RPU BOARD MEETING MINUTES April 29, 2003

Members Present: Mr. Landwehr, Mr. Bourgeois, Mr. Jibben and Mr. Hunziker

Absent: Mr. Utz

Also Present: *Mr. Adkins, City Attorney

 

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

 

1. Mr. Hunziker moved to approve the minutes of the March 25, 2003 meeting as amended to include the phrase commercial/industrial customers in line 7 of item #7, seconded by Mr. Bourgeois. All voting "AYE"

 

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

 

3. The Board recognized Mr. Dave Klinkhammer who retired this month as plant mechanic at the Silver Lake Plant after 36 years of service.

 

* Mr. Adkins entered the meeting at this time.

 

4. The 2002 audit results were presented by Mr. Wente from the Smith Schafer firm. Mr. Wente discussed the GASB 34 impact on RPU's accounting practices. The financial statements will be issued in a similar manner to those in the past with some minor accounting changes. Mr. Bourgeois stated that as a member of RPU's audit committee he found the rules of the operation to be in good shape.

 

5. The switchgear bids for the Northern Hills substation addition were reviewed. Mr. Hunziker moved to reject the bid proposals from Hyundai, Pioneer Power, PACS and Cutler Hammer due to failure to meet the technical specifications, and to approve a purchase order with Square D, seconded by Mr. Bourgeois. All voting "AYE"

 

BE IT RESOLVED by the Public Utility Board of the City of Rochester, Minnesota, to reject the bids received from Hyundai, Pioneer Power, PACS, and Cutler Hammer based on failure to meet technical specifications and failure to submit complete proposals.

 

BE IT FURTHER RESOLVED by the Public Utility Board of the City of Rochester, Minnesota, to approve a purchase order agreement with Square D for 15 kV Indoor Metalclad Switchgear

 

The amount of the purchase order agreement to be TWO HUNDRED FOURTEEN THOUSAND FIVE HUNDRED AND 00/100 DOLLARS ($214,500.00) and Square D being lowest responsible bidder.

 

6. A revised tariff for a Fire Hydrant Facilities Charge was distributed during the meeting. Mr. Bourgeois moved to approve the tariff effective June 10, 2003 subject to Council approval, seconded by Mr. Hunziker. All voting "AYE"

 

BE IT RESOLVED by the Public Utility Board of the City of Rochester, Minnesota, that the Common Council of the said City is requested to approve the following rate schedules effective June 10, 2003. Fire Hydrant Facilities Charge (FHFC)

 

7. Mr. Hunziker moved to approve revisions to the Interruptible Service rate schedule effective May 6, 2003 subject to Council approval, seconded by Mr. Bourgeois All voting "AYE"

BE IT RESOLVED by the Public Utility Board of the City of Rochester, Minnesota, that the Common Council of the said City is requested to approve the following rate schedule effective May 6, 2003. Interruptible Service (INTR)

 

8. Mr. Woodworth, Manager of Engineering, discussed the 2002 Electric Engineering & Operations Report with the Board, which identifies electric system reliability statistics. The number of new services has continued to increase. In addition, miles of distribution line have increased 4.1% over the past year; and 15.3% over the last five years. The ratio of connected KVA to System Peak shows the efficiency of RPU's system. One of the major projects completed was the 161kV conversion which began in 1987 and took 15 years to complete.

 

9. The revisions to the Electric Service Rules & Regulations were presented to the Board as described in the For Board Action form. Mr. Bourgeois moved to approve the revisions, seconded by Mr. Jibben. All voting "AYE"

 

BE IT RESOLVED by the Public Utility Board of the City of Rochester, to approve revisions to the Electric Service Rules and Regulations (Revised April 2003).

 

10. Mr. Rovang, Senior Civil Engineer, requested Board approval of an antenna agreement with Rapid Web LLP with terms similar to the previous Venture Systems Site Agreement. The recommended rent reflects the short guaranteed term of the agreement, the small amount of interior ground space and antenna space required for the proposed installations, and the lack of interest in the use of the site by other private wireless communications providers to date. Mr. Hunziker moved to approve the agreement, seconded by Mr. Bourgeois. All voting "AYE"

 

BE IT RESOLVED by the Public Utility Board of the Cit of Rochester, Minnesota, to approve the attached Site Agreement with Rapid Web, LLP, with 2003 per site rent of Seven-Thousand-Six Hundred-Nineteen Dollars ($7,619.00), and to request that the Mayor and the City Clerk execute the agreement for Installing Antennas and Appurtenant Equipment at the Willow Heights, Country Club Manor and Arnolds Water Tower Sites

 

11. Mr. Schlink, Manager of Power Production, described the process that would be used to clean and test the inside of the Cascade Creek Fuel Storage Tank using a robot. The project came in at 30% less than budget due to technology improvements. He stated that RPU is required to perform this type of maintenance every ten years. Mr. Hunziker moved to approve a purchase order agreement with InTANK subject to review of the terms and conditions of the proposal by the City Attorney, seconded by Mr. Jibben. All voting "AYE"

 

BE IT RESOLVED by the Public Utility Board of the City of Rochester, Minnesota, to approve a purchase order agreement with InTANK for Inspection and Certification of the Cascade Creek Fuel Storage Tank

 

The amount of the purchase order agreement not to exceed EIGHTY-FIVE THOUSAND AND 00/100 DOLLARS ($85,000.00).

 

12. The proposed extended warranty for the Pratt & Whitney Twin Pac (Cascade Creek Unit 2) was discussed. The exposure for the utility is primarily in the form of repair costs from a catastrophic failure of one of the major power or generation components of the new combustion turbine generator. The extended warranty has an additional benefit of covering all components supplied by Pratt & Whitney, in addition to the major components. Mr. Koshire stated that RPU has insurance, but it would not cover all the things a warranty does on this $27 million investment. He also said that RPU expects to call on the unit more frequently in the future. Mr. Jibben moved to approve the extended warranty, seconded by Mr. Hunziker. All voting "AYE"

 

BE IT RESOLVED by the Public Utility Board of the City of Rochester, Minnesota, that the Common Council of the said City is requested to approve a purchase order agreement with Pratt & Whitney Power Systems Inc. for An 18 Month Extended Warranty Cascade Creek Pratt & Whitney TwinPac (Turbine #2)

 

The amount of the agreement to be TWO HUNDRED FIFTY THOUSAND AND 00/100 DOLLARS ($250,000.00).

 

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

 

a. Mr. Hayward and Mr. Johnston from the Southern Minnesota Municipal Power Agency (SMMPA), RPU's wholesale supplier, appeared before the Board to discuss SMMPA's future power supply needs. SMMPA members supply wind power to residential customers. With the addition of two new wind turbines, this output can be doubled. Mr. Hayward stated that the Agency plans to bring the premium for green power from 3¢ to 1¢.

 

14. The management/financial reports were discussed.

 

15. Mr. Hunziker moved to adjourn the meeting, seconded by Mr. Jibben. All voting "AYE" The meeting was adjourned at 5:45 p.m.

 

Approved by the Board: May 27, 2003