Co-op to purchase Kandiyohi municipal power system
KANDIYOHI — Starting Feb.1, Kandiyohi Mayor Gordy Woltjer won't be fielding telephone calls when the power goes out in town and he won't be searching for blown transformers or downed power lines in a storm.
Instead, the Kandiyohi Power Cooperative will take the calls and take all responsibility for the repairs, upgrades and billing of city residents for electrical service.
"It's going to be a good deal for everybody," said Woltjer, of the upcoming transaction between the city and the co-op.
The city owns its electric system — including the power lines and other equipment — and distributes power it purchases from the Western Area Power Administration to city customers.
After negotiating with the co-op for several months and holding community meetings with residents, the city agreed to sell its electric system to the co-op.
Power will continue to come from Western Area Power Administration, but the co-op will assume all liability and maintenance of the system and billing of services for customers in the city of Kandiyohi.
The agreement will be finalized Wednesday in a signing ceremony at the co-op.
"It's a big deal to us and the city," said Scott Froemming, CEO of Kandiyohi Power Cooperative.
Adding the city's 277 customers to the co-op's membership will "help spread fixed costs over a broader base" and reduce "upward pressure on rates" for all customers, according to Froemming.
City customers will also have access to additional services, such as rebates and load control programs that they currently do not have.
"We'll be able to offer services that as a small city utility they couldn't do — or be expected to do," Froemming said.
The relationship between the city and co-op isn't new.
For at least 20 years, the city has contracted with the co-op to provide services, such as responding to requests for repairs and maintenance, which typically costs the city $30,000 a year. In recent years the co-op also started reading the city's meters.
But the ultimate responsibility and liability for the city-owned service has been with the city — and the Kandiyohi City Council members and the city's one maintenance worker.
That has presented challenges for the small city, especially during storms and power outages.
Woltjer said the city was on the hook for a recent hit-and-run incident when a vehicle damaged a transformer. It cost the city $6,500 because it was not covered by insurance.
When the sale is completed, the co-op will carry all the liability for problems and will plan upgrades to the city's system.
When residents experience service problems, they will call the co-op instead of the mayor.
It will be the responsibility of the co-op "that the lights stay on," Froemming said.