Hastings Utility Board Regular Meeting: July 23, 2026

On July 23, 2026, at 9:00 a.m., the Hastings Utility Board met at the Airport Conference Room, Hastings Municipal Airport, 3300 W 12th Street, Hastings, Nebraska. Vice Chair Jeanette Dewalt presided. Board members Susan Meeske, Regg Rutt, and Pat Mertens were present; Scott Kvols was absent. Staff and city officials also attended. The board unanimously adopted the agenda, approved the consent calendar, recommended Ordinance No. 4837 to the city council, and received the FY 2026-27 utilities budget presentation. Public notice of the meeting was published in the Hastings Tribune on Tuesday, July 21, 2026. No citizen comments were offered. The meeting adjourned at 10:48 a.m.

Consent Calendar

• The board unanimously approved the minutes of the June 11, 2026, regular meeting as part of the consent agenda (motion by Meeske, second by Mertens; roll call 4-0; Kvols absent).

Discussion Items

• Unfinished business: None was reported; the board moved directly to General Business.
• Manager/board communications: Staff welcomed new board member Pat Mertens of Centennial Plastics and thanked board members and city council for their time reviewing the budget. Board members echoed the welcome.

WEC Unit 1 Update

• Production staff reported the WEC Unit 1 overhaul outage was pushed back a few weeks because of delayed parts. The unit was originally scheduled to return online May 1, 2026, but did not start until May 23, 2026.
• After startup, the unit experienced over-pressurization of its seal steam system, requiring rework and eventually new turbine seals. The unit is currently operating D-rated at 49 megawatts until the fall outage.
• Staff said reduced generation revenue should be expected through the summer. A board member expressed appreciation for staff and GE's engineering help in returning the unit to service without further damage.

Solar Phase II Update

• Staff reported that all paperwork had been submitted and the utility received the federal Investment Tax Credit (ITC) rebate for Solar Phase II, approximately $4.3 million, bringing the total project cost to roughly/just below $1 million per megawatt.
• Staff said an additional approximately $1.8 million was obtained through the low-income housing adder, making Hastings the only utility in the state to qualify for that benefit.
• Staff said Phase III potential would be discussed with the budget.

Proposed Ordinance No. 4837

• Shane Stone explained the proposed ordinance would allow Hastings to establish a natural gas rate schedule for sales to large-volume industrial customers. Currently no such rate schedule exists.
• The ordinance is driven by Nebraska LB 548, which allows first- and second-class cities and villages to contract with industrial users. Staff worked with CPEP and noted the city already participates successfully in gas prepay arrangements.
• Staff stated the target would be new large gas users not currently served, potentially expanding the gas service area up to 100 miles from the existing service area, without extending pipes, but through gas marketing/facilitation. Existing large gas users already receive prepay discounts through current rates.
• The board voted 4-0 (Meeske motion, Rutt second) to recommend approval of Ordinance No. 4837 and move it to city council. Staff noted it is scheduled for the council agenda on Monday and would be pulled if not approved.

FY 26-27 Utilities Budget Presentation

• Staff presented the FY 2027 Hastings Utilities proposed budget and emphasized no action was requested at this meeting; a formal recommendation will come back in August, with a list of any changes.
• Staffing and assumptions: Total headcount is unchanged, with internal position moves. Budget assumptions include the already-approved electric cost-of-service plan (average 5% annual revenue increase through FY 2028) and gas cost-of-service plan (average 6.3% annual revenue increase through FY 2027), a proposed 1.5% water revenue increase, 3% material and payroll inflation for FY 2027, and a cash goal of roughly 50% of operating expenses, equivalent to about 180 days of cash.
• Electric: Revenue and expenses are heavily affected by weather and the SPP market. The utility has been recognized by APPA for five consecutive years in the top 25% nationally for System Average Interruption Duration Index. Other highlights include system-wide tree trimming in five areas, refresh/rewind of Transformer #250 from B Street, NDS4 soot-blowing upgrades, auxiliary boiler retube, turbine/control valve parts restock, coal pulverizer and piping repairs, and Don Henry performance enhancements.
• The Hastings Southeast project will have all utility work completed this budget year. Total utility relocation cost is $8,725,000, with 80% NDOT reimbursement projected at $6,988,000; $2,819,000 had been received as of July 2026, and roughly another $1 million reimbursement was expected.
• Proposed electric capital is $47.15 million, including approximately $25 million for Solar Phase III. Other capital items include the WEC DCS Evergreen upgrade, NDS reliability improvements, DHPC turbine recontrol/MCC replacement/performance upgrades, the Don Henry substation upgrade, and continuing 4.16 kV to 13.8 kV conversions.
• The board reviewed an average residential electric bill comparison; Hastings' post-approved-increase bill includes the estimated 5% COS addition, while other communities are shown at current rates without upcoming adjustments, and the bill is factored for urban residential customers with street lighting removed.
• A $3.7 million Don Henry substation upgrade is underway following a breaker failure during the March 19 storm; primary parts have long lead times, with construction expected to begin late next year.
• Staff discussed generation and capacity: Hastings' five-year average city peak load is about 90.6 MW, with approximately 62 MW of extra capacity; about 42 MW is actively marketed. Staff said the high-value capacity market helps support the utility and ratepayers.
• Solar Phase III / generation planning: Staff recommended including an up to 9.9 MW Solar Phase III project in the budget while noting initial estimates show a 20- to 30-year payback. The ITC credit was locked in as of fall 2025, with completion required by fall 2029. The project would be bonded, with cash dipping and then recovering after the 30-40% ITC credit. Staff said no rate impact is expected either way, bids would be sought in early 2027 to firm up pricing, and the project would come back to the board and city council before moving forward.
• Staff also described the Don Henry performance upgrade: cooling inlet air could add about 6.9 MW for a total project cost of about $2.5 million, roughly $370,000 per megawatt versus $8-9 million per megawatt for new gas generation, with a six- to eight-year payback.
• Gas: The gas department budget reflects market, transportation-credit, and weather impacts. The approved gas cost-of-service study runs through FY 2027, and the utility will go out for RFP for a new study. The utility changed natural gas suppliers under a five-year agreement, will continue the citywide gas leak survey and AMI meter replacement, and budgets to run Peak Shaver West and move/upgrade the North Kansas tanks. Distribution work includes finishing downtown low-pressure removal, finishing the CCC system replacement, and Theatre District area main replacements. Staff cited the February 2021 weather event as costing roughly $8 million over two weeks, with the peak shaver saving over $1 million.
• The average residential gas bill comparison uses the current rate and the post-approved 6.3% revenue increase, measured against other communities' current rates.
• Water: The 2026 Water Cost of Service Study proposes a new three-tier residential inclining block rate structure, a 1.5% overall annual revenue increase recommended for three years, and a 10% annual increase for CMS customers. Staff said the tiered structure encourages residential irrigation conservation while lowering bills for lower-use customers; 15 CCF per month is the break-even cutoff.
• Other water items include lead service verification ($50,000, 100% reimbursable), a corrosion control study, a water system centralization study, ASR injection well 6 rehabilitation, the smart sprinkler controller incentive program, the $1.26 million Google grant, Well 17 connection, new municipal Well 37, and lead service line/main replacement projects on 5th, 6th, and 7th Streets. Water capital is $7.84 million.
• Hastings has 11 water main breaks this year across 205 miles of water main, about 5.5 breaks per 100 miles, compared with the AWWA goal of under 15 breaks per 100 miles. The average residential water bill comparison uses the proposed tiered rate structure and an urban residential customer excluding lawn irrigation.
• Sewer: The 2026 Sewer Cost of Service Study recommends no system-wide rate change except the S-3/CMS rate class. Staff is comparing 'Clean and Dry' sewer backup assistance with other communities. Sewer capital includes two new HVAC units at PCF, tuck pointing and door replacement, and Phase 4 sewer inspection covering about 8.7 miles. The capital budget is $2.27 million, including relining projects on Burlington Avenue from 9th to 14th Streets. Sewer rates are based on water use in December, January, and February. The average residential sewer bill comparison shows Hastings' current rate against area communities.
• Budget highlights and cash outlook: FY 2026 highlights include the $4.3 million Solar Phase II rebate, the $1.26 million water grant, and the Highway 6 utility work nearing completion. The FY 2026 City Dividend (formerly PILOT) is projected at $3,566,178; the FY 2027 city dividend is budgeted at $3,883,437.
• With currently approved rate increases and the water increase, cash projections generally remain above or near the 50% target; electric is projected at about 45% by 2032, water dips then recovers, gas levels out, and sewer stays stable. Staff said that without these increases, electric and water would be in a bad position by 2032. Staff will discuss whether the 50%/180-day cash goal is appropriate for each utility later this year.

Key Outcomes

• Agenda adopted unanimously (motion by Meeske, second by Rutt; 4-0).
• Consent agenda/minutes approved unanimously (motion by Meeske, second by Mertens; 4-0).
• Ordinance No. 4837 recommended for approval to city council unanimously (motion by Meeske, second by Rutt; 4-0).
• FY 2026-27 utility budget was presented for review; no vote was taken. Staff will return in August for the board's formal recommendation.
• No closed session was held. The board adjourned at 10:48 a.m. on a unanimous motion.