PUC closes meeting to talk about gas pipeline arbitration

NEW ULM — Public Utilities Commission once again went into closed session to discuss arbitration related to gas volumes transported on the Fairfax gas pipeline.

Minnesota’s Open Meeting law allows the commission to conduct closed meetings for attorney-client privilege regarding active, threatened or pending litigation.

In 2017, the PUC was informed it had been overcharged by Hutchinson Utilities Commission for volumes of gas delivered to New Ulm from the natural gas pipeline. Hutchinson determined the error was due to the meter’s inability to compensate for variability in the specific gravity of natural gas. The overcharge was calculated for $1,298,645.98.

A settlement agreement was submitted to Hutchinson to pay the difference of the overcharge. However, the PUC continued to debate whether further litigation was necessary for unpaid, unaccounted-for gas volumes transported on the Fairfax gas pipeline to Heartland Corn Products ethanol plant.

In February, the PUC took part in an arbitration proceeding with the American Arbitration Association. The PUC filed a new arbitration claim against Fairfax and Heartland Corn Products. The first arbitration panel was held on March 4, 2019.

After this latest closed session, the commission announced a tentative settlement was reached, but the PUC is waiting for confirmation from Fairfax and Heartland. The terms of the settlement. The commission unanimously voted to allow the utility director to negotiate the final terms of the tentative settlement agreement. Final approval will come before the commission.

In other business:

The Public Utilities Commission (PUC) authorized to seek bids for the South Side Booster Station.

The 4.5 million gallon reservoir booster station, located at the gold course on south Summit Avenue, is experiencing pump failures due to the age of the pumps.

Dan Pirsig said most of the pumps at the station are worn out and were originally installed in the early 1970s.

Last September, the commission authorized the city manager to accept and sign the proposal for design engineering and construction services. The project was budget for 2019.

The Water/Steam Department was authorized to purchase a Utility Service Body with crane for the department’s service truck.

George Brown said this was for the department’s truck used to make repairs to water mains and includes a crane, air compressor, welder and other tools.

The low bid came from ABM Equipment & Supply at $88,063.

The PUC adopted an agreement between New Ulm Public Utilities, Minnesota Valley Action Council and the Minnesota Department of Commerce to cooperate and the deliver the Minnesota Energy Assistance program fro 2020. The annual agreement establishes the procedures for receiving energy assistance proceeds.

Finance Director Nicole Jorgensen said this agreement allows the PUC to collect the money directly rather than be distributed to individuals. No changes have been made from last year.