PUC approves service territory swap with Brown County REA

Initial loss of customers results in .8 percent drop in electric revenue

By RON LARSEN

Journal Staff Writer

NEW ULM -- Nearly three years of negotiations resulted in the New Ulm Public Utilities Commission recommending City Council approval of a service territory exchange with Brown County Rural Electric Association Tuesday night.

Brown County REA's board already has ratified the agreement, choosing not to wait for a joint meeting with the council, Interim Utilities Director Dan Sonnek said.

The agreement calls for New Ulm Public Utilities turning over about 80 electric customers across the Minnesota River in Nicollet County.

In return, NUPU will get service rights to nearly 2,000 acres of "growth" area on the city's western and southern boundaries, City Manager Brian Gramentz told the commission.

Sonnek estimated it would be "late spring or early summer when we could turn over those accounts" to Brown County REA.

"We'll be working together with BCREA to make sure that the transfer is a smooth one for our Nicollet customers," Sonnek said.

Brown County REA already serves customers in that area.

"Since we've got a line that runs from one end to the other (of the territory), I imagine that Brown County will be able to use our line which will be a plus for them," Sonnek said.

He admitted that loss of those customers would result in an .8 percent drop in electric revenue.

"So we will take a hit initially. But to put it in perspective, if we got one medium-sized large commercial account, it would make up for the meters lost," Sonnek said.

Gramentz added that one good-sized apartment complex could make up the difference, and "I see the potential for bringing in utility revenue from this new territory that would be a plus."

It also allows the NUPU to serve the New Ulm Economic Development Corporation's new industrial park on the west edge of the city.

Sonnek reported he expects Hutchinson Public Utilities to have final state Environmental Quality Board approval shortly to begin construction of its 89-mile pipeline from Trimont to Hutchinson.

Sonnek said the pipeline will pass within a mile and a half of New Ulm's western city limits. Because of changes made by the EQB, NUPU's 8-inch pipeline which was to run along public rights-of-way will now have to go through fields, necessitating the purchase of easements from landowners.

"But we can't even talk to landowners about easements until we get approval from the EQB," Sonnek said. "Right now, we're waiting for a ruling from the EQB as to whether we need to get a permit from the state Public Utilities Commission."

The electric division is installing protective risers on lines around town to keep birds and squirrels from causing power outages. Also, meters for about 400 accounts in town are being converted to remote-read meters, Sonnek said.

NUPU wound up February on the plus side with a net margin of $247,362, about $32,000 short of projections. That reduced the year-to-date net loss to $78,734.