DEPARTMENT: Central Operations Administration
FILE TYPE: Consent Action
TITLE
title
Authorization To Purchase Commercial Property Insurance For Byllesby Dam Powerhouse
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PURPOSE/ACTION REQUESTED
Authorize the Director of Risk and Emergency Management to execute commercial property insurance contract with HSB Specialty Insurance Company.
SUMMARY
Risk Management has overseen insurance for the Byllesby Dam since 2007. From 2007-2016, coverage was provided by North American Hydro Holdings, with Dakota County listed as an additional insured. When the Byllesby Dam upgrade project began in 2019, that relationship no longer existed.
During peak construction, builders risk insurance was carried by the general contractor, Voith Hydro. However, due to interconnect delays outside the control of both the County and the contractor, the County assumed responsibility for securing the builders risk policy in December 2024.
Securing builders risk coverage proved challenging due to the County’s newness in the hydroelectric market and the limited number of insurers willing to cover hydroelectric facilities. Coverage was obtained only after the County’s insurance broker engaged a specialty hydro broker and the County completed required engineering inspections. The builders risk policy, originally expiring on November 26, 2025, required three extensions through June 15, 2026, as project delays continued.
On June 16, 2026, Voith Hydro issued the certificate of completion for commissioning, qualifying the Dam powerhouse for commercial property insurance and allowing the County to transition off builders risk coverage.
Risk Management pursued commercial property quotes; however, market capacity for hydroelectric facilities remains extremely limited. HSB Insurance-an A+++-rated carrier and the County’s builders risk insurer since 2024-submitted the viable and comprehensive quote.
The proposed commercial property policy provides coverage for standard perils, including terrorism, for the Dam powerhouse structure and components. The insurable value is $34,721,125, and the annual premium is $186,266.49. Insured losses are subject to a per loss deductible of $500,000.
Given the project’s completion, the constrained insurance market, and HSB’s established underwriting familiarity with the Dam, Risk Management recommends purchasing this commercial property policy for the Byllesby Dam powerhouse.
RECOMMENDATION
recommendation
Staff recommends the County Board authorize the Director of Risk and Emergency Management to purchase the commercial property insurance with HSB Insurance for the policy period June 15, 2026, through July 15, 2027, for the cost of $186,267.
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EXPLANATION OF FISCAL/FTE IMPACTS
This contract is included in the 2026 Byllesby Dam operating budget and will be paid for with the proceeds from electricity generation sales.
☐ None ☒ Current budget ☐ Other
☐ Amendment Requested ☐ New FTE(s) requested
RESOLUTION
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WHEREAS, Dakota County purchases insurance for property losses; and
WHEREAS, the Byllesby Dam powerhouse is a new property structure requiring adequate replacement coverage; and
WHEREAS, an evaluation of the marketplace for competitive pricing was completed; and
WHEREAS, based on the evaluation of the marketplace, staff is recommending purchasing of the commercial property insurance coverage with HSB Insurance Company.
NOW, THEREFORE, BE IT RESOLVED, That the Dakota County Board of Commissioners hereby authorizes the Director of Risk and Emergency Management to purchase the following insurance to be paid at current rates from the Byllesby Dam operating budget:
HSB Insurance Company June 15, 2026 - June 15, 2027 Premium $186,266.49
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PREVIOUS BOARD ACTION
None.
ATTACHMENTS
Attachment: None.
BOARD GOALS
☐ Thriving People ☐ A Healthy Environment with Quality Natural Resources
☒ A Successful Place for Business and Jobs ☐ Excellence in Public Service
CONTACT
Department Head: Jenny Groskopf
Author: Jenny Groskopf