P.M.

and this meeting of the Rochester Public Utilities Board is now called to order.

A quick reminder as we get going that this meeting is recorded, and a recording will be available on the city's website immediately following the meeting or sometime thereafter.

Our first uh item today is the approval of the agenda.

May I have a motion to approve the agenda as presented?

I'll move the agenda.

Second.

We have a motion.

We have a second.

All in favor say aye.

Aye.

Aye.

Opposed.

The agenda is approved.

Now we'll move quickly to item number two in our agenda.

This is our safety moment with safety manager Mr.

Bob Cook.

Thank you so much, Bob.

I decided that the song I heard most words was baby is cold outside.

You're certainly applicable.

I admit I never heard of so many different songs.

Steve Cold I've shocked in a saw some people work shorts.

And well, I know that people are more resistant to the coal than maybe I am.

I thought this would be pretty dangerous.

So every year, according to the CDC, more than a thousand people die from exposing extreme coal and micro.

Yeah.

It's important don't have many if they don't have extreme expeditions.

They have during normal activities like driving walking, working outside, shuttling, whatever.

So I think that happened to anybody.

And coal doesn't just affect color, it affects judgment, coordination, reaction time.

Your body gets cold, blood full contribution to your hands feed and face.

That's when numbness sets in.

This is why cold weather is strongly linked with slips, falls and vehicle accidents.

Hypothermia is especially dangerous because it's often hard to recognize science and uncontrollable shivering, confusion for speech and fatigue.

People experiencing hypothermia often don't realize how serious it is.

They may think they're just tired of cold and keep going and delayed deadly.

Frostbites and other risks sometimes underestimate back to my story about the resource.

Once frostbite sets in, tissue damage can be permanent.

Uh, there's many people who had serious ammunition.

Cold weather also increases the risk of over exertion injuries, especially from activities like shuttling snow, early winter people suffer heart attacks, serious injuries because they push too hard for cold conditions of all taking breaks.

Those basically three things we can do.

One is the rest of conditions, short.

Second, slow down third sleep, travel card, and all of that.

And third, watch out for each other.

This is something that's pretty problem at the workplace.

Cold stress training is you know, watch your buddies, make sure that they're not solved.

So cold weather injuries are preventable, but only if we respect it.

Thank you very much.

Thank you.

Thank you so much, safety manager cook.

And now we move to the consent agenda.

Item number three.

Um we have for approval on the consent agenda four different items.

Three A, which is minutes from the December 16th RPU board meeting, uh, three B, which is a review of accounts payable.

Uh and then 3C, which is the 2026 through 2029 ESRI citywide small government enterprise agreement renewal, and then 3D, which is generation fuel purchases.

May I have a motion to approve the consent agenda.

I'll move approval.

Uh and a second.

I'll second.

We have approval and a second.

If I may, I'd just like to talk to the late edition on the consent agenda.

That was uh a factor of over the weekend as I had shared with the board over email.

We had a long run on our GT2 engine.

This was actually a historic run.

We've never run 49 to 50 hours scheduled on fuel oil.

The last time that we had run this duration, you'd have to go back to winter storm URI um of February of 2021.

So, in a typical year, we would see a couple thousand gallons of fuel oil, rarely.

In this case, we saw up to 200,000 gallons of fuel oil.

So, our normal procurement pathways of approving small fuel oil purchases generally happen under GM delegated authority due to this uh extreme circumstance and the need for potential other fuel oil.

We did this late edition both to cover the purchases over the weekend and after the fact authorization with our contract and the resolutions written in a way that would approve up to the budgeted fuel amount for the remainder of the year.

Should we have more oil runs there as well?

Dollars are budgeted.

It's just a matter of authorization of the board for expenditure.

Normally, natural gas purchases are covered under the already pre-approved natural gas contract that we typically don't approve on an annual basis.

It's just because there is such a long run on fuel oil that the this is being requested and necessary for authorization.

So appreciate your consideration.

If there's further discussion, we'd be happy to pull and have this as a regular item as well, just because of the nature of it.

We thought uh adding it to consent uh might be the appropriate place.

So with that, I'll pause.

Uh yeah, thank you.

I did a little review with this, and again, just it really is still within the budgetary things.

I am interested, just just as long as we're talking about the the weekend, um, just to understand it was that 49 hours, that's a long run.

Uh, two kind of questions.

How close did MISO get?

Were they like um they have another did they get close to turning anything off?

And then the second question is if we had our other um local generation, would it have been called into into production this weekend?

Two very good questions.

And I'll take a shot at it.

Bill is uh had a commitment today, so I'll I'll I'll cover the power resources questions.

Um the 49 hours was called in by MISO, and we had no natural gas availability for power generation over the weekend.

That's why you didn't hear West Side being run.

It's not capable on fuel oil.

So uh that historic run, the unit got called Friday for uh five hours, um, ran all day 24 hours on Saturday and all day 24 hours on Sunday.

So uh each day the market clearing price bid that unit in because it was on the margin.

So to your question of how close did we get, very close.

Um we sent out an energy emergency alert on Saturday evening calling for load curtailment that happened across all the central and northern regions of MISO, all of our partnering utilities did some form of the same.

And this would have been all but the southern portions of MISO was in an energy emergency energy alert.

The next step that we were prepared prepared for that could have happened on Saturday night was rolling blackouts.

And we would have been called upon by the energy market to start start cycling feeders off to try and shed load because MISA was right up at the margin of generation regionally.

We were in a comfortable position here.

Our generation was running, but this is a factor of low wind output, no solar in the evening, natural gas thermal generation, much of which was curtailed by lack of natural gas, and there was some coal units off as well.

So it wasn't any one particular unit.

It was extreme cold, high demands for natural gas, low wind output, low solar.

That was the factor of why we were so close on the margin there as well.

Um just to clear compared to that cold cable in their air-textile effect.

This was the entire state of Minnesota.

It means that you're telling us for anybody in that.

Anyone in Minnesota, anyone in Iowa, anyone in parts of Wisconsin, the uh I can we could pull up a MISO graphic at a later time where I could follow up.

But if you if you would go to MISOENERG.org and look at the map of what considers MISO, basically everything Missouri and North in MISO was in this EEA too across the whole region.

We saw it was a condition that resembled winter storm URI very closely, very closely.

That's why I was wondering the compares and when it happened in Texas, how the impacts were much more dramatic.

And I believe this the real issue was the major storms in the in the Midwest.

It was the deep three-day cold day over day over day, um, high loads, high demands for natural gas, some power generation offline, low wind output, that perfect storm to not try and not use a pun, but that perfect winter storm was the case where it got right to the margin of power generation.

This actually fits exactly with the NURC and MRO reliability assessments that is called into question generation uh availability during winter storm events.

So this represented a real risk that has been identified by the energy market and North American Electric Reliability Council that we sustained uh during and and we made it through.

Fortunately, there was no load loss.

We did experience some high prices.

The fact that our generation run and the fact that we're spending or we spent half a million dollars on fuel oil also means that we were able to capture some of the value.

And so RPU is probably net ahead over a million dollars by running our generation over the weekend that will help defray some of the higher energy costs that we will also be faced with over the weekend.

So this expenditure is a good thing.

If we haven't been buying this fuel oil, there would have been way more expense on buying more very expensive energy.

Very good.

And just to in light of the whole thing, I really appreciate the execution over the weekend, but also the communications.

So I had framed it as we would do this annually.

This resembles other resolutions that have been done in the past.

And then you're in emergency stuff.

So I if that would happen this weekend and we had to go above it, I think we would have we've been in emergency mode getting those approvals.

And we have emergency procedures to do so through mayor's authorization if need be.

Very good.

Thank you.

Just quick question, not related.

But our I'm just curious.

Did the curtailment you know, that we asked people to do?

Did we see any?

Did that work?

I was asked this question earlier today by a media contact.

Measuring load that never existed is a hard thing to prove.

I do know anecdotally our loads did go down because I had many people tell me on Sunday morning that they ate cereal for breakfast instead of cooking eggs on the stove.

So I know our community reacted, but the factor of warmer weather, uh sun coming up, wind blowing, loads recovering was a combination.

Also, I think people did their part to curtail, and we appreciate all the work to do that.

So it had an impact.

It's just very hard to measure the load that never existed.

Perfect.

Any other questions or comments?

Seeing none, uh, it's been moved and seconded to approve the uh consent agenda.

Um all in favor of approving consent agenda item 3A, B, C, and D, say aye.

Aye.

Aye.

Any opposed?

The consent agenda is approved.

Next, we move to item uh number four or open public comment period, not technically item number four on the agenda.

This agenda section is for the purpose of allowing citizens to address the utility board.

Comments are limited to two minutes, total comment period limited to 20 minutes.

Any speakers not having the opportunity to be heard will be the first to present at the next board meeting.

Do we have anyone set to address the board?

There isn't anyone signed up.

Thank you.

Now moving to item number four, regular agenda.

There are no items on the regular agenda this meeting.

And so we'll move to informational item number five.

And this is 5A, the 2026 strategic initiatives, year ahead review, and we'll turn it over to General Manager McCullough.

Hello, can you hear me now?

Yeah.

Okay.

Do we need to back up for any meeting minutes purposes?

Very good.

Thanks for everyone's patience.

Let's start a third time.

We're here really focused on our core mission and our vision as Rochester Public Utilities, and the goal for this information item is to talk about what is ahead for Rochester Public Utilities in the coming year.

We always start with our values here with Rochester Public Utilities.

And they're lived out every day.

They're discussed in inside the walls of RPU, the framing of how we work with one another really lives out these values on a daily basis.

The five R's is our strategic planning framework, reliability rates, responsibility, relationships, and reputation.

This weekend, I think was a great example of why reliability is important during extreme weather events.

Electricity and water are basic human needs, uh, basic support to the community, and that is why we exist as Rochester public utilities.

And much of what you'll hear this year that we'll be working on is a continuation of work that started in some cases decades ago with transmission planning, and in some cases a couple of years ago with the advanced metering project.

But for now, I just wanted to share that our efforts are in many cases multi-year.

And we'll walk through division by division to touch on uh what are the things that we'll be trying to accomplish this year and what was funded and approved in the budget that was uh uh just took effect this year in twenty twenty-six.

Uh, I really have five major initiatives that from my office I'll be working with the entire team on.

And I think one of my priorities also is helping the board continue to operate in a high performing way.

We're in a period of succession planning and transitions with the board with Kelsey joining us here.

And so continuing to help orient on board and continue the board fulfill their duties is part of I think my primary role as your employee and working with you to support you in those roles.

A lot of the work that we do extends beyond the walls of RPU related to community partners, uh the broader city organization and other utilities in the region.

And so part of my role as general manager is to continue to form and foster those relationships with other utilities, partners.

And so that is a lot of what I spend my time on as well, including with legislators.

I think the role of public affairs falls primarily in my space right now and work with city legislative coordinator and the city on trying to implement the relationships that we have with our elected delegates, both at the state and the federal level as well.

The strategic plan are five R's.

We're constantly trying to incorporate what we do and frame it within the strategic plan, how we measure ourselves, how we show that we're meeting those outcomes.

We'll continue to report to the board about meeting our key performance indicators and how those align with the five R's as well.

I have shared internally that looking forward over the next five years, uh, about 10% or more of the staff at RPU will achieve key milestone years that often lead people to make decisions to retire.

That's a big portion of our senior technical staff, our senior leadership staff.

And so a focus that has been a part of my tenure that will continue this year is continuing organizational development and leadership succession.

Um, many of who you see in this room today of people who are stepping into new roles and planning for the next five or years or beyond.

So that's a big focus of what we do as well.

Um, our business is infrastructure heavy, but it doesn't exist without people, and that sustaining and uh developing the people of our business is core to what we do.

Um wanna talk a little bit about the new program capabilities.

So these are things that have existed for a long time within RPU, but we're taking a uh a formal approach to these new programs this year, um, defining a formalized asset management program.

A lot of what you see in our budget planning involves assessing the health of our infrastructure and reinvesting in that.

And so bringing uh a formal structure that applies across the utilities organization so that we can assess the um uh the health of our assets, the risk of our assets failing, and use that feedback into our future capital planning as well.

Um, risk management as we enter into higher levels of market participation, taking over our energy market functions from SIMPA over the next five years.

We're entering new areas of risk that we'll be managing directly ourselves.

So building out a formal risk management program, quantifying all the business risks that we have that cut across cybersecurity, uh financial risk, market risk, asset risk, and bringing that back into uh making investments that are in line with those risks is another key initiative.

Um we have through support of the board, through support of our budgetary process, stood up a data and performance division this year.

From an IT perspective, we have treated infrastructure and applications and security in that framework.

We're adding data as a layer this year and starting to treat our data as an asset as well.

As we move into advanced metering, the volume and scale of data that we have and the value of that is going to be treated now as an asset, and we're building capacity as an organization within our IT department.

James can talk more about that in just a few minutes as well.

And uh, we know that many things are changing within our business, both internally and externally over the next five years.

I come from a background that uh started in manufacturing and continuous improvement, lean six Sigma.

We're starting to incorporate some of those continuous improvement formalized principles into our business as well and trying to embed them as part of our core process as well.

So building these programs and maturing the programs of these that already exist is the key focus of my office.

I'll hand it over to Todd.

Good afternoon.

Um, we identified six key initiatives for the uh water division here for this upcoming year in 2026.

Um the first of it is the lead service line replacement program.

We had that discussion at uh the November board meeting, I believe, and we provided an update uh for the lead service line program.

We were uh fortunate to be able to award our first lead service line replacement contract in late fall.

Uh that was about 50% complete before winter set in.

Um, and that will wrap up in the spring.

And then at this time, we're preparing plans and specifications to award a second contract uh here in April.

Um late start with the funding sequence in 2025, but we did get uh the project off the ground, and then uh we're hoping to reach more traditional schedule, getting projects bid in the spring, uh built in the summer completed by the fall.

So we're excited to embark on that journey.

Um the second item I will say is uh what I think as staff we believe is the single most important initiative we have in water, and that is our water system master planning process and groundwater study.

Um, as we talked about, and I think there was a short update in at November meeting also.

Um we are essentially under a moratorium for any new water wells and any expansion of our water appropriations at this time.

Um we do have some margin here for planning, but we need to keep the process moving uh to resolve how we're going to secure future uh source water for the system before we hit our limits.

Uh the study is going um, I would say excellent.

We've put together one of the best uh consulting teams I I think I've ever worked with.

Uh and so they're making great progress.

We have established our water demand projections over the next 40 years, which doesn't sound like a big step, but it's the single uh most critical thing to get the whole study process correct.

So um, we're hoping to be back in front of the board here next month uh to give you an update on that process.

The second half of that is just a tremendous amount of coordination with the state regulatory agencies.

So the uh Minnesota Department of Natural Resources and Minnesota Department of Health have been very good partners, have been very engaged throughout the process.

So making uh good strides in that area.

Infrastructure projects for 2026.

Uh it's another year that we're going to have several projects coordinating with the city's public works department uh and other departments to deliver projects.

Center Street will be a key project uh that involves water main and water service replacement.

18th Avenue uh Southwest is another important project for us, not just replacing aging infrastructure, but actually doing system improvements for capacity in the system.

Um Trunk Highway 14 interchange projects important, and then um we will be constructing uh the Ponderosa booster station, likely with our own forces here this year.

So that's an exciting step for us.

I won't go into great deal about water meter replacement and AMI.

I think Scott's gonna cover AMI uh in his presentation, but only to emphasize how important this is, not just uh an improvement in our ability to do uh more analysis with water meter data and better information for customers, but um the batteries and our existing meter systems are failing, and we're actually getting non-reads.

Uh, we're trying to keep pace with those battery failures, um, but AMI, this project will wholesale go through the system and get all of those meters upgraded and get us uh ahead of that curve for the aging meters.

Tim went into uh some description of our enterprise asset management system.

Um that's a really exciting initiative, not just for water, but across all the operational divisions, um, looking at lifecycle planning for assets, uh managing risk of asset failures, um, and having much more of a unified program across RPU, uh, but also a practical side of this.

2025 was one of the highest years for water main breaks we've had in many years.

Um, it ebbs and flows year to year, but that is not a good indicator in terms of the aging of the system.

So it's something that we have to keep an eye on as part of our asset management program.

And then lastly, I'll mention just land development coordination will continue.

Um, 2025 was a big year for land development.

We continue to see a high number of plats coming through uh the approval process.

Um, plats are generally larger with the national builders getting involved uh in town, which is a good thing.

Um, but we do have several key projects just to be able to support that land development activity, extending water main, uh trunk water main to the to the northwest areas and southwest areas is important.

Um, and for the first time in many years, we'll be creating a new pressure zone this year with the Pebble Creek project.

So that is a milestone for us.

That's general review of the six initiatives, key initiative areas for the water division.

I will hand it over to the next person.

Should we do the yeah, I guess we're looking at sure.

Good.

Thank you for the the overview.

I had a couple of things if you want to go back there.

Um just on the um water system master plan.

One of the things that's good that getting team assembled, but when you're doing this thing with DNR and all the stuff, we have our we have our uh municipal boundaries that we know about, but of course, our water system doesn't know about our boundaries.

How is the teamwork side of that going as far as um is there a Stuartville aspect to it?

Is there a um Byron aspect to it?

How does that work?

Excellent question.

Um, and just uh by way of a little bit more background, uh the concern about uh the limitations on wells is not actually constructing wells, it's further withdrawal from the Jordan Aquifer, which is a primary source water for RPU.

It's the primary source water for all of our neighboring cities, too.

Um, so the same challenge applies.

We've been conducting regional meetings with representatives from Byron, Stewartville, Orinoco and other cities in Olmstead County on a quarterly basis to really work together.

Um and they have been great partners attending meetings, they've been open to sharing data that's needed uh to build the the groundwater models that are being assembled because it will include their communities just as much as it includes Rochester.

So cooperation to date's been very good.

Yes.

Okay, but just to clarify, um Rochester's leading this up, and I'm I'm glad and we're probably the biggest thing, but I'm also are we the ones funding it all, or is this a group is there funding things that are coming from different areas or what what really is the I mean, is the mechanism that DNR is using is is pushing Rochester to do this, and the others are watching and like giving the data, or are they part of an active um sourcing of how this works and how it gets paid for?

At this point, uh RPU is funding the study.

We are 80% of the draw on the aquifer or more, at least 80%.

Um we are uh the entity that is facing uh sort of the restriction in the most severe sense.

Um talking to Stewartville Orinoco, they do have growth there.

There's no doubt in that community, but their growth is at a rate where um the two or three wells in their system are supporting themselves right now.

So we're the ones facing the kind of the front line of of this issue that that the DNR has raised.

Um I will say, as the analysis, if it does become uh the need to be more specific to the growth of their systems and they want to do more analysis, um, we're setting the program up where they would then become a cost participant in that.

Um, but at this point, uh building the base model, uh doing the base analysis is is our PU's lead right now from a cost perspective.

Okay, I again I trust the management team here, but I guess I want to make that uh I want to voice my concern that um just because we're the biggest doesn't mean we we carry the load.

Right.

Um just on the lead service line then too.

I know there's been some uh challenges with the funding levels.

Uh do we think we're I mean when you start getting into the spring now and start doing real lead line replacements?

Are we doing like 10% of what we thought we were gonna do, or did we do prep work that we're not gonna be able to do the real work on now, or where did we come out?

Sure.

Um so uh for the lack of a better term, it was kind of the first come uh first serve, the fastest you go, the bigger share of the funding in that um somewhat collapsed last year uh at the state level uh in terms of how they distribute funds.

And I I don't fault them for that.

They've come up with a much more even uh funding scenario where they're spreading it out over 10 years.

So we're uh already set to receive another 1.5 million next year uh for lead service lines.

Um our plan next year you mean 2026.

Excuse me, 2026, yes.

Uh so uh the project um for 2026 this year will be about the same size as the one we let last fall.

And um we're trying to be as strategic as possible uh in how we apply those in the areas with highest priority.

Um, but that that's going to be essentially our pace for the next few years about 1.5 million in funding for those replacements.

And they'll have for 10 years.

Uh it will last as long as the funding is available.

The idea that somehow somehow the state and federal government will come up with.

Understood.

Thank you.

So underneath my questions is really this idea that we do a lot of prep work that we're not going to get to the real work for.

And it doesn't sound like that's the case.

It doesn't sound like, but when we have this work and we have this operation in place, is there any thought of some person could put their hand up and say, hey, I'll pay for my home, or that's just not worked into how we're doing how we're doing work.

If uh if a property owner wanted to take the initiative on their own to replace them out of sequence, um, there's nothing to say they can't do that to but would our program could would that be worked into our program would be the same program and the difference would be where the funding source was coming from.

So I good question.

Um we have one source of funding through the state public facilities authority.

As a condition of using that grant money, we have to work on a prioritization.

There's a formula uh in terms of uh number of children under the age of five and income based on uh census blocks.

We're required to adhere to that prioritization schedule as we use those grant funds.

So if someone uh in a zone that is is a much lower priority, they're all important.

I don't want to convey that, but that has been scored at a lower priority ranking.

If they wanted to proceed on and and fund it themselves, they could today, but in terms of um redirecting grant monies to a lower.

Yeah.

I I'm not I'm not thinking that's and and I'm just voicing my interest in this.

I don't know where the rest of the board is or where the staff would recommend, but I I'm looking at some of the neighbors to surprise me where they're at.

And I think some of these people, if we were in a program that ran out of funding, I think there's people who would be interested in doing it themselves.

But I again, I just wanted to broach it.

I don't want to complicate it.

I don't want to do anything that hurts our uh grant qualifications.

Yep.

Those are all very good questions.

I think every community is struggling with, and um, in light of the changes that occurred last year, it makes those questions even more difficult to navigate.

Yeah, one quick question.

Uh you said you figured out your 40-year water demand.

Yes.

Can I what does what does that look like in 40 years?

What do we how much do we increase?

Uh max day demand, these are soft numbers.

I understand.

We're gonna firm them up here.

Yeah, max day demand is uh landing uh somewhere around 50 million gallons a day.

Um average requirement or annual requirements are probably peaking around eight to nine billion.

We're at 5.7.

Yeah.

Um yeah, it's uh it's uh challenge.

Got it.

Thank you.

All right.

Thank you.

Bill regrets uh some personal commitments that he had that came up on emergency basis.

So he asked me to cover his pieces.

We work very closely together on these as well.

So I think the board should probably be most familiar with what's happening here because this is a lot of the actions that the board used uh their time for the better half of last year to work on.

First of which is continuing progress on building Mount Simon station.

Um, I think you'll even see in the AP list in this board packet another milestone payment on the engine packages there.

We're continuing progress towards design procurement.

The next big milestones are air permitting and our interconnection.

We expect to see progress in both of those areas this year.

Um, we are in the queue to have our interconnections studied, hopefully in quarter two of this year.

If you'll recall, we jumped into a uh accelerated queue last year.

Um, and that will give us a position we believe to be studied earlier and have certainty in our interconnection costs.

That's a good thing.

When Mount Simon Station is done, that'll provide another unit or another set of engines, much like GT2 that ran this weekend will further secure capacity in the community and energy reliability there as well.

That project um will is scheduled to be online in the beginning of 2029.

So we still have several years ahead of us of construction of design construction and building there as well.

Um highlight the Silver Lake plant contract.

Uh board may recall that at the end of 24, we negotiated a sooner end of our steam contract in conjunction with Mayo's bold forward planning.

And so we are uh anticipating that by the end of 27 or up to by the end of 28 to cease steam operations at the Silver Lake plant um in downtown Rochester.

That is a lot of workforce planning, facilities master planning.

Um, so you will see that through our budget development as we come into the next two-year budget cycle, that future budget of 28-29 will reflect uh either landing steam or uh partial steam throughout that period.

So that'll have an impact on the steam enterprise.

It's it's been a period of history for uh quite a while that we have provided steam heat as a part of Rochester Public Utilities, and this will be a phase closed for us, at least in the short term as we retire that facility.

A lot of planning about what to do with the infrastructure, where to move the team, uh, where to move some uh pieces of our control that are in the control room there are all part of that planning.

And we're working very closely with the team about how to do that in an orderly fashion and work with our um IBEW colleagues as well that run that facility with the goal of having a smooth transition there, like we did when we ceased operating electricity at the Silver Lake plant as well.

There is an option to extend that contract up to the end of 28.

Just want to highlight that decision will come by the end of this year and also give us the option to do the proper budget planning for that, depending on when we end operations there.

GT1 recovery continues.

Uh, we are in the midst of the teardown investigation on that unit.

Um, so we've made progress there, but that is slow going on looking at the recovery of the engine generator.

Um, so far, signs are positive, but we won't have the final answer there until we get fully underway or fully complete with the investigation phase there.

We'll have a decision this year.

Uh, we believe that the unit is or is not salvageable.

So this initial investment is just to explore if it can be rebuilt in place as is.

So that decision will come.

Um, we are seeing progress on the three different wind contracts that we entered into, and those will start phasing in starting as soon as this year through um the end of 27, we hope.

And so uh a key milestone of start of construction before July of this year is one of our targets there as well from our larger wind investment as well.

Battery storage.

Uh, if you recall the last meeting of the year, we signed a tolling agreement with a battery storage uh company that will be helping us develop a two, 10 megawatts, two different 10 megawatt by four hour sites here.

So we're continuing that work.

That would have been a great asset to have this weekend as well and be able to manage some of the peak loads, at least on a short-term basis.

It wouldn't have sustained 50 hours.

And I think that duration of winter event is also revealing of both the value and the limitations of a short-term battery storage device as well.

Uh, I would be remiss to highlight that we are still seeking some additional power generation capacity.

So part of the planning this year is to look at how do we fill that remaining 100 megawatt roughly demand of power supply.

This is a factor of wind accreditation for capacity going down.

Our original portfolio looks anticipated more capacity available to us through wind.

So our appetite is increased slightly.

We expect to continue exploring partnership opportunities for joint builds, short-term capacity supply contracts, and the potential of up to a partial requirements contract that we could explore with another wholesale uh utility as well.

So that'll be planning work in 26.

We have until 2030 to secure that capacity.

Um, 2030 is not that far away.

Um, so we are within four years roughly by March of the end of our wholesale supply contract.

So these this is another year for major decisions related to our power supply and power resources.

Any questions I can address here before we move on?

Just on um the capacity thing.

That's a just at about 100 megawatts, not quite.

Roughly 100 megawatts of capacity.

If you average across all seasons, it's roughly 100.

There's a little bit of a larger appetite in the summer, a little bit less in the winter, but I say 100 because that's about the average across all four of our capacity seasons.

And you mentioned, you know, 2030 is not that far away.

But I guess do it, I mean, would we get to the end of this year and say we still have time, or do we need to have this understood uh by the beginning of the fourth quarter?

So for new builds, I will say we are it is four years from start to finish at a minimum.

So if we are looking at a joint build brand new facility, then this year is a decision for that.

We do have uh some conversations where there may be some options for us to enter into as soon as this year, some joint build contracts.

We're evaluating that.

We haven't brought them before the board yet, but we think uh another cycle of exploring maybe a request for qualification for suppliers to see what's available for joint builds.

A lot has changed in the last year with regulatory positions and people trying to build new infrastructure.

And so the market may be different than when we looked.

It's been almost two years since we went out and did our original request for information.

If it's a matter of uh engaging in capacity that somebody else has, it could be a delayed timeline.

But I think this is a year that we need to secure some certainty just because of the timelines there.

That's what I would think.

And the timelines all and you're still talking about like that, what it more looking newer.

You I think we had a point in during the last year where we talked about uh contracting with uh other people that have end of life assets.

That doesn't seem to be in the mix right now.

I would have said that, but I think some new opportunities might have emerged at the end of last year.

And so I wouldn't say that right now.

And we're not we're talking about some other potential natural gas assets that might have some extended life or coming off contract in other areas.

So I think we have some options there to explore.

It is a dynamic market right now, and I think that merits going to take another look before we make any big decisions.

Thank you.

First one advanced metering.

Not uh, I'm gonna be bringing doing a board informational update next month.

So I don't want to spoil the fun, but uh right now uh we're through our our uh solution build and we got all our integrations done and our testing.

Uh we did uh the goal live on the system on uh January 10th, and we're right now in the pilot mode.

So we have 500 electric meters out, 50 water meters out in that pilot area.

Uh first billing cycle will be on February 11th.

So we'll be developing the first bill in that pilot area during that time.

Uh looking at a lot of performance KPIs that we'll be highlighting next month in that presentation, making sure that system is working well, and then uh if all goes well, we'll be looking at deployment uh of electric meters for two years and uh deployment of water meters over the next three years.

So uh going over to asset management.

Always we have an asset management management program here at RP.

We really look at what is on our system generally in the in the substation and and um important uh infrastructure on our distribution system.

What has reliability impacts if it were to go around that?

What are long lead time minimum high cost items?

And that's really what we have mapped in our asset management program right now.

Uh so we do have some asset management projects in the budget here for the next couple of years.

First one being uh we're gonna be replacing a substation transformer at Zumbra River that is uh ending its uh available life.

Uh it's starting to show some age and some of the dissolved gas analysis that we've been doing.

It's also reaching some capacity issues.

We got uh some load growing out of Zumbro, and it's just not big enough.

So we'll be replacing uh that transformer.

We also have some circuit breakers on our system uh due to uh current and future changes around us that aren't going to be big enough to handle some of the uh required short circuit things that we're seeing, be able to function properly.

So we're gonna be going through and changing out those, especially on our tie substations that we tie uh with the outside uh utilities on.

So we'll be doing that over the next five years to upgrade those.

Uh we have some circuit breakers that are reaching end of life.

Um uh yeah, it's uh disconnect switches, I should say, uh, that are uh uh approaching that their end of life that are starting to show some A's are getting sloppy in their mechanisms.

So we're going through and changing out some of those.

And we also have some manhole switches in the downtown area.

If you remember the outage that we had downtown, uh we uh have some dollars here in the next five years to go through and replace the remaining switches uh uh two days.

They are about 40 years old.

So uh moving on if infrastructure infrastructure upgrades, as uh Todd mentioned.

Um a lot of the same projects that he mentioned.

So highway 14 interchange at 60th Avenue, highway 14 down at South Broadway, uh East Center Street.

Not only they have water infrastructure that need to be moved, we also need to move some electric infrastructure there.

Um bus rapid transit is another one.

Uh the one I want to highlight though is is the 18th Avenue project between Mailwood Road and 40th Street.

Uh why I want to highlight that is uh we'll be moving those overhead infrastructure that project to an underground.

We're gonna be doing the conversion there.

So that's gonna be a very big project, uh, an impactful project for us uh with the overhead underground conversion there.

Um, and then uh downtown meter mail feeders will be upgrading some of the uh male feeders here over the next five years as well.

As far as system expansion, uh read the newspaper lately.

Yeah, we got a lot of development coming in, so we got some a lot of new subdivisions coming in.

So goal right now is uh try to have a hundred lots or excuse me, a thousand lots per year done.

Last year we did 474.

So with sub subdivision expansion, we've got new services to do.

We got feeder extensions to do.

You see a lot of those uh highlighted in the budget packet.

Uh, we're also planning ahead, looking out five to ten years.

We are going to be purchasing, hopefully, here are in the process of purchasing some land potentially for a new substance subdivision, a substation in in the northeast uh part of the city.

That's really for low growth reliability.

Um the last one I'll talk about is this fiber.

Uh, we had do have some fiber optic uh rings around the city that we really use those for our communication, our SCADA system.

We also use them as communication for relaying and reliability issues.

So we cut in Marion Road.

Now we got to um really tie that Marion Road substation in to Willow Creek to kind of create a backhaul and also a redundant path.

So we'll be um doing that for ever project uh build out here in 2026.

Analysis and tools, always looking at uh giving our employees the best tools possible to be able to do analytics on our system.

The biggest one we have going on right now is is our GIS system.

We've spent uh much of 2024 and much of 2025 uh changing the databases there to be able to handle that Ezra upgrade.

So we'll be performing an upgrade here in 26, and then right behind it, uh, our designer program that we use to lay out uh subdivisions that ties into our GASA and SAP.

That's going end of life, so we'll be replacing that, and then right after that will be our outage management system.

So we'll be upgrading that and also integrating that with our AMI system.

So three big projects that'll help staff do better analytics on our system.

Then lastly, Grid North Partners.

Um that uh the joint development agreement is scheduled to be signed here uh on February 2nd.

The mayor is gone this week, so she'll be signing that on February 2nd that passed this this board and also the city council.

The routing, the final routing of that is scheduled to be done on February 5th from the public utilities commission.

So more information to come on where that piece of the nine cato the Mississippi River project will be routed.

In 2026, we had another uh big lift when it comes to agreements.

We're gonna be taking the CapEx project agreements and incorporating the Mankado and Mississippi River project that was part of the the utility board or the presentation from last uh last month.

Uh we'll so we need to amend that to include those assets.

The night the mancat of the Mississippi River project and those CapEx assets.

So we'll be doing that in 2026.

Construction is already started on the main cuto, and it'll be can be finished in in uh 2028 2029 time frame.

Um that is the the first phase of the grid north partners, and we have uh Tronch 2.1 coming right right behind it.

So we're in in the process of finding partners and and uh working with our partnering utilities on that project as well.

So that'll be another project that'll be coming to the board probably in a couple years.

But when it comes to uh system analysis, we're we're looking five to 10 years ahead.

It usually takes that long to get assets and build infrastructure.

So that's uh the main points for power delivery.

Yeah.

So I I'm interested in like in your and I've asked these before, but I'll just when you say the asset management stuff, you talk about the transformers and I mean these are high dollar things, and we're very infrastructure according.

Is there any concept that we have like a depreciation?

Like uh these things we they have a useful life of 40 years and they're like 80% depreciated.

Do we have any language like that?

Or is that I mean I'm almost thinking like financial language, but I I never see it.

And I by the way, public works doesn't have this either.

There's no concept that we have a billion dollars worth of infrastructure, but it's depreciated down to 30% of that.

For from my perspective, I look at age and usability and condition.

Peter, you want to quickly take that uh financial question.

I I think what you're asking on the financial side is do we keep a residual value on some of these assets?

Is that kind of what you're asking?

I um actually no, it really was like I think I think the smart engineers say this is coming to end of life, but I wish I had an objective way of looking at it and saying this is a 40-year useful life and it's 32 years.

And we don't, I never we do have a schedule of uh useful lives that we use for different assets and different types of assets.

A good example of one where we did make a fairly significant adjustment recently was when we started the advanced metering um project.

Uh those were I and I'm gonna be not exactly right.

I believe there are like 25 or 30 year assets for the old meeters.

We move them down to 15 because now the technology they're going to fail sooner.

Uh so we're going to be in a replacement cycle sooner.

So we do adjust the useful lives uh based on what the expected life of the asset is going in.

And the other part of that, I I was interested in like if as an example, if RPU electric really does have I'm gonna use the billion dollars worth of assets in the uh in and around the city if you try to and it and maybe that's at a replacement value um thing.

And I just think it'd be interesting to know that on a you know a hundred million dollar business.

What is the asset base?

I'll I'll take a shot also at uh adding some color here to this.

Um Peter's exactly correct.

We look at kind of the depreciated book value of our assets.

That's part of our annual audit.

We can show you that on our balance sheet, but that's not the full picture that you're describing as well from a replacement value.

You are probably low on replacement value of our assets.

Um I would have said a billion dollars three years ago, but we also saw significant inflation in the cost of replacement assets as well.

So the replacement costs of our assets went up considerably in the last five years because of the cost of newer assets compared to what we might have invested in 40 years ago.

So all of these are various aspects of answering the question uh our long range planning around our assets, and that's also one of the goals of our asset management framework that we're trying to identify useful life condition, what investments can we make to extend those useful life.

We have assets that are hundred plus years old with our hydroelectric facility, and we have assets that now last maybe 10 years or less with some of the more uh uh faster changing technologies as well.

So each asset category is different.

That's part of this effort is to help identify and have metrics around, I think the questions that you're asking here so that we can make uh better data informed decisions about where we need to invest and extend useful lives there as well.

We use a lot of good engineering practices and intuition and experience from historic failures.

We're trying to shift into more predictive and risk-based decision models as we move forward across all aspects of our business.

So we hope in the maturity of our asset management program, we'll be in a better position in future years to answer, I think the detail of uh data that you're looking for.

Yes, we're and again, I I'm looking at this because I it is my understanding after being here for five years now that we probably weren't maintaining our water resources as well as we should have.

And I feel I looking back, thinking like, why was that?

What were we not following?

And I think we went through this in some of the budget discussions last time.

So, how do you uh you know what are the headlights that help you see those things?

I still much rather see the smart people saying, like, no, this is this is running fine, it's meeting all of our standards, and just because it says it's 40 years old doesn't mean we replace it.

I'm not looking to do that.

I'm just looking for that early eyes so that we kind of know that as an example, were we running like um we weren't paying enough attention to our assets for this many years?

Um, so that that's kind of the the other interesting one too, just comparing the water to this.

We use the system expansion term here, where the water talks about land development.

It's probably a knit, but it it probably is dramatically different how you go about expanding, you know, building a thousand new uh single family homes and how you how you a water utility supports that versus an electric utility.

Yes, the the one thing I'll say in in the broader context, um, and Scott and I struggle with this from electric distribution and water, and it it isn't just you you're trying to forecast.

So you're trying to see ahead and anticipate how much development is going to occur next year or two years from now as we build budgets, and and Scott and I both encountered problems in 2025 of budgetary problems.

Just who could anticipate the rate of development last year uh for what we saw and and uh the short reaction times we have.

So there's the the engineering side of it.

How do we actually expand the systems and land development in terms of trying to be part of the planning process so we have a better prediction of what's coming in the future?

Very good.

Thank you.

Thank you.

And I and again, I know these are hard problems.

I know you guys have worked on them a lot through the last nine months.

Last question on grid north.

I mean, I I it's it's um one of the things that bothers me sometimes that do we need the complexity of this and it's worth doing, but it is my understanding that what we're really dealing with here is contracts and ownership, and there aren't a bunch, there isn't an RPU crew going out and working on this.

Correct.

Okay, thank you thank you.

I just want to establish ownership of a portion of the project, yes.

Thanks.

With that, I think Peter's Peter's next.

Well, the uh corporate services fund looks short and sweet compared to listening to the water and the uh transmission distribution guys and all the all the uh items that they're working on.

But obviously, this is the part where we pay for it.

So uh so the uh the the key things here uh areas the the financial planning, and I'm not gonna go into a lot of detail here, but we're really looking at how to structure some of the transactions.

First focus will probably be on the renewable contracts, but there is an opportunity for us to leverage our tax exempt status by issuing bonds.

It's usually done through a conduit debt issuer.

But the benefit of that difference between taxable and non-taxable debt essentially comes back to us through the the power purchase agreements.

So within the renewable.

So there's some structure there.

We'll be doing some analysis to come back and um you know come to the board and say, you know, we're recommending to do this and get into that in a lot more detail.

But we're at the early stages of doing some of that analysis.

It's an area that's fairly common in uh gas utilities, and it's growing in the electric uh utilities as well.

So it's an area we're looking at to give you an idea of magnitude on that.

Tim will probably cringe when I throw out some numbers on this, but we're looking at just on the renewable power.

We could be looking at 30 million dollars a year fairly quickly there, and the savings could be uh somewhere in the five to 10% of that.

So, you know, one and a half to three million dollar savings, you know, we kind of have to look at that.

So that would that comes right back through into rates.

So the second one there, uh looking at financial management, uh, as we talked about in the budget process, probably no surprise there.

Uh at the end of this year, we're going to start the process for issuing bonds to fund the Mount Simon, uh, some of the the uh grid North Partners project.

Then depending on what the outcome is on uh GT1, uh whether we're you know how much capital we need for that.

So the the amount that's in the budget right now is 241 million, looking at Q1 of 27, but that approval process has to start this year.

So we'll be starting into that area.

Uh the one that I think was on two or three of the slides already, uh the enterprise uh resource planning implementation.

This is really four projects, large projects and lots of little projects within the projects.

Uh, if you look at it, we have our SAP on-prem uh application that's going to be migrating into a cloud application.

The second part of that is uh the uh payroll processing and human management side.

It's in multiple uh applications across the city.

They're all going to be consolidated into one and then also moved into the cloud SAP solution.

The third one, which uh Todd and a number of people have touched on with the asset management, is really a big lift.

We've used different levels in different departments of the asset management within SAP.

So we're going to bring all of that over, but then there's a whole bunch of work and it's a think about tying this all into the GIS system and having those kinds of references in addition to all the life cycle management that's going to go on.

So that's kind of project number three.

And project number four is the city runs on JD Edwards, very similar to us.

It's an on-prem application uh coming up on an end of life as well.

And so there will be a migration of that environment also in the to the SAP cloud application.

So that project, um, the IT folks are going to be starting here.

I think the kickoff is February 10th.

Uh, and then shortly thereafter, in about April, we'll start doing a lot of the real in-depth discovery work, April and May, with uh really the implementation on that first phase for the RPU financials by the end of June next year.

So it's going to go quickly.

And then the last one there, which uh Todd had talked about the uh the water master plan.

I've got to get the right term up there.

Uh so the water master plan will actually feed right into and we do the financial analysis right in line, just as we did with the power resources plan.

We'll be doing the same thing on that, and it'll it'll impact you know the the uh the water availability, the water access charges, and also looking at our different water sources depending on what their recommendation comes back.

We could be looking at uh more water processing, transmission, things like that that are all come with a price tag.

So we'll we'll be coming back to address that.

The hope is we can start looking at that at the end of this year, but it's it's really going to be a challenge uh in the timing.

The goal there was to get some uh visibility into that so that when we're in the budget process in 27 that we can help inform that.

But it's it's really going to boil down to the timing of all the pieces lining up.

So uh it's not a guarantee, but that's kind of what's on the on the the national.

Any questions around the uh I did actually leave one big one off that Tim had on at the beginning, which was the process improvement.

That is also in the in the corporate services area.

Uh and Jill and her team in business services is leading that along with some of the change management and education that we need uh around the ERP sports.

So well, thank you for that.

I have a real quick questionslash comment.

You've said this to us before at different times, but just to summarize real quick again as board members, the drivers that allow us to issue bonds as cheaply as possible or as um is gonna the big levers are gonna be our debt coverage, yeah, the excellent bond rating of the city.

Um how well managed that is, and then the formula, not arbitrary nature of pilot things like that, or there's a lot of components.

Yeah, there's a lot of components when we talk about our credit writing, how the bond writing agencies look at us.

They look at our management, they look at our board, they look at you know, uh, you know, everybody implies type of thing as well.

They look at our environmental um track record, but yes, they also look at the stability of our financials.

That debt coverage is a really key number.

It's not the only number, but it's a key number, has a lot of a lot of weight in that that writing.

No, thanks.

I just want to keep an eye on it as we head into that.

So thank you.

Council member King.

I I kind of want to do a follow-on because I I when I look up at the fiscal management and that idea of the bond issuance and then rating agency underwriting.

Yep.

Um, one of the things they look at too is the amount of debt you're taking on.

Um they'll look at your local economy.

There's lots of things that go in there.

But I I guess I want to ask if we should start preparing ourselves for a reduction based on the amount of debt we're going to go into.

When you say a reduction or reduction of the case, I mean not losing our triple A rating because of the amount that we have uh out on loan.

So I appreciate the question because we are actually have an engagement going on with Bankatelli right now to do exactly that assessment.

The early indicators is no, we are not expecting to have a downgrade.

But uh I expect I will be coming to our March board meeting to kind of do an overview of this is how the ratings are actually constructed or how Moody's and Fitch look at them.

And these are the key factors and to kind of give us some idea of this is this is where how close or not we are.

So just for my perspective, and it and I say it out loud here in case someone wants to really fix my view is it simple was the one taking on the debt in years past.

Um and we didn't have debt on our books, we just had rates we paid.

But in the new world, we're gonna have the debt on our own books.

And it I'm just trying to get it straight in my head that it's not gonna happen or it shouldn't happen, and it could, or here's what we're doing to make sure it doesn't happen.

I think you know if we're not expecting it.

Could it happen?

Yes.

Yeah, that that that is a possibility.

One thing to to kind of um why that probably lines up a little bit differently is when the credit agencies look at our long-term power supply contracts, yeah, they capitalize them.

So even though the debt is on SEMPA's books, when they're doing that calculation, they go, okay, you have you have this exposure because you're and we're 42% of SEMPA.

So guess what?

If they had a debt challenge issue, we're 42% of that.

So yeah, they do kind of look at that already.

Good.

That makes me feel better.

Yeah, okay.

Thank you.

If I could add just a little bit more to that as well.

I want to give Peter credit.

We've worked closely with city administration as well.

To we have a separate bond rating from the city for the utilities portion.

And I think if you look back over the long tail of history, those have been very independent things and rating agencies kind of assess those differently.

That's changed in the near term.

And administration helped us understand that Moody's now typically looks at total debt across all enterprise funds as well.

So we entered into this again engagement with Baker Tilly with in partnership with administration with uh director of finance, Brian Anderson, Allison, Aaron.

And part of our goal is to look not just solely at RPU, but look broadly across the whole city at what our the debt view is both for the city and for the utility enterprise funds.

And so I was appreciative of that pre-planning work, and that also is trying to answer some of the same questions I think that you're getting at there.

We're we're not independent of the overall city's view as well.

And so part of what we'll report back is that kind of broader view and bring that back with administration as well.

Very good.

Thank you.

Okay.

Any other questions?

Thank you.

All right.

Well, I'm gonna actually talk about a few of the IT projects that we have going for 2026.

Um, not going to really touch on advanced metering because Scott kind of already did that piece.

And of course, the ERP is affecting pretty much every single department.

So thanks for stealing the thunder on that, Peter.

Appreciate it.

Uh but I will show two uh two important projects actually is is our data security, and this is effectively our cybersecurity aspect, which of course we're enhancing um ever since I started here.

It's just kind of been a uh one piece after the next piece.

And so we're we're trying to build all the layers and associated with that as well.

So that's a continual project that we're doing.

Um, but one that really excites me actually is the data analytics piece.

Um this is kind of a new thing that we sort of started really in the last few years and starting to stand up the the data analytics piece, the data state, and really starting to aggregate all these different data sources together.

Um what we talk about with the ERP and how all of these are um the GIS system, the finance system, the asset management system, and then you start looking at all the other potential data sources that we have out there, uh aggregating these together to start making some some decisions based on that data.

So it's I'm really excited about that one.

We just sort of stood up the team just this last year and really looking forward to enhancing them kind of for 2026.

Uh, but really in support of the business, there really isn't too much the IT doesn't touch.

So yeah, we're behind the scenes on a lot of these things, especially when the the room gets muted and things like that.

So yeah, you have any questions, I'm happy to take them.

So 25 character passwords rotated every two weeks, then one week.

Yeah, we're gonna go every seven days at least.

I have a couple um so just curious what the like this year's outcome of the data analytics will be, you know, kind of what the plan is.

For 2026, um, part of that is actually building out some of the data governance structure.

Um, so as we look at the different data sets that we have, uh things with the city, uh, we have a statutory requirement to ensure our customer information stays separate.

So we start putting in some data governance pieces in place there to ensure that that doesn't leak out.

Somebody that has access to the data, shouldn't have access to the data, and we have some controls in place for it.

So we're really kind of solidifying that that overall process.

You know, the first initial part was hey, let's see what we can get and start aggregating it together, cleansing it, making sure the integrity of it is good.

The second piece is actually starting to utilize it.

So we start putting out dashboards, um, things along those lines so that others can start using it and sort of utilizing the information.

So yeah, that's uh that's what we're focusing for this year.

Got it.

Thank you.

You're welcome.

Uh just um uh this is more of an observation and I I don't know how it fits, but I I don't know what the structure is.

I know we had our uh council onities or the consent agenda and we had some GIS stuff, and GIS is an important um information source and important thing.

But is that managed outside of IT and or how does that manage and who owns that data and is that just internally used, or is that data that really is available and is part of this data analytics?

So I'm gonna let Scott answer that one since GIS is actually kind of a part of engineering.

Part of the reason I'm asking is why is that?

Is it belonging in IT or does why doesn't it?

There's some historical pieces to it.

So well, no, I don't want to get into it like uh you know, explain it all to me.

I I I've observed it because when you talk about data analytics and data governance, I would think the GIS stuff belongs in there.

Uh, but organizationally it's not.

And then of course, then there's the city, then there's the county side of this.

So I don't want to get into the complexities of it, but I also don't want it to be left out, like it's not data that we own and that's important.

Do you want to go?

Go for it, Scott.

Do you have like a specific question?

Oh, no, okay.

I'm okay with where we're let me let me relieve Scott of some of the pressure here question.

Um the reason that I think that we're uh not uncomfortable, but this is an important question for us as a as a utility.

Um GIS in the way that we've used we use it in the water and the electric spaces is very much about directly supporting our distribution infrastructure, where the wires go, how they connect to one another, how they support our outage management system.

So when you say GIS, you may be thinking more of uh land use records and and maps.

When we say GIS, we're thinking about how the customer connects to the transformer through the feeder, and that when an outage happens, that the map that shows up on the website updates in almost real time.

So GIS for us goes beyond just the land record layer.

There's infrastructure and it's integrated to just about every other major enterprise system that we have.

I would call it operational technology for us.

It's core to our outage management systems, and now on the water model as well, we are using it for uh uh tracing out where water main breaks may happen and what it impacted customers.

So for the long history of RPU, it has been within our operational divisions, and that's where it lives because it serves directly the customers, uh that serves directly those operational divisions in the customer.

So it's not been IT for us for for the history as far back as I can see.

I would probably just add to the technology side of that.

Technology does still support GIS, like the servers I run on the dotted interface, you know, even when they go to the cloud.

IT is something to support that.

We have the same thing in our skater environment too, uh controls.

Uh it's exactly the same thing.

There's their operational systems and they run by Todd's area and Scott's area.

But IT 100% supports the technical environment.

It's and even the application sometimes, but for the most part, the application side is being managed by those specialists, especially when that role gets big enough that you need dedicated and knowledgeable resources that are on it full time.

So thank you.

And I will start off with the best for the last or the last.

So customer relations.

And our next step in that is when we signed on with MyMeter, MyMeter at the same time was being bought out by another vendor, Vertex One, who happened to be our second vendor that we brought in to demo.

We didn't go with Vertex One because they were very heavy on the water side.

And the um and they weren't just as as refined as MyMeter.

We ended up going with MyMeter.

But now we're going to get the best of both worlds because they have come together and put their portals together.

And so towards the end of this year, we will transition to what they call it's called their vConnect platform.

And that will be dependent based on when the freeze gets uplifted from Kayanta, because they'll probably freeze Kayenta as a part of the ERP project, and then we'll move forward.

So that might be towards the end of 2026 or yeah, 2026.

More than likely, it'll probably move into 2027.

So there's that.

We've got the CIS Cayenne upgrade, which was originally scheduled for this year.

Again, this is sort of dependent on the ERP.

There's a lot of moving parts and pieces as to when RP was going to start.

You've just been, it's just been reported that we're going to start this year and more so probably going live in 2027.

So this project will actually get pushed into uh 2027, the actual upgrade to nine from 9.1 to 9.2.

Um, but there's a lot of pre-work that we're going to be doing in terms of looking at some of those things that we will get with the upgrade.

Um we also may be looking at, you know, maybe some other options too, as we're moving to an ERP.

Um does our customer information system also eventually at some point in time be included.

So we're going to do our due diligence in the next year or so on that.

Benchmarking, um, I did report on that also last month.

Um, we are just coming towards the end of our 321,000 grant that we were awarded.

Um, again, this is a reminder uh our commercial customers that are 100,000 square feet last year, had to upload their data into the Energy Star portfolio manager using our MyMeter platform.

And this year it's going to be 50,000.

So we'll be adding another 126 approximate um commercial customers to the existing 137 from last year.

Um the marketing team will they did a great job last year in terms of outreach, um, doing presentations, hosting on-site visits, um, going to customer sites to help them set up their accounts.

Um, and then going forward, the customers should be able year after year, because it's an annual requirement, um, should be able to do that on their own.

So there's that.

We have the pollinator pilot project with the Minnesota Board of Water and Soil Resources, Bowser.

Um, we are in a three-year uh uh grant uh that we received a grant uh in 2024 for 110,000.

Um right now there's not much to report on that, um, other than we've got two transmission lines.

Um they get mowed in the spring and all through the summer.

And flowers are popping up.

We did add signage this uh past spring.

Um, so that was kind of exciting.

Um our goal ultimately, uh Bowser would like to see us end this with a transmission vegetation management plan.

Um so working closely with Scott's group um in the uh um trying to get that up and running.

We're gonna the uh Bowser's trying to get Pheasants Forever to come in and help us out.

And so more to come on that, hopefully within the next year.

Because it's this grant will end uh June 30th of next year, 2027.

So more to come on that.

Um, website redesign.

Um, all um utilities, um, government, local, uh, federal.

We need to make our website and digital content ADA compliant um to the WCAG 2.1 double A.

Uh, don't ask me what that acronym stands for.

Um, but it basically ADA accessibility by April of 2026.

We are in the process right now of working with GovStack, our new website vendor.

Um, and we will be going live soon with our new website.

And uh so there'll be a lot of work leading up to April to ensure that we meet compliance in with all of our digital content.

So more to come on that.

And finally, um, every year we've been doing it since what, 2002, our demand side management, um, our one and a half percent reduction in energy sales, which this year our goal again is over 17 million kilowatt hours.

Um, this in order to achieve those savings, we have a lot of programs through our conserve and save program, direct install programs.

We've got a low-income requirement where we have a spending of 0.2% of our residential sales, which is over 100,000, that we need to um uh um work with direct conservation direct installs with low-income customers.

So we have a couple of programs designed around that.

We have our smart smart thermostat program where we'll be able to um control thermostats in the summertime that's been going for the past couple years, and we'll continue with that.

Um, and then of course we have energy workshops and all of our partnerships with Minnesota Energy Resources.

So yes, sir.

Patty, how many years have we achieved our demand side management goal?

20 years.

Yep.

Yep.

Yeah, we're pretty Josh is really excited about that.

So um also before I leave you, um, I do want to introduce you to Tom Jorgensen in the back.

Um he is our new communications coordinator, so you may see his name popping up on media releases and social media posts.

This is his first board meeting.

So wanted to make sure you got to see the face with the name.

I saw him limited.

Yeah.

Yeah.

That's right.

Any questions?

Okay, thank you.

Yeah, I think I liked one of your LinkedIn posts or something.

Hopefully, that was you.

Someone from RPU did something.

So awesome.

Thank you so much.

It's just I'm so impressed with the high functioning fantastic team of directors and managers and the stuff you have going on, it's just incredible.

Um next, we uh are going to move to item 6A, RPU index of board policies, which I'll turn over to General Manager McCullough.

Just report we met in January to discuss the uh worker safety policy and had great feedback from the ad hoc group.

I think we're gonna take uh a little bit more time to do some revisions to that policy, great feedback from uh the ad hoc group, and I appreciate this dialogue and allowing us to have um uh feedback from the board as we as we move through these.

We'll we'll intend to probably bring that back for uh discussion, maybe in March, I think, just because we would like to bring it back to the ad hoc group again.

So just a slight delay there, um, but very excited about the feedback that we had there in the conversation.

And then we're gonna transition right away into item 7A, the general manager manager's report.

And again, I will turn it over to General Manager McCullough.

Great.

I, as you saw, uh have no slides for you today because I had intended to build my slides over the weekend and was otherwise busy with the team over the weekend as well.

I hope you took a chance to read the new format of our uh of my report.

And part of the change there is to be in the best position possible to help meet our accessibility guidelines.

What you will see from us and board packets, and I think this will apply broadly, is we'll be taking more attention to graphics and other things to meet those accessibility guidelines moving forward.

There has to be more effort up front in um getting them to meet these accessibility guidelines.

So we're actually restructuring a little bit of how we're doing it.

We'll still plan to bring graphics into the meeting and but we'll probably be delivering those in a slightly different way.

So we'll be transitioning a lot of things to words.

Um you'll see less charts and graphics in some cases, and when we prepare those, it'll take some more time behind the scenes to get them prepared in a way that can meet the accessibility guidelines there as well.

Um I think I will um just pause for any questions if there are.

I did take some time over the weekend, as I think all of you saw to communicate the great work of the team over this long, uh very long weekend of cold weather.

Um deeply proud of the team that's here that rose to the occasion.

And so unless there's any other questions, um, I'll just take any questions by exception here.

I just have one quick question.

I mean, thank you, by the way.

For I thought that you know, getting the information during the weekend was was helpful and it was um it looked like it was a lot of work.

So thanks to the team.

Um I just uh you put quite a bit in about the energy prepaid, and so just maybe a little bit of information about that.

Sure.

For those familiar with the concept of conduit debt, where we can port our tax exempt financing status through for other entities to use.

This is the city council, I believe, is familiar with this concept.

This is a concept where we can leverage conduit debt to prepay and buy down the we basically pre-pay for energy on energy contracts.

So there's another entity that can step into the middle.

You have a structure where there's conduit debt in there, you end up getting the same volume and a discounted price for all the energy over the term.

And we're talking 20, 30 year term here.

The net effect of that structure is we can take advantage of tax exempt financing discounts, others can, and we can effectively uh achieve six to 10% discounts over a 20-year lifetime on our energy contracts.

As Peter mentioned, this is measured in millions and tens of millions of dollars of opportunity for us.

You recall we've already secured 60% of our renewable energy volume.

So 60% of our power supply is in the form of power supply power purchase agreements.

There's a significant financial opportunity here.

This was just a that the conference I went to was an introduction again.

We've we've we've been seeing this concept for multi-years.

This is not a new concept, but it might be new for us.

So it was an introduction to the topic.

Peter touched on it as well as part of the corporate services initiatives.

We intend to bring that back to this board.

That would also come back to the city council as well, since it would require um uh uh some contract structures that I think would require council approval on that as well.

Um, so an introduction and more to come on that.

The intent of this overall um both my general manager report and the strategic initiatives is in response to feedback we had from the board last month of having more stories and having more check-ins on major projects.

And so all the initiatives that you saw here, we will plan to bring back at key points throughout this year and have more of a conversational update of what's happening with the projects, especially the multi-year project.

So that's also what we're going to adapt to this year, so that it's not so much um read a 200-page packet, but we can focus where the board is specifically interested in progress and um achievements that we're we're moving forward with.

Thank you.

Any other questions for the general manager?

Okay, hearing none, we'll move to item 8A, division reports and metrics.

Um, are there any questions or discussion from the board on division reports and metrics?

Councilmember Keene.

I I noted in uh packet page 40, there is a reference to uh repaired water distribution systems, and there's two different water main breaks on one street uh on 9th Avenue Southeast.

And I don't know if we're looking at those as just separate unique incidents, or is there something that this me makes us think we need work in this area?

Yes.

Uh so in December, we did encounter two water main breaks on on uh 9th Avenue.

Um, we map every single water main break that we have, and that all that information feeds into our prioritization model, um, which in the end identifies probably our top 20 water main segments to be replaced.

Um that's not quite true for Ninth Avenue, but there are is a history of water main breaks.

So these two may start to elevate that up on the list.

The reason that's important um when we're working with public works to identify projects for future years, um, sometimes sanitary sewer drives, which projects are needed, streets.

Just last year, 17th and a half avenue was almost number one, and that drove that project to the top.

So we will use that information.

It could elevate its prioritization here in the future.

Um, but it is 1969 cast iron water main.

Right, it's not it's not that old.

No, um, and we saw a fair amount of both cast and ductile iron water main breaks over the last year, uh, which is a little little troubling.

Is there any thought that when you go out and fix one on December 1st that whatever way we did it causes the one that happens three weeks, four weeks later?

We often get that question.

And I think that there is factors on soil conditions.

And so are they related?

Is it because we made one repair?

No, I think the root cause is probably common between the two water main breaks, not um the repair method or one repair caused the other.

That's my theory.

I would say on 9th Avenue, it when the time comes to replace that and we excavate it, we will probably find widespread corrosion throughout the whole length of the water main.

Yeah.

That's probably what's happening there.

Okay.

Thank you.

Any other questions?

Hearing none, we will now move on to other business.

Do we have any other business to come before the board this evening?

Hearing none, I'll entertain a motion to adjourn.

Uh so moved.

Do I have a second?

Second.

All in favor say aye.

Aye.

Aye.

Meeting of the RPU board is adjourned.