Mark Fritsch

by Mark Fritsch, General Manager

This month’s topic is “Year in Review”. Looking back on 2014, several significant achievements are noteworthy. The power plant re-purposing project construction phase one started with structural steel and concrete, and finished with walls, paint, lighting, heating and cooling. This allowed us to open for business for the first time in our new customer service area on August 25th. Customer appreciation of the new look both externally and internally has been overwhelming.

Planning to respond to disasters took us to a whole new level as we began looking at a scenario where 80% of the city would be damaged if an F4 tornado hit Owatonna. Our plans were tested with a table top exercise to simulate conditions and our response. Areas for improvement were identified and plans to continue exercises will occur each year. As we see from actual events around the country, you can’t be too prepared.

An opportunity to begin moving our electrical distribution lines from overhead poles to underground conduit began when Jaguar Communications approached us with an offer to significantly reduce the costs for this effort. Jointly installing conduit for their fiber and our electrical cable reduces cost for both of us. This four year effort will allow us to begin the transition of moving our electrical cable underground over the next twenty years. Key benefits for this include improving our reliability, storm hardening our distribution system and giving customers a choice for broadband communications. The disaster planning exercise I described earlier will have much less impact to reliability and our ability to get the lights back on when this is completed.

Each year individuals and teams are recognized for cost savings, cost avoidance or innovative ways to reduce costs. This is the third year that we have saved over $100,000 in new initiatives. Many of these ideas continue to bring savings year after year.

An area I’m most proud of is the efforts our employees put in to achieve 423 days without an accident. Our crews consistently identify potential hazards, develop methods to deal with them and look out for each other.

Improvements in our work processes, technology and the efforts of all our employees have resulted in reduction of our controllable expenses by over 20% in the last three years. This includes labor costs, benefits, and ongoing expenses. These reductions have allowed us to fund capital improvements and projects such as re-purposing our power plant without having to raise rates during that time.

Speaking of rates, the Utilities Commission just approved the 2015 budget that includes no rate increase for gas and water. A 1.5% increase was needed primarily to fund a future SMMPA rate increase and the joint underground project with Jaguar Communications. Savings and cost reductions continue to help keep us from having rate increases and when we do, they are modest.

I wish all of you a safe and happy holiday season.