1352 is
available for Hold, Secure or Unsafe tags providi e ' r protection where the
tags will be exposed for any length of time. It is urable, ar plastic and has a
weather - sealed hole which can accept an N ,P %pja11Ilock has ring, wire or rope
to tie it on.
ZERO STATE: A condition in which 41115' k-
not
This could be electricity from a capacitor,
water line, spring tension as in a breaker, et
safe to work on until all ources of pet -np
There may be times when oth ns must be n
this zero state, such as groun �n ctrical E
drains between two isolating vale .s. The to
and Hold Carded accordin gly. f�
2.
Wii` ystem has be - dissipated.
water from a earn or feed
isolated piece of equipment is
qnergy have been released.
° tained in order to continue
0. Ip ent or the use of open
be considered in any isolation
Region /PI'int/Deparfinent shall be responsible for
tion to meet.the intent of Part A of this SPAR.
R k q. s on , ibility of each plant, region, or department
annua { ervals.
F the supervisor, authorized person, competent
following items shall be reviewed:
uthorized person shall be:
2�0,,1 ghly acquainted with the requirement of an isolation or
': "oration procedure before the isolation or restoration process
arts, i.e., which components need to be isolated or restored and
the reasons for isolating or restoring, such as the safety
considerations, component damage or process change, etc., and
covers items discussed in Sections III through XIII.
Assuring that the qualified person understands the outage
requirements and competent person understands the switching
requirements and not proceed until such understanding exists.
CAUTION: Any hard copy reproductions of this policy should be verified against the on -line system for
current revisions.
spar20_2.doc Safety Policy and Regulation System
35
NSP SPAR
Issue #20.2 Equipment Control — Safety Tags
Issued. 10 101184 Revised. 9101191
3. Repeating all telephone and radio messages involving switching
orders, or other important information from any source and
recording time and date.
4. Verifying the correct Safety Tag is used and that a Safety Tag is
attached for each person requesting same or that multiple requests
are properly logged for attachment of a single Safety Tag.
5. Maintaining the Hold and Secure Card R 10&S14.
6. Giving final clearance on holding s ring of equipment and
releasing same.
7. Ensuring that a competent i dividual has indepe , ntly verified the
isolation and restoration o quipmegt when requir
8. Shall be responsible for issue g. nd re a "acing tempora releases.
B. Qualified Persons shall.be responsible fa 4
1. Being alert to po n 1. I , azards to emp es in addition to those
identified on the w re e 1 r work ore.
4,,
2. Rep i g all telepho a nd ra io messages involving switching
Rep
instruction and performance of
othu UR! rifyin Nha ipme' tit is in correct configuration prior to tagging
If instored energy within the confines of the tagged
eq - en reduced to a zero state.
t Filling t, installing, and removing safety tags.
1%69alifie C. .£ r competent person in charge of the actual work shall be
1. 4Requesting Hold or Secure tags be applied.
2. Assuring that the requirements of this SPAR governing equipment
control have been properly implemented to ensure safe working
conditions.
3. Reporting completion of work and releasing equipment back to
Operations.
CAUTION: Any hard copy reproductions of this policy should be verified against the on -line system for
current revisions.
spar20_2.doc Safety Policy and Regulation System
36
I 18964334
NSP SPAR
Issue #20.2 Equipment Control — Safety Tags
Issued: 10 101184 Revised. 9101191
IV. Hold Cards, Secure Cards
A. Hold Card description: Hold Cards shall be in two sizes: 4" x 7 -1/2"
(Form No. 17 -5048) and 2 -5/8" x 4 -3/4" (Form No. 17- 5050). These sizes
are for the convenience of the user. The larger card should be used at
outside locations where greater visibility is desired. Use the size most
suited for a given situation.
It should be kept in mind that the use oAthhe' "'e� size Hold Card on
insi de equipment may be desirable dulimitations or where
introduction of foreign objects may result uits. The color of the
card in red on white. The Hold Card as hment #1 shall be
the only card used as a Hold Ca,d%iip the NSP ac , tem. No other
configuration shall be used.
B. Secure Card description: SecLV rds sh be in two size's 4" x 7 -1/2"
(Form No. 17 -5052) and 2 -5/8" x 4- ' F rm o. 17- 5055)4 These sizes
are for the convenience of the user. a larger Secure Card should be
used for outside locatid s where high visi i is especially desirable. Use
the size most suited fo v n situation. ould be kept in mind that
the use of the smaller and on c - ro equipment does not
preclude the necessity of tachin ' arger ecure Card directly to the
switch, valve or other contro edl, vice. eicolor of the card is orange on
white. T Card ass wn in Attachment #2 shall be the only card
used a Secu Card in the SP system. No other configuration shall
be use
C. Hold Cards �..
NOT ERE r. NO MORE IMPORTANT SAFETY DEVICE THAN A
PROPER ILL fl T AND ATTACHED "HOLD" CARD. IT MUST BE
UNDERST D AN ESPECTED FOR WHAT IT REPRESENTS - A
LIFE -SAVI : PRO EDURE. IT SHALL BE USED ONLY FOR THE
POSE I ° ENDED.
Hol and r a shall include the following concerns:
1. ethod of installation
2. When to use
3. Limitation of use
4. Limitation of device movement with Hold Card attached
5. Limitation on re -use
6. Limitation on persons working under a Hold Card. (Use of a single
Hold Card covering multiple work orders shall be permitted with
CAUTION: Any hard copy reproductions of this policy should be verified against the on -line system for
current revisions.
spar20_2.doc Safety Policy and Regulation System
37
NSP SPAR
Issue #20.2 Equipment Control — Safety Tags
Issued. 10 101184 Revised., 9101191
approval of the person doing the actual work and only when
approved administrative control of the Hold Card is in effect.)
7. Instructions on filling out the Hold Card.
8. Authorizing person
D. Secure Card use: Secure Card use shall include the following concerns:
1. Method of installation
2. When to use `
3. Limitation of use
4. Limitation of device movement with cure' rd attached
5. Limitation of re -use.
6. Instruction in filling out the Sec,,(,E rd
7. Authorizing person f'
V. Hold and Secure Card Installation a Removal3for Equipment so ation. JIV
A. The following items shall be consid re` in the procedure of Hold and
Secure Card installatio
1. Card installed for p r p�fi °� o'ng thNwo,jiMmediate supervisor.
2. Isolation under prop.' au No i
P P
3. Verification that sys em c n roperly isolated and that any
sto e' a gy within t'h confines 'he tagged out equipment has
been re d to a zero tate.
4., ntificati .of qualified o competent persons to install cards.
5. 1 atio at cards hav4�een properly installed.
6. Ene : s . a o :,
O afeg a again ldental re- energizing
,dO 8. jrQRer phone, radio or verbal communication and
V3.' icaticr s of isolation
s on holding a system
ct loading and card positioning on locks
r Information Card attachment to switch -board remote
vices.
rd limitation on switchboard remote control device
nt.
B. The following items shall be considered in the procedure of Hold and
Secure Card removal:
1. Only the person for whom a Hold or Secure Card was installed
shall release it or, in unusual circumstances, the immediate or peer
supervisor.
CAUTION: Any hard copy reproductions of this policy should be verified against the on -line system for
current revisions.
spar20_2.doc Safety Policy and Regulation System
38
I1896433v8
NSP SPAR
Issue #20.2 Equipment Control — Safety Tags
Issued. 10 101184 Revised. 9101191
1 a. If an immediate or peer supervisor must approve the removal of a
Hold or Secure card, consideration shall be given to notification of
the person for whom the card was originally installed. This
notification shall be given prior to the original person doing any
work on his /her return to active duty.
2. Removal of cards ordered by supervisor or authorized person.
3. Ascertaining that equipment is clear and red'd, for re- energizing by
competent or qualified person.,
4. Removal of cards performed by qualifie r competent person.
5. Methods to assure all cards are accoun ed or in removal and no
additional cards removed.
6. Steps in removing of card andr #fete gizing.
7. Maintenance of clear area while energizing= or personnel
protection.
8. Completion of card by comp ent or q�. &q�ifed person.
9. Depositing of cards with superva or ; r au horized person.
VI. Temporary Release
When a system requires to 1AIM h a ily repositi, r"e for testing, cleaning,
flushing or other purposes, the fo wing�i� i e shall be considered:
A. A temporp(y" ,glgase requees l iled wifthe supervisors or authorized
VII.
B. Clearan'b r repo` itioning obtapWa from all signers of the Hold Card in
uestion. :' t �aU -B -1 and 1a. above.)
C.e The dual , orized to remove the Hold Card in question after
66 removin a Holt; reports to the supervisor or authorized person
who:
Notes Pat on the log, and;
2 Maint s the released Hold Card with the log, and;
3. oes and initials upon removal of the temporary release condition.
The following items shall be considered in maintaining records of Hold or Secure
Cards:
A. A record either on a log, work order or dispatcher log of:
1. Card number if used
CAUTION: Any hard copy reproductions of this policy should be verified against the on -line system for
current revisions.
spar2o_2.doc Safety Policy and Regulation System
39
1896439-,g
NSP SPAR
Issue #20.2 Equipment Control — Safety Tags
Issued. 10101184 Revised. 9101191
2. Name and title of person for whom card is attached
3. Name or initials of supervisor or authorized person ordering
installation of the card.
4. Request for outage or work number if applicable.
5. Name or initials of supervisor or authorized person who orders
removal of the card.
6. Maintenance of this record at a designated location.
7. Records shall be kept one year after complgipp of work.
VIII. Unsafe Cards
IX.
A. Description: Unsafe Cards are in one si;
5054). Unsafe Cards are printed it
cardboard. The word UNSAF4spo nal
front side, together with questand
The reverse side shall have N in
'DO NOT REMOVE THIS TAG U "
"NSP" in blue. The Unsafe Card as s
only Unsafe Card used' n the NSP sys
be used.
B. Use, installation and remo p I: Un 6K
information: �.£�4
1. ,a' achmehl'
2. e oval
3. o use w,. � e carded
Card
for
y: 4'(Form No. 17-
on Ni wh '' eather- resisting
I n large w' "e letters on the
as for infor "ation "required.
ie white letters rWthe words
THORIZED" in black and
in Attachment #3 shall be the
No other configuration shall
all include the following
cards hav een pfoduced by several different departments or sections.
a Jude suc,Items as green "Grounded" tags, "Caution Vehicle Under
'Y° tags..f
Continuation. ''these tags is permitted with instructions in using them added in
writing by the" G.O. Safety Department prior to use and the approval shall be
made part of Interpretations section of this SPAR.
X. Variances
A. Temporary. A temporary variance to this SPAR may be granted by written
instructions from the Department Manager or his designee. This
temporary variance shall be effective for a 30 -day period. An example of
CAUTION: Any hard copy reproductions of this policy should be verified against the on -line system for
current revisions.
spar20_2.doc Safety Policy and Regulation System
40
NSP SPAR
Issue #20.2 Equipment Control — Safety Tags
Issued. 10 101184 Revised. 9101191
this may be when a new plant is coming in line and current procedures
would be impossible to comply.
B. Permanent. A temporary variance may be made permanent if the written
instruction is submitted to the Safety Advisory Committee by the General
Manager or designee through the Industrial Hygiene and Safety
Department. The variance request shall be reviewed and acted on at the
next regularly scheduled meeting of the Safety Ad (sory Committee.
XI. Interpretation
Interpretation of this SPAR shall be provided as ecess on approval of the
Safety Advisory Committee and shall be ma ear of this S
XII. Discipline,
The NSP Positive Discipline and Crisis S sp si sAA rgcedures sha be in effect
for violations of this SPAR.
XIII. Business Unit Application
All Business Units shall be requi �d, o roce I re or installation into PART
B of this SPAR by 1/1/91. The pry' edu s 1, ak Into consideration the items
mentioned under A. Additio. Atems t T A may be included when
found necessac a)amize effectiveness.
This SPAR "`' ' ue" ham been favoFE b y reviewed by the SPAR Advisory
Committee. The ent, ers are a follows:
J. # zo ha = , r, Ma ' r, Quali y Assurance
Berg, Sae dmi t for -Power Supply
Pilla, Safe inistr o - Electric Utility
J. urphy, Ele c c Mairlenance -CSC Annex
D. nny, Safet dministrator - Wisconsin Company
M. D. er, Site fety Administrator - Prairie Island
J. J. Pine • Sr, S, ety Consultant - Corporate Safety
J. R. Thill, A istrator- Industrial Hygiene &Safety
Signed Signed
James R. Thill Ann M. Hoffman
Administrator Manager
Industrial Hygiene Occupational Health
and Safety and Safety
CAUTION: Any hard copy reproductions of this policy should be verified against the on -line system for
current revisions.
spar20_2.doc Safety Policy and Regulation System
41
I18964348
NSP SPAR
Issue #20.2 Equipment Control — Safety Tags
Issued: 10 101184 Revised: 9101191
ATTACHMENT #1
See SPAR Manual Hard Copy For Graphic Representation of Danger Hold Cards.
Cards are available from Maple Grove or your local stores area.
Part # Description
14 -8000 Generation, Fan Folded For Printer
14 -8007 Generation, Fan Folded�ll' rite On
17 -5048 Generation, Large W &4
17 -5050 Generation, Small to On
14 -8003 Electric, Small- tlo0 °
14 -8008 Electric, Large'ttdoor
CARDS ARE RED }IUD BLACK
O
HOLD
Request No. Card No.
Switch -Valve
Hold Open Hold Closed
Station or Location
Hold Card On For
Time Date
By Operator
By Order Of
Verified By
Time Date
------------------------------
------------------------------
Hold Card Off For
Time Date
By Operator
By Order Of
Form #
■
A
N
G
E
R
NSP
NOT REMOVE THIS TAG
UNLESS AUTHORIZED
BACK FRONT
CAUTION: Any hard copy reproductions of this policy should be verified against the on -line system for
current revisions.
spar20_2.doc Safety Policy and Regulation System
42
I 18964334
NSP SPAR
Issue #20.2 Equipment Control — Safety Tags
Issued. 10 101184 Revised., 9101191
ATTACHMENT #2
See SPAR Manual Hard Copy For Graphic Representation of Caution Secure Cards.
Cards are available from Maple Grove or your local stores area.
Part # Description
14 -8001 Generation, Fan Folded For Printer
14 -8009 Generation, Fan Folded to On
17 -5052 Generation, Large Wr' a On e,
17 -5055 Generation, Small W .i a On
14 -8006 Electric, Small-O f Electric, Large Ota door
CARDS ARE ORANGEID BLACK
O
SECURE
Req. No. Card No.
Switch -Valve
Secure Open Secure Closed
Station or Location
Secure Card On For _
Time Date
By Operator
By Order Of
Remarks
Secure Card Off For _
Time Date
By Operator
By Order Of
Remarks
Form #
O
C
A
U
T
O
N
NSP
DO NOT REMOVE THIS TA
UNLESS AUTHORIZED
BACK FRONT
CAUTION: Any hard copy reproductions of this policy should be verified against the on -line system for
current revisions.
spar20_2.doc Safety Policy and Regulation System
43
I �g
NSP SPAR
Issue #20.2 Equipment Control — Safety Tags
Issued. 10 101184 Revised. 9101191
ATTACHMENT #3
See SPAR Manual Hard Copy For Graphic Representation of Notice Unsafe Cards.
Cards are available from Maple Grove or your local stores area.
Part # Description
14 -8005 Electric, Large Outdoor
17 -5054 General All Purpose, Wr'te On
CARDS ARE LIGHT BLUE
s
0
UNSAFE
Equipment
Station
Location
Unsafe Condition
-----------------------------
Unsafe Card On
Time Date
By
By Order Of
Unsafe Card Off
Time Date
By
By Order Of
Form #
BACK
0
N
O
T
I
C
E
NSP
DO NOT REMOVE THIS TA
UNLESS AUTHORIZED
FRONT
CAUTION: Any hard copy reproductions of this policy should be verified against the on -line system for
current revisions.
spar2O -2.doc Safety Policy and Regulation System
44
EXHIBIT G
Substation Site Description
]HUC to supply]
45
N�N
0
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w
ief sonproperty.pai
Legal:
Lot 4, Block 1, First
Addition to
Hutchinson
Industrial District
Size:
1.946 acres
(84,803 sf)
Zoning:
1-1, Light Industrial
Utilities:
12" water & 10"
sanitary sewer; gas
& electric readily
available.
Contact:
Nelson Properties
Attn: Eric or Steve
740 Bowman Street
Stewart, MN 55385
Ph. (320) 5622413
ttttp: t/ nuteninsoneaa .coavwp- contenttuploaas /zu i z /u.)/nelsonproNr.,
M .
1 025 5th Avenue SE
Hutchinson, MN 55350
Notes:
Lot is about 160' wide and 530' deep.
[ Of 1 3/5/13 11:45 AN