NEW ULM — The New Ulm Public Utilities Commission agreed to submit a settlement agreement to the Hutchinson Utilities Commission (HUC) to resolve a metering error that resulted in New Ulm being overbilled $1.2 million for natural gas from the Hutchinson pipeline.

Utilities Director Patrick Wrase said the overcharging was the result of erroneous meters managed by HUC that measured the volume of gas delivered to New Ulm from the natural gas pipeline.

Hutchinson has determined the error was due to the meters’ inability to compensate for variability in the specific gravity of natural gas.

The error was most pronounced from January 2013 through July 2015. HUC has since calculated NUPUC was overcharged in the amount of $1,298,645.98. NUPUC has made its own internal calculations and believes this number is accurate.

Since December, NUPUC has hoped to reach a global settlement between all parties involved, including HUC, Fairfax and Heartland Corn Products (HCP); however a situation with HCP is holding up the settlement.

Wrase said there is still a problem with the meters at HCP, preventing any progress. As a result, NUPUC worked with city attorney Roger Hippert to settle the situation independently with HUC.

The agreement would require Hutchinson to pay New Ulm $1,298,645.98 and New Ulm will release Hutchinson from any and all liability, claims and damage.

“Staff has put an awful lot of work in this,” Hippert said. “The fact that this money is going to be paid out is in large part due to the work they put into this.”

At the end of Tuesday’s meeting the commissioners entered into a closed session to discussion possible litigation for unpaid unaccounted for gas volumes transported on the Fairfax gas pipeline to Heartland Corn Products ethanol plant.

Sewer Water Expansion

The commission directed NUPUC staff to include 2018 budget allowances for the funding of sewer and water utility upgrades in the 20th N. Street and N. Front Street area of the city.

Director Wrase said the paving of 20th N. Street was conducted by MnDOT as detour for reconstruction of Highway 14 in 204. Under normal development the installation of utilities prior to street reconstruction , but as it was a temporary there was no water or sewer utilities installed in the right of way.

Recently development has occurred in the area, including businesses without access to city water and sewer. It is believed the lack of utilities may be impeding higher density development in the area. In addition the structures built there are not able to be serviced for fire protection by the municipal water system.

City Engineers have estimated the extension of sewers with the inclusion of a small lift station would cost $335,600. The water extension would cost $121,520 for a total of $457,120.

The cost of this project would be covered through reimbursement as future developments connect. There is 14.715 acres of developable land that could connect to these proposed extensions. A single family lot developed on a quarter-acre could expect to pay $7,766 for a connection. This estimate is lower than the typical cost of a residential well or septic system.

In other news, Cathedral student Kendra Korma was awarded a $500 local prize for her essay submission to the Minnesota Municipal Utilities Association’s Tom Bovitz Scholarship Program. William Swanson with the Energy Awareness Commission said Kormann’s essay was selected as the winner for her thorough report on energy related topics. Her essay will move on to the MMUA State contest. The top prize on the state level is $2,000.

Wastewater staff was authorized to purchase a communiter/shredder equipment from Vogelsang for the 20th Street lift station in the amount of $47,898. In addition, staff was authorized to approve construction services with Rice lake Construction for the shredder replacement in the amount of $12,988. The total cost of the project is estimated at $60,866.

The comminuter or shredder is designed to grind up inorganic material like wipes or rags that could damage equipment at the wastewater plant downstream.

Utility Director Patrick Wrase reported street light fixtures on S. Broadway were converted to LED lights from 2nd South to 20th South.

“The results are quit remarkable,” Wrase said. “We’ve got high efficiency and long lived equipment in place.”