Rochester Public Utility Board Meeting - October 27, 2026

The Rochester Public Utility (RPU) Board met on October 27, 2026, at 4:00 PM in the RPU Community Room. The Board unanimously approved a consent agenda covering routine items, passed several regular agenda items including budgets and rate tariffs, received informational updates on groundwater modeling and a land purchase, and discussed revisions to Board Policy 22. The meeting adjourned at 5:25 PM, followed by an outdoor ceremony for the new solar array on the RPU building.

Consent Calendar

• Approved the minutes of the September 29, 2026 meeting.
• Reviewed accounts payable for 09/11/2026 to 10/09/2026 totaling $20,939,657.80.
• Approved revised Board Policy 11: Safety Program (formerly Worker Safety).
• Approved a resolution for 2026 and 2027 hourly power line clearance tree services with Asplundh Tree Expert, LLC, including overtime and double-time rates, and a one-year contract extension through December 31, 2027.
• Ratified Amendment No. 2 to the USIC contract for underground locating services, extending the term and revising pricing.
• Adopted a resolution supporting continued participation in the Climate-Smart Counties and Communities (CCC) program through June 2029 and accepting up to $27,000 in technical-support grant funds for 2027 projects.

Public Comments & Testimony

• Fred Carlson addressed the Board to thank them for quickly resolving a street light replacement issue on a footbridge near Elton Hills Drive, noting that five new lights were installed within two days of his email to the Board.

Discussion Items

• Solar on RPU Building Ceremony (Informational): Jake Shones, Residential Energy Advisor, reported that the City and RPU were awarded 20 solar projects totaling 766 kW capacity, costing about $2.7 million, offset by $1.9 million in state grants and up to $810,000 in federal tax incentives. 12 projects are already operational. The RPU Service Center system (39.5 kW, 92 panels) will produce an estimated 64,734 kWh/year, covering 4-5% of the building's load. The Board postponed the outdoor ceremony to the end of the meeting.
• Safety Moment: James Keltgen, Director of IT, discussed the recent “PHP to Shell” vulnerabilities (zero-day exploits) and emphasized the importance of patching, asset inventory, and layered security defenses for utility resilience.
• 2026-2027 Insurance Renewals (Approved): Shavonn Eastlee, Manager of Purchasing, presented renewals totaling $1,834,526.12, a 5.43% increase over the prior year. The portfolio maintains coverage with the League of Minnesota Cities Trust, Aegis, Travelers, StarTech, and switches cyber liability from Great American to Crum & Forster for better pricing and similar coverage. The largest increase (18.44%) was in generation asset insurance (StarTech), partly due to a prior claim at GT1.
• Solicitation of Underwriter for 2027A Bonds (Approved): Peter Hogan, Assistant GM of Administration, explained the request to authorize an RFP for a senior managing underwriter for proposed Electric Utility Revenue and Refunding Bonds (Series 2027A). The bonds would finance up to $141 million for the Mount Simon project and $32 million for Grid North transmission, with potential refunding of ~$80 million in 2017 bonds. A selection committee (City Finance Director, RPU Finance Director, RPU Assistant GM, RPU GM, with Baker Tilly as advisor) would evaluate proposals. No bonds are issued by this action; a parameters resolution will follow in December/January.
• 2027 Supplemental Electric Utility Budget (Approved): The Board approved the $141 million capital budget (down ~$100 million from original due to insurance coverage for Cascade Creek and earlier-than-expected permits for Mount Simon). Management recommended reducing the previously approved 6% general rate increase to 4%, resulting from lower debt service and a reduced wholesale power cost adjustment. The average residential customer will see about $5.17/month increase.
• 2027 Supplemental Water Utility Budget (Approved): The Board approved operating and capital budgets incorporating the previously approved 9.0% rate adjustment. A $3.23 million project for Kalmar Township was included. Average residential water bill will increase about $1.78/month.
• 2027 Electric and Water Utilities Rate Tariff (Approved): Two separate motions approved the fee and tariff adjustments effective January 1, 2027. The electric tariff includes a new section addressing large loads (including computational loads), allowing evaluation and potential creation of new rate structures. The water tariff remains unchanged from previously approved levels.
• Water System Master Plan and Groundwater Study Update (Informational): Todd Blomstrom, Assistant GM of Operations, presented initial results from groundwater modeling. Three scenarios were tested for future water supply (through 2085): using only the Jordan aquifer, only the Tunnel City aquifer, or only the Mount Simon aquifer. The Jordan option showed good yield but increased stream flow diversion and negative impacts on calcareous fens. Tunnel City showed poor yield (exceeding DNR thresholds for drawdown) but neutral surface water impacts. Mount Simon showed good yield and positive recovery trends for streams and fens, but may require treatment for water quality. Next steps include evaluating surface water options and optimizing hybrid scenarios. RPU launched a public website, “Water for Tomorrow,” and will present results to the City Council on November 23.
• North Broadway Land Purchase Update (Informational): Scott Nickels, Director of Power Delivery, reported a signed purchase agreement for two parcels adjacent to the RPU Service Center for $2.725 million (under the budgeted $2.8 million). The land is intended for a future substation (needed in 5-10 years for northeast load growth) and interim yard expansion. Due diligence (environmental, title, geotech) is underway; a reassignment agreement to RPU is expected in January. The purchase is within appraised value and aligns with existing Board Policy 22.
• Board Policy 22: Acquisition and Disposal of Interest in Real Property (No Action): General Manager Tim McCollough presented proposed revisions to Policy 22, reorganized for clarity and including key changes: allowing land acquisitions up to slightly over appraised value if justified to avoid condemnation, clarifying the $100,000 threshold requiring Board/Council action, and adding language on easements and disposal of idle land. The Board supported the direction; the revised policy will return for approval at the next meeting.
• General Manager’s Report: Tim McCollough noted two major Mount Simon-related decisions (groundwater study results and PUC approval for local siting authority) and the commencement of the Silver Lake dam project (lake drained). He thanked staff for their efforts and invited board members to the “Haunted Hallways” event on October 31.
• Division Reports & Metrics: No questions or discussion.

Key Outcomes

• All consent agenda items (4.A–4.F) approved unanimously.
• Regular agenda items 5.A–5.E approved unanimously with separate motions for each budget and rate tariff.
• The underwriter selection process for 2027A bonds will proceed to the Rochester Common Council for authorization.
• The 2027 electric rate will increase by 4% (reduced from previously approved 6%), with new large-load tariff language.
• The water utility will implement the previously approved 9.0% rate adjustment.
• Groundwater modeling continues; surface water alternatives will be evaluated; a decision on future water supply is expected by December 2026, with cost estimates in Q1 2027.
• The North Broadway land purchase will move forward after due diligence, with a formal action anticipated in January 2027.
• Revised Board Policy 22 will be brought back for approval at the next meeting.
• Meeting adjourned at 5:25 PM; the Board then participated in the solar ceremony outside.