Hawley, Minnesota

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History of the Hawley Public Utilities Commission

 

The Hawley Public Utilities Commission was created by a Village Council resolution on November 1, 1909.  Knud Wefald was the mayor at that time and H. P. Gunderson, Herman Burrill and H. F. Mensing were the first commissioners.  The name given to the commission was the Water, Light and Building Commission.  The first superindendent was N. A. Lee and the first secretary was J. E. (Jens) Johnson.

They apparently had a generator already running so the first order of business was to purchase meters and begin wiring houses.  The homeowner was charged 50 cents per hour for the labor involved in the wiring.  It took several years before everyone had a meter.  Each customer was required to pay for his own meter.  This lasted until 1941 when the commission bought all of them back.

By 1917 the load had grown beyond the capacity of the Fairbanks Morse unit so a deal was made with the Hawley Flour Mill to furnish current.  The mill apparently was generating with steam since the rate was tied to the price of coal.  In 1919 the Mill was still furnishing power and was charging $4 per day extra for running the generator all night.  This extra was charged to street lighting.  This lasted until 1921 when Ottertail Power took over for about a year.  Union Heat, Light and Power, based in Fargo then furnished power until 1932 when the commission resumed regenerating.

The first electric rate was set at 15 cents per kilowatt-hour plus $1 per month payment on the meter.  The load couldn't have been very large at first.  For the month of February, 1910 the billings were: Light billings $122.35, meter charges $15.50, and Penalties $.50.

In 1911 the Village was charged $50 per month for street lighting and $30 per year rental for each fire hydrant.  The first rate was a flat 15 cents per kwh.  In 1915 a step rate was in effect s follows: First 30 kwh 15 cents per kwh, next 30 - 12 1/2 cents, all additional kwh's 10 cents.

Rates fluctuated around this level till about 1930.  In 1920 the top rate did rise to 20 cents, no doubt due to inflationary conditions in the post WWI era.

By the end of 1910 there was a question of whether or not to give all night service or only morning and evening service.  Morning service was discontinued in 1913 but was soon resumed.  In 1914 the rate for current for electric motors was set at $2 per horse-power.  The minutes did not so state but this must have been the first demand charge.

In 1914 the movies apparently came to Hawley.  A special rate to serve the "moving picture machine" was set at 50 cents per evening and $1 per hour for extra day service.

There were no water meters in use in 1910.  The following rates were set in August of that year:  Hotels without baths & water closets $12/year, Baths, one tub $3/yr, water closets $3/yr, Lawn sprinkler $3/yr, Livery stables $12/yr, Extra for hose attachment $3/yr, for each additional family using water from any premise having a water tap $2/yr.

All rates were to be paid quarterly in advance.  August of 1915 must have been dry - the first lawn sprinkling restrictions were adopted.  In 1916 the water rate for theScandinavianLutheranChurchwas set at $4 per year.

In 1912 and 1913 there were several petitions to extend water mains and install street lights.  There were problems with the extension of water mains.  Who would pay for them?  Finally the benefitting property owners were required to sign pledges.  The property owners pledged $2000 for the pipe and materials and agreed to do the excavating themselves.  This was for 7 blocks - onHartfordfrom 6th to 9th streets and 4 blocks onJoseph Street.   In 1919 there was a petition for the installation of a 4" main onHobart.

In the 1920's the rates were changed every year and sometimes more often than that.  This probably was because the wholesale rate charged by Ottertail and Union Light varied from time to time.

In 1923 the commission began using meter books.

In 1924 the first part of the sanitary sewer system was installed.  In 1925 a contract was let to connect the Power Plant and the Village all to the sewer.  The price was $72.50.

In 1925 a 4 inch water main was laid on6th Streetfrom Joseph toReno.  Wicker Brothers got the contract for excavating and backfill at a bid price of 50 cents per foot. In those days it was all pick and shovel.

In 1926 the commission was able to loan the village $4000 and in 1927 there was the first mention of electric cooking ranges.

In 1932 it was decided to begin generating again.  Two Faribanks Morse units were purchased.  They were 110 and 140 horsepower and the cost of the pair was $26,508.  They were paid for in monthly installments of  $300 to $500 and the interest rate was 6%.  At this time a special fund was set up for the electric department.  The cost savings must have been apparent immediately since there was a substantial rate reduction soon after.

In 1938 the third unit was added.  This was a used machine and cost $10,000.  This brought the generating capacity up to around 300 kw.

In 1947 a Model 32 Fairbanks was installed and in 1949 a second Model 32 was purchased.  This brought the capacity up to around 900 kw.

The load continued to grow and in 1957 there was a joint meeting of the city council and the commission and a resolution was passed to enter into a contract to receive Federal power.

In order to get that power, however, it was necessary to get someone to bring it from the Garrison Dam to Hawley.  Ottertail Power had a transmission line along Highway 32 east of Hawley so they were the logical ones to do the wheeling.  Negotiations had begun with the Ottertail people in 1955.  There were two years of sporatic meetings without any agreement reached.  This was before the famous U. S. Supreme Court  decision known as the "Elbow Lake vs Ottertail Power" case that decreed that power companines such as Otterail were obligated to wheel power for municipal entities at a reasonable rate. The commission used K. B. MacKichan ofGrand Forks as the engineering consultant.  By the summer of 1957 the commissioners, Had McDonald,  Hart Johnard and Lawrence Quam had reached the conclusion that Ottertail's terms were just too tough and decided to add more generating capacity.

The last unit was then purchased in 1957.  It was also a Fairbanks Morse with a capacity rating of 650 kw.  The unit cost $107,355 and a bond issue of $90,000 was floated with an interest rate of 4.2%.  This engine ran on either oil or natural gas.  Generation continued until 1965 when Minnkota Power built a transmission line just outside the city limits and immediately began wheeling the Federal power.  Since that time all power has been purchased and the generating units have been maintained to provide a backup source in emergencies. 

From 1965 until 1977 all of Hawley's power was furnished by the U.S. Bureau of Reclamation (later changed to Western Area Power Adm. or WAPA).  The load grew each year but there was enough capacity at the Federal hydro dams to meet the increased demand.

In about 1973, however, the Bureau customers were notified that all of their requirements could be met only until 1976.  After that time they would be limited to the amount of power that they used in 1976 and all supplemental power had to be obtained elsewhere.  Hawley and several other cities in the region then began to purchase that additional power from Minnkota System through the local Rural Electric Co-ops.  The price was the co-op's cost plus 20%, and because of Federal regulations they could only contract for 4 years in advance.

In 1975 Secreatry Quam and John T. Anderson, the Thief River Falls Electric Superintendent, met at a Minnesota Municipa; Utilities Association meeting.  They agreed that, since their supply problems were similar, they sould seek ways to work together to find a better and cheaper source.  The upshot was that later in the year Hawley,ThiefRiverand Halstad hired a consulting firm to do a load projection study for the three cities.  This probably was the beginning of the Northern Municipal Power Agency (NMPA).

In 1976 the Minnesota legislature passed a bill authorizing the formation of municipal power agencies.  This enabled cities like Hawley, who operated their own electric systems, to band together and form an entity that would have municipal powers so that they could buy and sell power, own generation and transmission facilities, borrow money etc.  In December 1976 the NMPA was organized.  There later were a couple of drop-outs and a couple additions but eventually there were 12 members: Hawley, Halstad, Bagley, Fosston,Thief River Falls,Warren, Stephen, Roseau, Warroad, and Baudette in Minnesota and Park River and Grafton in North Dakota.

The Agency then hired consultants and began the search for a cheaper and more reliable source of power.  The co-ops price was not too bad but the 4 year contract limitation was something that the cities felt that they could not live with.  There followed 3 years of searching.  A coal fired plant being built in South Dakota was checked out, purchases from Manitoba Hydro were considered and other possibilities were explored before the "Coyote" came on the scene in 1979.

The Coyote was a lignite-fired, mine mouth generating plant under construction near Beulah,North Dakota.  It was a joint enterprise by Montana-Dakota Utilities, Ottertail Power, Northwestern Power and Light and Minnkota.  It was due to be completed and go on line April 30, 1981.  Minnkota had a 30% share in the project. 

After the energy crisis in the early 70's, there was a movement toward energy conservation so that the demand for electric energy was not increasing nearly as rapidly as it had in the past.  As a result Minnkota realized that the extra capacity that would be provided by the Coyote was more that the 12 member co-ops really needed.  In addition this was the period of high inflation and interest rates were in the double digit area and increasing.

In April of 1981 the Agency floated a $268,000,000 bond issue and used the proceeds to purchase the 30% share in the Coyote and a 15% share of the Minnkota distribution system.  Through a complicated financial arrangement the Agency became a Class B member of the Minnkota System and the member cities were able to purchase power on the same basis as the 12 member rural electric co-op's who owned Minnkota.  The Power Sales Contract between the Agency and the member cities specified that all of each city's power requirements had to be purchased from the Agency.  The arrangement was to last for at least 40 years.

The member cities now had a long term source of wholesale power and there was the assurance that the rates would be reasonable since Minnkota had a record of having some of the lowest cost electric generation in the nation.  The cities were also able to take advantage of Minnkota's sophisticated load control "Ripple" facilities. 

In 1960 the natural gas system was built.  Within a short time about half of the residences were heating with gas.  Until 1965 gas was also sued to run the largest electric generator.  The first residential rates were: 1st 3,000 cu ft-$1.80 per 1,000 cu ft, next 17,000 cu ft - $1.20 per cu ft, all additional - 95 cents per cu ft.

In 1926 the minutes show a loan of $4000 to the village.  Since then there have been numerous instances where the commission has loaned money or purchased bonds issued by the city.  In about 1950 the commission began to make contributions to the village and by the 60's there were regular annual contributions "in lieu of taxes."  In 1964 the contribution was $5,000 and in the 90's the annual amount had increased to $100,000.  In addition, since the 40's the street lighting and power for the sewer system have been donated.  In 1993 this amounted to some over $15,000.

A quick review of the minutes indicate that there have been about 30 commissioners in the 84 years.

Some of the milestones and incidents in the commission history:

1934 - There was a study to determine whether there was a possibility of generating hydro power on theBuffaloRiver.

1936 - The "White Way" was constructed.  This was the latest in street lighting and included only the business section.  These lights have since been replaced at least twice.

1951 - The name of the Water and Light Building Commission was changed to the Public Utilities Commission to conform with state law.  Also in the early 70's a state law changed Hawley from a village to a city.

1958 - The first billing machine was purchased.  The first computer was acquired in 1986.

1960 - The water conditioner (iron removal) was installed.

1966 - Fluoridation of the water supply began.

1968 - the first use of electricity for home heating.

1976 - Motor Vehicle Deputy Registrat office began operating under the Public Utilities Commission.

1977 - First "peak shaving" efforts.

1978 - Voltage on the distribution lines was increased from 2400 volts to 4160 volts. Restrictions were placed on the use of electricity for space heating.

This effort is meant to be nothing more that the title implies, a brief history of the Hawley Public Utilities Commission.  The information was gleaned from the commission minutes, City of Hawley historical files, newspaper articles, conversations with "old timers" and my own personal experiences during the 37 years of service.  I hope that I have succeeded in putting on paper some of the incidents in Hawley's history that otherwise would be forgotten.  

Lawrence L. Quam, July 1994