Members Present: Mr. Toulouse, Mr. Landwehr, Mr. Utz and * Mr. Hunziker

Absent: Mr. Bourgeois

Also Present: * Mr. Adkins, City Attorney


Board President Landwehr called the meeting to order at 4:00 p.m.


1. Mr. Toulouse moved to approve the minutes of the October 29, 2002 meeting, seconded by Mr. Hunziker. All voting "AYE"


2. Mr. Utz moved to approve the accounts payable report, seconded by Mr. Hunziker. All voting "AYE"


3. Mr. Greg Oxley, Director of Government Relations for the Minnesota Municipal Utilities Association (MMUA), appeared before the Board to provide an update on legislative activities at the state level. MMUA's legislative team actively represents member cities' interests on a wide variety of state legislative issues in St. Paul. MMUA is also very active in dealing with federal and state agencies on regulatory issues.


4. Mr. Hunziker moved to approve the annual maintenance on business software with SAP Public Services, seconded by Mr. Toulouse. All voting "AYE"


BE IT RESOLVED by the Public Utility Board of the City of Rochester, Minnesota, to approve a purchase order agreement with SAP Public Services Inc. for Software maintenance and support for 2003


The amount of the purchase order agreement to be SEVENTY TWO THOUSAND SEVEN HUNDRED NINETY SEVEN AND 40/100 DOLLARS ($72,797.40)


5. A revised resolution was distributed during the meeting with a reduced contract dollar amount for a proposed fuel cell project with the University of Minnesota. Mr. Koshire explained that there may be future phases to the proposed project and that each phase would be re-negotiated and would last approximately one year. Mr. James Licari and Mr. Hall Ottesen from the University of Minnesota discussed the project with the Board. The research will be done at the University of Minnesota-Rochester. The unit will be installed at one of RPU's substations. Mr. Ottesen stated that the size of the fuel cell was kept small at 500 watts to better study it. Mr. Landwehr moved to approve the revised resolution subject to review of the contract terms and conditions by the City Attorney's Department, seconded by Mr. Utz. All voting "AYE"


BE IT RESOLVED by the Public Utility Board of the City of Rochester, Minnesota, to approve a contract agreement with the University of Minnesota and that the Public Utility Board authorize the Mayor and the City Clerk to execute the agreement for Hybrid Energy System Study


The amount of the contract agreement to be FIFTY-NINE THOUSAND AND 00/100 DOLLARS ($59,000.00) and RPU will provide the fuel cell for the study.


6. The preliminary 2003 budgets for electric and water were discussed with the Board. The preliminary budget for electric reflects a small rate increased proposed to be effective April 1, 2003. In the water division, a 4% increase is proposed also effective April 1, 2003. Any rate adjustments would be requested during the first quarter of 2003. The Board will be asked to approve the budgets at their December 23, 2002 meeting.


* Mr. Hunziker and Mr. Adkins left the meeting at this time.


7. Mr. Koshire, General Manager, provided the following report:

a. The Southern Minnesota Municipal Power Agency (SMMPA) Board voted not to increase the cost of wholesale power to its members (this includes RPU). The SMMPA Board still needs to determine what to do with the bond refinancing savings they will receive.

b. The Cascade Lake transmission line re-route is completed.

c. The Minnesota Public Utilities Commission approved an agreement between People's Cooperative Services and RPU on 2000 annexations.

d. The next RPU Board meeting will be Monday, December 23, 2002 due to the holidays.


8. The management/financial reports were discussed.


9. Other Business:

Board member Utz and City Attorney Adkins attended the American Public Power Association's legal seminar recently.


9. Mr. Utz moved to adjourn the meeting, seconded by Mr. Toulouse. All voting "AYE" The meeting was adjourned at 5:55 p.m.


Approved by the Board: December 23, 2002