2.2 ERMUSR 03-17-2015 ELK RIVER MUNICIPAL UTILITIES
REGULAR MEETING OF THE
UTILITIES COMMISSION
HELD AT UTILITIES CONFERENCE ROOM
February 10,2015
Members Present: John Dietz,Chair;Al Nadeau,Vice Chair;and Daryl Thompson,Trustee
ERMU Staff Present: Troy Adams,General Manager;
Theresa Slominski,Finance and Office Manager;
Eric Volk,Water Superintendent;
Wade Lovelette,Technical Services Superintendent;
Tom Sagstetter,Conservation&Key Accounts Manager;
Michelle Canterbury,Executive Administrative Assistant;
Others Present: Cal Portner,City Administrator;Peter Beck,Attorney
1.0 CALL MEETING TO ORDER
John Dietz called the February 10,2015 meeting to order at 3:30 p.m.
1.1 Pledge of Allegiance
The Pledge of Allegiance was recited.
1.2 Consider Utilities Agenda
Troy Adams added Recognition of Employee Achievement to agenda item 1.3,and added
agenda item 5.5,Elk River Dam Failure Analysis Update to New Business.
Daryl Thompson moved to approve the amended February 10,2015 Utilities agenda. Al
Nadeua seconded the motion.Motion carried 3-0.
1.3 Introduction of New Employee and Recognition of Employee Achievement
Theresa Slominski introduced the new Purchasing Specialist,Kelly Durland. Troy Adams
introduced Zac Johnson and announced that he just recently achieved his journeyman status.
The Commission welcomed the new employee and congratulated Zac on his achievement.
2.0 CONSENT AGENDA(Approved By One Motion)
John Dietz had a few questions on the financials, staff responded.
Al Nadeau moved to approve the Consent Agenda as follows:
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2.1 January Check Register
2.2 January 13,2015 Previous Meeting Minutes
2.3 Financial Statements
2.4 2015 Pay Equity Report
Daryl Thompson seconded the motion. Motion carried 3-0.
3.0 OPEN FORUM
No one appeared for open forum.
4.0 OLD BUSINESS
4.1 Midwest Municipal Transmission Group and Transmission Ownership Update
In May 2006,the Utilities Commission authorized ERMU joining the Midwest Municipal
Transmission Group(MMTG)to explore the potential to obtain ownership in the regional
transmission system. The action to join MMTG represented ERMU's decision to investigate a
change in direction towards ownership versus renting. Ownership in the transmission system
essentially works as a hedge to mitigate volatility in transmission costs.
Troy Adams announced that on January 31,2015,ERMU received its first payment for their
share in the CAPX2020 Brookings transmission project in the amount of$72,741. This amount
represents the margin above the bond payments. ERMU will continue to receive payments for
their ownership in this transmission project for the 40 year life of the asset. This is a historic
moment in ERMU history. Central Minnesota Municipal Power Agency(CMMPA)will be
issuing a press release on this.There was further discussion.
5.0 NEW BUSINESS
5.1 2014 Annual Safety Report
Minnesota Rules Chapter 7826 Public Utilities Commission Electric Utility Standards
cover safety, reliability, service, and reporting requirements. Per 7826.0100(A), municipal
utilities are exempt from these requirements. However, the Elk River Municipal Utilities
(ERMU) Commission adopted a number of parts of this chapter as a Distribution
Reliability Standard policy. This policy includes an Annual Safety Report requirement.
The policy requires ERMU to"file an annual safety performance report with its local
governing body. The report will include summaries of all reports filed with OSHA and the
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Occupational Safety and Health Division of the Minnesota Department of Labor and
Industry during the calendar year."
In 2014, ERMU only submitted one report that qualifies under this reporting requirement;
the OSHA Form 300A, which is a summary of work related first report of injuries and
illnesses. Troy Adams presented the OSHA Form 300A that had been filed. There were
only four recorded incidents and zero days lost from work. John Dietz asked if we would
be receiving some type of dividend on our workers compensation premiums. Staff
responded.
5.2 2014 Electric Reliability Report
Minnesota Rules Chapter 7826 Public Utilities Commission Electric Utility Standards
cover safety, reliability, service, and reporting requirements. Per 7826.0100(A), municipal
utilities are exempt from these requirements. However,the ERMU Commission adopted a
number of parts of this chapter as a Distribution Reliability Standard policy requiring
annual reporting on system reliability.
Wade Lovelette presented the 2014 Electric Reliability Report. In 2014, our reliability
numbers remained excellent. The reliability index numbers reflect the condition of our
robust electrical system as well as the superb response time from our local line crews. This
also reflects the local accountability, long term visioning on the system design, and
ongoing system maintenance. There was further discussion. The Commission requested
staff bring back a comparison of our utility with other public power utilities in our region.
5.3 Performance Metrics Update
Theresa Slominski presented the Performance Metrics fourth quarter update. Staff is on
target for all metrics except one; the CAIDI reliability metric. CAIDI is the average outage
duration, or average restoration time. The goal is 2 hours or less and we are just under 3
hours for the metric calculation. At the close of the fiscal 2014 year, and completion of the
audit, the final score card will be evaluated and presented to the Commission for awarding
the related incentive compensation in 2015. John Dietz had a question on what percentage
the bonus would be based on the preliminary score card. Staff responded.
5.4 2015 Minnesota Municipal Utilities Association Legislative Conference Update
Troy Adams distributed copies of the 2015 State Position Statements packet he received at
the Minnesota Municipal Utilities Association(MMUA) Legislative Conference. Troy
stated that one of the big topics was the Clean Power Plan(CCP). This is the EPA's
published proposed rule intended to address climate change concerns. With the plan,
Minnesota would be required to reduce carbon by 41%. One of the problems with this is
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Minnesota wouldn't get credit for being an early adopter of renewables installed between
2005 and 2012. The final version of the EPA's rule is expected sometime in 2015. Only
when the rule is final can Minnesota begin on the development of its CCP plan. Based on
this, our action request to the state is to do nothing with the state laws until the CCP rule is
finalized.
Tom Sagstetter also attended the conference and wanted to add that even though the CCP
may not be crystal clear, we still need to come up with a plan. We need to be working
towards remediation of coal, and continuing to move towards conservation and renewable
energy. It may not be enforceable until 2019 but we need to be thinking how we're going to
meet certain mandates. The other big message we were able to deliver to our local
representatives was, if they had questions about any energy policies, please reach out to us
or other local utilities. Another concern Tom brought up was that hydro is currently
excluded as a renewable resource in carbon reduction. With things that we may be looking
at doing in the future with hydro and the dam, it should count towards clean power and our
reduction in carbon.
Troy Adams briefly touched on other conference topics including: Women's Economic
Security Act; OSHA updates; IPL-SMEC; and Service Territories. The Board of Directors
Meeting included a discussion on pay equity and lineworker wages. They also spent some
time talking about the 2015 American Public Power Association(APPA)National
Conference and the 2016 APPA Lineworkers Rodeo; both taking place in Minnesota.
5.5 Elk River Dam Failure Analysis Update
Troy Adams gave an update on the Dam Failure Analysis. For the past year we've been
working on updating the Emergency Action Plan(EAP) for the Elk River Dam. The EAP
was approved by both the Utilities Commission and City Council and was then submitted
to the Department of Natural Resources (DNR). Upon submission, the DNR requested
numerous changes that we've been working on. The DNR was willing to approve the EAP,
provided an updated Dam Failure Analysis (DFA)was completed in the near future. The
cost of a DFA would run approximately$11,800.
We were recently notified by the DNR that they had grant funds available that could be
used towards an updated DFA; they have secured a grant for$6,000. The city will need to
apply for the grant as they are the owner of the asset. Troy explained that we've added this
item to the agenda because we had been sharing the cost of the EAP with the city, and that
it would only seem fair to share the remaining cost to complete the DFA; approximately
$3,000 each. Staff requested the Commission approve the cost share with city to complete
the DFA. Daryl Thompson inquired as to where the $3,000 would come from. Staff
responded.
Daryl Thompson made a motion to approve the cost share for the Dam Failure
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Analysis (DFA)with the City of Elk River. Al Nadeau seconded the motion. Motion
carried 3-0.
6.0 OTHER BUSINESS
There was no other business.
6.1 Staff Updates
Troy Adams gave a quick update on the upcoming APPA Lineworkers Rodeo that will be held
in Sacramento California. We have three individuals that are interested and have committed to
go;Zac Johnson,Tony Ross and Aaron White. Mark Fuchs will also be attending the event and
serving as a judge. Troy Adams expressed an interest in attending the rodeo and wanted to run
it by the Commissioners to make sure they were on board. The Commissioners were in
consensus of Troy attending the event.
Troy Adams shared that Minnesota Municipal Power Agency(MMPA)were at Lincoln and
Meadowvale Elementary today giving presentations on Energy Savings. As part of membership
this is one of the things they come out and do;work in our school district.
Theresa Slominski gave an update on NISC. We went live as scheduled on February 2nd. There
have been many challenges and NISC is working on a laundry list of items. Staff has done an
excellent job of working through things and keeping an upbeat attitude. While everything is not
perfect,we're going to get there. We will have some grueling weeks ahead of us. There was
further discussion.
Wade Lovelette shared that Fratalone Excavating has finished dredging the cooling/discharge
pond. They will be back in the spring to dig up the discharge pipe and do some dress up work.
The excavator did a very nice job.
Eric Volk gave a recap on the private hydrant program. After sending out letters to the private
hydrant owners last November,we increased the amount of private hydrants we service from
129 to 159. We are now servicing 159 of the 205 private hydrants we have inventoried. In
addition,we annually service and maintain another 200 of our own hydrants. It has been a big
increase in workload for the water operators considering we were doing minimal maintenance
just a few years ago.John Dietz asked if we made a profit on the private hydrant program. Eric
Volk responded that at a minimum we break even. It's more of a value added public service.
There was further discussion.
6.2 Set Date for Next Meeting
The next regularly scheduled Commission meeting will be cancelled due to a scheduling
conflict,and a special meeting will be held on March 17,2015.
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The Commission recessed the regular meeting at 4:23 p.m.
6.3 Closing of Meeting: "Meeting to be Closed pursuant to MN Statute 13D.05, Subd.
3(c)(3)to develop or consider offers or counteroffers for the purchase or sale of real
or personal property."
a. Call Closed Session to Order
b. Discussion
c. Adjourn Closed Session
6.4 Adjourn Regular Meeting
Al Nadeau moved to adjourn the regular meeting of the Elk River Municipal Utilities
Commission at 4:26 p.m. Daryl Thompson seconded the motion. Motion carried 3-0.
Minutes prepared by Michelle Canterbury.
John J.Dietz
Chair,ERMU Commission
Tina Allard
City Clerk
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