Member System Profiles: The Hutchinson Utility Commission


In the often-frozen expanses of Minnesota, there are several APGA member
 
s taking unique measures to deal with the high prices of natural gas. One of these is the Hutchinson Utility Commission (HUC), a combined electric and natural gas municipal utility serving approximately 12,000 customers. The city started the natural gas operation in the mid-1960’s, taking over from a previous private manufactured gas company. Now, the utility has 96 miles of distribution main, much of it going to three large industrial customers: the home plant of Hutchinson Technology, Inc., and what John Weber, Director of the Natural Gas Division of the HUC described as the two largest 3M plants in the world, one of which makes “every kind of tape available,” such as the familiar Scotch tape. The Commission also serves as the transportation provider for fellow APGA member New Ulm Public Utilities.

The HUC previously transported their gas on just one pipeline owned by Northern Natural Gas. However, in 2003, HUC, with the assistance of Natural Gas Consulting of Omaha, Nebraska, built 93 miles of high pressure (normally 1,200 psig) transmission line to connect to the Northern Border pipeline, from which they currently get 100% of their gas. This is the first intra-state pipeline built in Minnesota. By doing this, they saved $1.1 million on transportation fees in 2004.. They also employ a risk management program to buy gas based on a time-diversity model in an effort to maintain low commodity prices for their end users.

However, HUC is currently in a legal battle with their public utilities commission, which is attempting to regulate their transmission pipeline over HUC’s objections.

Due to HUC’s northern latitude location, they have what Mr. Webster describes as “a very long winter,” lasting from late October through a gradual thawing out in April. To prepare, HUC gas employees, whom Mr. Webster praises for their high quality, perform a majority of their maintenance in the late fall. This ensures that the utility has to do as little work as possible during the winter beyond making sure ice and snow doesn’t collect on customer metering and regulating facilities.

HUC joined APGA two years ago because the “municipal utilities can learn so much from each other, and it’s easier to get tasks accomplished with the support of 600 other utilities rather than on their own.” Mr. Webster in particular praised APGA’s lobbying efforts, deregulation work, and everything we have done to make sure the new DOT rules are manageable.

He felt that one thing APGA could do, in addition to providing education and training to make systems better, is to “provide education to the public about why there is a need for public gas systems.”

Originally in June 10, 2005 Public Gas News
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