Paul Ciampoli
Welcome to the latest episode of Public Power Now.
I'm Paul Ciampoli, APPA's News Director.
Our guest on this episode is Tom Dankert, General Manager of Austin, Minnesota-based Austin Utilities.
In October of last year, Tom became General Manager of the public power utility.
Tom, thanks for joining us on the podcast today.
Tom Dankert
Thanks for having me.
Paul Ciampoli
Tom, just to get our conversation started, I want to give you the opportunity to provide a brief description of Austin Utilities in terms of things like its history, current number of customers served, and services it provides.
Tom Dankert
Austin Utilities actually last year in 2025 celebrated their 125th anniversary.
We had a little celebration here, had a public open house, but we do serve about just under 11,000 customers on the electric system. Mostly residential, but we do have a Fortune 500 company, Hormel Foods Corporation, here in town.
And we do provide all gas, water, and electric, all three services and we do bill out for the city storm water and sewer services as well.
We have 79 employees as of now, looking to add a couple more in 2026 that the board approved. And we do our own underground construction.
So these days up here in Minnesota where it's cold, we have water main breaks. Our own crews are going out and doing all that work. We have our own electric crew, gas water construction crew. So we're pretty much a full service provider for the residents within our community.
Paul Ciampoli
So what have been your priorities since you became general manager?
Tom Dankert
Well, what became apparent through the interview process and talking with the staff around here that the budget is a key item. In fact, when I came in and started in October, the budget was probably in the middle of the process in trying to sell to new employees, to the board of commissioners and the budget committee.
So the budget was number one on the list. We got that approved with a couple new staffing.
But if you look forward into kind of the long range planning, the five and 10 year budgets, capital budgets, capital improvement plans.
We want to continually work on and educate the board, as to the ups and downs and the cash flows and the dollars coming in and out.
We have SMMPA in the planning stages to build an energy station here at our former Northeast plant to be up and running by 2030. So I'm getting land lease for them to use that, working with them to get the construction and everything done.
They're going to build it, they're going to own it, that's going to be on our property so we can start generating in Austin again will be a priority. But the board has also made some requests of some fiscal restraint. Again, I came from the city of Austin where I was in charge of the finances and budgets.
I think one of the things they're looking at is cost containments, reductions, revenue enhancements that maybe we can bring forward.
But I would say at this point in time, the biggest thing that the board has been looking at and have had the discussions with me is…succession planning.
We have a number of supervisors, directors that are probably in the five to seven-year time frame until they retire, maybe some even earlier. So transferring that knowledge, and we've been over the years, big promoters of internal promotions.
So just getting that succession plan, I think, in place in the next year, talking about supervisors, you need to train the leads or do we need to bring in assistant supervisors?
What do we need to do to transfer that knowledge, that systems that you've been working on for the last 20, 25 years, how do we get that down to the next level?
And if we do have a promotion to a supervisor, how have we adequately trained staff underneath them to take on additional responsibilities to move up in the world, whether it be training, whether it be conferences, just day-to-day actions?
That is one of the big things I think, and looking back at the last five years, they've had a lot of discussion about it. Sounds like they've started some things. I mean, I've been working with human resources on some of these.
So it's more of a let's get a plan together, let's get staff ready, because this will be happening. It's not like it might not happen, it will happen.
And we want to make sure we have the right staff in place who understand the system, understand our GIS system, understand the community as a whole, how we deal with this, the customers and citizens.
In our Fortune 500 companies and our large companies, there are other companies here and now.
Transferring that knowledge, transferring that base is key to our success and getting continued support amongst our residents.
Our board of commissioners, during election times, there's usually not a whole lot of people running against them for a reason.
They keep the rates affordable, they keep construction going, they provide adequate dollars for the budget, and they provide plenty of support to myself and the other directors and supervisors and employees to make sure this train keeps running.
Paul Ciampoli
Now you mentioned the acronym SMMPA -- I just wanted to verify that refers to Southern Minnesota Municipal Power Agency.
Tom Dankert
Correct. We buy 100% of our electric through that agency.
We're one of 17 members on that agency that we have a permanent board seat on. So all the electrical side of power coming into the community is through SEMPA. So we work as a board member. We work with SMMPA on those processes and what they're looking at for future generation, meeting the carbon-free standards, et cetera.
Paul Ciampoli
That is a good segue in terms of one of the questions I have for you is could you provide an overview in terms of how Austin Utilities benefits from being a member of SMMPA?
Tom Dankert
Yeah, being a member of SMMPA, evidently, prior to my time, our purchase power contract expired in 2030, which means several years before that, if you're no longer going to be part of that, you got to figure out how you're going to be generating or purchasing electricity on the open market. Until, I think it was 2024, the utilities board was leading the direction of we're not going to rejoin SMMPA, we'll figure it out.
Recently, however, probably in the last couple of years, they decided, no, we're going to sign on and extend the purchase power contract till 2050, which was when all the other contracts for the SMMPA members were expiring.
I guess we took a look in the mirror and said, we're doing this on our own. We need more staff. We need more construction staff. There are economies of scale working with SMMPA. SMMPA is very open. We have a permanent board seat as one of the three largest members on the SMMPA board.
So we're involved on a regular basis with operations and their decisions going forward. That means then we don't have to worry about the staffing and those sort of items trying to ramp up to be our own producer of energy or just by getting the expertise to buy it on the open market.
And now that they've committed to creating an energy station here in Austin, 49 megawatts, which in the worst case, area lines go down, we have the ability to service the entire city with that, only makes a stronger partnership with the staff there.
And staff have been great to work with for many things, legislative priorities, local priorities, even deal with the local councils, et cetera. So they provide us a huge benefit and a huge sounding board for things we might be looking into that we just quite frankly wouldn't have here if we tried to do this locally.
Paul Ciampoli
And I apologize if you mentioned this previously, but with respect to the 49 MW energy station, is that natural gas fuel?
Tom Dankert
It's going to be dual fuel, so natural gas will also have diesel fuel as an option also. I think you're probably looking in the range of $85 million investment in our community by SMMPA. Austin Utilities would be out of our bonding capacity capabilities to do that ourselves. I guess we made that commitment years ago and we tore down our Northeast power plant that was coal-based.
And now SMMPA's gone through -- Sherco 3 has to be shut down by December 31st of 2030. So they need to ensure they can generate enough energy throughout the system to service what will be 16 SMMPA members when we get to January of 2031.
Paul Ciampoli
And so you covered a lot in terms of succession planning, so I don't know if you had anything more to add to that.
But I guess beyond that, one question occurred to me in terms of overall workforce and recruitment, I guess it's fair to say is kind of an ongoing challenge.
So any thoughts on that in terms of how you guys are approaching that challenge?
Tom Dankert
[You] run into that challenge on some higher level jobs -- Director jobs, et cetera, for which, I think we went out in the open market and brought new staff in just over six months ago. It just didn't seem to work out. We then decided to promote an internal individual to the position who's thriving at it. You can see the fire in his eye that he’s enjoying this. So on the director level, I guess we went a couple of years without some staff just trying to find a place where we had. So those challenges still exist.
When we have internal promotions for, I would say, supervisory, heavy equipment operators, engineering techs, et cetera, we usually get a good number of internal staff who've experienced some of those operations that are trying to move up within our company, for which then the lower level positions open up to the open market.
And here in Austin, the utility is, I would say, one of the premier employers in the community, and I would not expect us to have much of a challenge filling some of those new jobs as people try to work their way up within the utility.
There's a lot of knowledge from supervisors and internal staff that you could certainly see some of these folks moving up into the director level as people retire.
But again, it's all part of our job as directors and supervisors to provide adequate training and provide adequate coverage for those individuals to be able to thrive and succeed at these positions.
Paul Ciampoli
Well, thanks so much again for taking time to speak with us today.
And you have an open invitation to return as a guest at some point in the future.
Tom Dankert
I'm always here to help.
Paul Ciampoli
Thanks for listening to this episode of Public Power Now, which is produced by Julio Guerrero, graphic and general designer at APPA.
I'm Paul Ciampoli, and we'll be back next week with more from the world of public power.
