OPENPUBLICA · PUBLIC MEETING RECORD
Record of Proceedings

Rochester Public Utility Board Meeting - June 23, 2026

Boards and Commissions — Tuesday, June 23, 2026
BodyRochester, Minnesota
SessionBoards and Commissions
DateTuesday, June 23, 2026
StatusFILED
Video Record
0:00 / 2:29:56

Transcript — Verbatim
0:01

Any discussion?

0:03

All in favor, please signify by saying aye.

0:06

Aye.

0:06

Aye.

0:07

Aye.

0:08

Any opposed?

0:09

The agenda is approved.

0:11

The next item in the meeting is our safety moment.

0:14

And we have our safety moment with our director of information technology.

0:24

Thank you much, Malachi.

0:26

If you'll notice on your not with your packet, but we actually have Swedish fish.

0:31

That's what we had initially done when we started kind of doing some of the cybersecurity training when folks would detect a message that was that was fishing.

0:39

And the reason I kind of bring that up, and the reason we still kind of even do this to this day is that fishing is still obviously the most effective way that attackers get into an organization.

0:47

So basically, you're like, well, it seems really basic.

0:51

Uh the truth is it's still the number one threat.

0:53

And so the FBI's uh what is it, Internet Crime Complaint Center or IC3 has basically said that yeah, the the business email compromise is is the most likely way that people get in.

1:05

And so just kind of want to reinforce that um with you guys.

1:09

Uh some of the stuff that I have also in front of you is some social engineering pieces, little things to look for, uh, things to look out for as far as a sense of urgency.

1:18

Um and I think really kind of the important piece really is that these these business email compromise attacks that they happen to have, um, they don't tend to succeed because the technology failed.

1:30

They tend to succeed because they take advantage of our busy lifestyles, our schedules, and they kind of hit us at just the right moment, and that's exactly what they're looking for.

1:39

So for board members, it's actually really important because you're uh you could potentially get an email from the general manager, the CEO, another board member, things along those lines, and it just happens to hit at just the right time uh when people are susceptible to it.

1:53

So the biggest pieces is and one that I want to elicit for you guys is that uh whenever you get one of these and you want to verify that something's legitimate, use a separate channel.

2:03

So you use a known phone number of the person who's writing a message, do a separate chat.

2:08

Uh, whatever you do, don't reply back to the email saying, hey, is this really Tim McCullough?

2:13

No, probably not.

2:14

The attacker's just gonna say that they are.

2:16

So um you have to use those right away.

2:19

On the backside of that piece of paper, though, um, actually have what we had previously done as a fish when we first started this program just last year.

2:27

Um, so you'll see some of the items are are kind of elicited on there that uh the sense of urgency, uh Tim's name is spelled incorrectly, things along those lines.

2:36

And some of these new phishing messages can get pretty tricky.

2:41

So just because there aren't any red flags doesn't really mean that the message is safe.

2:46

You know, sometimes these messages are really well polished and it's really hard for you to find these things.

2:50

But a good thing to remember is trust but verify.

2:54

So um so tonight's takeaway is you know, please just enjoy the Swedish fish, but don't take the bait, right?

3:00

Um, when an email creates urgency, asks for action or change in a normal process, stop and verify things.

3:07

So have any questions, please let me know.

3:09

Otherwise, I have more Swedish fish in my desk if you do really set.

3:12

Thank you, guys.

3:14

Thank you so much.

3:15

That came up last week when I had a docusign item to sign.

3:19

I didn't recognize the source and actually was able to call Tim quick and just confirm.

3:24

Am I supposed to sign this?

3:25

And you know, of course it was all fine, but never know.

3:29

Thank you.

3:30

Next item on the agenda is our consent agenda.

3:34

Um the consent agenda items are 3A through 3F, and these include minutes from the May 19 2026 meeting, uh, review of accounts payable, uh fleet vehicle purchase uh V789, articulating telescopic aerial device, uh P972, eminent domain for the mancato to Mississippi River transmission product and a poll inspection contract.

4:01

Can I get a motion to approve the consent agenda as presented?

4:05

I'll move to approve as presented.

4:08

We have a motion.

4:10

Um is there a second?

4:11

All second.

4:12

It's been moved and seconded.

4:14

Is there any further discussion on the consent agenda items?

4:17

Councilmember Keene.

4:18

I'd like to just check on uh just I'm trying to make sure I have my numbers right here, but uh three dot e on eminent domain.

4:25

Um I want to I I this apparently is just good planning in case it comes up, or is there something planned to come up?

4:32

Uh this is similar to what was done in 2012 in our participation in the CapEx 2020 projects.

4:39

So the uh the mancato to Mississippi River transmission project has an approved route by the public utilities commission being led by Excel and eminent domain would be used only as a last resort if property acquisition could not be um acquired through normal negotiation.

4:57

So it's a necessary tool.

5:00

Our participation in the project and the joint ownership group requires a governance level decision approval by this body and also the city council for authorization of use of eminent domain if necessary.

Discussion Breakdown — Share of Meeting
Fiscal Sustainability██████████████████████████████30%
Engineering And Infrastructure████████████████████20%
Water And Wastewater Management██████████████████18%
Procedural█████████9%
Public Engagement████████8%
Budget Equity Analysis██████6%
Personnel Matters█████5%
Technology and Innovation███3%
Public Safety█1%
Summary of Proceedings

Rochester Public Utility Board Meeting - June 23, 2026

The Rochester Public Utility (RPU) Board met on June 23, 2026, at 4:00 p.m. at the RPU Community Room. The meeting covered consent agenda approvals, a bid award for water tower rehabilitation, adoption of updated electric service rules, approval of up to $20 million for gas turbine recovery, informational reports on power delivery and capacity auction results, and a policy review on financial policies. The regular session adjourned at 6:30 p.m., followed by two closed executive sessions.

Consent Calendar

  • Minutes of May 19, 2026 – Approved unanimously.
  • Review of Accounts Payable – Approved; total transactions from 04/09/2026 to 05/08/2026: $24,185,008.07.
  • Fleet Vehicle Purchase (V789) – Approved resolution authorizing purchase of a utility bucket truck for up to $240,000 (replacement of V619).
  • Articulating Telescopic Aerial Device (P972) – Approved resolution authorizing purchase from Altec for up to $290,000.
  • Eminent Domain for Mankato to Mississippi River Transmission Project – Approved resolution authorizing use of eminent domain (quick-take) as last resort for property acquisition; further approval required from City Council on July 7, 2026.
  • Pole Inspections Contract – Approved contract with OSMOSE for wood pole inspections and treatment for cycles in 2026-2028 (2026: $200,708.96; 2027: $107,357.00; 2028: $110,387.28); rejected proposal from EXO as unresponsive.

Public Comments & Testimony

  • No public comments were presented.

Discussion Items

  • Consideration of Bids – Apache Tower #87 Rehabilitation and Repainting (Project #2026-06)

    • Assistant General Manager Todd Blomstrom presented the project, which includes complete removal and replacement of coating systems (exterior, wet interior, dry interior with lead paint remediation), safety climbing system upgrades, foundation repairs, replacement of expansion joint, and alternate bids for LED obstruction lights, tank mixer, full-plate landing, and concrete pad replacement.
    • Five bidders; low bid from O&J Coatings Inc.: $618,000 base bid + $53,000 alternates = $671,000 total (under $700,000 budget). References checked.
    • Motion by Patrick Keane, second by Wendy Turri; approved unanimously.

  • 2026 Electric Service Rules and Regulations Update

    • Randy Anderton, Manager of Engineering, presented key changes: new definition for "computational load" (data center load), clarification on shared metering (requiring individual RPU meters for each apartment unit), updates related to state statute language, and new section on street lighting.
    • Discussion included notification to contractors and public works coordination.
    • Motion by Patrick Keane, second by Kelsey Vaszily; approved unanimously, effective July 1, 2026.

  • Cascade Creek Gas Turbine 1 Recovery

    • Tony Dzubay, Manager of Power Resources, presented options: repair ($18.9M), replace ($87M), or do nothing. Repair was recommended, with an 11-month timeline and projected positive revenue by year eight ($3.8M). The $20 million authorization includes potential insurance reimbursement (expected ~90% recovery of $10-11M applicable costs).
    • Board authorized expenditure of up to $20 million and appointed Project Manager.
    • Motion by Patrick Keane, second by Wendy Turri; approved unanimously.

  • Informational – 2025 Power Delivery Engineering & Operations Report

    • Scott Nickels, Director of Power Delivery, presented 40 KPIs across five categories. Highlights: System reliability: SAIDI (50.64 min vs 90 min benchmark – green), SAIFI (0.89 vs 0.8 – yellow), CAIDI (52.63 min – green), ASAI (99.990% – green). Vegetation management and manhole repair fell short (yellow/red) due to cost increases. Generation availability factor affected by GT1 outage. Added ~500 customers (total 61,242); 67.2% of distribution is underground. Discussion on budget adjustments for growth.

  • Informational – MISO Annual Capacity Auction Results for Planning Year 2026/27

    • Bill Bullock, Director of Power Resources, reported auction results showing capacity additions (4% net increase, mainly solar and gas) and lower summer prices (50% lower than prior year). Winter and fall prices similar; spring had overabundance. Future load growth projections (driven by data centers and electrification) may increase capacity needs. FERC and NERC are taking aggressive actions on reliability.

  • Board Policy Review – Policy 32: Financial Policies

    • General Manager Timothy McCollough and Assistant General Manager Peter Hogan presented a draft companion policy to the city’s finance policies, respecting charter authorities. Key areas: budget process, shared services (e.g., billing for public works), purchasing authority (including emergency and wholesale supply delegation), and payment in lieu of tax (PILOT).
    • Board discussion focused on PILOT: current policy uses volumetric (kilowatt-hour/CCF) basis; city council adopted policy of 6.5% of retail revenue. Staff recommended phasing in after cost-of-service studies (2027 water, 2028 electric) over five years, with explicit definition of retail revenue and treatment of power cost adjustment.
    • Billing treatment (showing PILOT as separate line item) was debated. Some board members (Brett Gorden, Kelsey Vaszily) supported transparency and rate comparability; others (Patrick Keane) expressed concern about appearing confrontational with city administration and preferred administrative resolution. No consensus on separate line item; that element was parked for future discussion.
    • General consensus: align with city council policy direction on PILOT, implement gradually after studies, and work out definitions with city staff. Board agreed to move forward with revisions to the policy, excluding the billing treatment component.

Key Outcomes

  • Unanimous approvals: Consent agenda (3.A–3.F), Apache Tower #87 rehabilitation contract ($671,000 to O&J Coatings Inc.), 2026 Electric Service Rules and Regulations (effective July 1, 2026), and GT1 Recovery Project ($20 million authorization).
  • Upcoming special meeting: Possible July 7, 2026, to approve interconnection agreement for Mount Simon station (favorable news: $0 in outside system upgrades vs $20 million budgeted).
  • Policy direction: Board supported phased implementation of PILOT changes aligned with city council policy (6.5% of retail revenue) after cost-of-service studies, with no change before FY2027. Billing treatment to be revisited later.
  • Executive sessions: Closed sessions held: (11.A) 6:36–7:04 p.m. for real property negotiations (Kelsey Vaszily recused); (11.B) 7:05–7:27 p.m. for workers' compensation litigation discussion.

Meeting Transcript

Any discussion? All in favor, please signify by saying aye. Aye. Aye. Aye. Any opposed? The agenda is approved. The next item in the meeting is our safety moment. And we have our safety moment with our director of information technology. Thank you much, Malachi. If you'll notice on your not with your packet, but we actually have Swedish fish. That's what we had initially done when we started kind of doing some of the cybersecurity training when folks would detect a message that was that was fishing. And the reason I kind of bring that up, and the reason we still kind of even do this to this day is that fishing is still obviously the most effective way that attackers get into an organization. So basically, you're like, well, it seems really basic. Uh the truth is it's still the number one threat. And so the FBI's uh what is it, Internet Crime Complaint Center or IC3 has basically said that yeah, the the business email compromise is is the most likely way that people get in. And so just kind of want to reinforce that um with you guys. Uh some of the stuff that I have also in front of you is some social engineering pieces, little things to look for, uh, things to look out for as far as a sense of urgency. Um and I think really kind of the important piece really is that these these business email compromise attacks that they happen to have, um, they don't tend to succeed because the technology failed. They tend to succeed because they take advantage of our busy lifestyles, our schedules, and they kind of hit us at just the right moment, and that's exactly what they're looking for. So for board members, it's actually really important because you're uh you could potentially get an email from the general manager, the CEO, another board member, things along those lines, and it just happens to hit at just the right time uh when people are susceptible to it. So the biggest pieces is and one that I want to elicit for you guys is that uh whenever you get one of these and you want to verify that something's legitimate, use a separate channel. So you use a known phone number of the person who's writing a message, do a separate chat. Uh, whatever you do, don't reply back to the email saying, hey, is this really Tim McCullough? No, probably not. The attacker's just gonna say that they are. So um you have to use those right away. On the backside of that piece of paper, though, um, actually have what we had previously done as a fish when we first started this program just last year. Um, so you'll see some of the items are are kind of elicited on there that uh the sense of urgency, uh Tim's name is spelled incorrectly, things along those lines. And some of these new phishing messages can get pretty tricky. So just because there aren't any red flags doesn't really mean that the message is safe. You know, sometimes these messages are really well polished and it's really hard for you to find these things. But a good thing to remember is trust but verify. So um so tonight's takeaway is you know, please just enjoy the Swedish fish, but don't take the bait, right? Um, when an email creates urgency, asks for action or change in a normal process, stop and verify things. So have any questions, please let me know. Otherwise, I have more Swedish fish in my desk if you do really set. Thank you, guys. Thank you so much. That came up last week when I had a docusign item to sign. I didn't recognize the source and actually was able to call Tim quick and just confirm. Am I supposed to sign this? And you know, of course it was all fine, but never know. Thank you. Next item on the agenda is our consent agenda. Um the consent agenda items are 3A through 3F, and these include minutes from the May 19 2026 meeting, uh, review of accounts payable, uh fleet vehicle purchase uh V789, articulating telescopic aerial device, uh P972, eminent domain for the mancato to Mississippi River transmission product and a poll inspection contract. Can I get a motion to approve the consent agenda as presented? I'll move to approve as presented. We have a motion. Um is there a second?

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