Rochester Public Utilities Board is now called to order.

A quick reminder as we get started.

This meeting is going to be recorded and a recording will be available on the city's website after the meeting.

The first item on the agenda tonight is the approval of the agenda.

I'll make a motion.

We have a motion.

Do we have a second?

Second.

Thank you.

It's been moved and seconded.

All in favor, please signify by saying aye.

Aye.

Aye.

Any opposed.

Then the agenda is approved.

Perfect.

Next up, we have our safety moment.

And this is with safety manager, Mr.

Bob Cook.

Evening everybody.

How many people knew that today, February 17th, is random acts of kindness day?

So I didn't know it either until I looked it up to be honest.

But uh in the workplace, kindness is one of the strongest safety tools we have because sometimes the kindest thing you can do is something like reminding somebody to put on their protective equipment, pointing out a trip hazard, asking, are you okay if somebody looks distracted or tired, taking a second to help someone lift something properly instead of rushing, speaking up when something feels unsafe, even if it's awkward to do so.

These may seem like small, but these actions can prevent injuries and even save lives.

So here's the point.

So today I want to challenge everybody to do one random act of safety kindness, such as picking something up off the floor that could cause a slip or trip.

I saw an ice cube earlier today on the floor, and I picked it up.

Uh checking in on a co-worker who may look rushed or stressed, helping someone secure a load or use the right tool, thanking someone for reporting a hazard, or simply saying, take your time.

One small act today could prevent a big incident tomorrow.

Thank you and have a great meeting.

Next up is item number three, our consent agenda.

In the consent agenda, we have two items, uh, minutes from the January 27, 2026 RPU board meeting, and a review of accounts payable.

May I have a motion to approve the consent agenda as presented.

I'll move to approve the consent agenda.

Second.

Thank you.

We have a motion.

We have a second.

Any discussion.

Hearing none, all in favor of approving consent agenda.

Item 3A and 3B, please signify by saying aye.

Aye.

Aye.

Any opposed?

The consent agenda is approved.

Next, we reach the open public comment period of our meeting.

Um this agenda section is for purposes of allowing citizens to address the utility board.

Comments are limited to two minutes.

Total comment period limited to 20 minutes.

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

Do we have anyone signed up to address the board tonight?

There isn't anyone signed up.

Thank you so much for that.

Next, we will move on to the uh item number four on the agenda, the consideration of bids.

Um we have item four A, which is underground medium voltage cable bid acceptance and award.

Um we have a motion and second for this item.

I guess never mind.

Go ahead and go ahead and present, and then we'll sorry, I'm out of order on that.

I'm out of order on that, sorry.

Just ram it right through, right?

Oh no.

So what we have before before you tonight is um I'm sorry.

I'm sorry.

Apologize for that.

I thought it was still on from before.

Sorry.

The pricing final pricing will fluctuate up or down depending on copper and aluminum pricing at time of shipment, which is very standard for us.

There were and sorry.

Yeah.

There were ones that actually are using the same manufacturer that uh were extremely close too.

I mean, you have limited manufacturers in this space, just like you do on a lot of specialty stuff.

So any other questions or comments.

Okay.

Uh hearing none, thank you.

Anything else to we should know?

Or nope.

Awesome.

Thank you for that.

Appreciate it.

Um hearing no further questions or comments.

Do we have a motion to approve?

Move to approve.

Awesome.

And second.

Second.

It's been moved and seconded with no further discussion.

Um all in favor of approving the resolution on board packet page 19.

Please signify by saying aye.

Hi.

Any opposed.

The item is approved.

Thank you.

Now we move on to item number five into our regular agenda.

Prior to consideration of item 5A, the agreement for electrical facilities dedicated to serving Mayo Clinic, which will be presented by manager of electrical engineering, Mr.

Randy Anderton.

Board member Brett Gordon has declared a potential conflict of interest and will recuse himself from discussion and action on this item.

Thank you, Brett.

So yeah, um, so the the item itself, I have a little PowerPoint slide here, and um only have one slide on the actual item.

I think Tim had asked if just kind of a uh informational wrap-up uh presentation of the Marion Road project.

So that's the bulk of the what we'll talk about here, and then uh kind of go over the gist of the uh the MOU.

But I do have a historic trivia, and there's three people in the room that can't participate.

Scott, Neil, and Steve.

And uh our other participant who may have had some background on this just uh left us.

So somebody asked me last week, how long have we been working on this project?

Well, if you go back to when we got approached by Mail Clinton, hey, we'd like to work with you guys on developing some new substation capacity.

So if that was the starting point, now we're at the ending point.

Does anybody want to guess?

How far back do we go when we started?

I don't know how far back it was, but I heard today it was pre-bold unbound.

So brave souls that would like to throw a year out there.

2014.

Any other guesses.

All right, only see more time.

I have win my file.

I actually pulled some papers out this afternoon.

These were some conceptual concept maps of routes and things, and the maps are dated June 12th, 2008.

So 18 years ago.

So that's why Neil and Steve couldn't answer that question because they're involved in that also.

So I just click that.

What do we do here?

All right, so uh the current status, we're basically done.

Let the cat out of the bag there.

Um we have just a few little cleanup punch list items, literally, some of them are clean up, you know, along the route, things like that, nothing major.

Um now that second bullet point, you might go 10 million dollars on their budget.

What in the world?

How did that happen?

Which is a good thing, but if you remember, we we came in with our original budget, and then we upped the number by a significant amount.

Um there was some huge inflationary pressures back then.

We had some real unknowns with you know our cultural heritage site.

There was maybe a very expensive reroute we would have to do.

We had you know the railroad, we had the highway 14 cross, a lot of unknowns, uncertainties.

So we kind of let's here's our worst case.

You know, we got the approvals for worst case scenario.

Thankfully, we didn't have too many of the worst case happen.

So we we did come under quite a ways under the official final authorization.

Um we uh RPU we're also serving load for Marin Road substation.

We have two active feeders there right now.

Um, and we have three more that will eventually uh energize in the the future.

One of these we may a third one we may start on this year.

Um all the cables.

Here's my show and tell all of the cables for for the customer have been installed from the substation to downtown.

Um so this is what we call a mainline feeder.

So there's three of these.

There are four sets of these coming all the way from the substation to downtown interconnection point.

So I'll just pass this around.

Try not to touch the end.

So there's four of those total.

And uh one set of those I kind of say can power about 10 Walmarts.

So give you a little context there.

And we have we've proofed out the cables.

We've you know, tested them.

Uh we have a meeting tomorrow, kind of between us and mail clinic on energizing those.

We did find a little bit of snag.

Uh, there's a relay on the customer's side that looks like it's gonna have to get repaired, which might delay the energization a little bit.

Um so yeah, and then eventually, maybe later this spring summer, as the grass starts to grow.

We're gonna maybe plan to do a final drone flight, just kind of a complete uh view of the complete finished product.

But here's got a number of pictures here.

We're gonna start the south end and work our way to uh downtown.

So believe it or not, I know a lot of you you know heard Marion Road sub it actually exists.

There it is, right there.

Is there a is this a late?

No, this it probably doesn't work.

So in the upper left corner, that is the substation.

Uh there's currently two transformers there, it's designed to accommodate a total of four in the future.

Uh two for mail clinic and two for RPU non-mail load.

So then we're looking south currently.

So the underground duct you can see uh follows our transmission line.

You can see some uh of the that being placed.

And here you got concrete pumper trucks, and there's the three parallel duct banks.

We're working our way further north, uh heading up towards uh Bear Creek Park.

Now this is uh now we're looking turned around the other direction, we're looking north.

That gravel road is the access into the back side of the substation.

The it's completely installed there.

Grass has been reseeded.

Um so now we're into one of our infamous areas here on the north side of highway 14.

Uh, you can see the highway 14 bridge in the distance in the back there.

Um, this is the cultural heritage site there off to the left-hand side.

I'm glad to report it was an extremely uneventful uh exercise getting through there.

So that was very we're glad to see that.

And then we're working a little further north.

The uh pedestrian bridge, that was uh one of the brand new bridges we placed for the the crossing across Bear Creek, and uh now we're looking back south.

Uh the brand new bike trail that was part of the project, having to repave that some brand new LED lights for the park.

So we had a really great partnership with the parks department.

The whole, I shouldn't say the whole route, but a huge amount of the route is on parkland.

They were great to work with, and it was a win-win.

It was you know great route for us, and they got some new amenities as part of the project.

Yes, just looking at this picture.

I I was of the impression that the power lines go underneath this bridge.

Is and and can you talk about that?

How they're like is there what's the uh containment?

There's uh some individual conduits.

The bridge, that's why the bridge had to get replaced so they could accommodate these conduits underneath.

So there's right, it's a much more robust bridge than used to be there just because of the weight, had to be designed to accommodate these conduits, and as you felt the weight of this cable, yeah.

So it had to be structurally designed to accommodate uh all the future con the cables that might be placed in there.

Yeah, be the same for the Silver Lake.

Uh I mean yeah, soldiers field bridge.

Sorry about that.

And then this is just another little view kind of back towards the bridge.

Yeah, the grass is taking completed project, and see the brand new lights there.

So I I jumped a little ways further east.

Oops, sorry about that.

I jumped too far, I didn't want to hit it twice.

There's a this picture's a little little fuzzier.

Um, so these are pictures of the manholes where you're at here is at the kind of at the intersection of Third Avenue Southeast and 9th Street.

You can see the Olmstead main clinic in the background there.

So there'd be one of these man, three of these manholes in series all along the way, you know, one for each of the duct segments, and then as we go just a little further east by the railroad tracks, and that's Broadway, uh at the top of the the view.

This was uh, you know, a fairly major task.

We had to you can see the massive excavation there with the jack and boar, they call it uh that had to be done three individual times, uh, one for each set of conduits for each duct segment.

So that uh that was a large undertaking, similar process to get under highway 14.

So now we are cross on the west side at uh the golf course here again.

That's the other brand new pedestrian bridge.

You can see a little bit of the I think some of the duct segments on the that hasn't been completed yet, but at this picture, and now we're we've moved a little further into uh soldiers uh field here uh with some of the major excavation.

You can see the three uh duct being installed there, and this was uh a big impact, you know, on that park.

I think everybody was aware of that.

Um see the memorial there, it gives you a little references to where we're at.

But here again, you know, we had a lot of at the end of the day.

We ended up um you know, a lot of new bike path.

We see some of the original you know, fine grading after we're done.

Some of the new pavement very up at the north end, you can't quite see it, but uh, and then that I think that's maybe the last photo I had.

Um, so I think I'd already mentioned we have uh three additional feeders at Marion Road substation that we would plan to uh energize in the future.

Um I'd already mentioned too that it can accommodate two additional transformers, so there's this could easily become our largest substation in Rochester.

So is there any other questions on the informational part?

This is just an explanation a little bit of the MOU.

That's really interesting.

Like those pictures.

When you said install additional feeder cables, are you talking about pulling them through all that, or are they already sitting in there dormant or so the ones for mail clinic are already in place?

We have them we being RPU, we have empty ones for other non-mail loads.

So we the one of the feeders, one or two of them might still be kind of feeding in the neighborhood area of near the substation, but one or two then also would also come all the way to downtown, probably two eventually.

Uh yeah, just uh I mean going back on the MOU and just at a higher level.

I think of Mayo is we have these certain projects with mail, but we also have Mail Clinic as a RPU customer separately too.

And I just want to if there's some high-level thing that could say this was a specific project we did, they cover the costs with this, and this is how you know this the MOU addresses how we're gonna use that, but there's also things that we just uh treat mail clinic like any other customer who was very large business, and we build them by kilowatts.

Is it is that accurate?

Yep.

I didn't know if you want to jump in.

I can so I guess a couple different things.

We have the construction piece of it, yep.

And they you know, they funded uh basically everything they're utilizing, they funded it all.

So the MOU is addressing, so I don't want to confuse you.

It's not just the Marine Road project, we're also incorporating the other substations and stuff that they are utilizing.

So we are trying to treat them like every other customer.

That's why we have the MOU because they believe it or not, they like to keep the lights on.

Yep.

And they like to have extra feeders, extra capacity.

So that's not built into our rate structure to cover those costs.

So when the cables fail, it's like, well, there's way more cables than a normal customer needs.

You need to pay for those, you know, whether it's replacement or repair or whatever.

So that's what the MOU is trying to do is to cover the costs of all this additional excess capacity, extra feeders.

And I trust the uh the the splits and all that are always different, and I trust the good work's being done below that.

But I view it as sort of the firewall from the special mail stuff to protect the normal RPU customers from having to cost share in that.

Is that is that a good way to think of it?

Yes, that's that's the purpose.

You're thinking about it correctly.

So this in concert with our rate tariff is the way that all the costs for the dedicated feeders and the infrastructure for our industrial customer class of one is properly recovered, and it protects other rate payers from having to pay for this infrastructure as well.

Uh our line extension fees we have for residential are of a similar design, so that development pays its way through industrial and large customers are treated the same way.

So upfront capital investment is shared, and we also the OM agreement is for our maintenance of that.

And um a lot of this is turned over as a contribution and aid.

They're utility assets that are serving one customer.

So we have operational control, we have uh maintenance control of that, and the point of delivery is in the downtown area.

So we take responsibility all the way to where we connect to the Mayo Clinic system in the downtown area now from two substations.

Okay.

Uh so I appreciate that.

And that's I just I wanted to get it stated.

That's kind of how I'm viewing what we're doing here.

Um, I was surprised to see references to other substations in there, like the IBM one, like this.

Why would it make this MOU if it has if it's not serving load specifically to well actually?

So we have uh original, so the original crosstown substation, I think it was 92 or 94.

There was an agreement put in place that addressed some of the you know the cost of building the substation and the ongoing costs.

But all if you look in there, well, you maybe I guess you didn't see it, but it had talks about these ducts coming, you know, the systems coming out of the substation, feeding the mail clinic.

Well, since that time there have been numerous other changes, additions.

Okay.

So it's kind of like okay, if we're gonna have to do this for Marion Road, we need to clean up and let's just make a comprehensive uh document to address all of them.

And we have begun to serve some mail load out of the IBM substation.

Um so it's kind of a long story, but the substation itself, you know, it's feeding IRG, feeding mail clinic, it'll ultimately feed some of the redevelopment around IRG campus.

So the substation would probably uh Peter and Scott, we met about this that we figured we believe that's really covered through the rates, just like you mentioned.

Um, but here again, they have extra redundant capacity in the feeders that's more over and above than what they're a normal customer would have.

So we're just kind of trying to blend it all into one agreement.

Okay, yeah.

Oh, I so I think that makes sense.

It's in this agreement because there is males out there now in those other buildings.

Yep.

Okay, all right.

That that's helpful.

Thank you.

Wendy, just one I'm at some of the same questions Patrick had, but also wondering, does it include does OM include replacement?

Or yes, okay.

So it it anything from you know what, we're there once a month just doing routine substation inspections to we lost a three million dollar transformer, and we gotta buy a new one.

Who's paying for it?

And that's so it's addressing everything from just routine maintenance to map major capital replacement.

Well, thank you for that.

Is there any other questions or discussion?

I'll just note that the agreement has been negotiated with the Mayo Clinic and it's actually executed from their side.

You'll see there was a replacement in the uh we had when we published the packet, it's executed on Mayo's side.

So there's one further step here.

This will go in front of the city council tomorrow night.

This is effectively a rate that is required with the industrial customer class.

So council has concurrence on these as well, and we're hoping for energization as soon as we're reasonably ready after this week, after these decisions.

Yep, we do have like I say we have kind of a Mayo RPU joint meeting tomorrow with the operational people to try to figure out when when does that come?

But based on the information shared at our meeting, I would like to move approval of the resolution as presented in board packet page 23.

Thank you.

We have a motion.

Do we have a second?

Second.

It's been moved and seconded.

All in favor of approving resolution, the resolution on uh sorry, all in favor say aye.

Aye.

Aye.

Opposed.

Carried.

Now that we've concluded item 5A, if someone could let uh board member uh Gordon uh back into the room.

And we'll give him a moment to uh get in and take his seat.

And welcome back.

So with concluding of that item number five, we now move to the informational section of the meeting.

And the first item on the agenda is informational item 6A, water demand forecast for master planning process, which will be presented by assistant general manager of operations, Mr.

Blomstrom.

Well, thank you, good.

Good afternoon.

Uh the agenda packet for today includes an attached technical memorandum, and that document outlines what our forecasts are for water demand over the next 40 years.

As the name implies, uh, there's a lot of technical information in that.

Um, I'm just going to give a very high-level overview, but if there's questions about the details of the content of that memo, I'm I'm happy to address them at any time.

Um, it's an important milestone uh that we wanted to touch base with uh the board here today.

Uh these demand forecasts really set the foundation for what all the uh subsequent analysis is going to be in our master planning process.

And assuming that uh it's generally acceptable to the board today, uh, that draft will go out to the state agencies for review as well as other interested parties, and then we'll be seeking comments on the document.

So the objective of the memo uh is really uh to develop future water demand forecasts through 2065 is our plan horizon.

There's a couple of important things to always keep in mind when you're doing infrastructure planning.

Um, one of them is it's not supposed to be done in isolation.

These planning documents are supposed to be coordinated with all the other planning work that the city has done throughout the last uh few years, uh including the city's comprehensive plan that was updated last year, but also land development is often driven and sometimes restricted by the availability of water and sewer extensions.

That's really a key piece to how land typically develops in in any given city.

So there's a fair amount of coordination that we have done with the sanitary sewer master plan that was done a few years ago.

Um, and so uh between uh the sanitary to sewer master plan, the city's comprehensive plan.

There's a number of other planning documents that are called out in the tech memo uh that we've coordinated along the way.

Um, but again, uh really the purpose of this uh is to set the foundation for all the future planning work that will come in the future.

So water demand forecasts were estimated two different with two different methods.

Uh one of them is a per capita demand projection.

That's essentially figuring out how much an average person uses in water each day, and then projecting out population in the future, and from that you can extrapolate future water demand.

And the other second process is a land use base or consumption-based demand estimate, where you're trying to estimate how much water does a typical acre of say single family residential use.

And then if you have a land use plan, you can extrapolate out into the future.

So I'll quickly walk through both of those methods.

Um, but to begin with, uh, we've seen this slide before, and this is the historical population change over the last 60 years here in Rochester.

Um, there has been a four-fold increase in population with the city, uh, adding nearly 92,000 residents uh over the last 60 years.

Uh, but there's also been growth in in the adjacent communities uh in Orinoco, Byron, and Stuartville, well smaller, um, still uh a gaining increase in population overall, uh, adding about 12,000 people over the 60-year period, and they are drawing water from the same source we are.

So to a large extent, we're all in this together in terms of uh solving our long-term water uh source water supply needs.

So extrapolating out into the future, uh, we know what our history is in terms of population growth, and looking at trying to forecast what is the population growth out into the future.

The main source of that information is the comprehensive plan again that was updated last year by the city.

There was a fair amount of work and looking at what they project is growth rate.

But the comp plan for the city only gets us out to 2040, and that's the 165,000 population estimate that you see on the graph.

Beyond 2040 out to 2065, we have to look at other sources and in terms of forecasting population growth.

A couple of those sources are the Minnesota State Demographic Center, state demography demographer, as well as using U.S.

Census Bureau data.

I will say that the state demographic office has Rochester identified as one of the fastest growing counties in the state over the next many years out through 2055.

And the US Census Bureau supports that.

The interesting thing though, when you start to look out very long term in population growth, the natural growth rate, so that is birth minus deaths, plus whatever migration that you have in terms of population coming into the area, really starts to flatten out throughout the state and even throughout the country out through the year 2080, where you actually see a plateau of population growth in the United States.

Now that is not equal across all parts of the country.

There are places that are gaining population throughout that phase, and there's portions that are losing population.

So this is a fairly strong growth rate projection that we have for Rochester, about 1.6% through 2040.

That's getting back to the growth rates that we've seen from the 1970s, 80s, and 90s, and then a slight tapering out through 2065.

In the report, uh that it breaks down water demand in a couple of different ways because there are assumptions built in the various uses of water.

So there's indoor usage.

That's the water that a typical customer uses during the winter period.

And that represents about 85% of the total annual uh water demand, about 60% of the average summer summer demand.

Right now we're at about 79 gallons per capita per day or 79 gallons per person per day.

Um but that is declining very slightly over the years, and that's not unusual.

Most city water systems are seeing a decline in per capita water demand.

A lot of it is uh the efficiency appliances that are replaced, uh is increasing uh water conservation.

It's also a little bit uh not to get into too much detail, is as cities grow larger and larger, the ratio of land uses tends to shift a little bit, and that causes some decline uh in indoor water uh consumption.

There's outdoor water demand.

So this is usually what we're seeing for irrigation in the summer.

Um, and we have seen a little bit of upward trend in that as we see new subdivisions coming in.

There's a little bit higher percentage of people with irrigation systems uh built in, but that's averaging about 90 gallons per capita per day uh during the summer months.

And in the assumptions of this projection, we assume that was flat, which is uh an assumption that we are going to get conservation measures in place to try and prevent that uh summer water usage from continuing to increase.

Average uh day demand is then calculated uh through the overall throughout the year.

And then the last thing I'll mention is peak day demand.

Um, when you design a water system, you don't design it for the average day or an average peak day.

You have to design it for uh a drought period uh so that we have some resiliency in the system.

There is a whole section in the memo if you enjoy that technical stuff that talks about uh gamma curves and extrapolation uh from uh weather periods, but more or less they're looking at a 1% recurrence or 100-year drought period is kind of our benchmark.

Can be looked at as 200-year or 500-year drought, but there 100-year drought period was was seen as a good balance.

If we get into an extreme drought scenario, there are things that that the utility can do to temporarily restrict water and get through those drought periods.

But in the end, there's a table in the bottom right.

Uh, that is the results uh with the average day increasing from about 14.5 to 20, um, and then a peak day going from 30 to 42 million gallons per day.

So we're looking at about a 30, 25 to 30 percent increase in water demand overall.

Um, that's fairly substantial, um, assuming or considering that it 100 years of development got us to this point, uh, an aggressive growth rate out in the future is a fairly uh healthy water demand increase.

An aggressive growth rate out in the future is a fairly healthy water demand increase.

I'll jump to the second method, land use based consumption.

So we took water data from about 42,000 water meters throughout our system, took each one of those meter data sets, attached that to a specific parcel for which it resides.

We know the parcel size.

We overlay that with computer mapping to know what the land use is.

And you can come up with this very large data set of water consumption by land use per acre.

And that process, I'll talk a little bit about that more on a future slide.

But you end up with a lot of data scatter.

So there's this process of trying to analyze that and come uh come to some conclusions are what some reliable uh water demand rates are per acre for land use.

And again, uh that has to be connected with the comprehensive plan because it's based on land use in the future.

Uh, the sewer master plan, and then the Rochester Olmsted Council of Government Metropolitan Transportation Plan, which seems like a weird plan to bring into the mix.

But the transportation plan does a very good job, not just at predicting overall population growth, but they actually have the whole county broken up into transportation grids or blocks, and they predict growth rate within each one of those blocks.

So coordinating with that means that the city and RPU and Roll Cog are using the same basis or assumptions for how growth will actually occur spatially.

And again, it's to produce our spatially distributed water demand through 2065.

As I mentioned, there's this enormous scattering of data.

Um we took and organized all of that by all of the specific land use designations, um, carving off the upper and lower 5% just to try and get some of those outliers uh in place.

Uh but essentially you come down to the point where you start to get an average water use per acre for each one of those land uses.

Um, but even a commercial land use designation, which is in the comp plan, there's a lot of different commercial land use.

There's hotels, there's restaurants, uh, there's car washes and uh hotels, um, commercial buildings and so forth.

So you really have to look at throughout that mix of commercial and try to come up with some type of target value to categorize them in a commercial residential, low designate, low density residential, high density residential.

All that being said, you end up with this wonderful table.

This is the conclusions of that effort of the demand per acre.

We do have a low range uh high range and sort of a target range, uh, trying to look at a sensitivity analysis based on what assumptions are made.

Um, but these are the the consumption rates that we've we've derived from that analysis.

Once we have those, uh, and as I mentioned, you have this on the left, this future land use map that's straight out of the comprehensive plan.

We have the urban service areas for the wastewater plan that sets our outer growth perimeter, and then the transportation plan with these uh finite population growth sectors throughout the community.

Merging all of those together, you get what is figure one in the report.

And this is kind of the core of this whole estimating process.

The outer tan color that you see, particularly on the left, that is the ultimate sewer service boundary area.

And it's quite jagged because it's based on gravity feeds, so it's following the terrain.

Um, the black and white dashed line that you see chasing that fairly closely, that is what we have designated as the future ultimate water service boundary for the study.

Uh, mimics it fairly closely, deviates in a few small areas for some specific reasons, partly uh while service can be served in some of these areas, they are probably not going to develop landfill being an example on the north end there where you see it uh deviating and so forth.

Um, all the multicolors are the land uses out of the comp plan.

So we can apply these rate factors to those land uses, but then you see all the tan shaded area, and that's the area where the 2040 comprehensive plan only reaches out so far.

We need to reach out another 25 years.

And we worked fairly closely with the community development department uh to come up with some good assumptions on what the right mix of land uses would be in those areas that are not designated in the comp plan today.

So this is really a graph of just comparing the two methods.

There's the blue area, which is the average day demand forecasts.

You see there's a light blue line and a dark blue line.

Light blue line is the land use based.

Dark blue is the uh per capita demand rate.

Um very close in the beginning, uh beginning years.

There's a little bit of deviation as you get out towards 2065.

Um part of that is some of the assumptions on declining per capita demand.

Some of it is just a little bit different density uh calculation uh results as you go out into those long years.

The upper piece, which will really drive the water system design is the peak day demand.

Um, it is trending a little above the per capita demand.

Um, but again, uh we feel like a uh a little bit more conservative approach there is warranted when we want to make sure that we're planning for drought periods and not average peak day demands.

So all that being said, as we kind of round to the finish line here, um, this table, and I won't go into it, but it's just an illustration, all that analysis goes into this table, which feeds into the groundwater model, which is ultimately where we're trying to get to.

But we are only one of nine cities that need to feed into that groundwater model.

The state has designated the the scope of the groundwater model that we need to conduct.

It encompasses all of Olmstead and portions of the surrounding counties.

So uh our intent is to use our land use base water demand projections for Rochester, and then we've essentially done uh similar process on the per capita demand for all of these cities with their population growth rates and their average uh demand per capita.

Um quite uh increase in uh average day demand uh when you look out through the entire study area from 18 uh all the way up to uh 25 MGD uh for average day demand.

So last slide, uh there are some key milestones that we want to touch base on in the future.

Uh, this was again a big milestone to get water demand estimates.

We'll share those out.

Uh they'll be reviewed by the state and others to make sure that we have concurrence.

Um we'll be working on conservation and reuse to see what we can do to try and bring those demands down a little bit through conservation.

Uh we are required to do an analysis of a surface water sources, and so that's being done concurrently with this effort.

But the next major touch point or milestone that we want to be back uh to the board with is our initial groundwater modeling results.

When those come in, we're going to start to see what our destiny is.

If groundwater is going to be a viable source in the future to meet these demands.

Like to be back in May.

The feedback I'm getting from the consulting group is they may need a little bit more time.

So it could be June when we have that data.

Um, from there, based on the alternative water sources, we'll look at treatment, what treatment processes would be required for us to maintain regulatory compliance.

And then by November, we will we should have final uh groundwater uh findings to share with the board.

And then following up on all the infrastructure that would be needed to implement this in years in the future with a final report in April next year.

So with that, uh, I can answer any questions that you might have.

Well, thank you so much.

Any questions or comments?

Board member Trey.

Just have a few, and we've already talked because you know, I this was like uh, you know, ice cream for me to read, right?

So um I think the only thing I wondered about the drought, the you know, the hundred-year drought is I mean, did they take into account?

Because I know again from my wastewater world, that number has changed.

So the hundred-year flood number has changed so significantly.

Is that this is the same thing happening for the drought?

Uh, if you're into this stuff, it's really fascinating, which I think you and I are.

Um, they looked at gamma curves.

So they're looking at um rainfall for June, July, and August, and how that's changed over the last 80 years.

Rainfall in June has actually gotten a little wetter over the last 20 years compared to an 80-year span.

Uh, so we actually are getting a little bit more precipitation in June than we have decades and decades ago.

Um, we also the report does that for July and August.

What's interesting is it goes sort of beyond data and comes to customer behavior.

And when we look at our pumping rates, customers try harder in June to keep up with lawn irrigation when there's a drought year, and you can see that start to fall off as almost if you get a very dry summer and eventually people just sort of give in to the effort.

Um so June uh over the last 20 years is what we use to determine the extrapolation of the 100 year drought.

Okay, good.

Thanks.

Only other question I had is you mentioned we're working with the Olmstead County cities on this, but there's other Dodge and Winona County cities.

Are we going to be as the whole group going to be working together?

Or how's that?

How's that gonna go?

Right now, uh, to try and keep focused, those cities that I had listed on there, we are doing we are conducting quarterly meetings with all these cities are invited.

Uh, and so we sit down and we look at these results, we'll review this report.

Um, the DNR actually comes down for those meetings.

We have them in person, and the DNR is helping to guide all of us together through the study process.

So um, there's good coordination.

Um, I will say that we do have a representative from Olmsted County on that.

We haven't included the adjacent counties at this point in time.

So thank you.

Councilmember Keene.

Yeah, I do want to follow up on that regional kind of discussion too, to make sure I understand it.

Um, your first chart showing demand had Rochester and the three biggest like adjoining cities.

Um, and then when we went to the and that was going like historical, but when we went to outward, we had I think about six more six more cities included.

And is that that's just by someone's judgment, or is that really a DNR boundary that they created?

So excellent question.

The the the whole exercise about this groundwater model um it goes beyond just the safe yield capacity of the Jordan aquifer.

They're concerned, the DNR, um, that if we exceed the safe yield capacity, not only would it be drawdown and static levels of the Jordan, it will actually start to impact surface water bodies.

Yeah.

And the most sensitive of surface waters are the calcareous fen wetlands.

So those are scattered out.

Some are even in the corporate limits of Rochester, some are scattered around the perimeter of the city and outward and farther reaches of the county.

So when they look at the groundwater model, they have to capture all of those calcareous fen wetlands, um, which could potentially be influenced if we as a region overpump uh from a given aquifere.

So that study box of the groundwater model goes way out uh and includes all of Olmstead County and slight portions of the adjacent counties.

Is it is it a watershed?

What defines that?

I how are they defining what it went?

It didn't go to Winona, but it did go to Casson.

I yeah, uh well, it it is it is the the geographic center of a bulk of the demand, which is Rochester.

Yep.

And it is the location of these wetlands that are around the county.

It ends up being a square matrix or a box for the grid of the actual groundwater model.

It's a rectangle, basically.

And to capture what they want to see the DNR in terms of potential impacts, it ends up reaching out that far.

Okay.

It it doesn't feel as scientific as it should.

Uh you mean in terms of determining the boundary?

Yeah, I mean, I I don't even want to just when you think about the Jordan aquifer, I mean it's in Wisconsin.

It's it's but I think I do understand there's gonna be a geographic center, but it it's almost sounds like this study is based on the Rochester demand and the DNR concerned about the Rochester demand, it's not a regional concern.

It is a read, yeah.

Yeah, I'm sorry if I'm not explaining it very well.

It is very much regional concern.

Each one of these cities, and one of them in particular has wells right next to one of the fens.

Um, and so there's a very good likelihood that their pumping in the future and their growth rate that you see on this chart could be impacting some of those fens also.

But holistically, if you look out in Southeast Minnesota, it's this core of urban metropolitan area that's drawing so much water demand from the same source.

Um, and and that's almost bringing the aquifer drawdown uh into a cone in and around Rochester in theory.

But when you said they made that box or the triangle, it's based on the geographic center being Rochester, because that's where the geographic demand is highest.

It is, and I wish I had the figure uh it would be more clear, but then you have to consider there's scattering of these surface water bodies that are very sensitive to changes in groundwater and how those are scattered out around the perimeter of Rochester and throughout Olmsted County is what dictated how we draw the boundary of the groundwater model.

Okay.

Um as far as the two methods, I appreciate spending time with it, but it seems like they come to similar conclusions.

Does it make sense to continue on with doing two of them or is the per capita the better way to go?

No, the the land use will will be definitely the best way to go because not only do we get a holistic increase in water demand, when you do it by land use, we can estimate water demand by eat each individual sector of the city in each pressure zone.

That was the that's really the key point that we it's good to hear, but it to me that sitting in 2026 and saying what the land use will be 30 years down the road seems like a really um divine kind of thing to do.

It is it it really is, yes.

And that that is the where there's art in us in in assumptions versus fact.

But some assumptions need to be made.

Okay.

Yeah.

Uh other question here.

You did the thing about did the so the uh sewer boundary around the city.

And I'm kind of cringing because that implies that if the city can't grow there, that the growth won't happen there.

But you you still have these other sewer systems all around in Stuartville, Byron uh or an oco now.

Aren't those I mean does I I don't understand how that is when I'm when I'm studying groundwater, why I care about the sewer uh capacity above it.

Yes.

Um, so that is that is how we estimate our ultimate build out of our system.

And eventually it will it's gonna get more granular when we know the source of water, it's where the trunk water mains and transmission need to be designed within the system to handle all of the future demand for a groundwater-based system.

It it cares very little where the boundary between cities are, right?

And and that is why this table is actually needed in the model.

Doesn't care if it's a Byron well or RPU.

Well, it's a well in the Jordan, and so all of these estimates will end up going into the analysis.

Okay.

Yeah.

Last question, other than um, as are these other cities also uh not allowed to drill wells right now in the into the Jordan?

Uh I am told by the DNR that the moratorium applies to all municipal wells in the Jordan right now.

Yes, okay.

And and again, if you had any insight, we always worried about the municipalities, it makes perfect sense.

That's where the density of people living are.

What is the percent of the people living in townships or not uh unincorporated compared to uh urban?

Is it like two percent of the population or is more like 10% of the population?

Um yeah, today I'm trying to think of what the population of Olmstead County is.

I should know that.

About 165.

We're about 145 soul.

Yeah, but that that's Stewartville, and there's a lot of those are the other small cities.

Yes.

So I I'm actually looking for the unincorporated or the not it's just not Rochester, it's like they're living township or basically wells.

They're living on shared wells or wells and septic fields.

Yep.

And in the model, it is not just the municipal wells.

We have mapped every single well record in the model, all of the water demand is going into the model.

Yeah, yeah.

Even a farm that has a well that has a well record that's actually being included in the model.

Okay.

Um, my my comments are just I I am worried that Rochester's carrying Rochester through RPU is carrying the load for this, and our ratepayers are paying for the study where it really is more of a regional.

And I'm I am worried that uh the constraint would be on Rochester's growth, not on the regional growth.

That that is uh a very real concern.

I I will say if we look at issues like the White Bear Lake litigation, which quite frankly is what's driving this.

Um, the DNR got sued because they issued too many water appropriations, in some people's opinion, yeah, and it damaged White Bear Lake.

Um those limitations applied to the entire eastern metro, and they're all struggling with that issue.

So there is the one example in Minnesota, it did not target one city, it was applied uniformly.

Okay.

So yeah, so I just want to say there, I don't know how the rest of the board feels, but I do worry about that this becomes a constraint on Rochester, but not on the regional area.

And if if if you need to straighten me out on that or or make sure that's how it's worked, I'd appreciate it.

Yep.

And I I have I have verified with the DNR multiple times for that very reason and those same concerns.

This moratorium applies to every municipal system, not just Rochester and the DNR has said yes.

Thank you.

Yeah.

I'll just add Todd and I have talked early on about how to fund the study portions of this because there's a hard cost to these studies that RPU is carrying the burden on and those quarterly meetings that are being gathered, other cities are paying their engineers and paying their staff to contribute to those.

So there is a labor contribution that's happening that does have a direct cost to other cities as well.

It's a fair point about who's funding the study efforts here.

The reality is is that for our own needs, we can't move forward without funding these.

And I think there will be a time in the future where that discussion becomes more real about where when we start planning infrastructure, what does this look like as a regional effort and how far do we go regionally together on this one as well?

And how far do we go regionally together on this one as well?

But we have to plan for our own needs first, and that's our obligation here as the municipal water provider here in the region.

Good.

I appreciate that.

Thank you.

And I would argue that we're probably the only one that has a piece of paper that says you can't drill another well because we had the most recent well permit be approved.

But I believe exactly what Todd is saying that anyone else who asks or uh submits another permit will be given the same uh directive that this work of the water modeling, the comprehensive master plan on the groundwater model needs to be done.

Thank you.

Good comment.

Any other comments or questions?

I have a couple of questions.

The new kid has some questions.

Oh, that's good.

Uh the Aquifer feeds a lot of areas, not just our area.

How that how big is that area?

Uh so if you can imagine cutting a cross section right across Lumstead County and turning it on its side and looking, there are layers.

So there's water bearing layers, which are aquifers, and there's confining layers that separate the aquifers.

Water really can't flow vertically very easily.

Um, and so it depends on which aquifer we're talking about.

The Jordan expands out you know, into Wisconsin up in the all the way through the metro area.

It's a very large aquifer.

There are deeper aquifers, though.

Yeah.

Um, and I remember you saying that.

Yeah, and there are some advantages to getting down into the deep rockers.

You're more separated from all the contaminant sources that it's reserved exclusively for municipal water systems.

But yeah, so are other communities or regions looking at the same information, gathering the same information that we're gathering, or is this are we kind of alone in this in terms of the study?

So if I understand the question correctly, part of I think part of the the results of the White Bear Lake litigation.

I mean, that was significant in the way water is managed in Minnesota.

Out west, you know, there's water rights and water shares here was sort of a free-for-all for for throughout history until we realized there's actually a limit to groundwater in Minnesota, and that's what the White Bear Lake situation illustrated to all of us.

RPU is the largest groundwater system in the state.

Okay.

And we are drilling wells every three or four years, punching them into the Jordan, and our UCR water demand increasing.

It's I'm not surprised the DNR came to us and said we have some concerns about this being sustainable.

And then I guess my last question is Is there anything in this that you found really surprising or that caught you off guard that you weren't expecting?

Um, no, I I think that the consultant team was very rigorous in data.

I mean, to use quite literally tens of thousands of of individual meters as data sets.

I feel very confident.

Um, there have been past planning efforts here at RPU that sort of unraveled.

And it was because they skipped over this part and made some assumptions and went charging off into planning the system, and the assumption is just sort of made it all completely unfeasible.

So that's why we're so diligent about this piece.

If we don't get this piece right, everything else will have errors in it.

So I'm pretty happy.

Yeah.

Thanks.

Uh good questions.

Any other questions or comments?

Thank you so much.

I appreciate it.

Good information.

Now we will move to our second informational item, item six B, advanced metering project update with director Nichols.

So originally I was gonna have Lawrence, the internal project manager do this update, but he went on vacation.

So I'm not sure he did that on purpose.

We like hearing from you, Scott.

No, you don't.

So you get the B team today.

So I kind of wanted to step back a little bit.

I know there's a couple of new board members that uh are on the board now uh that weren't here when we started talking about the AMI about two, three years ago now, as we went through some of the procurement phases and some of the study phases.

Uh, goodness sake, this study started even before I was a director.

So I had to catch up a little bit as well.

But um a little bit of context here to in these first couple of slides, really, what is AMI?

What are the systems that are tied together?

And when we talk AMI, we're really talking about those three uh pieces on top.

It's the AMI system, those are the meters out in the field, it's the collector system that brings the data back.

Then the MDM, the meter data management system, it's a smart work system.

That's really where that data resides, where you can now start utilizing that data to do alarming, do some analysis and some of those things.

And then there's a uh tied to our kind of system, our uh customer information system.

So all three of those systems really needed to be developed, designed, integrated, tested before we can even go forward.

And that's really where the stage is today.

Um, one thing that is not on this slide is is the data lake.

Uh, there's a link to that data lake, and that's really kind of part of the AMI project, but it's a separate project, really managed by our IT department that's pulling that data out of the out of the MDM system with other sources of data as our our data lake, but I would say where all the data at RP resides.

We're talking uh AMI data, we're talking SCADA data, uh you know, not GS data, but uh any any data resides in that data lake, and really that's driven by IT uh and fill tang is is really the front on the front.

Uh but when we talk AMI in general, we're really talking about those three top buttons.

The meters, the infrastructure to bring the data back to the head end system that collects it.

There's a cleansing that happens between the AMI and the MDM system called the VEE.

There's missing data, uh, that's really where that data then is replicated uh and smoothed out before it hits the MDM.

Uh the MDM is really where you do all your analytics, and then obviously a tie to uh the kind of system to do move in, move out.

Um, you can look at real-time data for a customer walks in, you can pull up their their meter data uh so you can have a conversation with them up front.

Um also excuse me, uh the the tie to our customer portal as well, so that customer can log into that customer portal and see their 15 uh minute interval data.

That's uh the last piece that still needs to be worked on here and vetted out.

Uh but that's what AMI is going back.

This is the the project timeline.

How did we get here?

So back in November, we started that workshop, and I would say probably two years to three years before that, we started talking about the studies.

We talked about the procurement and all the steps on the system that we wanted to design and the why, and putting that uh business plan together and that uh to justify the expense, uh not only for the electric system but also for the water system.

Uh ultimately the the board approved that plan.

So we went forward starting back in November of 2024 with the workshops, brought in uh some consultants to help us with this uh system and util system.

Um they brought forward systems that met our requirements that were serving utilities of our size and complexity, and we really did some vendor demos and workshops during that time.

From there, we built our requirements for them to actually bid on the system, went through that process uh in the latter part of 2024 and the first part of 2025, came up with that final solution uh mid-2025, and then started the build with the chosen vendor from there.

Once we chose the vendors and developed all those requirements, uh they built the system.

Once the system was built, we started to integrate it with our systems, and then the heavy testing came along.

So, whenever uh we want to test out the workflows that we're gonna utilize the system for any changes to the system required regression testing to go back and make sure that any changes that we did didn't impact functionality.

Uh that took about a year to get through.

Um, and that's kind of kind of where we ended up today up in today in January.

Uh, we did uh go live in January on December 31st, and we moved on into our pilot uh in January of this year.

So a little bit about the pilot.

So the pilot, we're we have 500 electric meters installed and 50 water meters installed in the pilot area.

Uh so the pilot area that's kind of north of the lured rack area uh between Valley High and West Circle, and it kind of goes up to where Valley High turns in the West Circle up there north of Costco.

The reason why we picked that is we had all the different meter types in that area, uh commercial, some bigger commercial, residential apartment buildings, that nature.

So we went through and installed all the AMI meters in that area.

So then we're doing the the pilot uh three-month pilot in this area.

We did the first built bill generation in that on uh February 11th.

Uh, haven't heard any positives or negatives on that.

I think that's part of our next uh status meeting that we're gonna have.

Uh but we did uh we're able to uh go through and then do that first bill cycle in this area.

Um we're looking at probably a three-month pilot to really test out the KPIs that we want on our system, and I'll spend a little more time on this.

Uh, this is what we want the system to do.

This is really kind of how we're gauging how the system is performing.

We're looking at the performance of the system, the read rate.

We're looking at the reliability of the data, all the latency, how long does it take to come back?

So all the latency, how long does it take to come back?

Um, testing all the integrations, are all the integrations working.

Moving on into the uh operational impacts.

Can we do remote connects and disconnects?

Uh can we do audit detection?

We want to be able to see those things to validate that that functionality is working.

We're also looking at customer impact.

We're trying to see are we getting complaints from customers?

What do customers like, what customers don't like?

We're we're um looking for that feedback from from that customer base to help gauge how it's working for them.

Um and then also building our accuracy.

Probably the most probably the most important thing on this list is how accurately are we are generating our bills.

We want to make sure those are bills for our customers are accurate.

Always on the on the forefront is cybersecurity and security.

How good is that security?

How secure is that system?

We're really good trying to gauge that as well.

And and data quality.

We talked about that cleansing that happens between the head end and the and the VEE, really gauging how much of that are we doing during this pilot.

The more cleansing we have to do.

So probably the system isn't working as well as it should.

Some of the the key risks here that we're also looking for is network coverage.

So we uh the water meter speaks to electric meter, electric meter speaks uh through other electric meters, and then eventually to a relay, comes back to our system.

So we want to really see how that network coverage is working.

Are we having gaps in our network coverage?

Are we finding that some meters aren't being able to be read and why that is?

We might need to change our network coverage there.

Um we're also trying to gauge vendor response.

So if we're having a problem, how quickly is that vendor getting on to our tickets and correcting our system?

Um and really trying to determine are we ready to roll this out in full scale?

So those are the KPIs that we're uh that we're looking at right now.

Right now we're on track uh based on our last meeting.

Um so we're if all goes well, not gunwood, uh be looking at doing mass deployment uh in April.

That'd be that three month time frame.

So any questions on the KPIs?

One quick question, if you don't mind, Scott.

Sorry.

Absolutely.

The remote connect and disconnect from testing, are you kind of waiting until tenants move in and out of commercial space to test it?

Are you just simulating?

We can simulate.

Okay, gotcha.

Just on I'm not sure if you're calling this a pilot project, or this is a go live for 500.

Yeah, this is the pilot for the 500 electric meters.

So we're we're calling it a pilot because we're testing the system.

Yeah, we I think so, but but they don't have a backup, they're not like running two meters, they're running they just have a AMI.

Okay.

That's correct.

And and and it is in our obviously just as this goes on.

The idea is we're gonna make sure these 550 or whatever it is work through three months before we really start rolling it out.

Correct.

Um I I did want to understand I say this.

Is there any risk here?

I don't know how to ask this, but it would have been is there any way you'd have the two different meters running and say, you know, and basically saying, yep, everything checks out.

Unfortunately, no, there's we have one meter socket.

There's no way to do it.

Um we can compare historical.

Okay, and there are people kind of watching along with that it's working that that something subtle isn't changed, like it's it could billing it 98% of what it's used, things like that.

Okay, and then really guys kind of goes back to that billing accuracy.

Yeah, I'm just I'm just like tripping over the word pilot, like it's uh, but this it really is go live for a small uh micro and then learning as much as we can there and then going forth.

And and we're gonna see some inaccuracy issues.

I mean, at the end of the day, some of these meters have been out for a while, the water meters have been out for a while.

Some of those ac accuracies degrade over time.

So with a new meter, you might find some inaccuracies.

Some of those based on uh the known known performance of the meter.

I hadn't thought of it that side that then that that the new stuff would be more accurate.

Um as far as the more sophisticated usages.

Do you have any of these 500 residentials that we know there's people that are gonna want to upload their data and play around with it and do some other things that there are some of those mixed in with the not yet, but that's one of the things we want to make sure that's the next uh integration project is to get that 15-minute interval data before we start mass deployment.

Yeah, we're safe.

I don't know if there's any way to find that, but that I assume there are some like the high-tech users that are gonna want to to um, especially some of these solar guys, um, are gonna want to understand the next level below what they're what they're doing.

Absolutely.

That's why we put a milestone in.

We want that functionality that we can go on the customer portal and see that data in 15-minute intervals before we do a phased deployment.

Thank you.

I haven't told Scott yet, but I've had several customers directly volunteer to me in the discussions about the grid access fee to be early testers and a lot of them have expressed excitement about the coming project and they're looking forward to having access to the data.

So I think we'll be able to find some friendly customers who are willing to help us test from the customer side beyond our own pilot implementation as well.

Yep.

And they also got a question from the project team to see if you want to be one of the early testers as well.

I don't want any special privileges above any other customer.

Quick quick question, Scott.

Oh, sorry.

Um, just and this could be me not understanding it.

Um I said it said you did 500 electric and 50 water.

So 500 electric, 50 water, correct.

So you didn't do all of the water.

So apartment buildings, there's only one water meter.

Oh, that's why.

Okay, so you did all of them.

Okay, thank you.

So once the pilot is successful and we get the the customer portal up and running, this is really a summation of uh how that phase deployment is gonna go.

So we're gonna have two companies really going out into the field and doing the change outs.

Westco, who is our contractor is gonna be doing the bulk of them.

RP will be doing some of them based on complexity or other things.

Um the the issue really one of the key risk factors in water is now we gotta get in every basement.

Okay.

So how it's gonna work is for those residential or harder, harder to reach customers.

Westco is going to reach out three times to the customer to try to get on site to change the electric and water meter.

If they don't have success doing that, that's going to come back to RPU.

So RPU will be then reaching out to them and changing out those meters so we don't slow West Co down.

Uh, we're gonna start northwest.

Um, but if you look at we're looking at roughly 60,000 electric meters that need to be changed out and roughly uh 40,000 water meters that need to be changed out in the city.

This is gonna be a huge undertaking.

This is a fundamental shift in the project.

We have the the technology hard part about building the system, testing the system, integrating the system, and doing all those checks.

And now we're gonna, once the pilot is complete, um the field hard part of this project is gonna begin, and that is changing on every meter in the in town.

Uh on the bottom and in yellow in the yellow highlights are some of the key risk factors I want to kind of highlight.

I'm gonna make sure I have these correct, so I'm gonna throw my glasses on quick.

Um so looking at uh the electric is on top, uh, RTU.

Uh originally when I saw this, I thought this was remote terminal unit in the skater world.

It is not, it is returned to utility.

That's what we talked about.

Those are the number of meters that will be turned back to utility because Westco ran out of uh contact options.

Um those will become back to RPU to install those.

Uh, we expect to find some issues out in the field.

Uh, we're gonna come up on a meter socket and the meter socket's gonna be broke.

Uh so we anticipate about two and a half percent of those will be broke when we get out into the field.

Um, part of the the service assured program that we rolled out for electric, we'll be covering that.

That's one of the reasons why we did that on the electric side.

And then um, maybe even a bigger issue and Todd that Todd is well aware of that we've been working on as well.

Uh, in order to change out the water meter, you have to operate the valve inside the house house.

We expect about five percent of those to be unoperable, which means we have to get a plumber in to fix that.

So Todd and I are working on solutions there to how do we accommodate um almost 2,000 of those, and that's gonna be an additional service run to those houses to be able to do that.

Um, and then we expect about one percent um billing expectations, kind of going back to your point there, uh Patrick, where we're gonna get a customer call, say, well, last month before AMI, my bill was this, now it's this, and we have the documentation available to explain that that to them with the higher accuracy of equipment.

Um, not some some slack in the in the water meter, things of that nature.

So fully expecting to engage with those customers during that time frame.

Um, as far as phase deployment is concerned, it's gonna take about two years on the electric system and about three for the water system.

That's what it's what's planned.

So we talked a little bit about the timeline.

Um high-level timeline, two years for electric, three years for water and broken down.

Um you can see the RTUs return to utilities kind of adding on to the end of that, it'll really be handled throughout the project, but uh see some more detail in your packet if you desire.

So talk a little bit about the network.

Uh, right now we got uh almost uh 37 devices out.

Uh, not only this is to really bring that data back from the field uh into the head end system of the AMI.

So they're kind of dispersed all through the city.

We did do a uh a study to see the optimal places for that based on range and readability of that data.

Um, as of right now, that network that has built been built out so far has been uh working almost at 100%, knock on wood again.

Um however, right now there's no leaves on trees.

So once the foliage comes up, we might experience some additional uh issues, which means we might have to either put additional hardware out or change the positioning of the hardware to maximize that those data reads.

And if you get asked, that's what one of the relays looks like.

It'll be hanging on a poll because inherently we'll get asked, what is that thing that's hanging there?

That's what that relay is going to look like as it comes back.

Um, on a financial standpoint, can't uh have a presentation like this while talking about financials.

Uh the the green line is the budgeted amount, the blue line is the commitments.

Those so those excuse me, the blue line is what we've actually spent on all of our contracts.

Uh and the orange is contracts that we have approved, uh, but haven't spent the money yet.

Uh as the project progresses, the blue line will get bigger.

The orange line uh hopefully will stay that that uh that size and actually shrink, uh, but any change orders stuff would uh be added to that that uh orange line.

Uh as you can see, we're we're still under contingency at this point.

Can't see enough about the core team.

Can't cannot have done this project about the court team.

And as you look at all the faces uh and the names, they are spread throughout the utility.

I think the AMI project touched just about every department in RPU.

We had representatives from all those departments on this core team, they were on this project from day one.

Uh dedicated staff that did great work and can't thank them enough.

Um again, Lawrence should be here, Nami.

So even though the core team had the bulk of the day in, day out lift of the project, this still couldn't have been done by just about every department in this utility that also contributed to this effort.

So with that.

Well, Scott, thank you for that.

This is so big.

I will this touches everyone.

Like you can't overstate how big it is.

So but appreciate soft start.

Any questions or comments?

Talk to me about communications, like how the com I assume there's a pretty significant plan of at intervals of communicating with people.

Yeah.

So before we do the phase deployment, we'll be reaching out uh in different publications, community outreach type things, let them know we've already kind of been doing that through plugged in, but we do have a plan definitely to reach out to the customers, let them know it's coming, why it's coming, and uh start talking about the portal and different things they'll be able to see and use utilize the system for.

They'll be able, then they'll know that the other company will be reaching out because that will probably be I imagine that could be confusing for people.

Correct, and they're gonna be working for us, so they'll have uh RP credentials and nice stickers on the side of their truck.

But yes, it'll all be scheduled for when that appointment.

Uh so they'll come on site um for the water, they'll be at a point to get in the house.

If they're going out in the neighborhoods, they'll be knocking on doors before they pull meters because inherently someone's working on a 15,000 page PowerPoint that then they're in the middle of that they didn't save yet.

So you want to make sure you knock on wood if you if there's any disruptions, and we'll have customer contact that way as well.

That's during the deployment phase, but we'll still be reaching out to the customers before that uh with some communications.

Scott, can I add to also we've got two commercials that we've created, one for the water and one for the electric.

Um, walking through the whole process of how the, you know, they'll come up to your house, they'll knock on your door, they'll identify themselves, they go through and show how the meter gets placed, replaced.

Um they same with the water, they go into your house, they put the little boots on.

We did run those commercials um right prior to the um start of the pilot, and we've got a plan to uh start rerunning those as we get uh probably in the May April time frame.

Um, so that those will also be going out too.

And that was not in any of them.

The Scott, one quick uh question that too, or point to make on that too.

The this is something that we're asking everyone to do.

Yes, we're not we're not providing an opt-out.

Can you remind me again a little bit about the appeals process for anyone that gets stuck in on this and really you know wants to register their complaint about it?

Does it come back to us on the board?

It will.

Uh, but if you remember two, three months ago we did a board action to update that policy.

So but yeah, I'm more just reiterating that this is something that we it's it's an important project, it's good for everyone, and it's something we want everyone part of.

So yeah, absolutely.

And the appeals will come back here.

We've already had I've had one question of opt-out, if you'll recall or for Kelsey's sake, last year we eliminated our opt-out program.

We had one customer on it in the entire city.

And so we've since moved that customer over to automatic reads through our existing AMR system.

And we don't have a system design.

So the answer will be no, it'll be a term of service to retain electric and water service to uh allow the metering to be changed out as a next step.

So I wouldn't expect any volume of appeals to come into the board.

There certainly may be public input that comes through as these projects go.

Um, you can go back on YouTube or uh go to the they don't have video stores anymore, but you can you there's documentaries out there with some level of misinformation about what metering projects look like.

So it's it's not out of the realm of possibility that this board may hear more about that.

We'll work with our communications, we'll work with our direct customer outreach to implement the board's policy.

And if there are appeals that come, we would bring those to the board, or the customers may come directly to the board on those as well regarding the policy choices.

Any other questions or comments?

If not, thank you, Scott.

Appreciate it.

I just would also note that we are at the tail end of cities across the country that are doing this.

I think characterize the last 10%.

So this is nothing new, and I'm happy where it's finally coming here.

So thank you.

Okay.

Informational items are concluded on the agenda.

We're next move to the board policy review.

Um, item 7A, and I will turn it over to General Manager McCullough for discussion.

You'll notice a shift in our plan on addressing uh reviewing policies.

And I've recommended to the board president and vice president to introduce the concept of a new policy.

Um, and it's shown on the index as RPU financial policies.

The reason for this is we've been working uh across the city.

There's an intention to bring forward a city financial policies review and update to the city council.

And since RPU operates under a charter board and that this board has uh financial responsibilities, there's versions of those policies that we're hoping to define how financial decisions and policies work within the board structure in concert with the city's uh financial policies as well.

So I guess what I'm suggesting here and looking for is uh a couple of volunteers or voluntolds to form an ad hoc group to help in the development of those policies.

This is not new, these are we operate under a financial structure that's existed for years.

This effort is to really bring that together in a comprehensive financial policy document that really speaks to how we do things and get that approved through the board.

And so that's what I'm my request is to form an ad hoc group and we'll get started on that work.

The city administration is planning to bring that forward, I believe, to council in the uh April time frame as soon as that.

So we're working in concert and in parallel with that effort.

Our policies would reference the city policies where those govern and they would uh speak to the board's responsibilities where there is a charter difference in those.

So that's kind of the goal with this process.

So there's clarity there.

Do we want to select that here and now?

I would suggest that we, if the board is ready to select that now, that we could get started.

We already have some early drafts going, and this this will be a larger policy document.

So it might take several meetings of the ad hoc group to form that together.

Our goal would bring bring that in the second quarter forward for the board consideration.

And we're looking for two board members for that.

Yes, no more than two.

Does anyone have interest in serving on that?

I I do.

I would I have interest.

Wendy, perfect.

Does anyone else?

If not, I have a strong interest in being on it, but I will defer to someone else if they feel strongly about it.

So good with that, Malachi.

Thank you, Brad.

Okay, Wendy and I will join you in that endeavor and look forward to it.

Very good.

Thank you.

Now we move to that now on this policy front.

I will move to the general manager's report once again.

Uh turn it over to General Manager McCullough.

Very good.

Uh I did send a written report ahead.

I'd be happy to answer any questions there, but I do want to touch on the SIMP board report section.

I do have a few visuals I'd like to share with the board here as well.

Um, as I mentioned last month with winter storm fern, there are some lingering financial impacts of that winter storm event that we are now starting to see.

And I wanted to talk through the simpa wholesale side of things as well.

So as you all know, the weekend of January 22nd through the 27th was an extremely cold weekend here in Minnesota and across most of the Midwest.

Unfortunately, one of the major uh power supply assets of Simpa, which we are owners of, um, was unavailable through that weekend.

So the CHERCO Unit 3 tripped offline on Thursday evening.

It was expected to run on Friday.

It was not available.

So replacement energy was needed to be procured in the energy market at higher expense.

And then it was unavailable Saturday and came back online Sunday.

Had that unit operated for three days, this we wouldn't even be having this conversation, and we might actually be seeing an energy cost uh uh energy cost adjustment positive, meaning a credit.

But because of that reliability impact, uh, there is uh financial impact here.

I wanted to talk a little bit about what that might look like.

This is the portfolio that exists to supply all of the Simpa members.

The red squiggly line is the load curve of all the membership, and we are about 40% of that as Rochester.

And anytime you see white space under that curve, that can be a potential problem.

That means that that energy was bought the market and no assets were running to hedge against that.

And so a little bit of framing or reference here.

The orange represents about a 200 megawatt wind portfolio directly owned by Simpa.

And through the coldest period, there was uh very little wind.

And so you see almost to zero wind the 24th and 25th, which was the uh Saturday and Sunday.

The light blue represents member generation.

These are typically diesel fired units that exist in the smaller member communities.

Those largely did run.

There were some reliability impacts on some of those units.

Uh and uh we're not the only ones who's experienced fires in the last uh year with our generation unit.

So it was a hard weekend all around on a lot of the generation for member owned generation.

FES OES acronyms you may not be familiar with.

That's Fairmont Energy Station and Owetana Energy Station.

Those are natural gas fired units, and there was a limited gas availability for a period here.

That's why you see the green coming in and out there.

But the big impact here is Sherco Unit 3.

You can see how much of that portfolio that Sherco is for the SIMPA membership.

And really, where we're seeing the impacts is the 23rd, 24th, and 25th, when there was no energy hedge to be able to produce our own electricity and get paid the market price for that.

And so that energy had to be procured in the MISO market during that time as well.

Early settlements are showing about a 10 million dollar impact overall for those three days for the full SEMPA membership to RPU as a 41% member.

That's about $4.1 million of additional wholesale expense that we will anticipate seeing.

Some of those costs will not be fully settled until really the end of February.

And so this will start showing up this month in the energy cost adjustment, the ECA charge.

And as you'll see in this next slide, also there was some self-insurance.

So last year or the year before, Simpa in recognizing that the premiums for insurance to insure against a loss of generation like this were climbing and the coverage was declining.

And so there was a choice to self-insure moving forward.

So there is a self-insurance fund that has uh been funded to a tune of about a half a million dollars, half a million dollars a year.

And so there was a drawdown on that self-insurance that'll mitigate some of this balance.

So rather than paying premiums that may never uh warrant claims, the self-insurance funds is a way of paying ourselves.

The concept's pretty well tested here.

So that's mitigating a piece of it, is a partial drawdown of the self-insurance that leaves about 400,000 in that fund for the remainder of this year.

Should there be other claims against the self-insurance fund?

And then part of how the ECA is designed, the energy cost adjustment is it's capped to reduce monthly bill impacts to the member cities.

And the way we design our rate structure is that ECA, once it's received for us, gets translated to a power cost adjustment that shows up directly on customer bills across all customer classes.

Um, and so it's since it's capped at the Simpa level at two cents.

This first charge will be a full two cent charge coming through in January, about 4.6 million dollars total, take 41% of that.

We're going to see about 1.8 million dollars charged to us.

We talked about, I believe, last month that and some of my reports that our own generation performed really well during this period.

And so we're able to mitigate some of that impact.

So with the charges coming to us from SIMPA, we'll be able to offset some of that cost on the bill with our own member generation.

That'll all be true up this month, really, and start showing up on customer bills that will land in March.

There's still a decision since that cap was hit.

There's still about $5.4 million worth of January cost, wholesale costs that are we need to either we speaking as myself as a simple board member.

A board decision needs to be made whether that will just continue to pass through the ECA to or two and a half months running, or if the simple board would choose to draw down cash reserves to absorb that $5.4 million.

That decision hasn't been made yet.

That'll be considered in the board meeting uh second week of March.

And so there's a chance that our ECA would continue to be high for two to two and a half months.

That would effectively be an additional two cents per kilowatt hour on customer bills that'll hit in February and hit in March until that uh wholesale expense from January is fully covered, or it could be limited just to one month if the board decides to draw down cash reserves.

Um you can see kind of a relative energy cost adjustment.

This is a two-year look back.

The blue bars represent the charge or credit that we've seen from SIMPA, and the January 2026 bar on the far right shows the impact of a two cent cap there and what we would expect.

So it's a the single largest ECA charge that we've seen in the last two and a half uh years looking back.

Speaking of reserves, this is the current outlook.

So this is projected forward as if all of the costs are recovered through the ECA in February and March.

So they're the purple dashed line represents the projected balance moving forward.

You can see that reserves are currently above max bandwidth, but they are expected to be drawn down both with this current event and with the uh upcoming Sherco Unit 3 outage, which starts at the end of February through April.

So there's uh expected drawdown there.

The board could decide to fund this remaining 5.4 million from reserves, and we would still the agency would still be within bandwidth there.

That will be my recommendation is to fund this from reserves.

I think that's a better pathway for us than having a sustained ECA for three months that would hit our customers.

It's money that's already been collected from our customers, and I believe this is the purpose for operating reserves to mitigate this exact kind of expense here as well.

So, but that will be a board decision moving forward.

And I can touch on anything else that was in my report, but I did want to take a moment just to recognize that this is gonna be felt by our customers the next couple months with the high energy costs that we experienced in January.

Just a comment, thank you for the all you guys did to protect reliability and just keep us sliding through it and keep the lights on throughout.

So that was just well done.

Just curious, what happened to the Sherco plant?

I've heard early reports, sounds like there was a ice accumulation on some transmission lines in the region that shed off, caused a voltage transient that caused the unit to trip offline, a fan that operates the boiler tripped offline, and then it went through a series of startup failures.

Another fan tripped turbine vibration event.

Um, and then uh this is how it can go with a large thermal unit like that.

They were able to get the unit back up online by Sunday evening into the following days.

It is operating at a D rate right now, about a hundred megawatt D rate, and they're expecting to keep D rated through the end of February rather than take the unit offline to fix something.

They're gonna ride through and take it offline in February for a two-month planned outage.

So it's limping along right now through the end of the month.

Any other questions or comments?

Okay, hearing none, we'll move quickly then to division reports and metrics.

Uh, item number nine A for February 2026.

Are there any questions or discussions from the board on division reports and metrics?

Hearing none, do we have any other business to come before the board tonight?

In my teams chat, somebody asked a question.

Oh, okay.

But I don't know where it came from or how I got the notification because I'm new here.

That's one of our internal teammates.

I think we can handle that question internally.

Um yeah.

Oh, sounds good.

Perfect.

Uh having no other business to come before the board tonight, um, I will entertain a motion to adjourn.

Uh move to adjournment.

We have a motion.

Do we have a second?

I'll second.

Motion, second.

All in favor say aye.

Aye.

Aye, aye.

This meeting of the RPU board of directors is adjourned.