Rochester Public Utilities Board Meeting - November 26, 2025

The Rochester Public Utilities Board convened at 4:00 PM for a regular meeting focused on budget amendments, energy storage authorization, and utility rate adjustments. The meeting opened with a safety moment regarding impaired driving during Thanksgiving Eve, followed by unanimous approval of the agenda and the consent calendar. The board addressed significant public concerns regarding a newly implemented grid access fee for solar customers before proceeding to approve a budget amendment for water infrastructure and a major battery storage project.

Consent Calendar

• Unanimously approved the consent agenda, including resolutions found on pages 121, 124, 129, and 132 of the meeting packet.

Public Comments & Testimony

• James Rentz (Rochester resident and solar owner): Expressed strong opposition to the new grid access fee, characterizing it as a tax that discourages solar adoption. He requested clarification on the redacted documents supporting the fee and argued that the fee works against the encouragement of solar energy, especially given the removal of federal subsidies.
• Evan (DER customer): Opposed the current implementation of the grid access fee, arguing it creates a short-term fix that leads to worse long-term costs for the community. He described DER systems as public-private partnerships and requested a six-month pause on the fee to allow for further discussion on how to slow rate increases and keep energy dollars local.
• Sarah Dukek (Rochester resident and recent solar panel purchaser): Expressed surprise and concern regarding the fee, noting it negatively impacts the financial viability of solar for new installers. She questioned whether the fee signals a trend of continuous rate hikes and inquired about strategies to decrease dependence on non-local energy sources.

Discussion Items

• Safety Moment: Safety Manager Bob Cook presented on the dangers of "Blackout Wednesday" (Thanksgiving Eve), highlighting statistics regarding impaired driving fatalities and urging staff and the public to commit to driving sober.
• 2025 Water Utility Budget Amendment (Item 4A): Director Todd Blomstrom presented a recommendation to reclassify $1.075 million in trunk water main oversizing reimbursement costs from the general capital expense fund to the water connection discharge fund. The presentation detailed that accelerated development and specific fringe projects (Badger Heights, Prairie Ridge) caused a substantial budget deficit in oversizing reimbursements. Staff explained that absorbing this cost would deplete fund balances and drive up rates for existing customers, whereas using connection charges aligns costs with the developers causing them.
• Battery Energy Storage Authorization (Item 4B): Director Bill Bullock proposed authorizing a 20-megawatt battery storage project via a tolling agreement at the RPU Service Center and Zumbro Station. The discussion clarified that the battery would operate on energy arbitrage (buying low, selling high) and provide capacity credits, aiming for cost neutrality. Board members questioned the tolling structure, security measures (specifically that the vendor does not have access to the SCADA system), asset removal liabilities at the end of the 20-year term, and insurance coverage. Staff confirmed the project is a pilot to gather experience before potential future scaling.
• Lead Service Line Replacement Update (Item 5A): Director presented an update on the lead service line replacement program, noting that state funding for 2026 was reduced from a requested $12 million to approximately $1.5 million due to new state funding tiers. The board discussed strategies to focus on removing "unknown" lines and managing carrying costs, while acknowledging the unfunded mandate challenges posed by the federal Lead and Copper Rule.
• Cybersecurity Professional Development (Item 5B): Director Kelchin provided a presentation on RPU's cybersecurity strategy, emphasizing the multi-layered defense against ransomware and nation-state actors. Staff outlined their use of tabletop exercises, risk assessments, and a Security Operations Center (SOC). The board prioritized cybersecurity as a key business function and committed to funding and training.
• General Manager's Report: General Manager McCullough provided updates on:
  • SIMPA Membership: Discussed the Energy Cost Adjustment (ECA) mechanics, confirming that wholesale costs are determined by the SIMPA board and passed through to RPU customers, with RPU managing the retail calculation.
  • Solar and Grid Access Fee: Addressed public pushback by explaining the economic necessity of recovering wire costs from net-metered customers who oversize their systems. He noted that while the fee reduces the subsidy for excess generation, customers still retain 70-90% of the value of their systems. He acknowledged communication gaps regarding the fee's 2025 delay and promised further outreach.
  • Municipal Solar Grants: Announced that RPU secured an additional $2 million in state grants to install solar on seven additional municipal buildings.

Key Outcomes

• Approved Resolution 4A: The board voted unanimously to amend the 2025 water utility budget, moving $1,075,000 from the general fund to the water connection charge fund to cover trunk main oversizing costs. This resolution will be forwarded to the City Council for approval on December 1, 2025.
• Approved Resolution 4B: The board voted unanimously to authorize the 20-megawatt battery energy storage agreements at the Service Center and Zumbro Station, contingent on final SIMPA approval. Staff agreed to report on the battery's technical and financial performance after one year of operation.
• Informational Updates: The board received reports on reduced lead service line funding, cybersecurity protocols, and the rationale behind the grid access fee.
• Adjournment: The meeting adjourned with no further business.