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Commission approves five-year New Ulm firm-transportation and interconnect agreements
Summary
The commission approved a five-year transportation contract and matching interconnect agreement with the city of New Ulm that phases New Ulm to a retail rate over two years and reduces reserved capacity from 20,000 to 15,000 dekatherms after Heartland Corn became a direct customer.
The Hutchinson Utility Commission approved a five-year firm-transportation capacity agreement and a concurrent interconnect agreement with the city of New Ulm.
Jeremy Crosby presented the agreements, saying New Ulm'9s existing arrangement expired March 31 and the new five-year contract phases their rate to the utility'9s retail level over two years so that by 2028 New Ulm pays the full retail charge. Crosby said the contract reduces New Ulm'9s reserved capacity from 20,000 dekatherms to 15,000 dekatherms because Heartland Corn is now a direct customer with its own lateral.
Crosby said the agreements add customary imbalance penalties to require transportation customers to stay within nominated tolerances when connected to the interstate pipeline. Those penalties are industry standard, he said, and are intended to prevent market gaming and to preserve operational integrity.
Commissioner Matt moved to approve the New Ulm firm transportation capacity agreement and Commissioner Tom seconded; the motion carried by voice vote. The commission then approved the interconnect agreement concurrently.
The agreements will be monitored over the five-year term and revisited if New Ulm'9s volumes change or if Heartland Corn elects a different arrangement at the remarketing period specified in other contracts.
