FAIRMONT– In a recent Fairmont Public Utility Commission (PUC) meeting, the board went over a study from engineering firm, DGR, which detailed a 10 year capital improvement plan (CIP). That study showed that there’s about $15 million worth of work that needs to be done over the next decade.

After receiving the report, City Administrator, Cathy Reynolds, said they turned to a consultant to get an electrical rate study going to see how they can keep projects moving forward. She said there are a lot of projects in the works as well as a number of upcoming projects in regards to utilities.

“The city has been focused on looking at our infrastructure, what work we need to do and planning for the future so we can maintain it,” Reynolds said.

Electrical isn’t the only area under public utilities the city has been looking at. In 2020, a rate study was done that looked at the water and wastewater and a five year CIP was made. Since then upgrades have been ongoing to support infrastructure needs and keep up with requirements.

While the water plant is about 10 years old and its infrastructure is pretty good, the distribution system for the water, ground storage tanks which hold the water, need to be replaced and it’s a multi-million dollar project.

The wastewater plant, next to the former public works building on Margaret Street, comes with several Minnesota Pollution Control Agency (MPCA) requirements and permitting that needs to be kept up with.

“We have to maintain those standards in order to continue to process,” Reynolds explained.

Now in 2022, several years into the plan, Reynolds said they went back to the rate study and Northland Securities, a full-service brokerage firm, to have them update the study based on actual project costs.

“We have to make sure we have what we need and that we’re not over doing or under on rates so we can continue with the infrastructure updates that the community desperately needs in some regards,” Reynolds said.

As for electrical, the 10 year CIP DGR came up with includes projects to ensure the efficiencies of the electrical grid and system.

There is also work slated for 2023 in partnership with Southern Minnesota Municipal Power Agency (SMMPA), the city’s wholesale electric provider.

The ongoing Advanced Metering Infrastructure (AMI) project is also part of the upgrades that are being done. By getting the AMI metering in place, the city is able to read the meters in real time and have more accurate information for billing.

Utilities are solely funded by resident’s utility bills. All of the capital projects, personnel costs and everything associated with the water, wastewater and electric departments are funded by users.

The work over 10 years that’s needed is expected to cost about $15 million, which is why the rate study is being done. It will look at how to adjust rates to plan for expenditures over the next decade.

Reynolds noted that electrical rates haven’t been raised for a number of years and it’s likely that some slight adjustments will need to be made.

Along with the work that’s needed, the cost of energy that the city purchases from SMMPA has gone up because of impacted supply chain.

Reynolds stressed that the city is being proactive by looking at the needs and doing an analysis to ensure it’s in the best position possible to support utilities and the base infrastructure needs of the community, rather than having to do massive rate hikes for expenditures later.

“Proactive planning to look at the long term-needs and planning for them is more effective and efficient than reactive planning,” Reynolds said.

She also said that if they were to do reactive work and something went down, they may be in a position where they can’t get what they need. Transformers right now are back-ordered up to 36 months.

“The supply chain delays is huge on the electrical side,” Reynolds said.