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Rochester, MN (KROC-AM News) - The price tag for a major utility project in Rochester has grown significantly since it was first approved.

Rochester Public Utilities Board today approved a nearly $13 million increase in the budget for the Marion Road Substation and Feeder Build-out project. The estimated cost was about $33.3 million when the project was approved last year. The estimated overall cost has since grown to nearly $46.3 million.

RPU staff blames the increase on "recent supply chain issues and inflationary pressures that were not anticipated when the project was originally budgeted." The higher-than-expected costs will be funded using money from RPU's electric cash reserves.

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The RPU board also voted this afternoon to approve the municipal utility's share of the cost of the upcoming 9th Street Southeast reconstruction project in Rochester. The Marion Road Substation project is described as the major driver for the 9th Street Southeast project because RPU will be installing several concrete-encased manhole and duct systems in the roadway right of way between Broadway and Slatterly Park to deliver electricity from the new substation to customers in downtown Rochester.

Elcor Construction submitted the low bid for the project at about $10.8 million but with the addition of a contingency budget of 20-percent, the overall price tag is estimated at nearly $12.4 million. The Mayo Clinic, which will benefit from the addition of the Marion Substation and related infrastructure, has agreed to fund nearly $7.5 million of that total.

RPU expects the 9th Street project to begin in July. It is scheduled to be completed in November of next year.

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