Brainerd Public Utilities: Commission increases city contribution

Tuesday, the Brainerd Public Utilities Commission agreed to send a little bit more money to the city of Brainerd through its monthly contributions to the city.

Tuesday, the Brainerd Public Utilities Commission agreed to send a little bit more money to the city of Brainerd through its monthly contributions to the city.

BPU Secretary/Finance Director Todd Wicklund said the policy to make regular monthly contributions to the city based on retail electricity sales was first adopted in 2003 and had been revised in 2005 and 2009. The amount BPU contributes to the city hadn't changed since November of 2009.

The contribution rate approved by the commission is $0.004 per kWh, an increase from $0.0035 per kWh. It doesn't seem like much, but the annual net benefit to the city will increase from $144,000 per year to $224,000 per year.

"I know we hate to pay the city certain amounts," Wicklund said with a laugh. "But at the same time, it seems like a reasonable amount."

When Wicklund spoke with BPU's rate consultant last fall about the increase, the consultant was OK with the increased rate, he said. Because of that, BPU staff recommended increasing the contribution rate.


"Does the city want the money?" Commissioner Bill Wroolie asked jokingly.

The motion to approve the increase passed unanimously.

In other business, the commission heard an update from Mike Kumm of Public Power Energy Services, LLC on BPU's ongoing power energy purchasing discussions. BPU currently purchases energy from Minnesota Power and has been looking at purchasing energy from a different entity. BPU recently rejected an energy purchase agreement from Minnesota Power which would have ran through 2024.

The alternative supplier BPU is looking at only initially provided pricing through 2022, Kumm said, which meant the company had to speculate on pricing for 2023-2024. Last week, the alternative supplier provided pricing for the two years, and the prices are better than those provided much earlier in the process.

"The alternative supplier is a good deal," Kumm said.

Commissioners Mark O'Day and Dolly Matten will meet with Kumm and his co-CEO, Todd Hegwer, in December to go over final numbers and make a recommendation to the commission before its December meeting. Ideally, a contract would be available to sign and take effect Jan. 1.

"The savings are significant and they're substantial," Kumm said.

The commission unanimously approved a motion to have Public Power Energy Services, LLC start drafting contract documents with the potential alternative supplier.


In other business, the commission reaffirmed its policy to charge customers outside the city limits of Brainerd double for utility service. The policy has been discussed recently in tandem with the planned 2016 Brainerd Lakes Regional Airport utility extension project.

The project would provide BPU water and sewer service to the airport. The airport lies in Oak Lawn Township, so the airport and its tenants would be charged double for utility service. At the Nov. 19 Airport Commission meeting, the commission decided to come to the Brainerd City Council in December to ask if an exception to the policy could be made for the airport.

Tuesday, Council President Gary Scheeler, who serves as council liaison to the BPU Commission and Airport Commission, told the BPU Commission of the Airport Commission's intent. Scheeler asked the BPU Commission where it stood on creating an exception to the policy.

"I believe you have to charge double for anybody that's outside the city limits," Scheeler said. "First of all, you're setting a precedent, if you're doing it with the airport, you could be doing it with everybody else."

DIscussion revealed commissioners agreed to uphold the policy as it's currently stated.

"The feeling from here is we definitely want to stick to the policy as it exists today, there's no ifs, ands or buts about it," Commission President Lucy Nesheim said. "That's our policy."

In other business, Scheeler informed the commission he would be meeting with city of Baxter representatives next week to discuss the possible annexation of three parcels of land currently in Crow Wing County. The county has decided it doesn't want to maintain the roads on the land anymore, he said, and is leaving it up to Baxter and Brainerd to divvy the land up.

Scheeler asked the commission if it would be open to having the BPU facility on Highland Scenic Drive, currently in Baxter, be annexed into Brainerd, as Scheeler said he could bring up that option as part of these other annexation negotiations.


"It's about time, that I think, this campus should be part of Brainerd," Scheeler said.

One of the parcels is on Dellwood Drive, Scheeler said, and the other two parcels are behind Menard's on Highway 371.

"The county kind of felt that one (40-acre parcel) would fit Brainerd, the other two (40-acre parcels) would fit Baxter," Scheeler said. "And we need to sit with Baxter and negotiate that out."

Scheeler said he thought Baxter would be receptive to allowing the BPU facility to be annexed into Brainerd.

In other business, the commission approved its 2016 budget and 2016-2020 capital improvement budget. Both documents will now go before the Brainerd City Council at its Dec. 7 meeting for final approval.

SPENSER BICKETT may be reached at 218-855-5859 or . Follow on Twitter at .

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