NEW ULM — The New Ulm Public Utilities Commission held three closed session discussions regarding negotiations and litigation, Tuesday.

The first closed session was to discuss the status of negotiation with the International Brotherhood of Electrical Workers (IBEW). The negotiation strategies involve a labor proposal related to contracts between the PUC and IBEW.

The next closed session was allowed under attorney-client privilege. The meeting was to discuss the status of “Nelson vs New Ulm PUC,” pending litigation against the PUC and 71 other defendants regarding a plaintiff’s mesothelioma claim.

The last closed meeting was another attorney-client privilege discussion regarding the status of arbitration proceedings involving Fairfax and Heartland Corn Products.

In 2017, the PUC was informed it had been overcharged by Hutchinson Utilities Commission for 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 transported on the Fairfax gas pipeline to Heartland Corn Products ethanol plant.

Last February, the PUC took part in arbitration proceedings with the American Arbitration Association. The PUC filed a new arbitration claim against Fairfax and Heartland Corn Products.

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Utilities Director Kris Manderfeld gave an informational report on a natural gas supply agreement with Minnesota Municipal Gas Association (MMGA).

In August, the PUC authorized participating and signing a gas supply agreement with MMGA to purchase gas through a prepay natural gas transaction.

The agreement involves selling municipal bonds for natural gas and taking advantage of the spread between tax-exempt bonding and private bonding. The PUC would purchase gas through the agreement for 30 years with re-pricing points every five to seven years. The pre-pay would give a discount of 33 cents per mmbtu, with a reduction of 5 cents for MMGA for expenses.

On Jan. 22, a conference call was held to update all participants on the market conditions. Manderfeld said the market conditions are improving meaning final approval to sell the bonds could come in February. Gas volumes will be finalized as a contract is finalized.

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The commission authorized a payment of $2,031 to the Coalition of Greater Minnesota Cities (CGMC) for the Environmental Action fund.

This is an annual cost the city and PUC split. The purpose of funding is to confront regulatory issues. The money funds a neutral science-based organization made up of wastewater plant operators in Minnesota that helps provide data to address environmental regulations. CGMC uses the data to ensure environmental regulations are science-based and not arbitrary.

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The purchase of an HX50 vacuum excavation system was authorized for $60,298.88. The equipment will be purchased jointly by the Electrical Distribution, Gas and Water Departments. The equipment is part of the 2020 budget.

The purchase of a 2019 John Deere 310SL backhoe was approved at $107,384. The item was budgeted at $130,000.

An air compressor was purchased at $23,431. However, the previous air compressor was destroyed in an accident. The PUC received $18,000 from insurance bringing the net cost down to $5,431.

A quote for a steam service pipe at Emerson Union Apartments was approved. The low quote came from R.E. Carlson for $69,340. This will replace the old service line to the apartments.

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The PUC appointed commissioners to the Personnel Committee, the Energy Awareness Commission and Cable Communication Advisory Board. Commissioners Sean Fingland and Shannon Hillesheim will remain on the Personnel Committee. Mary Ellen Schanus will remain on the Energy Awareness Commission. Commissioner Seth Visser was appointed to the Cable Communication Advisory Board.