NEW ULM — The New Ulm Public Utilities Commission (PUC) authorized accepting a proposal from Power System Engineering (PSE) for a $40,000 area study on the North Side Substation.

The North Side Substation feeders and transformer are starting to reach capacity for load. The study will look into the future of development. The study will help determine where a new transformer could be built.

Utilities Director Kris Manderfeld said the study would alert the public utilities on when to take action on building a new substation.

“Building a substation take a bit of lead time,” Manderfeld said. “The study will find us the best solution and when to make that solution.”

The commission also accepted a proposal from PSE to develop plans and specs, set bid date and advertise for bids for a $72,650 transmission pole replacement.

The transmission system has two ongoing concerns: woodpecker damage to a river crossing and the wishbone structure along the old Water Street right of way.

The proposal from PSE is to do a replacement project, which means replacing the current poles with either wood or steel. The age and condition of the cross arms on the wishbone poles indicate a need for replacement. Visual inspections show rotten material.

Both projects are included in the 2020 budget.

The commission accepted a bid for the Boiler Number Four controls upgrade for $231,365. The current controls for this boiler are pneumatic controls from 1965. The new controls with variable frequency drives and electronic jacks will allow better control and performance.

Network access control software and labor from Marco Technologies was authorized by the commission. The network acess control will allow only authorized computer devices to attach to the PUC network. Marco submitted the lowest quote at $31,862.

The 2020 preliminary budget for PUC was ordered filed by the commission. The 2020 budget anticipates an operating income of $44 million with operating expenses of $42.2 million, for a net operating income of $1.8 million.

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The PUC meeting ended in a closed session. The commission received an update on pending arbitration with the City of Fairfax and Heartland Corn Products. The commission is allowed to conduct closed meetings in attorney/client privilege cases.

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.