NEW ULM — Because of increased costs, a public utilities project has gone $160,000 over budget.

That was the bad news delivered during the Public Utilities Commission meeting Tuesday. The project in question is an upgrade to the controls for Gas Turbine #7. The current controls were installed in 2001, and Power Plant Chief Engineer Glen Hillesheim said the technology within them is far outdated.

“The biggest problem is the SPC, which is a station program controller,” he said. “It’s basically from the sixties and seventies technology. You can’t get the cards anymore that go in. The problem is if you can’t get them, the unit goes down and we’re gonna be out of market. We’re looking at nearly a year to get this whole project done. I don’t believe we should leave it out of service that long.”

Three bids were received. The best bid was from HPI Energy Services for $661,124.91. This is over $160,000 more than the $500,000 budgeted for this project.

“I have gone over a little bit because originally two years ago I had gotten rough bids for and it was like 432,000 they quoted me,” Hillesheim said. “We went through the grant process and got denied. Inflation took a big hit. I was gonna do some windows for the power plant. [But we’ll] push the windows off so I take that 50,000 separate capital item and put it into this budget.”

Utilities Director Kris Manderfeld said the remaining overage can be covered by the utilities relief fund without any concerns. She said the reserve money is held exactly for situations like this.

Hillesheim said this turbine is vital for New Ulm, both as a way to generate income and provide power for New Ulm should any issues arise.

“It’s reliable energy for New Ulm,” he said. “We can isolate ourselves from the grid. You can start these units and have power backup no matter what is happening outside on the grid. It’s important to industries in town to have your own backup power. We do make money on the capacity sales. For having that unit just sit there, you can get paid for capacity for having that.”

Hillesheim said the replacement needs to take place in fall or spring weather when it is not too hot or too cold. He said the project could be completed as early as October or November, but could potentially be pushed back to March or April 2025.

Commissioner Sean Fingland made the motion to approve the bid from HPI Energy Services for $661,124.91. Commissioner Mary Ellen Schanus seconded the motion. The next Public Utilities Commission meeting will be held March 26.