Hastings Utilities is not recommending rate increases for three utility services, including two that have seen annual increases for several years.

In providing a high-level preview of the Hastings Utilities 2019-20 budget during the Hastings Utility Board meeting Thursday morning, HU Manager Kevin Johnson said staff is not proposing rate increases for electric, water and sewer services. There is, however, a 5 percent natural gas rate increase proposed.

Members of the Hastings City Council will review the HU budget, as well as the city budget, during the Aug. 19 Council work session.

Johnson said there is no electric rate increase proposed because the cost-of-service study that is planned has not yet been undertaken, and because of the potential of the city’s electric service agreement with Breechblock Renewables LLC.

The proposed Breechblock project would be located on the 144.45 acres of city-owned property just west of the Whelan Energy Center property east of Hastings.

The city cannot publicly discuss details of the project due to a nondisclosure agreement.

Mayor Corey Stutte said during a previous Hastings City Council meeting Breechblock is looking to potentially make a $150 million to $200 million investment in the Hastings community leading to “probably over 60 jobs with an average salary over $60,000 to $70,000.”

Johnson said during Thursday’s meeting, should Breechblock move forward, the project would be a top-two HU customer for electric and water service and a top-five sewer customer.

No water and sewer rate increases are proposed because Johnson said those departments have amassed ample monetary reserves and because bids for different aspects of the city’s Aquifer Storage and Restoration Project have come in lower than anticipated.

The city of Hastings is working closely with the Nebraska Department of Environmental Quality, Nebraska Department of Health and Human Services, Upper Big Blue Natural Resources District, Little Blue NRD and other water quality experts to design the $46 million ASR Project system to reduce the high level of nitrates migrating through the aquifer and into the city wells.

Marty Stange, HU environmental supervisor, provided an ASR project update during Thursday’s meeting.

So far, he said, the ASR Project is working better than anticipated.

Capital expenses budgeted for the ASR project in 2019-20 total $2.3 million.

HU water rates have increased the last seven years.

Sewer rates have increased the last eight years. Those increases were made to help Hastings Utilities comply with environmental regulations.

“So, we have built up sufficient cash for both water and sewer,” Johnson said.

Johnson said the proposed 5 percent gas rate increase would be the city’s first natural gas rate increase since 2000.

“This is to cover the deficiencies over and above what we have for operating and capital expenditures,” he said. “In our revenue projections we have about $8.5 million in revenue but $5.5 million is gas purchases.”

Those gas purchases are a straight flow-through with no additional charges for customers, Johnson said.

Distribution, transmission, administrative and general expenses, plus capital replacement costs have exceeded the remaining $3 million revenue.

This has been the case since 2012.

Those extra costs would have meant the gas department has operated in a deficit, or would have, if not for credits that have been available.

Johnson said those credits now are exhausted.

“We’re at a point now where the projections looking out, we need to start beefing up our gas rates to cover our costs,” he said.

Using 130 CCF, based on average household monthly gas usage during the winter, a 5 percent rate increase would mean customers pay an extra $3.80 per month — $90.41 to 94.21.

However, Johnson said those projections are based on winter gas consumption. Averaging gas consumption over 12 months, the proposed rate increase would mean customers pay about an extra $1.90 per month.

Also during the meeting, City Finance Director Roger Nash introduced Robin Ginn as the new financial manager for Hastings Utilities; and Derek Zeisler, HU director of marketing and energy supply, introduced Tara Ogren as Hastings Utilities’ new process financial analyst.

Board members also voted 4-0 to proceed with an amendment to its gas supply agreement with Central Plains Energy Project in connection with the reset of the available discount in the Central Plains Energy Project No. 2.

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