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04-29-2009 HUCMRegular Meeting April 29, 2009 Members present: President Dwight Bordson; Vice President Robert Hantge; Secretary David Wetterling; Commissioner Craig Lenz; Commissioner Donald H. Walser; Attorney Marc Sebora; General Manager Michael Kumm. President Bordson called the meeting to order at 3:00 p.m. The minutes of the March 25, 2009 regular meeting were reviewed. A motion was made by Vice President Hantge, seconded by Secretary Wetterling, to approve the minutes as written. Motion was unanimously carried. GM Kumm gave an overview of plans to install an 8 megawatt natural gas generator as outlined in the 5 -year plan. The 8 megawatt natural gas generator would be more flexible and efficient than the operations of the current units. At this time Kirk Dunbar, Environmental Engineer for HDR Engineering Inc was welcomed to the meeting. Mr. Dunbar is working with HUC on the permitting process of installing the 8 megawatt natural gas generator. He explained that the Minnesota Pollution Control Agency would look very favorably with the removal of HUC's old diesel generator units, with the installation of a new natural gas generator. GM Kumm will develop a business plan with scenarios showing the effect on gas pricing. HUC will keep the board informed with any decisions by staff as this is a deviation from the original five -year plan. GM Kumm presented the March 2009 payables. After discussion, a motion was made by Commissioner Walser, seconded by Secretary Wetterling to ratify the payment of bills in the amount of $4,071,748.10 (detailed listing in payables book). Motion was unanimously carried. GM Kumm presented the March 2009 financial statements /budget year -to -date. GM Kumm provided a handout and explained the load duration curve and he talked about the base load contract and the effect it has on our revenue because of the weekend shutdowns of HTI and 3M; on weekends we are selling into the market at a loss, however, this is offset by lower market prices during the week when our load is greater. After discussion, a motion was made by Commissioner Lenz, seconded by Vice President Hantge to approve the March 2009 financial statements /budget year -to -date. Motion was unanimously carried. GM Kumm reported on the renewable energy workshop sponsored by the Southwest Initiative Foundation. Discussions at the workshop included wind and anaerobic digestion. GM Kumm presented the changes /additions to the policies and requirements booklet: • Delete section: Disconnection of Services by Utilities This is a continuation of the policy review schedule. Staff recommends deleting this section and adding a better explanation of when we can and cannot disconnect residential services; and when we can and cannot disconnect commercial services. A motion was made by Secretary Wetterling, seconded by Commissioner Walser to approve the deletion of section: Disconnection of Services by Utilities. Motion was unanimously carried. • Add section: Disconnection of Residential Services by Utilities • Add section: Disconnection of Commercial Services by Utilities • Add section: Landlord Acknowledgement • Add section: Inaccessible Utility Equipment /Meters Staff recommends adding the above sections to the policies and requirements booklet. A motion was made by Commissioner Lenz, seconded by Secretary Wetterling to approve the additions to the policies and requirements booklet. Motion was unanimously carried. (Policies attached.) GM Kumm presented the Winter Payment and Disconnect Policy from November 24, 1986. Staff recommends rescinding this policy as HUC has adopted the Minnesota Cold Weather Rule Statute as policy in the Policies and Requirements Booklet as of March 25, 2009. A motion was made by Secretary Wetterling, seconded by Commissioner Walser to rescind Winter Payment and Disconnect Policy from November 24, 1986. Motion was unanimously carried. (Policy attached.) GM Kumm presented changes to the electric large general service code 40 and 41. There was no definition in the rate schedule as to when a customer would move from the electric large general service to the electric small general service; and there was no definition when a customer would move from the electric small general service to the electric large general service. A motion was made by Secretary Wetterling, seconded by Vice President Hantge to approve changes to the electric large general services code 40 and 41. Motion was unanimously carried. Because the agenda did not call out changes to the electric small general service code 30, a motion was made by Secretary Wetterling, seconded by Commissioner Lenz to approve changes to the electric small general service code 30. Motion was unanimously carried. (Rate code 30, and rate code 40 & 41 attached.) Jan Sifferath presented the write -offs. We have several accounts that were never cleared off the books that should have been. At the end of the year there will be another substantial list that should have been cleared off. After discussion, a motion was made by Commissioner Walser, seconded by Secretary Wetterling to approve the write -offs (detailed listing on page 2,735 of April general journal). Motion was unanimously carried. John Webster presented requisition #003497 for John Deere 110 compact 4WD tractor loader and backhoe from RDO Equipment. This is a budgeted item and replaces our small skid loader. We will keep the old skid loader for use at the power plant and we will sell the trailer. After discussion, a motion was made by Vice President Hantge, seconded by Commissioner Lenz to approve requisition #003497 for John Deere 100 compact 4WD tractor loader and backhoe from RDO Equipment for $39,395.50. Motion was unanimously carried. (Requisition attached.) Division reports Business — Jan Sifferath • May 12, 2009 Jon Guthmiller will give a presentation on energy efficiency at the Crow River Country Club for the Hutchinson Area Chamber of Commerce. • Cleaning up accounts in rate code 40 and 41 that should be in rate code 30 Electric — Steve Lancaster • Completed interviews for the position of groundsperson. • Distributed specifications for the downtown power plant project. • Working on underground conversions. • Working on AMI. Gas — John Webster • Pipeline Safety audit this week. • AMI vendor presentations provided us with good prospects — working on specifications. • Working with City on a grant for stimulus money. Payroll — Jared Martig • Attending Rate Making course next week. • Inventory building might be done the end of May. GM Kumm reported: • Johanna Beckman will be hired for the summer to do a 75 -100 page history piece on HUC. • Big Stone II decision was postponed until September. • Met with MMGA — that decision has been extended to June 1 st • Meeting with McLeod Coop on April 30, 2009 on the territory issues. • MRES has completed an agreement with a supplier on wind energy — meeting May 6, 2009, HUC will be working with MRES on acquiring some of the wind energy. Legal Update • City is reviewing their flu preparation in light of the Swine Flu outbreak. • A data practices request has been received to view e -mails going to Council Members. Unfinished Business None New Business Discuss 5 -year Capital Expenditure: GM Kumm distributed handouts outlining HUC's 5 -year capital expenditure with the addition of land purchase and alternative energy. There being no further business, a motion was made by Vice President Hantge, seconded by Secretary Wetterling to adjourn the meeting at 5:03 p.m. Motion was unanimously carried. ATTEST: Robert Hantge, Vice President David Wetterling, Secretary Regular Meeting April 29, 2009 Members present: President Dwight Bordson; Vice President Robert Hantge; Secretary David Wetterling; Commissioner Craig Lenz; Commissioner Donald H. Walser; Attorney Marc Sebora; General Manager Michael Kumm. President Bordson called the meeting to order at 3:00 p.m. The minutes of the March 25, 2009 regular meeting were reviewed. A motion was made by Vice President Hantge, seconded by Secretary Wetterling, to approve the minutes as written. Motion was unanimously carried. GM Kumm gave an overview of plans to install an 8 megawatt natural gas generator as outlined in the 5 -year plan. The 8 megawatt natural gas generator would be more flexible and efficient than the operations of the current units. At this time Kirk Dunbar, Environmental Engineer for HDR Engineering Inc was welcomed to the meeting. Mr. Dunbar is working with HUC on the permitting process of installing the 8 megawatt natural gas generator. He explained that the Minnesota Pollution Control Agency would look very favorably with the removal of HUC's old diesel generator units, with the installation of a new natural gas generator. GM Kumm will develop a business plan with scenarios showing the effect on gas pricing. HUC will keep the board informed with any decisions by staff as this is a deviation from the original five -year plan. GM Kumm presented the March 2009 payables. After discussion, a motion was made by Commissioner Walser, seconded by Secretary Wetterling to ratify the payment of bills in the amount of $4,071,748.10 (detailed listing in payables book). Motion was unanimously carried. GM Kumm presented the March 2009 financial statements /budget year -to -date. GM Kumm provided a handout and explained the load duration curve and he talked about the base load contract and the effect it has on our revenue because of the weekend shutdowns of HTI and 3M; on weekends we are selling into the market at a loss, however, this is offset by lower market prices during the week when our load is greater. After discussion, a motion was made by Commissioner Lenz, seconded by Vice President Hantge to approve the March 2009 financial statements /budget year -to -date. Motion was unanimously carried. GM Kumm reported on the renewable energy workshop sponsored by the Southwest Initiative Foundation. Discussions at the workshop included wind and anaerobic digestion. GM Kumm presented the changes /additions to the policies and requirements booklet: Delete section: Disconnection of Services by Utilities This is a continuation of the policy review schedule. Staff recommends deleting this section and adding a better explanation of when we can and cannot disconnect residential services; and when we can and cannot disconnect commercial services. A motion was made by Secretary Wetterling, seconded by Commissioner Walser to approve the deletion of section: Disconnection of Services by Utilities. Motion was unanimously carried. • Add section: Disconnection of Residential Services by Utilities • Add section: Disconnection of Commercial Services by Utilities • Add section: Landlord Acknowledgement • Add section: Inaccessible Utility Equipment/Meters Staff recommends adding the above sections to the policies and requirements booklet. A motion was made by Commissioner Lenz, seconded by Secretary Wetterling to approve the additions to the policies and requirements booklet. Motion was unanimously carried. (Policies attached.) GM Kumm presented the Winter Payment and Disconnect Policy from November 24, 1986. Staff recommends rescinding this policy as HUC has adopted the Minnesota Cold Weather Rule Statute as policy in the Policies and Requirements Booklet as of March 25, 2009. A motion was made by Secretary Wetterling, seconded by Commissioner Walser to rescind Winter Payment and Disconnect Policy from November 24, 1986. Motion was unanimously carried. (Policy attached.) GM Kumm presented changes to the electric large general service code 40 and 41. There was no definition in the rate schedule as to when a customer would move from the electric large general service to the electric small general service; and there was no definition when a customer would move from the electric small general service to the electric large general service. A motion was made by Secretary Wetterling, seconded by Vice President Hantge to approve changes to the electric large general services code 40 and 41. Motion was unanimously carried. Because the agenda did not call out changes to the electric small general service code 30, a motion was made by Secretary Wetterling, seconded by Commissioner Lenz to approve changes to the electric small general service code 30. Motion was unanimously carried. (Rate code 30, and rate code 40 & 41 attached.) Jan Sifferath presented the write -offs. We have several accounts that were never cleared off the books that should have been. At the end of the year there will be another substantial list that should have been cleared off. After discussion, a motion was made by Commissioner Walser, seconded by Secretary Wetterling to approve the write -offs (detailed listing on page 2,735 of April general journal). Motion was unanimously carried. John Webster presented requisition #003497 for John Deere 110 compact 4WD tractor loader and backhoe from RDO Equipment. This is a budgeted item and replaces our small skid loader. We will keep the old skid loader for use at the power plant and we will sell the trailer. After discussion, a motion was made by Vice President Hantge, seconded by Commissioner Lenz to approve requisition #003497 for John Deere 100 compact 4WD tractor loader and backhoe from RDO Equipment for $39,395.50. Motion was unanimously carried. (Requisition attached.) Division reports Business — Jan Sifferath • May 12, 2009 Jon Guthmiller will give a presentation on energy efficiency at the Crow River Country Club for the Hutchinson Area Chamber of Commerce. • Cleaning up accounts in rate code 40 and 41 that should be in rate code 30 Electric — Steve Lancaster • Completed interviews for the position of groundsperson. • Distributed specifications for the downtown power plant project. • Working on underground conversions. • Working on AMI. Gas — John Webster • Pipeline Safety audit this week. • AMI vendor presentations provided us with good prospects — working on specifications. • Working with City on a grant for stimulus money. Payroll — Jared Martig • Attending Rate Making course next week. • Inventory building might be done the end of May. GM Kumm reported: • Johanna Beckman will be hired for the summer to do a 75 -100 page history piece on HUC. • Big Stone II decision was postponed until September. • Met with MMGA — that decision has been extended to June 1 sc • Meeting with McLeod Coop on April 30, 2009 on the territory issues. • MRES has completed an agreement with a supplier on wind energy — meeting May 6, 2009, HUC will be working with MRES on acquiring some of the wind energy. Legal Update • City is reviewing their flu preparation in light of the Swine Flu outbreak. • A data practices request has been received to view a -mails going to Council Members. Unfinished Business None New Business Discuss 5 -year Capital Expenditure: GM Kumm distributed handouts outlining RUC's 5 -year capital expenditure with the addition of land purchase and alternative energy. There being no further business, a motion,was seconded by Secretary Wetterling to adjourn ,the unanimously carried. ATTEST: _ o e ant e, Vice President made by Vice President Hantge, meeting at 5:03 p.m. Motion was Wetterli , Secretary PM .. .. .- .. ■ WE III M. I .. .. _ .. ._ . re 11 IMP! I I . MAI . IIIIII , rgk'l!'JWIA'l , W . _ ■ �.. �. MAO DISCONNECTION OF RESIDENTIAL SERVICES BY UTILITIES 1. Residential utility service shall be disconnected for any of the following reasons: • Failure to pay a delinquent account or failure to comply with the terms of the budget payment plan. • Failure to contact Hutchinson Utilities Commission to gain protection from disconnection under the Cold Weather Rule. • Failure to maintain the payment agreement established under the Cold Weather Rule. • Failure to comply with deposit requirement. • Failure to pay for merchandise or charges for non - utility service billed by the utility. • Payment of bill with a dishonored check. • Failure to provide authorized utility personnel access to utility equipment. • HUC shall disconnect residential utility service, without notice, where service has been reconnected without HUC's authorization. • HUC shall disconnect residential utility service, without notice, where it has reasonable evidence that utility service is being obtained by potentially unsafe devices or potentially unsafe methods that stop or interfere with the proper metering of the utility service. • HUC may disconnect residential utility service, without notice, where a dangerous condition exists for as long as the condition exists. • At the request of the property owner, as long as it's currently in owner's name. 2. HUC must have a Landlord Agreement on file acknowledging that landlord /owner will be responsible for all utility charges after the read out date requested by a tenant. Failure of the landlord /owner to execute this form will lead to a shut off of services on the read -out date requested from tenant. 3. For all items mentioned in number 1 and 2 above, a disconnect/reconnect fee shall be applied. The disconnect/reconnect fee is as follows: • A $40 trip charge to disconnect. • A $40 trip charge to reconnect after payment has been received. 4. In the event of unauthorized use of, or tampering with the equipment of HUC. A tampering charge of $50 will be assessed to the customer's account. The appropriate law enforcement agency will be notified. HUC reserves the right to charge the customer for the cost of repairs to the equipment of HUC. 5. A dishonored check will be assessed a $30 processing fee; plus: • A $40 trip charge to deliver a door hanger, giving customer 24 hours to make check good with cash, money order or credit card. 6. HUC is not required to furnish residential service under conditions requiring operation in parallel with generating equipment connected to the customer's system if such operation is hazardous or may interfere with its own operations or service to other customers or operation as a condition or rendering service under such circumstances. For additional information, see RUC's Parallel Generation Policy. FAILURE TO RESPOND TO THE DISCONNECT NOTICE SET FORTH ON THE BILL OR FAILURE TO PAY FOR SERVICES RENDERED BY HUC MAY RESULT IN THE DISCONNECTION OF SERVICES TO THE PROPERTY WITHOUT ANY ADDITIONAL NOTICE TO THE CUSTOMER. IT IS THE CUSTOMER'S RESPONSIBILITY TO PAY FOR SERVICES RENDERED AND TO ADVISE HUC OF ANY CHANGE IN ADDRESS. NEITHER HUC NOR THE CITY OF HUTCHINSON, NOR ANY OF THE AGENTS, EMPLOYEES OR REPRESENTATIVES OF THE CITY OF HUTCHINSON OR HUC, WILL BE RESPONSIBLE FOR ANY DAMAGES OR CLAIMS INCURRED AS A RESULT OF THE DISCONNECTION OF SERVICES. Residential utility service may not be disconnected or refused for any of the following reasons: • Delinquency in payment for services by a previous occupant of the premises to be served. • Failure to pay for a different rate classification of utility service. • Failure to pay the account of another customer as guarantor thereof. • Failure to pay charges arising from any underbilling occurring more than 2 years prior to the current billing and due to any misapplication of rates or faulty metering. • If a customer is on the Budget Payment Plan and has a credit balance on account. DISCONNECTION OF COMMERCIAL SERVICES BY UTILITIES 1. Commercial utility service shall be disconnected for any of the following reasons: • Failure to pay a delinquent account. • Failure to comply with deposit requirement. • Failure to pay for merchandise or charges for non - utility service billed by the utility. • Payment of bill with a dishonored check. • Failure to provide authorized utility personnel access to utility equipment. • HUC shall disconnect commercial utility service, without notice, where service has been reconnected without HUC's authorization. • HUC shall disconnect commercial utility service, without notice, where it has reasonable evidence that utility service is being obtained by potentially unsafe devices or potentially unsafe methods that stop or interfere with the proper metering of the utility service. • HUC may disconnect commercial utility service, without notice, where a dangerous condition exists for as long as the condition exists. • At the request of the property owner, as long as it's currently in owner's name. 2. HUC must have a Landlord Agreement on file acknowledging that landlord /owner will be responsible for all utility charges after the read out date requested by a tenant. Failure of the landlord /owner to execute this form will lead to a shut off of services on the read -out date requested from tenant. 3. For all items mentioned in number 1 and 2 above, a disconnect/reconnect fee shall be applied. The disconnect/reconnect fee is as follows: • A $40 trip charge to disconnect. • A $40 trip charge to reconnect after payment has been received. 4. In the event of unauthorized use of, or tampering with the equipment of HUC. A tampering charge of $50 will be assessed to the customer's account. The appropriate law enforcement agency will be notified. HUC reserves the right to charge the customer for the cost of repairs to the equipment of HUC. 5. A dishonored check will be assessed a $30 processing fee; plus: • A $40 trip charge to deliver a door hanger, giving customer 24 hours to make check good with cash, money order or credit card. 6. HUC is not required to furnish commercial service under conditions requiring operation in parallel with generating equipment connected to the customer's system if such operation is hazardous or may interfere with its own operations or service to other customers or operation as a condition or rendering service under such circumstances. For additional information, see RUC's Parallel Generation Policy. FAILURE TO RESPOND TO THE DISCONNECT NOTICE SET FORTH ON THE BILL OR FAILURE TO PAY FOR SERVICES RENDERED BY HUC MAY RESULT IN THE DISCONNECTION OF SERVICES TO THE PROPERTY WITHOUT ANY ADDITIONAL NOTICE TO THE CUSTOMER. IT IS THE CUSTOMER'S RESPONSIBILITY TO PAY FOR SERVICES RENDERED AND TO ADVISE HUC OF ANY CHANGE IN ADDRESS. NEITHER HUC NOR THE CITY OF HUTCHINSON, NOR ANY OF THE AGENTS, EMPLOYEES OR REPRESENTATIVES OF THE CITY OF HUTCHINSON OR HUC, WILL BE RESPONSIBLE FOR ANY DAMAGES OR CLAIMS INCURRED AS A RESULT OF THE DISCONNECTION OF SERVICES. Commercial utility service may not be disconnected or refused for any of the following reasons: • Delinquency in payment for services by a previous occupant of the premises to be served. • Failure to pay for a different rate classification of utility service. • Failure to pay the account of another customer as guarantor thereof. • Failure to pay charges arising from any underbilling occurring more than 2 years prior to the current billing and due to any misapplication of rates or faulty metering. LANDLORD ACKNOWLEDGEMENT A signed Landlord Acknowledgement provides the following: • Acknowledges who the landlord /owner is • Requests HUC to provide utility service to tenants • Understands that tenant will be responsible for all utilities between the date service is required by the tenant and the date tenant requests read- out of services • Agrees to be responsible for and pay all utility charges from the read -out date given by tenant until services are established with a new tenant. • Understands that failure to pay these charges could result in disconnection of electric service. HUC will not be responsible for any damages alleged to be caused by service disconnection. Disconnection /reconnection fees apply. • Landlord /owner has the option to call HUC to assure that tenant has put the utility service in tenant's name. • Landlord /owner can request the disconnection of services as long as the account is in the landlord /owner's name. Disconnection /reconnection fees apply. INACCESSIBLE UTILITY EQUIPMENT /METERS Failure to provide authorized utility personnel access to utility equipment, including metering equipment can lead to disconnection of utilities. Procedures shall be established and maintained to notify customers of inaccessibility. 7 Mgr. Hakel presented a winter payment and disconnect policy. This policy will be inserted with Utility statements mailed in December. Winter Payment and Disconnect Policy Hutchinson Utilities is not obligated to abide by the winter disconnect rules established by the Public Utilities Commission (no shut -offs between October 15 and April 15). However, Hutchinson Utilities will work with customers who are having problems paying their utility bills, to avoid a winter disconnect. To avoid a disconnect, customers must contact the Utilities' Collections and Metering Superintendent by the date indicated on the disconnect notice. Arrangements can then be made concerning the past due amount. Budget Plans or other arrangements are available. Low income customers can be referred to agencies which may be able to assist then in paying their utility bills. Hutchinson Utilities does not make a policy of disconnecting utilities in the cold weather months; but, if customers who receive disconnect notices do not contact the Utilities by the due date, they risk having their utilities disconnected regardless of the weather. A motion was made by Commissioner Lyke, seconded by Commissioner Beatty to adopt the above policy. Motion was unanimously carried. The December regular meeting will be held on December 31 at 9:00 a.m. The January regular meeting will be held on January 22 at 1:00 P.M. A meeting with staff personnel regarding the Hay Report will be held on December 2 at 7:00 a.m. The following are October payables: �ror jq / HUTCHINSON UTILITIES COMMISSION 225 Michigan St SE Hutchinson MN 55350 Telephone: 320 - 587 -4746 Fax: 320 - 587 -4721 RATE SCHEDULES Effective: January 1, 2006 ELECTRIC RESIDENTIAL SERVICE CODE 10 AVAILABILITY: Available for domestic purposes only, in a single or multiple residence. All newly connected multiple dwelling units shall have one meter per unit, and a house meter. Energy charge: 8.72 cents per KWH Meter charge: $6.50 per meter ELECTRIC SMALL GENERAL SERVICE CODE 30 APPLICABILITY: Applicable to any customer for single or three phase electric service with less than 50 KW demand supplied through one meter at the secondary voltage at that location. At any time the customer demand reaches 50 kilowatts for three consecutive months, the customer will be removed from the Electric Small General Service rate and billed under Electric Large General Service rate. Energy charge: First 2000 KWH per month - -- 9.11 cents per KWH Over 2000 KWH per month - -- 8.55 cents per KWH Meter charge: $10.00 per meter ELECTRIC LARGE GENERAL SERVICE CODE 40 & 41 Applicability: Applicable to any customer for combined power and lighting with a minimum demand of 50 kilowatts for single or three phase electric service supplied through one meter at the secondary voltage at that location. If demand drops below 50 kilowatts for twelve consecutive months, the customer will be removed from Electric Large General Service rate and billed under Electric Small General Service. Demand charge: $6.00 per KW Energy charge: 7.37 cents per KWH Minimum monthly charge: 75% of the maximum demand charge — the maximum demand is the customers peak usage over the previous twelve months. SERVICE AT PRIMARY VOLTAGE: Customer owns /maintains facilities, and service provided at primary voltage — a 5% discount will be given on the energy charge. This adjustment includes a discount for primary metering. HUC owns /maintains facilities, and service provided at primary voltage — a 2% discount will be given on the energy charge. POWER FACTOR PENALTY: A power factor penalty will apply if the customers measured power factor drops below .94 LARGE INDUSTRIAL SERVICE CODE 50 & 51 APPLICABILTY: Applicable to any customer for combined power and lighting with a minimum demand over 4000 KW during any one month in a 12 month period. Service will be delivered at the primary voltage available at the customer's property line. The customer will own and maintain all electrical facilities on the customer's side of the metering transformer. Demand charge: $7.00 per KW Energy charge: $0.0675 per KWH POWER COST ADJUSTMENT (ELECTRIC) Power cost adjustment is based on the combined costs of purchased power from outside suppliers, fuel (natural gas and fuel oil), and unrecovered or excess revenues from previous month. Computations of power adjustments shall be made monthly. The resultant adjustment, if any, shall be applicable for the month. All rates are subject to power cost adjustment. SECURITY LIGHT RENTAL RATE TO FURNISH AND MAINTAIN FIXTURE: HIGH PRESSURE SODIUM: Monthly Monthly Lamp Size Charge Lamp Size Charge 150 watt metered $3.00 150 watt unmetered $7.00 250 watt metered $3.50 250 watt unmetered $10.00 Lights will be dusk to dawn type with photo control and will be installed on existing pole in the area. If a new pole is needed, customer will pay for the pole and installation. 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