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Willmar Utilities Commission to consider rate-hike recommendations

WILLMAR -- Members of the Willmar Municipal Utilities Commission will meet in January to further discuss a consultant's recent recommendations for 2015 electricity and water rate increases and possible increases in 2017 and 2018.

WILLMAR - Members of the Willmar Municipal Utilities Commission will meet in January to further discuss a consultant’s recent recommendations for 2015 electricity and water rate increases and possible increases in 2017 and 2018.
Utilities officials said the increases are needed to provide sufficient retained earnings to pay for major electric and water infrastructure projects during the next four years. The last cost of service and rate study was done in August 2008.
The commissioners during their regular meeting Monday discussed possible dates for a January working session and a final date will be determined later.
Utilities General Manager Wesley Hompe said the commissioners at their last meeting Dec. 8 looked at and accepted the consultant’s cost of service and rate design study with the understanding that the commission would spend some more time going over the study in detail.
The recommendations in the study by Dave Berg Consulting, of Rosemount, included cost of service based on actual 2013 data, projected operating results for years 2014-2018, and recommended an overall electric rate increase of 4.5 percent and an overall water rate increase of 20 percent in 2015.
The increases were recommended to help ensure the utilities’ continued financial strength. The study also said that based on financial projections, future rate adjustments may be needed.
The study said the 2015 increases will not affect all customers equally and it recommended specific rates for all classes of electric and water customers.
Even though the commissioners accepted the study, they have not yet recommended any increases to the City Council.
City Attorney Robert Scott said that accepting the study did not “lock in’’ the recommended rate adjustments.
A working meeting in January, Hompe said, would give the commission time to look at and understand the study in detail. Hompe said part of next year’s budget incorporates the recommended 2015 increases, starting in June. The increases would require final approval of the City Council.
“That’s obviously an assumption until all of the pieces fall into place,’’ Hompe said. “If you look at the details of that and if there is no adjustment at all throughout the entire year, we’ll have to significantly change our operation, never mind anything with capital.’’
Among the major projects proposed through 2018 are construction of the Priam substation , Willmar substation transformer replacement, relocation of the diesel generators, replacement of aging underground lines, and water treatment plant upgrades.
Commission President Steve Salzer asked if staff intended to look at capital projects. “I think some of us wanted to hear more about those,’’ he said.
That was Commissioner Jeff Nagel’s understanding. He said it seemed that much of the consultant’s report depended on the capital projects.
“We would like to just revisit those to be sure we’re all understanding exactly what those are and in agreement that those should move forward or if not, some adjustment should be made because that would affect his study to some point,’’ Nagel said.
Hompe said the utilities needs enough retained earnings to be able to afford any of the future projects.
“They’re integrated with each other and they are addressed in the study. But we need to have you folks really understand what we plan on doing and why those are on our capital budget. So that will be part of the discussion,’’ he said.
In other business, the commission approved five policies, practices and procedures affecting data kept by the utilities. The policies are required by the state of Minnesota and will be updated as needed, said compliance officer Janell Johnson.
The policies cover requests for information on data subjects; requests for access to public data; use and disclosure of medical information; guidelines and procedures for staff for compliance with the Minnesota Government Data Practices Act; and ensuring the security of not-public data.
At the end of the meeting, the commissioners expressed their appreciation to outgoing Ward 1 representative Bruce DeBlieck, who was defeated for a seventh four-year term on the council in the November general election.
DeBlieck served as a utilities commissioner from 1981 to 1986. After his initial election in 1991, he served 22 of the 24 years as commission liaison.
As a gift, Salzer gave DeBlieck a photo of the 1983 commission. DeBlieck said the utilities are well-run and he encouraged the commissioners to attend conferences, meetings and educational opportunities to keep current on industry trends.

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