Rolla Municipal Utilities General Manager Rodney Bourne presented Rolla Municipal Utilities First Quarter Report for Fiscal Year 2019 at the Rolla City Council meeting. Bourne said there was an increase of around $150,000 on the municipally owned electric and water utility's net income since the temperature has been significantly colder in the fall into early winter of this year compared to the first quarter of FY 2018.
Upon completion of the first quarter of FY 2019, Rolla Municipal Utilities (RMU) operating Revenues are up $525,921 over FY 2018. Operating expenses are up $467,606 over the first quarter of FY 2018 resulting in an operating income of $39,164, which is down $58,315.
When combined with miscellaneous income and expenses, RMU has experienced a net income of $155,511, which is up $150,147 over the first quarter of FY 2018.
“We are seeing the opposite in the current quarter we are in, where we had a very cold January last year, and even though it has been cold we have had some cold snaps; it hasn’t been as consistently cold as it was the second quarter of 2018,” Bourne said. “So we are doing a swap where we had a good first quarter, the second quarter not quite as good, but it’s going to all balance out.”
RMU’s electrical department has various extensions and upgrades underway, Bourne said. The improvements along Kingshighway are going smoothly, with the elimination of overhead lines on Kingshighway between Bridge School and Fairgrounds Rd. And on Jan. 3, 2019, RMU has started the ongoing process to reconfigure fiber system to allow for removal of fiber on Kingshighway and Faulkner Street.
Last fall RMU’s large substation transformer at RMU’s Dewing Substation had a failure, Bourne said, and a spare transformer was installed. The failed substation transformer has been shipped out for diagnosis as of Nov. 13, 2018.
Bourne added, “That should be covered or partially covered by our insurance company, and we may have to pick up some increase in cost with upgrading some fans and devises in it.”
RMU is also going to rebuild the Dewing Substation transformer to a better quality standard and will probably be responsible for some of the up-charges with that, Bourne said.
“We think the insurance is going to cover most of that repair. It’s around a $170,000 repair excluding the upgrades, it’s a significant claim,” Bourne said.
RMU’s Water Department organized and started a service line replacement crew during FY 2018, and the crew has completed replacing water service lines in Brookside Lane and Cottage Circle.
“Currently, they are in the Rolla Lions Club area replacing service lines there at the fairly new subdivision. That’s where we are having our problems. We are focusing on the areas, particularly new subdivisions where we have copper lines and getting those replaced,” Bourne said.
And the main water crew is replacing existing 6” mains with 8” PVC at Whitney Lane and Wakefield and Greenbriar Drive since RMU has had water mains over there that have been constant problems, Bourne said.
“The street department I don’t believe has a major street construction project there, but the water mains have gotten to the point where we just need to replace them, so they are working on several streets there and they are parked there for the next several months doing that work,” Bourne added.
There is anticipation for a small delay in the Clean Line project which may open an opportunity for reduced pricing on the transmission component to bring low-cost wind energy from Western Kansas to Missouri and east in the Public Service Commission Regional Transmission Organization Market in Illinois.
“It did get back to the Missouri Public Service Commission, and I think we are going to have some success there, we had some delays, and hopefully those delays are going to benefit us as a pool. And it has allowed us to renegotiate some of the terms with the Greenbelt Express and the Clean Line Energy project,” Bourne said.
The Green Belt Express hearing was Dec. 18 through Dec. 19, 2018, with Bourne attending. The Grain Belt project has been acquired by Invenergy of Chicago, which has the financial backing to complete the project. Additionally, the Iron Star project, which is a large wind project being developed in Kansas, has been acquired by Engie. Both acquisitions are a positive development and an indication of the viability of the projects, according to Bourne.
“The Iron Star Wind power Farm out of Western Kansas, had the Kansas Public Service Commission Approval, Illinois and Indiana approvals, but they didn’t have Missouri, and that’s one of the big advantages we had and ended up getting because they needed Missouri approval. They wanted to provide value for Missouri, and hopefully we are going to be the beneficiaries of that,” Bourne said.
The Marshall County Wind project is a 25-megawatt share of a wind farm project RMU has in eastern Kansas that has now been in operation for over a year. The project hit a 50 percent capacity factor in its first year of commercial operation which is higher than anticipated.
This provides benefits to Missouri University of Science and Technology and Brewer Science as they were able to increase their participation in wind resources to meet their sustainability goals, according to Bourne.
“Brewer Science and Missouri University of Science and Technology are beneficiaries of that, in that we can go back and offer them additional power. I think they are getting 100 percent of what they requested off the wind farm now as a renewable energy source for those two entities. So that was a good thing for them,” Bourne added.
The I-44 natural gas pipeline has a Federal Energy Regulatory Commission (FERC) filing to raise the transportation costs for all communities west of Sullivan.
If successful, heavy impacts in municipal gas systems will be expected. As a pool, the Demand Charge Cap is set at $7,700 MW-MO. RMU will pay approximately 2 percent less than the Missouri Public Energy Pool (MoPEP) average all-in cost with this new demand cap. Last year RMU was 1 percent under the average cost.
MoPEP has an all-time high winter peak of 478MW in January, while Rolla’s peak was just over 72MW. The pool experienced an increase of 8 percent in kWh usage over 2017 and hit a summer peak of 529MW on July 11, 2018, which is earlier than usual.
Missouri legislative session is starting soon with bills already being pre-filed, which include Eminent Domain, Underground locate requirements, Transparency of sale of 4th class city utility systems, Net metering, Sunshine Law, Prevailing Wage and Rural Broadband initiatives — all could influence electric and water industries.
The Missouri Department of Natural Resources is working on an implementation of VW Trust Fund Grants (Volkswagen Clean Air Act Civil Settlement) with $41 million in funds allocated for Missouri.
“That money is being allocated for a lot of different things throughout the state, one of those funds was possibly some electric charging stations located on the major corridors, we are still waiting to see how that is going to work out. Rolla is participating in that conversation,” Bourne said.
RMU had applied for a $30,000 grant for replacement of one of the service trucks that RMU uses in the electric distribution system, and RMU was notified five weeks ago that they did receive the $30,000 grant to offset some of their costs.
Bourne added, “The Missouri Public Service Commission granted approval for Ameren acquiring our assets in November of 2018, and FERK approval was granted Dec. 17, 2018 so there is really no obstacles left that we see on the sale completing except for getting the project built and constructed and put in place.
“We are still expecting late 2020 to mid-2021 date for Ameren getting the assets and getting the transaction complete.”
RMU’s Yearly Reliability Report for FY 2018 reflected nearly 100 percent reliability at 99.997 percent.
“Every year, for every outage we have on our system, our lineman fill out an outage report and send that in, and we upload that information into the American Power Association’s Outage Management Tracker. Then we pull statistics out to see how we are doing and we like to compare ourselves to other utilities that we can benchmark against,” Bourne said.
Customer Average Interruption Duration Index — the average minutes interrupted per interrupted customer — is at 24 minutes. “You can see our reliability is very good, and we are striving to improve that all the time. To me it’s almost remarkable that it’s that low,” Bourne said.
The System Average Interruption Duration Index — the average minutes interrupted per customer for all customers — is 10 minutes compared to 29 minutes in 2017 and 18 minutes in 2016, reflecting good availability on RMU’s system.
The System Average Interruption Frequency Index – the number of short interruptions per customer for all customers — improved significantly to 0.4 short interruptions per customer for all customers over 1.3 short interruptions in 2017.
Natural causes, such as wildlife and storms, are the No. 1 cause of outages in Rolla, and No.1 cause of disruptions in the Midwest in general, Bourne said.
FY 2018 reflected that customers wait in the dark less time than the investor-owned system in Rolla.
RMU’s water statistics included two water meters had overproduction, which will help water losses.
“In 2018 we were down to 12 percent estimated water loss, and 10 percent is the benchmark, and we are getting closer and closer to where we think we need to be,” Bourne said.
And as of June 2018, the last time RMU did a statistics report, they are at 68 percent PVC Water Mane in town.
“I know we talk a lot about infrastructure, the Governor has talked about infrastructure and how we can improve infrastructure, this is an excellent example of how we are doing it through just our rates and our normal process, but again we have been doing it for well over 20 years now," Bourne said.
Forty-eight miles of water main still need to be replaced in the area.
“We still have a lot of work to do, a lot of years ahead of us replacing water mains We do one to two miles per year.” Bourne said.