Rochester Public Utility Board Meeting - February 18, 2026

The Rochester Public Utility (RPU) Board convened at 4:00 p.m. on February 18, 2026, to discuss bids for medium voltage cable, a cost responsibility agreement with Mayo Clinic, water demand forecasts, an advanced metering project update, and the financial impacts of a recent winter storm. The meeting adjourned at 5:35 p.m.

Consent Calendar

• Approved the minutes of the January 27, 2026, RPU Board meeting.
• Approved accounts payable totaling $11,892,701.49 for the period 01/10/2026 to 02/08/2026.

Public Comments & Testimony

• No public comments were submitted.

Discussion Items

• Safety Moment: Safety Manager Bob Cooke noted that February 17th is Random Acts of Kindness Day and emphasized that kindness in the workplace is a strong safety tool, encouraging actions like reminding coworkers about PPE or pointing out hazards.
• Consideration of Bids (Item 4.A): RPU approved a resolution to accept bids from RESCO, IRBY, and Border States Electric for stock medium voltage underground cable. The purchase will be from the low apparent bidder per item, subject to delivery quantity tolerance and metals price escalation/de-escalation at time of shipment. Steven Cook, Supervisor of Engineering - T&D, presented and noted that final prices may fluctuate with copper and aluminum market prices.
• Agreement for Electric Facilities Dedicated to Serving Mayo Clinic (Item 5.A): Board Member Brett Gorden recused himself due to a potential conflict of interest and left the room for the discussion and vote. Manager of Electrical Engineering Randy Anderton presented a review of the Marion Road substation project (initiated in 2008, completed under budget of $10 million) and explained the new Memorandum of Understanding (MOU) with Mayo Clinic. The MOU replaces legacy cost responsibility agreements and establishes clear responsibility for future repair, replacement, and upgrade costs for electric facilities dedicated to Mayo Clinic. The agreement is designed to protect other ratepayers from bearing the costs of Mayo’s redundant and excess capacity infrastructure. Discussion included clarification that the MOU covers all dedicated Mayo facilities (including those at Crosstown and IBM substations) and that RPU retains operational and maintenance control. The Board approved the resolution 4-0-1 (Gorden recused).
• Water Demand Forecast for Master Planning (Item 6.A): Assistant General Manager Todd Blomstrom presented a technical memorandum projecting water demand through 2065. Two methods were used: per capita demand and land-use-based consumption. Average day demand is forecast to rise from 14.5 to 20 million gallons per day (MGD), and peak day demand from 30 to 42 MGD – a 25–30% increase. The forecast coordinates with the city’s comprehensive plan, the sewer master plan, and the regional transportation plan. It includes a 100-year drought scenario and factors in conservation assumptions. The study area covers all of Olmsted County and portions of adjacent counties due to groundwater model requirements, and it engages other municipalities that share the Jordan aquifer. A moratorium on new municipal Jordan wells is in effect for all communities. Board members expressed concerns that Rochester might bear disproportionate study costs and growth constraints, but staff confirmed the DNR indicated the moratorium applies regionally.
• Advanced Metering Project Update (Item 6.B): Director of Power Delivery Scott Nickels provided an update on the Advanced Metering Infrastructure (AMI) project. A pilot with 500 electric and 50 water meters began in January 2026; the first bill cycle completed on February 11th. A three-month pilot is testing key performance indicators (read rate, latency, billing accuracy, cybersecurity, network coverage, etc.). If successful, mass deployment will start in April 2026, with electric meter changeouts over two years and water meter changeouts over three years (approximately 60,000 electric and 40,000 water meters). Westco is the primary contractor; RPU will handle complex or hard-to-reach sites. Key risks include inoperable water valves (estimated 5%) and broken meter sockets (estimated 2.5%). Customer communications are planned, and commercials have been produced. The project is under budget with contingency remaining.
• Board Policy Review (Item 7.A): General Manager Timothy McCollough proposed forming an ad hoc committee to develop a new RPU Financial Policies document, working in parallel with the city’s financial policy update. Board members Wendy Turri and Malachi McNeilus volunteered to serve on the committee.
• General Manager’s Report (Item 8.A): McCollough reported on the financial impact of Winter Storm Fern (January 22–27, 2026). The Sherco Unit 3 (a SIMPA generation asset) was unavailable for three days due to ice accumulation on transmission lines and subsequent startup failures, requiring replacement energy purchased at high market prices. The estimated wholesale cost impact to RPU (41% SIMPA member) is about $4.1 million. SIMPA has a self-insurance fund that provided partial mitigation ($500,000, leaving ~$400,000). The Energy Cost Adjustment (ECA) is capped at two cents per kWh; the first charge (2 cents) will appear on customer bills in March, totaling ~$4.6 million for SIMPA with RPU’s share at ~$1.8 million. An additional $5.4 million in January costs may be recovered either through two more months of ECA charges or by drawing down SIMPA cash reserves. McCollough recommended drawing from reserves to limit customer bill impacts. The SIMPA board will decide in March.
• Division Reports & Metrics (Item 9.A): No questions or discussion.

Key Outcomes

• Consent Agenda (Items 3.A & 3.B): Approved unanimously.
• Bid Acceptance (Item 4.A): Resolution approved unanimously.
• Mayo Clinic Agreement (Item 5.A): Resolution approved 4-0-1 (Brett Gorden recused). Agreement will be presented to the Rochester Common Council for concurrence.
• Financial Policy Ad Hoc Committee: Board members Wendy Turri and Malachi McNeilus appointed to the committee; General Manager McCollough will lead the effort, targeting a draft for board consideration in the second quarter of 2026.
• AMI Pilot: Continues through March 2026; mass deployment expected to begin in April 2026 if KPIs are met.
• Energy Cost Adjustment: Customers will see a 2-cent/kWh ECA charge on March bills; an additional $5.4 million cost may be spread over two more months or absorbed by SIMPA reserves pending a March board decision.
• Meeting Adjourned: 5:35 p.m.