Kasson City council approves purchase of Peoples electric territory covering about 357 customers

The Kasson City Council voted to approve a contract to acquire a portion of Peoples (the incumbent cooperative) electric territory that staff said includes about 357 customers (mostly residential), two commercial accounts and several street or security lights.

City staff described the deal as consistent with a multi‑year directive to serve all Kasson residents and said the territory covers areas on the city’s south side, including South Fork and the Windsor Court expansion. The staff presentation estimated peak summer load in the new territory at roughly 1 to 1.5 megawatts and projected about $450,000 in revenue under current rates, while noting those figures will change over time.

Under the proposed contract, the city will make a lump‑sum payment for existing customers and an annual per‑kilowatt‑hour payment for certain future customers for a 10‑year tracking period, a structure staff said was chosen because Peoples requires evidence of actual customers rather than paying for projected future services.

Council members asked detailed financial questions about lump sum versus per‑kWh payments, legacy rate policy and whether the city could buy out future customers outright; staff said they would follow up with the seller to ask whether a buyout option for future customers was feasible.

The council moved, seconded and approved the contract. Staff said the acquisition will increase the city’s customer base and buying power for future power contract negotiations, and that the city will take next steps to finalize any remaining pricing detail.

Quoted: "We're anticipating about 1 to 1.5 megawatts load in the summertime... and about $450,000 of revenue based on the current rates," staff said during the presentation.

Authorities referenced: none (deal discussed as a contract; no ordinance or resolution number listed in the packet).