PUC costs, revenues

close to budget for

first quarter of 2004

March surge

due to cost of

purchased gas and electricity

By KEVIN SWEENEY

Journal Editor

NEW ULM -- New Ulm Public Utilities' costs and revenues are tracking close to the utilities budget for the first three months of the year, commissioners heard at the Public Utilities Commission meeting Tuesday.

The net margin for March was $467,151, bringing the net margin for the year up to $726,733. This compares to a budgeted net margin of $194,832 for the month, and a year-to-date net margin of $779,681.

Utilities director Gary Gleisner said the March surge is due largely to seasonally high utility costs for purchased natural gas and electricity passing through to customers' bills.

The electric division showed a net margin in March of $50,083, up substantially from a budgeted margin of $12,991 for the month. The electric division is showing a net margin for the year of $66,512, when budget had been expecting a loss at this point of $26,312.

The Natural Gas division showed a margin in March of $391,829, well over the budgeted margin of $177,926. But the year-to-date margin of $480,268 is below the budgeted margin of $669,357.

In action items at the PUC's meeting Tuesday, commissioners approved an updated schedule of fees and charges that will more accurately reflect its costs. The changes will take place June 1.

Only a few changes were made in the schedule. The charge for non-sufficient checks will change from $20 to $30. The reconnect charge for utilities will rise from $25 to $35 during business hours, and from $75 to $150 for non-business hours. A meter testing fee of $50 is being added for repeated requests to have meters tested.

In the Electric Division fees, the PUC modified the fees for new residential service. Instead of charging the developer $300 per lot payable when the service is extended past the lot, then $350 more when the service is activated when the lot is sold, the PUC will charge a single $750 for new residential underground service. The charge for upgrading and converting existing residential service to underground service remains $350.

The PUC also approved a contract with BP Gas & Power to be the city's natural gas supplier for the next five years. Of the four bids received, BP Gas & Power offered the lowest rate by charging no management fee. BP is able to deliver the gas to the city's new connection with the Hutchinson Pipeline at a lower rate because of the location of the pipeline.

The PUC also approved the bid of Minnesota Elevator to do the upgrade work on the the New Ulm Power Plant's elevator. The cost of the bid is $92,611. Minnesota Elevator will be taking out the old elevator and replacing it with new equipment.

The PUC authorized city staff to start researching computer software to replace the city's 20-year-old computerized billing system.

The PUC had an update on its plans to build a structure around the Town Border Station, a structure connected to its connection to the Hutchinson natural gas pipeline. The station, located along the KC Road, has been making noise that bothers nearby property owners. While the noise was lessened by "fine-tuning" the station's operation, said Gleisner, the Utilities want to build a structure around the station to insulate the noise, protect it from the elements and provide security.

The PUC's application for a variance from setback regulations will be going before the Brown County Zoning and Planning Board on May 11.

The commission also commended the Water/Steam Department for its handling of a recent vandalism at the Hermann Heights water reservoir. A vandal had broken a padlock and gained access to the top of the reservoir. Although it didn't appear that anyone had gained access to the water supply, the reservoir was taken off line, tested, drained and inspected. It will be refilled this week after some mechanical problems that were found in the inspection are corrected. The Water/Steam department notified the Minnesota Department of Public Health, which also took samples and found no sign of contamination.