John Kraske, a consultant retained by Hastings Utilities, told the Utility Board on July 24 that the utility should adopt a formal line‑extension policy requiring residential customers to make a contribution toward construction costs.

Kraske said he recommends that residential customers pay 25% of the total extension investment. "So let's say that it costs you $10,000 to serve this new customer — they're gonna pay $2,500," Kraske said. He described four customer classes — residential, general service (nonresidential), irrigation and large power — and recommended different methods for calculating required customer contributions for each class.

Kraske said the policy would protect existing customers from subsidizing expensive, low‑payback extensions and give prospective customers predictable up‑front costs. He described three common approaches used elsewhere — percentage contribution, fixed customer contribution and fixed developer credit — and recommended a percentage method for Hastings with a residential 25% contribution. For large power customers he recommended a customer‑specific analysis and council oversight; for irrigation he recommended an allowable investment equal to about $74 per horsepower.

Shannon Landauer of HEDC (Hastings Economic Development Council) told the board the draft must preserve the utility's ability to compete for industrial projects. "We should never lead with incentives, but when it comes to closing a deal ... we want to be able to do that without a lengthy process and without having to give up confidentiality of that company," Landauer said. Board members asked whether the council could waive or tailor contributions for critical economic‑development prospects; staff said the draft ordinance would include options and that waivers could be presented to board and council.

Kraske provided examples and methodology: he described a rural example in which Dawson Public Power District required a large customer to pay the bulk of a costly extension and said Hastings staff would prepare an upfront engineering estimate and true up final costs before energizing service. He recommended an annual margin calculation based on Hastings' 2024 rate‑study results to size allowable investment limits for customers.

City staff said a draft ordinance based on language similar to Grand Island's policy has been provided to utilities staff and will be reviewed and scheduled for council consideration. No formal vote was taken at the July 24 meeting.

Why it matters: a written line‑extension policy would change when and how much new customers pay to connect to utility infrastructure, affecting developers, single‑home builders and large prospective industrial customers and limiting the degree to which existing customers subsidize new connections.

What’s next: staff will review language of the draft ordinance, return with options for board and council, and HEDC indicated it will work with staff where confidentiality and speed are needed for site recruitment.