Public Utility Board Meeting – September 29, 2026

The Rochester Public Utility (RPU) Board met on September 29, 2026, at 4:00 p.m. at the RPU Community Room, 4000 E River Rd NE. The Board recognized a retiring manager, approved a sizable consent agenda, awarded a construction contract for a new water booster station, authorized public notification of 2027 supplemental rate adjustments, reviewed 2027 legislative priorities, and discussed updates to the worker safety policy. All votes were unanimous. The meeting adjourned at 5:45 p.m.

Recognition

• Board President Malachi McNeilus and General Manager Timothy McCollough recognized Ryan Moore, Manager of Geographic Information Services, for 27 years of dedicated service. Moore grew the GIS function from a single position to a department of five professionals and integrated GIS with key operational systems (CIS, ERP, outage management, AMI, SCADA). The Board formally thanked Moore and wished him well in retirement.

Consent Calendar

• Approved minutes of the August 25, 2026 Board meeting.
• Reviewed accounts payable from August 12 to September 10, 2026, totaling $16,596,835.56.
• Approved 2027 Board meeting dates.
• Approved revised Board Policy 4: Board Organization.
• Adopted a resolution authorizing purchase of five units of submersible switchgear from Border States Electric for $836,000.
• Approved additional expenditure of $488,000 for the Country Club Road Water Main Extension Project (City Project J7862), increasing total authorized project expenditure from $1,200,000 to $1,688,000; approved corresponding $488,000 amendment to the 2026 Water Utility Capital Budget (including $113,000 for design from the Water Connection fund); recommended City Council approval of the second budget amendment; confirmed that previously approved agreements with Pulte Homes of Minnesota LLC and ML Group I LLC remain in effect.
• Approved engagement with Baker Tilly US, LLP for financial audit and regulatory examination services for fiscal years 2026 and 2027, with an option to extend through fiscal year 2028.
• Approved resolution authorizing Transaction Confirmation for Secondary Firm Natural Gas Supply for the future Mount Simon generating facility, recommending City Council authorize the contract with Constellation NewEnergy – Gas Division, LLC.
• Approved additional expenditure of $158,958.80 for fuel nozzle replacement on Gas Turbine #2.

Public Comments & Testimony

• No members of the public signed up to speak.

Discussion Items

• Award Construction Contract for Kalmar Booster Station (Item 5.A): Assistant General Manager of Operations Todd Blomstrom presented. The project creates the 10th major water pressure zone for the growing western area. Only one bid was received from Rice Lake Construction Group of Deerwood, MN, for $2,540,300. The original budget placeholder for the project was $2.15 million; the total project cost, including design, administration, and construction, is now $3,235,300. A second budget amendment of $1,085,300 is required. Reasons for the single bid and cost escalation included: contractor capacity constraints, project complexity, location outside the metro area, and an initial estimate prepared quickly without a completed water system master plan. The Board discussed the need for future development fees for pumping stations to fund growth equitably. The motion passed unanimously.
• Public Notification: 2027 Supplemental Electric and Water Utility Rate Adjustment (Item 6.A): Assistant General Manager of Administration Peter Hogan presented. The two-year general rates were set in 2025; no changes are proposed to the general rate structure. However, to achieve an effective 4% general electric rate increase, the Board authorized adjusting the power cost adjustment (PCA) to retain savings from Chero debt payoff for new debt service. The average residential electric customer impact is estimated to go from $6.12/month to $5.17/month (likely a net decrease or minimal increase? The transcript says "from $6.12 a month down to $5.17" but that may be a reduction; context suggests the PCA adjustment is meant to partially offset costs. Clarification: The speaker said "average residential customer on the electric side, going from $6.06 and twelve cents a month down to five dollars and seventeen cents" – this appears to be the reduction in PCA that will be retained? Actually, it's unclear. The summary should note the proposed 4% effective increase via PCA. Water rates are unchanged. A new "Large Load Computational Load" tariff was introduced: loads ≥2.5 MW trigger a cost/risk study; loads ≥5 MW require a separate electric service agreement. Miscellaneous fees updated, including involuntary disconnect fee reduced from $70 to $45 due to remote disconnect capabilities. The Board authorized public notification of the proposed changes; formal rate approval will be sought in October.
• 2027 Legislative Priorities (Item 7.A): Informational only. General Manager McCollough outlined state and federal priorities. Key state issues: funding for lead service line replacement (current funds exhausted by early 2027), regional water supply resilience (education year as master plan completes by March 2027), large load legislation, net metering modernization, plug-in solar (aligning with City pilot), nuclear development, ECO Act reform to include demand response/solar, and transmission rights. Federal priorities: technology-neutral permitting reform (impacting North Hills Wind Project – no federal permits issued for wind since last year), lead service line funding, and positions aligned with American Public Power Association. Discussion covered the regional vs. Rochester-only water solution and risks to renewable energy goals if federal wind permits remain stalled. The Board expressed support for the direction; the legislative agenda will be coordinated with the City Council.
• Board Policy 11: Worker Safety (Item 8.A): Assistant GM Blomstrom presented proposed changes to RPU Board Policy 11 (renamed "Safety Program" from "Worker Safety"). Key additions: stated goal of zero injuries, regulatory compliance with OSHA 29 CFR 1910.269 (electric) and general industry, explicit stop-work authority for all employees, quarterly safety reporting to the Board (leading and lagging indicators), and provision for Board action if safety goals are not met. Board members provided input; the policy is expected to be brought for adoption at the next meeting.
• General Manager's Report (Item 9): McCollough provided updates: customer survey results showed improved portal satisfaction but persistent affordability concerns (higher summer bills due to increased volume); record in-person lobby traffic (call volumes down 10%); Silver Lake Dam modification/dredging project to be considered by Council on October 5; lead service line replacement funds nearly exhausted; solar on public buildings event planned; Flux ERP project in design/configuration phase. Discussion followed on development lot delivery (better coordination with developers) and joint trench work progress (ahead of last year, with two NPL crews).

Key Outcomes

• Consent Agenda (4.A–4.I): Approved unanimously.
• Kalmar Booster Station (5.A): Approved resolution awarding contract to Rice Lake Construction Group for $2,540,300, approving second budget amendment to $3,235,300, recommending City Council approval, and authorizing project manager to proceed. Unanimous.
• Public Notification of 2027 Rates (6.A): Approved resolution authorizing public notification of proposed rate adjustments. Unanimous.
• Legislative Priorities (7.A): Reviewed; no action required. Board consensus to refine strategy as more information becomes available.
• Worker Safety Policy (8.A): Board provided guidance; policy will return for formal adoption at next meeting.
• Adjournment: Motion by Keane, seconded by Vaszily, unanimously approved at 5:45 p.m.