• 07Mar

    Here is a podcast where I discuss clean energy, local economy, and the power of a publicly owned utility. The podcast is about 15 minutes if you would like a listen.

    Local Energy Rules Podcast

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  • 17Oct

    Edit: First suggestion to make the list is #12 by Ivan.

    Edit 2: Wow the readership and comments to me on this post have been off the charts, keep them coming.

    This is a little bit of a thinking out loud post for me, so I welcome your ideas.

    So Mayor Brede issued a proclamation moving us in that direction. This came as a total surprise to basically everyone that works on energy issues in the community. The proclamation did not receive input from the Energy Commission, RPU Board, or Public Works. As such we are trying to weigh what it would take to achieve this. 2031 is significant because we are out from the shadows of our horrible SMMPA deal in 2030. Ultimately for the city to achieve this we will need Mayor Brede to show leadership on issues like sprawl, and transit oriented development which he has yet to take any action on. In fact, since 1966 the city population has approximately doubled while our land area has grown from 11 sq. mi. to 55.

    First we must quantify what 100% renewable means. The assumption is that this would refer to all energy sources. This means that both transportation and heating will need to be converted to renewable sources. Also changes take time. It is now 2015, and in 2030 there will still be many of today’s vehicles on the road, the average age of a vehicle on the road today is 11 years old.  Since most cars sold are still based on the combustion engine there will be many out there in 2030. It is also unlikely that we will retrofit every existing furnace to a renewable energy source in the next 15 years. As such we must assume that the real goal is to produce a quantity of renewable of energy that meets & exceeds the quantity of energy we use as a community. There is an understanding that we will still be using some fossil fuel based energy, but would be transitioning out.

    Read more…

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  • 16Aug

    If you are passionate about the broadband issue / Charter Monopoly, I invite you to the Rochester City Council Committee Meeting on Monday August 17, 2015 at 3:30 in Room 104 at the government center.  It is a fairly small room so come early to get a seat as I hope supporters of municipal broadband take the time to attend. The facts and the public are clearly in favor of taking steps to crack the Charter monopoly. Remember, because of changing technology broadband will be able to supplant subscription TV in very short order. Here are 6 things to know: Read more…

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  • 30Jun

    Here is a Rochester Public Utilities #ActOnClimate

    I don’t often post on items that happen in my committee meetings, but I wanted to share something significant that occurred at the RPU meeting(s) today. RPU has 5 directors, 1 of which represents the City Council. As a lifelong energy nerd, that happens to be me.

    The meeting got off to a rocky start as we the RPU building was evacuated due to a chemical scent. After an hour of standing around outside, we moved the meetings to the Silver Lake Plant location.  Interestingly I was interested in stopping by the Sierra Club picnic at 6:30, but seeing as I was sitting on a board determining the future of power in Rochester, I figured that they would prefer me to be the RPU board meeting. Sorry Andrea…

    Today RPU updated its energy roadmap to show a much cleaner future:

    1. As a result of our SMMPA contract we are on the hook for coal power produced at Sherco 3 until 2030. After that we have no obligation to purchase power from SMMPA, and most likely will not.
    2. The latest roadmap for power production assets has RPU investing heavily in gas turbines and renewable energy over the next 20 years.
    3. In 2031, with the expiration of the SMMPA power purchase obligations, RPU will abandon all energy from coal.
    4. Over the next 20 years the current plan will see RPU add:
      1. 50 MW gas packing unit to replace an aged and less efficient unit (Cascade Creek 1)
      2. 30 MW combined heat / power gas unit
      3. 390 MW combined cycle gas turbine
      4. 18.5 MW of Solar PV
      5. 150 MW of Wind Power
    5. RPU will voluntarily meet all state environmental standards.
    6. Changes in storage technology, energy demand management, and gas prices could also combine to create an increased case for more renewables.
    7. RPU’s only exposure to coal would be on market contracts, but this plan does not require those contracts for now.
    8. Right now we only get 8% capacity credit for solar and 14% for wind, because those resources are not readily available at all times they are needed. However with some minor changes in policy we could significantly increase renewable capacity and shrink gas capacity.
    9. In general this plan will offer competitive energy rates, much cleaner energy, and more production dollars staying in SE Minnesota.
    10. 4 different scenarios were analyzed with all 4 basically coming to the same conclusions, but with slightly different timelines.


     photo IMG_5451_zps7gr3wekl.jpg

    Additionally the numbers for expected demand show that conservation in Rochester has greatly reduced the outlook for needed power into the future. Here you can hopefully see that the expected demand for power went down significantly between the 2012 forecast and the 2015 forecast.

     photo IMG_5448_zpscgvyf93e.jpg


    In other actions RPU is working to ensure that we have no unfunded liabilities in our water utility, much like we did in the electric utility last year. A decade of holding rate increases to 0% left us with some issues that now need to be addressed. Both before and after the changes RPU will have some of the lowest water rates in the country.


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  • 20Nov

    Here is a time lapse of the replacement of the RPU Reservoir near St. Mary’s.

    Approving this was a tough vote because this was a good decision for the city of Rochester and a bad decision for 1 block of citizens that lived closest to the site.  Complicating the matter was the fact that I serve on the RPU Board AND represent the neighborhood AND was up for reelection at the time.

    Ultimately the tank was forced to the corner because Mayo was unwilling to provide any land to set the tank back more.


    • My number one goal was to not lose a single inch of parkland and we were successful.
    • The project is located on land that the city leases solely for the purpose of water storage and has for decades.
    • Pretty nice design for a water tank with extensive neighborhood interaction.
    • The design, location and operations will save the city millions.  Every other site considered took public lands from other neighborhoods and cost much more.
    • Significant park improvements occurred and many quality trees were planted as a result of this project.

    Lessons learned:

    • The Mayo signage was handled inappropriately, staff made a decision that should have gone to the city council.
    • Lighting came as a bit of surprise.  It is done for security reasons.  Some neighbors hate it but an equal number have expressed that they are OK with it.
    One last thing:
    • We got a number of nice trees planted, but I am going to try to get a few more on the South and Southeast sides.


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  • 03Jun

    RPU will spent about $106k to reimburse people that ran water to prevent freeze-ups.  This was probably a good investment because with “service assured” we would foot the cost of addressing freeze-ups with many customers.  Either way I think it is good customer service.

    Attached, please find recap of the Running Water credits that applied to customers invoices as their respective accounts came up for billing in May.

    There are currently nine more accounts that will be receiving Running Water Credits on their June invoices.  These are for customers that called in after their May billings processed.




    TOTAL WATER CREDITS APPLIED:                              $ 26,177.26

    TOTAL WASTE WATER CREDITS APPLIED:               $ 79,836.71

    TOTAL RUNNING WATER CREDITS:                           $106,013.97


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  • 18Mar

    RPU to assist homeowners required to run water.  Because many of the people running water save RPU money because they were service assured subscribers, this probably saved RPU money.

    RPU Board

    As you know this winter has resulted in a number of water service line freeze ups. In February RPU began communicating with customers, and recommending , if their water temperature was below 40 degrees, they run their water continuously to keep the service from freezing. Recently, with the high individual customer  water use, RPU and Public works have been getting calls regarding high bills because of the high water use. Since the sewer bill is based on water use, some ( a few hundred) customers experienced very high sewer bills. RPU had been discussing what we may do to help with these high bills, on the water side. It seems providing a credit based on last year’s average use was the most accurate and fair approach, that could be based on actual numbers.

    Last week we received an e-mail from City Administration (see below) recommending adjusting the water and sewer bills that have been impacted by the cold weather. Staff has been meeting to discuss the situation, the recommended approach, and how we might implement such an adjustment. The recommended  adjustment will be made from the list of customers that have called RPU and let us know they are running their water. This can be verified by a use comparison check. the decision was made to make a onetime adjustment, probably in May, based on average (water and sewer)  use in the winter months in 2013, and adjusted from metered usage in February, March and April of this year. (We believe customers will continue to run water into April as the frost depth reported by MnDOT is not receding. We will communicate this to these  customers via letter, and of course if they call RPU. Operations has reported not all frozen water services are thawed, and we did get one frozen service report yesterday.

    This adjustment, to date, will involve approximately 1600 customers that have called RPU. We have also analyzed the cost benefit of this adjustment, and have determined it is appropriate based on projected cost saving to RPU. These savings come from not having to repair or clear water services that could have been frozen, from those customers that have service assured. Operations has also strong belief running some of these services has prevented some water mains from freezing, thus deferring potential main repairs. We will be communication this approach to City Finance and Public Works so they may plan accordingly.

    Let me know if you have any questions


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  • 05Mar

    Here is a memo describing the difference between cash and utility basis.  Having sat through the presentations it is pretty clear to me that the Utility Basis is the way to go.  I do find it funny that the primary reason for the cash basis is to dumb it down for council members…

    This seems like a smart policy that better aligns long term income and investments.

    DATE:  February 28, 2014

    TO:  Board Members

    FROM:  Susan Parker, Director of Corporate Services

    SUBJECT:  Differences between Utility Basis and Cash Basis Rate making

    At the February 26, 2014, board meeting Jerry Williams asked for a brief description of the two methods of rate making and how the methods are different.

    Cash Basis

    Under the cash basis the revenue requirements include operations & maintenance expense, debt service, and normalized capital improvements.

    The advantages of cash basis is it is understood by City Councils since it is the method that general fund budgeting typically uses.  Cash basis attempts to match cash inflows and outflows on a yearly basis and it does meet the bond obligations.

    The disadvantages are the cash basis tends to conceal any major rate problems and revenue deficiencies since this method does not take into consideration the future replacements of assets.  The cash method tends to result in unexpected and large rate adjustments and is not generally accepted by courts if rates are challenged.

    Utility Basis

    Under the utility basis the revenue requirements include operations and maintenance expense, depreciation expense, and rate of return on assets.  The rate of return is determined by including an inflationary increase in asset replacement costs plus interest expense.

    The advantages of utility basis is it leads to more stable and consistent rate adjustments and typically leads to a more financially stable and healthy Utility.

    The disadvantages are cash reserves will build more quickly for future asset replacements and the cash reserves level may need to be justified.  Most governments operate on a cash basis, the Utility may need to explain the use of depreciation since it is a non-cash expense and may need to explain the importance of rate of return.

    With the retirement of the Silver Lake Plant for electrical generation in 2015, the timing is good to develop the financial plan on the utility basis.  In order to balance the advantages and disadvantages in the event the financial plan indicates large adjustments are needed, which staff does not believe will occur, a minimum rate adjustment to meet debt service would be defined and a plan to phase-in from cash basis to utility would be developed.

    Please let me know if you have further questions or concerns.

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  • 18Feb

     News flash: It’s been cold winter in Southern Minnesota

    From: Cary Johnson
    Sent: Tuesday, February 18, 2014 2:09 PM
    To: Tony Benson; Stephanie Humphrey; Patty Hanson
    Cc: Mark Kotschevar; Larry Koshire; Walter Schlink; Heidi Andrist
    Subject: Frozen Water Services

    Here is a recap of what we have for frozen services today and where we are at with regards to thawing.

    We have recorded approximately 150 frozen services to date. These are only calls that have come into RPU. We know some customers are not calling RPU with this information and are just calling plumbing contractors on their own. There is no way to know this information however, as many of these customers are on numerous plumber’s lists.

    The Water Services Assured program has recorded 56 frozen service calls to date.

    We have thawed 46 of these customers.

    RPU crews have thawed 23 of these 46 frozen services.

    RPU has 4 Service Assured customers that can’t be thawed by water jetting, or welding. These customers have been supplied temporary water and we are gearing up to excavate the yards to thaw these 4 services.

    RPU has 6 Service Assured customers on the list yet to be thawed. All these calls were received Monday, February 17th.

    RPU has just over 500 customers that have called in reporting they are running their water to prevent their service from freezing.

    Cary Johnson

    Manager of Maintenance and Construction – Water Operations

    Rochester Public Utilities

    4000 East River Rd NE

    Rochester, MN 55906

    Phone: 507-280-1507

    Email: cjohnson@rpu.org

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  • 20Nov

    A quick look basically shows that our per unit changes including “adjustments” is pretty typical for MN.  However our base energy charge is higher.  This means that our rates tend to be regressive and offers less incentive for conservation.  RPU will be doing a rate study in 2014 and I have offered some suggestions to reduce the base charge.  Keep in mind the differences are pretty small, but do exist.

    2 things that I think should change is that the base charge should be lower (and thus per unit cost higher).  Secondly I think that we should have progressive rates where the first level of pricing is cheaper and the cost gets progressively more expensive.  Thus people have more of a reward for saving energy.

    MN Utility Rates (including RPU).

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