03-30-2011 HUCMRegular Meeting
March 30, 2011
Members present: President Robert Hantge; Vice President Paul Nordin; Secretary
Dwight Bordson; Commissioner Donald H. Walser; Commissioner Craig Lenz; Attorney
Marc Sebora; General Manager Michael Kumm
President Hantge called the meeting to order at 3:00 p.m.
The minutes of the February 23, 2011 regular meeting were reviewed. A motion was
made by Vice President Nordin, seconded by Secretary Bordson to approve the
minutes as written. Motion was unanimously carried.
Paul Harvego of Conway, Deuth & Schmiesing, PLLP, was welcomed to the meeting.
Mr. Harvego presented the financial audit for 2010. After discussion, Mr. Harvego
commended the staff and GM Kumm for a great job in 2010. Secretary Bordson made a
motion, seconded by Commissioner Lenz to accept the financial audit for 2010. Motion
was unanimously carried.
The February 2011 payables were discussed. A motion was made by Commissioner
Lenz, seconded by Secretary Bordson to ratify the payment of bills in the amount of
$3,463,909.52 (detailed listing in payables book). Motion was unanimously carried.
GM Kumm presented the February 2011 financial statements /budget year -to -date. After
discussion, a motion was made by Commissioner Lenz, seconded by Vice President
Nordin to approve the financial statements /budget year -to -date. Motion was
unanimously carried.
Don Walser arrived at 3:33.
GM Kumm presented the HTI natural gas transportation agreement. This agreement will
go into effect May 1, 2011. After discussion, a motion was made by Commissioner
Lenz, seconded by Vice President Nordin to approve the HTI natural gas transportation
agreement. Motion was unanimously carried. (Agreement attached.)
Steve Lancaster, Director Electric Division, presented the bid tabulation for directional
drilling contractor for 2010 — 2012. Every two years we go out for bids for the
construction season. After discussion, a motion was made by Secretary Bordson,
seconded by Commissioner Lenz to approve the bid tabulation for directional drilling
contractor for 2010 — 2012 from Steile Construction. Motion was unanimously carried.
(Bid tabulation attached.)
GM Kumm presented the pipeline / utility crossing agreements between Hutchinson
Utilities Commission and the City of Hutchinson for 1 -1/2 -inch and 6 -inch water service,
and an 8 -inch sanitary sewer service. After discussion, a motion was made by
Commissioner Walser, seconded by Secretary Bordson to approve the pipeline / utility
crossing agreements between Hutchinson Utilities Commission and the City of
Hutchinson for 1 -1/2 -inch and 6 -inch water service, and an 8 -inch sanitary sewer
service. Motion was unanimously carried. (Agreements attached.)
GM Kumm gave an update on the transmission owner membership in MISO. Discussion
was held regarding the benefits of becoming a transmission owner member. GM Kumm
presented the transmission schedules and related costs of membership. GM Kumm will
present the transmission owner membership agreement for approval at the April
Commission meeting. (See attached.)
GM Kumm presented for review the policies and requirements booklet, sections: meter
testing; right -of -way clearing; and tree removal or trimming. Staff is not recommending
any changes to these policies. After review no changes were recommended by the
Board.
GM Kumm presented changes to the exempt and non - exempt handbooks, sections:
hours and conditions of employment; flextime program (exempt only); rest periods; and
meal periods. The only recommended change is section: rest periods — exempt;
replacing the second and third sentences with `One rest period is taken in the morning
and the other rest period is taken in the afternoon.' GM Kumm explained to
accommodate shift personnel, no changes needed to rest periods — non - exempt. A
motion was made by Commissioner Walser, seconded by Secretary Bordson to
approve the changes to the policies and requirements booklet, section: rest periods -
exempt. Motion was unanimously carried. (Changes attached.)
GM Kumm discussed PILOT verbiage for the billing insert which will be included in the
May billing. This will be the first bill in which the 2.75% calculation will be detailed. After
discussion, the Board recommended the last sentence to read, `This is not a rate
increase.' (Changes attached.)
Hutchinson Utilities annual breakfast meeting is scheduled for April 13, 2011. Our ten
largest electric and gas customers are invited to the annual breakfast meeting. A motion
was made by Commissioner Lenz, seconded by Secretary Bordson to declare the
Hutchinson Utilities annual breakfast meeting on April 13, 2011 as an open meeting.
Motion was unanimously carried. (Invitation attached.)
Division Reports
Gas — John Webster
• MNOPS is requiring daily flood reports for the next couple weeks
• Damage prevention meeting held March 17 was a success with 24 sponsors
and around 200 in attendance compared to around 150 last year
• Working with 3M on the FERC 554 report
• Attending MEA Gas Operations Learning Summit in Omaha next week
Finance — Jared Martig
• Management letter needs a written out -of -state travel policy
• JD Edwards daily inventory software is working now
Business — Jan Sifferath
• To date in 2011 we have received $13,000 back through the Revenue
Recapture program
• Lori Johnson was hired as the new account coordinator
• Human resource package in the JD Edwards software is complete
• Randy Blake is writing an article to include pictures regarding the engine
replacements at plant 1 which will be placed on the Hutchinson Utilities web
site when complete
Electric — Steve Lancaster
• Met with HDR regarding the procurement specs. We hope to bring to the
Board for approval at the May Commission meeting
• Good visit at the Rolls -Royce engine plant in Lake Charles, Louisiana
GM Kumm reported on both the Legislative Rally and the MMUA Winter Legislative
Conference he attended.
Legal Update
Nothing to report
Unfinished Business
• GM Kumm is working on the follow -up with McLeod Coop for the past due
territory agreement payments
• Follow -up discussion held regarding the City assessment to HUC for the
Industrial Boulevard SE reconstruction
New Business
• President Hantge reported on his attending the MMUA Winter Legislative
Conference today. He went to discuss the current legislative law regarding
the Governor's salary cap.
• President Hantge asked how the the e- packets are working for the
Commissioners
• Discussion held regarding the need to review the exempt travel expenses
policy. Proposed changes to include a tipping limit not to exceed 15% of bill
and utilizing a separate form if no receipt available. Jan Sifferath will review
the travel expenses policy.
There being no further business, a motion was made by Secretary Bordson, seconded
by Commissioner Lenz to adjourn the meeting at 4:50 p.m. Motion was unanimously
carried.
ATTEST:
Robert Hantge, President
Dwight Bordson, Secretary
Regular Meeting
March 30, 2011
Members present: President Robert Hantge; Vice President Paul Nordin; Secretary
Dwight Bordson; Commissioner Donald H. Walser; Commissioner Craig Lenz; Attorney
Marc Sebora; General Manager Michael Kumm
President Hantge called the meeting to order at 3:00 p.m.
The minutes of the February 23, 2011 regular meeting were reviewed. A motion was
made by Vice President Nordin, seconded by Secretary Bordson to approve the
minutes as written. Motion was unanimously carried.
Paul Harvego of Conway, Deuth & Schmiesing, PLLP, was welcomed to the meeting.
Mr. Harvego presented the financial audit for 2010. After discussion, Mr. Harvego
commended the staff and GM Kumm for a great job in 2010. Secretary Bordson made a
motion, seconded by Commissioner Lenz to accept the financial audit for 2010. Motion
was unanimously carried.
The February 2011 payables were discussed. A motion was made by Commissioner
Lenz, seconded by Secretary Bordson to ratify the payment of bills in the amount of
$3,463,909.52 (detailed listing in payables book). Motion was unanimously carried.
GM Kumm presented the February 2011 financial statements /budget year -to -date. After
discussion, a motion was made by Commissioner Lenz, seconded by Vice President
Nordin to approve the financial statements /budget year -to -date. Motion was
unanimously carried.
Don Walser arrived at 3:33.
GM Kumm presented the HTI natural gas transportation agreement. This agreement will
go into offoct May 1, 2011. After discussion, a motion was made by Commissioner
Lenz, seconded by Vice President Nordin to approve the HTI natural gas transportation
agreement. Motion was unanimously carried. (Agreement attached.)
Steve Lancaster, Director Electric Division, presented the bid tabulation for directional
drilling contractor for 2010 — 2012. Every two years we go out for bids for the
construction season. After discussion, a motion was made by Secretary Bordson,
seconded by Commissioner Lenz to approve the bid tabulation for directional drilling
contractor for 2010 — 2012 from Steile Construction. Motion was unanimously carried.
(Bid tabulation attached.)
GM Kumm presented the pipeline / utility crossing agreements between Hutchinson
Utilities Commission and the City of Hutchinson for 1 -1/2 -inch and 6 -inch water service,
and an 8 -inch sanitary sewer service. After discussion, a motion was made by
Commissioner Walser, seconded by Secretary Bordson to approve the pipeline / utility
crossing agreements between Hutchinson Utilities Commission and the City of
Hutchinson for 1 -1/2 -inch and 6 -inch water service, and an 8 -inch sanitary sewer
service. Motion was unanimously carried. (Agreements attached.)
GM Kumm gave an update on the transmission owner membership in MISO. Discussion
was held regarding the benefits of becoming a transmission owner member. GM Kumm
presented the transmission schedules and related costs of membership. GM Kumm will
present the transmission owner membership agreement for approval at the April
Commission meeting. (See attached.)
GM Kumm presented for review the policies and requirements booklet, sections: meter
testing; right -of -way clearing; and tree removal or trimming. Staff is not recommending
any changes to these policies. After review no changes were recommended by the
Board.
GM Kumm presented changes to the exempt and non - exempt handbooks, sections:
hours and conditions of employment; flextime program (exempt only); rest periods; and
meal periods. The only recommended change is section: rest periods — exempt;
replacing the second and third sentences with 'One rest period is taken in the morning
and the other rest period is taken in the afternoon.' GM Kumm explained to
accommodate shift personnel, no changes needed to rest periods — non - exempt. A
motion was made by Commissioner Walser, seconded by Secretary Bordson to
approve the changes to the policies and requirements booklet, section: rest periods -
exempt. Motion was unanimously carried. (Changes attached.)
GM Kumm discussed PILOT verbiage for the billing insert which will be included in the
May billing. This will be the first bill in which the 2.75% calculation will be detailed. After
discussion, the Board recommended the last sentence to read, 'This is not a rate
increase.' (Changes attached.)
Hutchinson Utilities annual breakfast meeting is scheduled for April 13, 2011. Our ten
largest electric and gas customers are invited to the annual breakfast meeting. A motion
was made by Commissioner Lenz, seconded by Secretary Bordson to declare the
Hutchinson Utilities annual breakfast meeting on April 13, 2011 as an open meeting.
Motion was unanimously carried. (Invitation attached.)
Division Reports
Gas — John Webster
• MNOPS is requiring daily flood reports for the next couple weeks
• Damage prevention meeting held March 17 was a success with 24 sponsors
and around 200 in attendance compared to around 150 last year
• Working with 3M on the FERC 554 report
• Attending MEA Gas Operations Learning Summit in Omaha next week
Finance — Jared Martig
• Management letter needs a written out -of -state travel policy
• JD Edwards daily inventory software is working now
Business — Jan Sifferath
• To date in 2011 we have received $13,000 back through the Revenue
Recapture program
• Lori Johnson was hired as the new account coordinator
• Human resource package in the JD Edwards software is complete
• Randy Blake is writing an article to include pictures regarding the engine
replacements at plant 1 which will be placed on the Hutchinson Utilities web
site when complete
Electric — Steve Lancaster
• Met with HDR regarding the procurement specs. We hope to bring to the
Board for approval at the May Commission meeting
• Good visit at the Rolls -Royce engine plant in Lake Charles, Louisiana
GM Kumm reported on both the Legislative Rally and the MMUA Winter Legislative
Conference he attended.
Legal Update
Nothing to report
Unfinished Business
• GM Kumm is working on the follow -up with McLeod Coop for the past due
territory agreement payments
• Follow -up discussion held regarding the City assessment to HUC for the
Industrial Boulevard SE reconstruction
New Business
• President Hantge reported on his attending the MMUA Winter Legislative
Conference today. He went to discuss the current legislative law regarding
the Governor's salary cap.
• President Hantge asked how the the e- packets are working for the
Commissioners
• Discussion held regarding the need to review the exempt travel expenses
policy. Proposed changes to include a tipping limit not to exceed 15% of bill
and utilizing a separate form if no receipt available. Jan Sifferath will review
the travel expenses policy.
There being no further business, a motion was made by Secretary Bordson, seconded
by Commissioner Lenz to adjourn the meeting at 4:50 p.m. Motion was unanimously
carried.
Dwight Bordson, Secretary
ATTEST:
RobarrHantegig, President
AGREEMENT
HUTCHINSON
UTILITIES THIS AGREEMENT ( "AGREEMENT ") IS MADE AND ENTERED INTO
COMMISSION THIS 30th DAY OF MARCH, 201 1, TO BE EFFECTIVE AS OF THE 1 ST
DAY OF MAY, 201 1, BY AND BETWEEN HUTCHINSON TECHNOLOGY,
225 MICHIGAN INC. ("HTI ") WITH OFFICES LOCATED AT 40 WEST HIGHLAND PARK
STREET
HUTCHINSON DRIVE NE, HUTCHINSON, MINNESOTA, 55350 AND HUTCHINSON
MINNESOTA UTILITIES COMMISSION ( "HUC ") A MINNESOTA MUNICIPAL UTILITY
55350
LOCATED AT 225 MICHIGAN ST SE, HUTCHINSON, MINNESOTA,
55350. HTI AND HUTCHINSON SHALL HEREINAFTER SOMETIMES BE
REFERRED TO SEPARATELY AS "PARTY" OR JOINTLY AS "PARTIES."
WHEREAS, HTI DESIRES TO PURCHASE, AND HUC SHALL
PROVIDE, FIRM GAS FOR USE AT HTI'S HUTCHINSON
HEADQUARTERS /PLANT; AND,
WHEREAS, HTl DOES ACKNOWLEDGE THAT HUC WILL, IN
RELIANCE UPON THIS AGREEMENT, ENTER INTO AN AGREEMENT TO
PROVIDE FIRM GAS AND TRANSPORTATION.
NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING
AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE
RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED, THE PARTIES MAKE
THE FOLLOWING AGREEMENT:
ROBERT HANTGE
PRESIDENT
PAUL NORDIN HUC SHALL PROVIDE, AND HTl SHALL ACCEPT, FIRM GAS
VICE PRESIDENT COMMENCING MAY 1, 201 1, AT 9:00 A.M. AND TERMINATING ON
DWIGHT BORDSON
SECRETARY MAY 1, 2012, AT 9:00 A.M.
DONALD H. WALSER
COMMISSIONER
CRAIG LENZ
COMMISSIONER
MICHAEL KUMM
GENERAL MANAGER
TEL 320 -587 -4746
FAx 320 -587 -4721 L 1
I . AVAILABILITY
A. GENERAL
FIRM TRANSPORTATION SERVICE UNDER THIS AGREEMENT
SHALL BE AVAILABLE TO HTI UNDER THE TERMS AND
CONDITIONS OF THIS AGREEMENT. THIS SERVICE MAY NOT BE
CURTAILED OR INTERRUPTED EXCEPT PURSUANT TO THE TERMS
OF THIS AGREEMENT.
B. THE COST FOR ADDITIONAL CAPACITY OR NEW INSTALLATIONS
UTILIZING THIS SERVICE SHALL BE BILLED TO HTI. HTI MUST
SUBMIT A WRITTEN REQUEST TO HUC FOR ADDITIONAL
CAPACITY /NEW INSTALLATIONS. ALL ADDITIONAL COSTS MUST
BE PRE - APPROVED, IN WRITING, BY HTI.
C. COMPLIANCE WITH AGREEMENTS
SERVICE UNDER THIS AGREEMENT SHALL NOT COMMENCE
UNTIL BOTH PARTIES HAVE FULLY EXECUTED THIS AGREEMENT
AND COMPLIED WITH ALL RELEVANT REQUIREMENTS
CONTAINED HEREIN.
D. AGREEMENT CHANGES
HUC HAS THE RIGHT TO MODIFY THIS AGREEMENT DUE TO
CHANGES IMPOSED BY HUC'S CURRENT NATURAL GAS
TRANSMISSION PROVIDERS AND FEDERAL, STATE AND LOCAL
REGULATORS /AUTHORITIES.
2. TERM
THE INITIAL TERM FOR SERVICE UNDER THIS AGREEMENT IS ONE (1)
YEAR. HTI MUST NOTIFY HUC IN WRITING THREE (3) MONTHS PRIOR
TO THE EXPIRATION OF THE TERM IF HTI DESIRES TO CONTINUE
SERVICE UNDER THIS AGREEMENT. IF HTI HAS COMPLIED WITH ALL
TERMS OF THIS AGREEMENT, AND HAS NO OUTSTANDING
ARREARAGES, HTI MAY, UPON WRITTEN NOTICE PROVIDED TO HUC
THREE (3) MONTHS PRIOR TO THE EXPIRATION OF THE CURRENT
TERM, EXTEND THIS AGREEMENT FOR A MUTUALLY AGREED -UPON
PERIOD. IF A TERM FOR THE EXTENSION CANNOT BE AGREED UPON BY
HTI AND HUC, THE PARTIES AGREE TO A MINIMUM TERM OF ONE (1)
YEAR. IF SUCH TIMELY NOTICE IS NOT PROVIDED BY HTI, HUC IS NOT
OBLIGATED TO RENEW SERVICE FOR HTI.
[21
3. RATES
A. RATES FOR SERVICE
THE FOLLOWING CHARGES SHALL APPLY TO THE FIRM
COMMODITY AND TRANSPORTATION CAPACITY TO BE PROVIDED
To HTI BY HUC:
COMMODITY
MONTHLY INSIDE FERC VENTURA INDEX, AS PUBLISHED
BY PLATT'S "GAS DAILY ", PLUS /MINUS THE NNG
VENTURA TO NBPL VENTURA MONTHLY PREMIUM.
MONTHLY INDEX AS PUBLISHED IN PLATTS FERC GAS
MARKET REPORT FOR NORTHERN NATURAL GAS CO. AT
VENTURA, IOWA PLUS OR MINUS ANY INDEX PREMIUM OR
DISCOUNT BASED ON CURRENT MARKET CONDITIONS AT
THE TIME THE GAS IS PURCHASED.
HUC SHALL PURCHASE HTI'S FIRM BASE LOAD NATURAL
GAS REQUIREMENTS, FOR THE FOLLOWING MONTH,
WITHIN 24 BUSINESS HOURS OF RECEIPT OF HTI'S FIRST
OF THE MONTH BASE LOAD NOMINATION. (SEE SECTION
7, PARAGRAPH "A ")
2. MONTHLY DEMAND CHARGE
MONTHLY DEMAND CHARGE PER -- $10.33
MCF OF BILLING DEMAND
3. TRANSPORTATION CHARGE
TRANSPORTATION CHARGE, PER METERED MCF - - $0.83
THIS CHARGE SHALL BE ADJUSTED, STARTING ON MAY 1,
2012 AND ON EACH MAY 1 THEREAFTER, ACCORDING
TO ANY CHANGE IN THE CPI -U FROM THE PREVIOUS
YEAR; PROVIDED HOWEVER, THAT SUCH CHARGE SHALL
NEVER BE LESS THAN $0.83. CPI -U SHALL MEAN THE
ANNUAL AVERAGE CONSUMER PRICE INDEX - ALL
URBAN CONSUMERS AS PUBLISHED BY THE UNITED
STATES DEPARTMENT OF LABOR, BUREAU OF
STATISTICS, WASHINGTON, C.C..
4. TAXES
THE ABOVE CHARGES DO NOT INCLUDE ANY TAXES.
[3I
B. METERING
HTI SHALL PAY ALL COSTS ASSOCIATED WITH THE
INSTALLATION OF METERS AND ANY OTHER EQUIPMENT
NECESSARY FOR HTI TO RECEIVE SERVICE UNDER THIS
AGREEMENT UNLESS OTHERWISE AGREED TO IN WRITING
BETWEEN HTI AND HUC.
4. RECONNECTION CHARGE
ANY TRANSPORTATION CUSTOMER RECEIVING SERVICE PURSUANT TO
THIS AGREEMENT MUST PAY THE "RECONNECTION CHARGE" AS SET
FORTH WHEN REQUESTING A RETURN TO HUG'S SYSTEM SUPPLY FOR
ALL OR ANY PORTION OF THE TRANSPORTATION CUSTOMER'S DAILY
REQUIREMENTS.
THE RECONNECTION CHARGE SHALL BE CALCULATED ON A MONTHLY
BASIS AND SHALL CONSIST OF A REALIGNMENT SURCHARGE THAT
APPLIES TO ALL VOLUMES MEASURED BY HTI'S INDUSTRIAL METER.
A. TERM
SIX MONTHS - COMMENCING WITH THE FIRST MONTH
FOLLOWING THE TERMINATION OF THIS AGREEMENT
B. REALIGNMENT SURCHARGE
THE REALIGNMENT SURCHARGE SHALL BE IN ADDITION TO THE
INDUSTRIAL RATE AS PUBLISHED BY HUC.
THE REALIGNMENT SURCHARGE (RS) SHALL BE CALCULATED
AS FOLLOWS:
RS = MONTHLY INSIDE FERC VENTURA INDEX, AS PUBLISHED
BY PLATT'S "GAS DAILY ", PLUS /MINUS THE NNG
VENTURA TO NBPL VENTURA MONTHLY PREMIUM MINUS
HUG'S "BASE RATE" ($7.85 IN 2010). PROVIDED,
HOWEVER, THAT SUCH SURCHARGE SHALL NEVER BE
LESS THAN $0.00.
5. BILLING AND PAYMENT
A. BILLING
INVOICE WILL BE RENDERED TO HTI, OR ITS AGENT, BY THE
FIFTEENTH DAY OF THE MONTH FOLLOWING THE MONTH IN
WHICH SERVICE IS RENDERED BY HUC.
(4]
B. PAYMENT
PAYMENT IS DUE FROM HTI ON OR BEFORE THE TENTH DAY
FOLLOWING THE DATE THE BILL 1S ISSUED BY HUC. A LATE
PAYMENT CHARGE OF ONE AND ONE-HALF PERCENT PER
MONTH, OR THE LEGALLY AUTHORIZED MAXIMUM INTEREST
RATE, WHICHEVER IS LOWER, SHALL BE LEVIED ON ANY UNPAID
BALANCE.
6. CONDITIONS OF SERVICE
A. HUC HEREBY CERTIFIES THAT IT HAS SUFFICIENT FIRM
TRANSPORTATION CAPACITY TO PROVIDE THE AMOUNT OF FIRM
TRANSPORTATION SERVICE TO HTI PURSUANT TO THE TERMS
OF THIS AGREEMENT FOR THE TERM OF THIS AGREEMENT.
C. UNLESS OTHERWISE AGREED BETWEEN HTI AND HUC, HTI
WILL REIMBURSE HUC FOR THE COST OF METERING AND ANY
OTHER EQUIPMENT AS REQUIRED BY HUC TO PROVIDE SERVICE
TO HTI UNDER THIS AGREEMENT. ALL SUCH EQUIPMENT SHALL
REMAIN THE PROPERTY OF HUC.
HUC SHALL SUBMIT A WRITTEN ESTIMATE TO HTI ITEMIZING
ALL COSTS ASSOCIATED WITH THE INSTALLATION OF REQUIRED
METERING AND OTHER EQUIPMENT NECESSARY FOR HTI TO
RECEIVE SERVICE UNDER THIS AGREEMENT. HTI MUST
PROVIDE WRITTEN APPROVAL TO HUC AUTHORIZING PURCHASE
OF SAID EQUIPMENT.
D. UNLESS OTHERWISE AGREED TO IN WRITING BY HUC AND HTI,
AUTOMATIC TELEMETERING EQUIPMENT IS REQUIRED. HTI
SHALL PROVIDE TELEPHONE, COMPUTER AND OTHER
INTERFACES, AS WELL AS ELECTRIC CONNECTIONS TO THE
METER(S), AS AGREED TO BY HTI AND HUC. ALL MONTHLY
UTILITY FEES (TELEPHONE, ELECTRICITY, ETC.) SHALL BE
BORNE BY HTI. HTI SHALL PROVIDE HUC WITH ACCESS SO
THAT HUC MAY OPERATE AND MAINTAIN SAID EQUIPMENT.
E. HUC SHALL PROVIDE HTI (OR AGENT) WITH A DAILY USAGE
REPORT VIA EMAIL FOR NOMINATION PURPOSES.
7. NOMINATIONS
A. FIRST OF THE MONTH NOMINATIONS
BY 7:00 A.M. CENTRAL CLOCK TIME ( "C.C.T. "), BY THE
15TH DAY OF THE MONTH PRIOR TO GAS FLOW, HTI, OR
ITS DESIGNATED AGENT, SHALL PROVIDE HUC A
WRITTEN ESTIMATE OF HTI'S DAILY FIRM BASE LOAD
(51
LEVEL OF NATURAL GAS REQUIRED FOR THE FOLLOWING
MONTH. IN THE EVENT HUC HAS NOT RECEIVED THE
BASE LOAD NOMINATION FROM HTI BY THE ABOVE
DESIGNATED TIME, HUC SHALL NOMINATE THE CURRENT
MONTH'S BASE LOAD LEVEL FOR THE FOLLOWING
MONTH.
B. DAILY NOMINATIONS
HTI, OR ITS DESIGNATED AGENT, SHALL NOTIFY HUC OF
ANY REQUESTED CHANGE TO ITS NOMINATION, IN
WRITING, BY 7:00 A.M. C.C.T AT LEAST ONE (1)
BUSINESS DAY PRIOR TO THE DATE OF THE REQUESTED
CHANGE, HUC SHALL GRANT SUCH REQUESTS IN ITS
REASONABLE DISCRETION.
C. GAS DAY
THE GAS DAY SHALL RUN FROM 9:00 A.M. TO 9:00 A.M.
CENTRAL STANDARD TIME.
8. DAILY SWING SUPPLY
HUC AGREES TO PROVIDE DAILY SWING SUPPLY TO HTI AT THE
APPLICABLE PRICE, AS PUBLISHED FOR THE DAY BY PLATT'S "GAS
DAILY" IN ITS "DAILY PRICE SURVEY ($ /DTH)" FOR "NORTHERN,
VENTURA" "MIDPOINT" ( "DAILY INDEX ") PLUS /MINUS $0.01. SWING
SUPPLY IS DEFINED AS SUPPLY INCREASES OR DECREASES, FROM
CONTRACTED LEVELS, NOMINATED AT LEAST 24 HOURS PRIOR TO
THE START OF THE GAS DAY.
9. REAL-TIME BALANCING
HUC SHALL PROVIDE HTI WITH REAL-TIME BALANCING, BASED ON
THE FOLLOWING:
BEST EFFORTS REAL-TIME SWING NOMINATED LESS THAN 24 HOURS
PRIOR TO THE END OF THE GAS DAY ON A BEST EFFORTS BASIS,
PRICED AT THE APPLICABLE PRICE, AS PUBLISHED FOR THE DAY BY
PLATT'S "GAS DAILY" IN ITS "DAILY PRICE SURVEY ($ /DTH)" FOR
"NORTHERN, VENTURA" "MIDPOINT" ( "DAILY INDEX "), PLUS /MINUS
$0.15.
[61
10. AGENTS
A. DESIGNATION OF AGENTS
HTI MAY DESIGNATE AN AGENT FOR NOMINATING
VOLUMES FOR TRANSPORTATION ON HUG'S SYSTEM.
HTI SHALL NOTIFY HUC IN WRITING AT LEAST FIFTEEN
(1 5) BUSINESS DAYS PRIOR TO THE FIRST DAY OF THE
MONTH IN WHICH SUCH SERVICES WILL BE UTILIZED THAT
A THIRD PARTY HAS BEEN DESIGNATED AS HTI'S AGENT
AND SHALL ACT AS AGENT FOR HTI FOR PURPOSES OF
NOMINATIONS, BILLING, AND /OR OTHER FUNCTIONS AS
SPECIFIED BY HTI. IF HTI UTILIZES AN AGENT FOR ANY
OR ALL OF THESE PURPOSES, HTI AGREES THAT
INFORMATION TO BE SUPPLIED BY HUC TO HTI MAY BE
SUPPLIED ONLY TO THE AGENT AND THAT INFORMATION
SUPPLIED BY THE AGENT TO HUC SHALL BE RELIED
UPON BY HUC AS IF PROVIDED BY HTI. HUC SHALL BE
HELD HARMLESS FOR ANY ERRORS BETWEEN HTI AND
SAID AGENT. SUCH DESIGNATION SHALL REMAIN IN
EFFECT UNTIL HTI NOTIFIES HUC IN WRITING THAT THE
PREVIOUSLY DESIGNATED AGENT IS NO LONGER ITS
AGENT.
B. INFORMATION REQUIRED
HTI SHALL PROVIDE THE FOLLOWING INFORMATION TO
HUC CONCERNING EACH AGENT USED BY HTI FOR ANY
PURPOSE:
1 . NAME AND ADDRESS OF THE AGENT OR
AGENTS;
2. PRIMARY AND SECONDARY CONTACT
PERSONS FOR THE AGENT OR AGENTS;
3. TELEPHONE AND FACSIMILE NUMBER FOR
PRIMARY AND SECONDARY CONTACT
PERSONS FOR THE AGENT OR AGENTS; AND
4. TWENTY -FOUR HOUR TELEPHONE NUMBER
FOR WEEKENDS AND HOLIDAYS FOR THE
AGENT OR AGENTS.
[71
C. HTI To REMAIN LIABLE
HTI MAY ELECT TO HAVE ITS BILL FOR SERVICES UNDER
THIS AGREEMENT SENT DIRECTLY TO ITS AGENT.
HOWEVER, IF HTI SELECTS THIS OPTION, HTI REMAINS
FULLY LIABLE FOR ANY BILL RENDERED BY HUC. ALL
DEADLINES SET FORTH IN THIS AGREEMENT SHALL
CONTINUE TO APPLY, REGARDLESS OF WHETHER HOC'S
BILL IS SENT DIRECTLY TO HTI OR TO HTI'S DESIGNATED
AGENT.
1 1. FORCE MAJEURE.
A. DEFINITION
EITHER PARTY SHALL BE EXCUSED FROM PERFORMANCE
UNDER THIS AGREEMENT BY FORCE MAJEURE ACTS AND
EVENTS. "FORCE MAJEURE" SHALL MEAN ACTS AND
EVENTS NOT WITHIN THE CONTROL OF THE PARTY
CLAIMING FORCE MAJEURE, AND SHALL INCLUDE, BUT
NOT BE LIMITED TO, ACTS OF GOD, STRIKES, LOCKOUTS,
MATERIAL, EQUIPMENT, OR LABOR SHORTAGES, WARS,
RIOTS, INSURRECTIONS, EPIDEMICS, LANDSLIDES,
EARTHQUAKES, FLOODS, FIRES, STORMS, GOVERNMENT
OR COURT ORDERS, CIVIL DISTURBANCES, EXPLOSIONS,
BREAKAGE OR ACCIDENT TO MACHINERY OR PIPELINES,
FREEZING OF WELLS OR PIPELINES, OR ANY OTHER
CAUSE OF WHATEVER KIND, WHETHER SPECIFICALLY
ENUMERATED HEREIN OR NOT, THAT IS NOT WITHIN THE
CONTROL OF THE PARTY CLAIMING FORCE MAJEURE.
B. EFFECT
1. IF HUC IS UNABLE TO PROVIDE SERVICE
UNDER THIS AGREEMENT DUE TO A FORCE
MAJEURE ACT OR EVENT, HUC'S
OBLIGATION TO PROVIDE SERVICE UNDER
THIS AGREEMENT SHALL BE SUSPENDED
FOR THE DURATION OF THE ACT OR EVENT.
HUC SHALL NOTIFY HTI OF THE FORCE
MAJEURE EVENT AS SOON AS REASONABLY
POSSIBLE BY ANY MEANS PRACTICABLE,
INCLUDING, BUT NOT LIMITED TO,
TELEPHONE OR FACSIMILE, AND SHALL
CONFIRM THE DETAILS OF THE FORCE
MAJEURE ACT OR EVENT IN WRITING WITHIN
A REASONABLE AMOUNT OF TIME
THEREAFTER. HUC SHALL WORK TO
181
REMEDY THE FORCE MAJEURE ACT OR
EVENT AS SOON AS REASONABLY POSSIBLE
AND SHALL KEEP HTI APPRISED OF THE
TIME, DATE, AND CIRCUMSTANCES WHEN
SERVICE UNDER THIS AGREEMENT SHALL BE
RESTORED. HTI IS NOT REQUIRED TO PAY
ANY CHARGES UNDER THIS AGREEMENT
DURING THE TERM OF THE FORCE MAJEURE
ACT OR EVENT.
2. IF HTI IS UNABLE TO TAKE SERVICE UNDER
THIS AGREEMENT DUE TO A FORCE
MAJEURE ACT OR EVENT, HUC'S
OBLIGATION TO PROVIDE SERVICE UNDER
THIS AGREEMENT SHALL BE SUSPENDED
FOR THE DURATION OF THE ACT OR EVENT.
HTI SHALL NOTIFY HUC OF THE FORCE
MAJEURE EVENT AS SOON AS REASONABLY
POSSIBLE BY ANY MEANS PRACTICABLE,
INCLUDING, BUT NOT LIMITED TO,
TELEPHONE OR FACSIMILE, AND SHALL
CONFIRM THE DETAILS OF THE FORCE
MAJEURE ACT OR EVENT IN WRITING WITHIN
A REASONABLE AMOUNT OF TIME
THEREAFTER. HTI SHALL WORK TO REMEDY
THE FORCE MAJEURE ACT OR EVENT AS
SOON AS REASONABLY POSSIBLE AND
SHALL KEEP HUC APPRISED OF THE TIME,
DATE, AND CIRCUMSTANCES WHEN HTI
WILL RESUME SERVICE UNDER THIS
AGREEMENT. HUC IS NOT REQUIRED TO
PROVIDE SERVICE UNDER THIS AGREEMENT
DURING THE TERM OF THE FORCE MAJEURE
ACT OR EVENT.
12. LAWS, REGULATIONS, AND ORDERS.
SERVICE UNDER THIS AGREEMENT IS SUBJECT TO ALL PRESENT
AND FUTURE VALID LAWS, ORDERS, RULES, REGULATIONS, ETC,
ISSUED BY ANY FEDERAL, STATE, OR LOCAL AUTHORITY HAVING
JURISDICTION OVER THE MATTERS SET FORTH HEREIN.
13. MISCELLANEOUS PROVISIONS.
A. DECLARATION OF INVALIDITY
IF ANY PROVISION OF THIS AGREEMENT IS DETERMINED
TO BE INVALID, VOID, OR UNENFORCEABLE BY ANY
COURT OR OTHER ENTITY HAVING JURISDICTION, SUCH
191
DETERMINATION SHALL NOT INVALIDATE, VOID, OR MAKE
UNENFORCEABLE ANY OTHER PROVISION, AGREEMENT
OR COVENANT OF THIS AGREEMENT; AND THE PARTIES
AGREE TO NEGOTIATE IN GOOD FAITH A REPLACEMENT
TO SUCH INVALID, VOID OR UNENFORCEABLE PROVISION
AND /OR ANY OTHER AMENDMENTS AS MAY BE
NECESSARY TO ENSURE THAT THE AGREEMENT AS A
WHOLE REFLECTS THE ORIGINAL INTENTIONS OF THE
PARTIES.
B. NO CONTINUING WAIVER
NO WAIVER OF ANY BREACH OF THIS AGREEMENT SHALL
BE HELD TO BE A WAIVER OF ANY OTHER OR
SUBSEQUENT BREACH.
C. LIMITATION ON AGREEMENT
THE PARTIES EXPRESSLY ACKNOWLEDGE AND AGREE
THAT IT IS NEITHER THE PURPOSE OF THIS AGREEMENT
NOR THEIR INTENT TO CREATE A PARTNERSHIP, JOINT
VENTURE CONTRACT OR COMPANY, ASSOCIATION OR
TRUST, FIDUCIARY RELATIONSHIP OR PARTNERSHIP
BETWEEN THEM. EXCEPT AS EXPRESSLY PROVIDED
HEREIN, NEITHER PARTY SHALL HAVE ANY AUTHORITY TO
ACT FOR OR ASSUME ANY OBLIGATIONS, OR
RESPONSIBILITIES ON BEHALF OF, THE OTHER PARTY.
D. COMPLETE AGREEMENT
THIS AGREEMENT SETS FORTH ALL UNDERSTANDINGS
BETWEEN THE PARTIES AS OF THE EFFECTIVE DATE
HEREIN. ANY PRIOR CONTRACTS, UNDERSTANDINGS AND
REPRESENTATIONS, WHETHER ORAL OR WRITTEN,
RELATING TO THE MATTERS ADDRESSED IN THIS
AGREEMENT ARE MERGED INTO AND SUPERSEDED BY
THIS AGREEMENT. THIS AGREEMENT MAY BE AMENDED
ONLY BY A WRITING EXECUTED BY BOTH PARTIES.
E. GOVERNING LAW
THE INTERPRETATION AND PERFORMANCE OF THIS
AGREEMENT SHALL BE GOVERNED BY THE LAWS OF
MINNESOTA, EXCLUDING, HOWEVER, ANY CONFLICT OF
LAW THAT WOULD APPLY THE LAW OF ANOTHER
JURISDICTION.
[ 101
F. CONFIDENTIALITY REQUIRED
NEITHER PARTY SHALL DISCLOSE DIRECTLY OR
INDIRECTLY WITHOUT THE PRIOR WRITTEN CONSENT OF
THE OTHER PARTY THE TERMS OF THIS AGREEMENT TO A
THIRD PARTY, EXCLUDING HTI'S AGENT, EXCEPT (1) IN
ORDER TO COMPLY WITH ANY APPLICABLE LAW, LEGAL
PROCESS, ORDER, REGULATION, OR EXCHANGE RULE; (11)
TO THE EXTENT NECESSARY FOR THE ENFORCEMENT OF
THIS AGREEMENT; AND (III) TO THE EXTENT NECESSARY
TO IMPLEMENT AND PERFORM THIS AGREEMENT. EACH
PARTY SHALL NOTIFY THE OTHER PARTY OF ANY DEMAND
OR PROCEEDING OF WHICH IT IS AWARE WHICH MAY
RESULT IN DISCLOSURE OF THE TERMS OF THIS
AGREEMENT (OTHER THAN AS PERMITTED HEREUNDER)
AND USE REASONABLE EFFORTS TO PREVENT OR LIMIT
THE DISCLOSURE. THE PARTIES SHALL BE ENTITLED TO
ALL REMEDIES AVAILABLE AT LAW OR IN EQUITY TO
ENFORCE OR SEEK RELIEF IN CONNECTION WITH THIS
CONFIDENTIALITY OBLIGATION. THE TERMS OF THIS
AGREEMENT SHALL BE KEPT CONFIDENTIAL BY THE
PARTIES HERETO FOR TWO YEARS FROM THE EXPIRATION
OR TERMINATION OF THIS AGREEMENT.
IN THE EVENT THAT DISCLOSURE IS REQUIRED BY A
GOVERNMENTAL BODY OR APPLICABLE LAW, THE PARTY
SUBJECT TO SUCH REQUIREMENT MAY DISCLOSE THE
MATERIAL TERMS OF THIS AGREEMENT TO THE EXTENT
SO REQUIRED, BUT SHALL PROMPTLY NOTIFY THE OTHER
PARTY, PRIOR TO DISCLOSURE, AND SHALL COOPERATE
(CONSISTENT WITH THE DISCLOSING PARTY'S LEGAL
OBLIGATIONS) WITH THE OTHER PARTY'S EFFORTS TO
OBTAIN PROTECTIVE ORDERS OR SIMILAR RESTRAINTS
WITH RESPECT TO SUCH DISCLOSURE AT THE EXPENSE
OF THE OTHER PARTY.
G. AUTHORITY TO ENTER AGREEMENT
EACH PARTY TO THIS AGREEMENT REPRESENTS AND
WARRANTS THAT IT HAS FULL AND COMPLETE AUTHORITY
TO ENTER INTO AND PERFORM THIS AGREEMENT. EACH
PERSON WHO EXECUTES THIS AGREEMENT ON BEHALF
OF EITHER PARTY REPRESENTS AND WARRANTS THAT IT
HAS FULL AND COMPLETE AUTHORITY TO DO SO AND
THAT SUCH PARTY WILL BE BOUND THEREBY.
H. NO THIRD PARTY BENEFICIARY
THERE IS NO THIRD PARTY BENEFICIARY TO THIS
AGREEMENT.
[ 121
THIS AGREEMENT SETS FORTH ALL TERMS AGREED UPON BETWEEN THE
PARTIES, AND NO PRIOR ORAL OR WRITTEN AGREEMENTS SHALL BE
BINDING. THIS AGREEMENT SHALL NOT BE ALTERED, AMENDED OR
MODIFIED EXCEPT AS IN WRITING AND EXECUTED BY BOTH PARTIES.
HUTCHINSON UTILITIES
COMMISSION
BY:
NAME: ROBERT HANTGE
TITLE: COMMISSION PRESIDENT
DATE: -513 zO I
WITNESS:
DATE: 3— 3O ~ It
[ 13]
HUTCHINSON
TECHNOLOGIES, INC.
BY: ji��
NAME:
TITLE: ��,.c�(nsr'. -�� �cc2 ✓ursdi
DATE: a Az S
WITNE S:
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PIPELINE / UTILITY CROSSING AGREEMENT
This Pipeline / Utility Crossing Agreement ( "Agreement ") is made effective this 30th day of
March , 2011, by and between Hutchinson Utilities Commission ( "HUC "), a
Minnesota Municipal Utility, and CITY OF HUTCHINSON (Hutchinson)
WHEREAS HUC holds one or more rights -of -way across certain lands described herein (the
"Lands ") and has constructed a 12 inch Natural Gas Pipeline therein described herein as
( "HUC's Facility ").
WHEREAS Hutchinson has acquired or intends to acquire one or more rights -of -way across the
Lands and proposes to install therein a 1 1/2" water service described herein as the ( "Hutchinson
Facility ").
WHEREAS HUC and Hutchinson wish to define their respective rights and liabilities with
respect to the area and the manner in which Hutchinson installs its water service in, across or
under the Lands ( "Crossing Area ") and the continuing rights and liabilities of the parties for the
Crossing Area after Hutchinson completes the installation of its water service, all in accordance
with the terms and conditions set out in this Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
premises, mutual covenants and agreements herein contained, the parties agree as follows:
Facility Crossing Agreement
1. LOCATION AND NOTICES
(a) Location of Crossing Area (Legal Description):
SEIANW1 /4, SEC. 5 all in TWP. 116N, RGE. 29W, Hassan Valley Twp., McLeod County,
Minnesota
(b) Notices:
Grantor's Business Office
Name: Hutchinson Utilities Commission
Address:
225 Michigan St SE.
Hutchinson, MN 55350
Contact:
John Webster
Phone:
320- 234 -0507
Fax:
320 -587 -4721
Alternate:
320-587-4746
Grantee's Business Office
City of Hutchinson
111 Hassan St SE
Hutchinson, MN
Kent Exner
320 - 234 -4212
320 - 234 -4240
320 -583 -5663
(c) Field Representative:
Grantor's
Name:
Ryan Ellenson
Position:
Crew Chief
Address:
225 Michigan St SE
Hutchinson, MN 55350
Phone:
320 -583 -1753
Fax:
320 -587 -4721
Alternate:
320 -587 -4746
Grantee's
uentin Larson
Senior Engineering Specialist
111 Hassan St SE
Hutchinson, MN
320 -583 -7454
320 - 234 -4240
320 - 234 -4246
2. HUC hereby agrees, insofar as it has the right to do so, that Hutchinson may perform the
work on the Hutchinson Facility in the Crossing Area in accordance with the terms and
conditions of this agreement.
3. Hutchinson shall assume all risks for damages, bodily injuries, or loss to either property
or persons, that may be incurred by Hutchinson or its agents, invitees, or licensees
present on or in the vicinity of HUC's pipeline Facilities arising out of or resulting from
Hutchinson activities.
4. Hutchinson shall properly and diligently perform its activities (i) so as not to
unreasonably interfere with or impede the operation of HUC's pipeline Facilities and
activities, (ii) in a good and workmanlike manner and in accordance with sound
engineering and construction practices, and (iii) in compliance with all applicable codes,
statutes, laws, regulations, permits, licenses, orders, and direction of lawful governmental
authorities ( "Applicable Laws "). The minimum technical standards set forth in
Applicable Laws shall govern unless this Agreement provides for more stringent
standards; provided, however, that if compliance with the terms of this Agreement would
result in a violation of any Applicable Laws, such Applicable Laws shall prevail and this
Agreement shall be deemed to be amended accordingly.
5. Hutchinson shall notify the appropriate One -Call system at 800 - 252 -1166 and, in addition
to the One -Call notice, Hutchinson's Field Representative shall contact RUC's Field
Representative directly, either in person or by telephone, a minimum of 72 hours
(excluding Saturdays, Sundays and Statutory Holidays) before commencement of
Hutchinson Work within 25 feet of the Crossing Area and, if unable to contact that
person, Hutchinson. shall serve a minimum of 72 hours ..critter. notice before
commencement of Hutchinson Work. Upon notification, HUC's Field Representative
will field locate and verify depth of cover over the HUC Facility. In no event shall
Hutchinson commence work within 25 feet of the Crossing Area prior to HUC's Field
Representative locating and verifying depth of cover of the HUC Facility
All crossings of HUC's Facilities shall be at an angle between 45 and 90 degrees, with 90
degree crossings being preferred.
7. Unless otherwise indicated or ordered by governmental authority or regulations:
(a) HUC's Facility shall be entitled to the upper position in the Crossing Area except
for above grade facilities;
(b) A minimum distance of 24 inches shall be maintained between the external
surfaces of the underground Facilities; and
(c) The Hutchinson Facility shall be maintained at the same depth with no side bends
for the entire width of the Crossing Area.
8. HUC and Hutchinson shall coordinate and cooperate in the installation of any cathodic
protection devices or test stations. As a minimum, should Hutchinson install a steel line
across the Crossing Area, a permanent cell and above ground test station must be
installed. It is further agreed and understood that each party shall be responsible for and
bear the cost of installation and maintenance of the cathodic protection on their respective
systems, and all risk and of loss associated therewith.
9. Hutchinson shall not backfill any of the proposed crossings until HUC has inspected the
crossing and its pipeline facilities for compliance with the requirements set forth in
paragraph 7 above, which inspection shall take place no later than seventy -two hours
after notice of intent to close is given.
10. The parties intend that each shall bear its own costs and expenses incidental to typical
pipeline crossings.
11. No blasting shall occur on or within 100 feet of HUC's Facilities, unless first approved in
writing by HUC.
12. The parties agree that following the installation and backfilling of the Hutchinson Facility
in the Crossing Area, each party shall rely primarily on its own property insurance in
connection with any loss or damage occurring to its structures or facilities. Each party
shall insure its own structures and facilities against loss by casualty, and the parties
hereby release one another from any and all liability or responsibility to the other or
anyone claiming through or under them, by way of subrogation or otherwise, for any loss
or damage to such structures or facilities arising following the completed construction of
the crossing to the extent covered by property insurance, even if such loss or damage
shall have been caused by the negligence or wrongful act of the other party or anyone for
whom such party may be responsible.
Subject to the previous paragraph, (i) Hutchinson agrees to indemnify and defend HUC
against and from claims or losses asserted or incurred by third parties in connection with
injury or death to third parties or damage to the property of third parties, arising out of any
act or omission of Hutchinson, or anyone for whom Hutchinson is responsible or
attributable to Hutchinson operations; and (ii) HUC agrees to indemnify and defend
Hutchinson against and from claims or losses asserted or incurred by third parties in
3
connection with injury or death to such third parties or damage to the property of third
parties, arising out of any act or failure to act of HUC, or anyone for whom HUC is
responsible or attributable to HUC's operations. The indemnifications set forth in this
paragraph shall extend to all costs and expenses, including reasonable attorneys' fees
incurred by an indemnified party in connection with any of the foregoing, and shall survive
the assignment or termination of this Agreement.
13. No change, modification, or alteration of this Agreement shall be valid unless it is in
writing and signed by the parties. No course of dealing between the parties shall be
deemed to alter the terms hereof.
14. Neither party to this Agreement shall assign or transfer this Agreement or the rights and
privileges hereby granted without the written consent of the other party, and such consent
shall not be unreasonably withheld. The party intending to assign or transfer this
Agreement shall give to the non - assigning party to this Agreement notice of its intent by
registered mail.
15. It is the intention of the parties that this Agreement remain in effect during the entire
period that either party maintains a pipeline that is or was at any time crossed by the other
party's pipeline; this Agreement shall be considered to be effective for a period equal to
the shorter of (i) ninety -nine years, or (ii) the longest period permitted under the laws of
that state with respect to such agreements.
16. This Agreement sets forth the entire agreement between the parties and shall be deemed
to supercede any and all previous agreements and understandings, if such there be,
whether in writing or oral, between the parties with respect to the subject matter hereof.
This Agreement shall inure to the benefit of and be binding on the parties, their
successors, and assigns.
17. All conditions attached to the original pipeline easement, as drafted by HUC, shall
continue to remain in effect during the entire period that HUC maintains its pipeline.
TO EVIDENCE THEIR AGREEMENT, The parties have executed this Agreement as of the
date first above written.
CITY OF HUTCHINSON
By G7�4,, � L
Its: Administrator
4
HUTCHINSON UTILITIES
COMMISSION
By - - --
Its: Pr e
PIPELINE / UTILITY CROSSING AGREEMENT
This Pipeline / Utility Crossing Agreement ( "Agreement ") is made effective this 30th day of
March , 2011, by and between Hutchinson Utilities Commission ( "HUC "), a
Minnesota Municipal Utility, and CITY OF HUTCHINSON (Hutchinson)
WHEREAS HUC holds one or more rights -of -way across certain lands described herein (the
"Lands ") and has constructed a 12 inch Natural Gas Pipeline therein described herein as
( "HUC's Facility ").
WHEREAS Hutchinson has acquired or intends to acquire one or more rights -of -way across the
Lands and proposes to install therein a 6" water service described herein as the ( "Hutchinson
Facility ").
WHEREAS HUC and Hutchinson wish to define their respective rights and liabilities with
respect to the area and the manner in which Hutchinson installs its water service in, across or
under the Lands ( "Crossing Area ") and the continuing rights and liabilities of the parties for the
Crossing Area after Hutchinson completes the installation of its water service, all in accordance
with the terms and conditions set out in this Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
premises, mutual covenants and agreements herein contained, the parties agree as follows:
Facility Crossing Agreement
1. LOCATION AND NOTICES
(a) Location of Crossing Area (Legal Description):
SE1 /4NW1 /4, SEC. 5 all in TWP. 116N, RGE. 29W, Hassan Valley Twp., McLeod County,
Minnesota
(b) Notices:
Grantor's Business Office
Name: Hutchinson Utilities Commission
Address:
225 Michigan St SE.
Hutchinson, MN 55350
Contact:
John Webster
Phone:
320 - 234 -0507
Fax:
320 -587 -4721
Alternate:
320 -587 -4746
Grantee's Business Office
City of Hutchinson
111 Hassan St SE
Hutchinson, MN
Kent Exner
320 - 234 -4212
320 - 234 -4240
320 -583 -5663
(c) Field Representative:
Grantor's
Name:
Ryan Ellenson
Position:
Crew Chief
Address:
225 Michigan St SE
Hutchinson, MN 55350
Phone:
320 - 583 -1753
Fax:
320 -587 -4721
Alternate:
320 -587 -4746
Grantee's
uentin Larson
Senior Engineering Specialist
111 Hassan St SE
Hutchinson, MN
320 -583 -7454
320 - 234 -4240
320 - 234 -4246
2. HUC hereby agrees, insofar as it has the right to do so, that Hutchinson may perform the
work on the Hutchinson Facility in the Crossing Area in accordance with the terms and
conditions of this agreement.
3. Hutchinson shall assume all risks for damages, bodily injuries, or loss to either property
or persons, that may be incurred by Hutchinson or its agents, invitees, or licensees
present on or in the vicinity of HUC's pipeline Facilities arising out of or resulting from
Hutchinson activities.
4. Hutchinson shall properly and diligently perform its activities (i) so as not to
unreasonably interfere with or impede the operation of HUC's pipeline Facilities and
activities, (ii) in a good and workmanlike manner and in accordance with sound
engineering and construction practices, and (iii) in compliance with all applicable codes,
statutes, laws, regulations, permits, licenses, orders, and direction of lawful governmental
authorities ( "Applicable Laws "). The minimum technical standards set forth in
Applicable Laws shall govern unless this Agreement provides for more stringent
standards; provided, however, that if compliance with the terms of this Agreement would
result in a violation of any Applicable Laws, such Applicable Laws shall prevail and this
Agreement shall be deemed to be amended accordingly.
5. Hutchinson shall notify the appropriate One -Call system at 800 -252 -1166 and, in addition
to the One -Call notice, Hutchinson's Field Representative shall contact HUC's Field
Representative directly, either in person or by telephone, a minimum of 72 hours
(excluding Saturdays, Sundays and Statutory Holidays) before commencement of
Hutchinson Work within 25 feet of the Crossing Area and, if unable to contact that
person, Hutchinson shall serve a minimum of 72 hours written notice before
commencement of Hutchinson Work. Upon notification, HUC's Field Representative
will field locate and verify depth of cover over the HUC Facility. In no event shall
Hutchinson commence work within 25 feet of the Crossing Area prior to HUC's Field
Representative locating and verifying depth of cover of the HUC Facility
6. All crossings of HUC's Facilities shall be at an angle between 45 and 90 degrees, with 90
degree crossings being preferred.
7. Unless otherwise indicated or ordered by governmental authority or regulations:
(a) HUC's Facility shall be entitled to the upper position in the Crossing Area except
for above grade facilities;
(b) A minimum distance of 24 inches shall be maintained between the external
surfaces of the underground Facilities; and
(c) The Hutchinson Facility shall be maintained at the same depth with no side bends
for the entire width of the Crossing Area.
8. HUC and Hutchinson shall coordinate and cooperate in the installation of any cathodic
protection devices or test stations. As a minimum, should Hutchinson install a steel line
across the Crossing Area, a permanent cell and above ground test station must be
installed. It is further agreed and understood that each party shall be responsible for and
bear the cost of installation and maintenance of the cathodic protection on their respective
systems, and all risk and of loss associated therewith.
9. Hutchinson shall not backfill any of the proposed crossings until HUC has inspected the
crossing and its pipeline facilities for compliance with the requirements set forth in
paragraph 7 above, which inspection shall take place no later than seventy -two hours
after notice of intent to close is given.
10. The parties intend that each shall bear its own costs and expenses incidental to typical
pipeline crossings.
11. No blasting shall occur on or within 100 feet of HUC's Facilities, unless first approved in
writing by HUC.
12. The parties agree that following the installation and backfilling of the Hutchinson Facility
in the Crossing Area, each party shall rely primarily on its own property insurance in
connection with any loss or damage occurring to its structures or facilities. Each party
shall insure its own structures and facilities against loss by casualty, and the parties
hereby release one another from any and all liability or responsibility to the other or
anyone claiming through or under them, by way of subrogation or otherwise, for any loss
or damage to such structures or facilities arising following the completed construction of
the crossing to the extent covered by property insurance, even if such loss or damage
shall have been caused by the negligence or wrongful act of the other party or anyone for
whom such party may be responsible.
Subject to the previous paragraph, (i) Hutchinson agrees to indemnify and defend HUC
against and from claims or losses asserted or incurred by third parties in connection with
injury or death to third parties or damage to the property of third parties, arising out of any
act or omission of Hutchinson, or anyone for whom Hutchinson is responsible or
attributable to Hutchinson operations; and (ii) HUC agrees to indemnify and defend
Hutchinson against and from claims or losses asserted or incurred by third parties in
3
connection with injury or death to such third parties or damage to the property of third
parties, arising out of any act or failure to act of HUC, or anyone for whom HUC is
responsible or attributable to HUC's operations. The indemnifications set forth in this
paragraph shall extend to all costs and expenses, including reasonable attorneys' fees
incurred by an indemnified party in connection with any of the foregoing, and shall survive
the assignment or termination of this Agreement.
13. No change, modification, or alteration of this Agreement shall be valid unless it is in
writing and signed by the parties. No course of dealing between the parties shall be
deemed to alter the terms hereof.
14. Neither party to this Agreement shall assign or transfer this Agreement or the rights and
privileges hereby granted without the written consent of the other party, and such consent
shall not be unreasonably withheld. The party intending to assign or transfer this
Agreement shall give to the non - assigning party to this Agreement notice of its intent by
registered mail.
15. It is the intention of the parties that this Agreement remain in effect during the entire
period that either party maintains a pipeline that is or was at any time crossed by the other
party's pipeline; this Agreement shall be considered to be effective for a period equal to
the shorter of (i) ninety -nine years, or (ii) the longest period permitted under the laws of
that state with respect to such agreements.
16. This Agreement sets forth the entire agreement between the parties and shall be deemed
to supercede any and all previous agreements and understandings, if such there be,
whether in writing or oral, between the parties with respect to the subject matter hereof.
This Agreement shall inure to the benefit of and be binding on the parties, their
successors, and assigns.
17. All conditions attached to the original pipeline easement, as drafted by HUC, shall
continue to remain in effect during the entire period that HUC maintains its pipeline.
TO EVIDENCE THEIR AGREEMENT, The parties have executed this Agreement as of the
date first above written.
CITY OF HUTCHINSON
B C
Its: Administrator
4
HUTCHINSON UTILITIES
COMMISSION
By
Its: Pr e
PIPELINE / UTILITY CROSSING AGREEMENT
This Pipeline / Utility Crossing Agreement ( "Agreement ") is made effective this 30th day of
March , 2011, by and between Hutchinson Utilities Commission ( "HUC "), a
Minnesota Municipal Utility, and CITY OF HUTCHINSON (Hutchinson)
WHEREAS HUC holds one or more rights -of -way across certain lands described herein (the
"Lands ") and has constructed a 12 inch Natural Gas Pipeline therein described herein as
( "HUC's Facility ").
WHEREAS Hutchinson has acquired or intends to acquire one or more rights -of -way across the
Lands and proposes to install therein an 8" sanitary sewer service described herein as the
( "Hutchinson Facility ").
WHEREAS HUC and Hutchinson wish to define their respective rights and liabilities with
respect to the area and the manner in which Hutchinson installs its sanitary sewer service in,
across or under the Lands ( "Crossing Area ") and the continuing rights and liabilities of the
parties for the Crossing Area after Hutchinson completes the installation of its sanitary sewer
service, all in accordance with the terms and conditions set out in this Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
premises, mutual covenants and agreements herein contained, the parties agree as follows:
Facility Crossing Agreement
1. LOCATION AND NOTICES
(a) Location of Crossing Area (Legal Description):
SE1/4NW1 /4, SEC. 5 all in TWP. 116N, RGE. 29W, Hassan Valley Twp., McLeod County,
Minnesota
(b) Notices:
Grantor's Business Office
Name: Hutchinson Utilities Commission
Address:
225 Michigan St SE. _
Hutchinson, MN 55350
Contact:
John Webster
Phone:
320 - 234 -0507
Fax:
320 -587 -4721
Alternate:
320-587-4746
Grantee's Business Office
City of Hutchinson
111 Hassan St SE
Hutchinson, MN
Kent Exner
320 - 234 -4212
320 - 234 -4240
320 -583 -5663
(e) Field Representative:
Grantor's
Name:
Position:
Address:
Ryan Ellenson
Crew Chief
225 Michigan St SE
Hutchinson, MN 55350
Phone:
320 -583 -1753
Fax:
320 -587 -4721
Alternate:
320-587-4746
Grantee's
uentin Larson
Senior Engineering Specialist
111 Hassan St SE
Hutchinson, MN
320 -583 -7454
320 - 234 -4240
320 - 234 -4246
2. HUC hereby agrees, insofar as it has the right to do so, that Hutchinson may perform the
work on the Hutchinson Facility in the Crossing Area in accordance with the terms and
conditions of this agreement.
3. Hutchinson shall assume all risks for damages, bodily injuries, or loss to either property
or persons, that may be incurred by Hutchinson or its agents, invitees, or licensees
present on or in the vicinity of HUC's pipeline Facilities arising out of or resulting from
Hutchinson activities.
4. Hutchinson shall properly and diligently perform its activities (i) so as not to
unreasonably interfere with or impede the operation of HUC's pipeline Facilities and
activities, (ii) in a good and workmanlike manner and in accordance with sound
engineering and construction practices, and (iii) in compliance with all applicable codes,
statutes, laws, regulations, permits, licenses, orders, and direction of lawful governmental
authorities ( "Applicable Laws "). The minimum technical standards set forth in
Applicable Laws shall govern unless this Agreement provides for more stringent
standards; provided, however, that if compliance with the terms of this Agreement would
result in a violation of any Applicable Laws, such Applicable Laws shall prevail and this
Agreement shall be deemed to be amended accordingly.
5. Hutchinson shall notify the appropriate One -Call system at 800 - 252 -1166 and, in addition
to the One -Call notice, Hutchinson's Field Representative shall contact HUC's Field
Representative directly, either in person or by telephone, a minimum of 72 hours
(excluding Saturdays, Sundays and Statutory Holidays) before commencement of
Hutchinson Work within 25 feet of the Crossing Area and, if unable to contact that
person, Hutchinson shall serve a minimum of 72 hours written notice before
commencement of Hutchinson Work. Upon notification, HUC's Field Representative
will field locate and verify depth of cover over the HUC Facility. In no event shall
Hutchinson commence work within 25 feet of the Crossing Area prior to HUC's Field
Representative locating and verifying depth of cover of the HUC Facility
All crossings of HUC's Facilities shall be at an angle between 45 and 90 degrees, with 90
degree crossings being preferred.
7. Unless otherwise indicated or ordered by governmental authority or regulations:
(a) HUC's Facility shall be entitled to the upper position in the Crossing Area except
for above grade facilities;
(b) A minimum distance of 24 inches shall be maintained between the external
surfaces of the underground Facilities; and
(c) The Hutchinson Facility shall be maintained at the same depth with no side bends
for the entire width of the Crossing Area.
8. HUC and Hutchinson shall coordinate and cooperate in the installation of any cathodic
protection devices or test stations. As a minimum, should Hutchinson install a steel line
across the Crossing Area, a permanent cell and above ground test station must be
installed. It is further agreed and understood that each party shall be responsible for and
bear the cost of installation and maintenance of the cathodic protection on their respective
systems, and all risk and of loss associated therewith.
9. Hutchinson shall not backfill any of the proposed crossings until HUC has inspected the
crossing and its pipeline facilities for compliance with the requirements set forth in
paragraph 7 above, which inspection shall take place no later than seventy -two hours
after notice of intent to close is given.
10. The parties intend that each shall bear its own costs and expenses incidental to typical
pipeline crossings.
11. No blasting shall occur on or within 100 feet of HUC's Facilities, unless first approved in
writing by HUC.
12. The parties agree that following the installation and backfilling of the Hutchinson Facility
in the Crossing Area, each party shall rely primarily on its own property insurance in
connection with any loss or damage occurring to its structures or facilities. Each party
shall insure its own structures and facilities against loss by casualty, and the parties
hereby release one another from any and all liability or responsibility to the other or
anyone claiming through or under them, by way of subrogation or otherwise, for any loss
or damage to such structures or facilities arising following the completed construction of
the crossing to the extent covered by property insurance, even if such loss or damage
shall have been caused by the negligence or wrongful act of the other party or anyone for
whom such party may be responsible.
Subject to the previous paragraph, (i) Hutchinson agrees to indemnify and defend HUC
against and from claims or losses asserted or incurred by third parties in connection with
injury or death to third parties or damage to the property of third parties, arising out of any
act or omission of Hutchinson, or anyone for whom Hutchinson is responsible or
attributable to Hutchinson operations; and (ii) HUC agrees to indemnify and defend
Hutchinson against and from claims or losses asserted or incurred by third parties in
3
connection with injury or death to such third parties or damage to the property of third
parties, arising out of any act or failure to act of HUC, or anyone for whom HUC is
responsible or attributable to HUC's operations. The indemnifications set forth in this
paragraph shall extend to all costs and expenses, including reasonable attorneys' fees
incurred by an indemnified party in connection with any of the foregoing, and shall survive
the assignment or termination of this Agreement.
13. No change, modification, or alteration of this Agreement shall be valid unless it is in
writing and signed by the parties. No course of dealing between the parties shall be
deemed to alter the terms hereof.
14. Neither party to this Agreement shall assign or transfer this Agreement or the rights and
privileges hereby granted without the written consent of the other party, and such consent
shall not be unreasonably withheld. The party intending to assign or transfer this
Agreement shall give to the non - assigning party to this Agreement notice of its intent by
registered mail.
15. It is the intention of the parties that this Agreement remain in effect during the entire
period that either party maintains a pipeline that is or was at any time crossed by the other
party's pipeline; this Agreement shall be considered to be effective for a period equal to
the shorter of (i) ninety -nine years, or (ii) the longest period permitted under the laws of
that state with respect to such agreements.
16. This Agreement sets forth the entire agreement between the parties and shall be deemed
to supercede any and all previous agreements and understandings, if such there be,
whether in writing or oral, between the parties with respect to the subject matter hereof.
This Agreement shall inure to the benefit of and be binding on the parties, their
successors, and assigns.
17. All conditions attached to the original pipeline easement, as drafted by HUC, shall
continue to remain in effect during the entire period that HUC maintains its pipeline.
TO EVIDENCE THEIR AGREEMENT, The parties have executed this Agreement as of the
date first above written.
CITY OF HUTCHINSON
By C/
Its: Admi istrator
HUTCHINSON UTILITIES
COMMISSION
By _
Its: s I'd n t
Daniel Lan
From: Daniel Lang
Sent: Thursday, March 24, 2011 10:16 AM
To: Michael Kumm
Subject: FW: MRES conversations with GRE about HUC ITA
Below is a table summarizing the costs. Also below is a table summarizing the rates for the various services from MISO.
The table immediately below summarizes what the total costs might be for entire year in 2011, obviously that won't occur,
as you are not likely to start incurring the higher costs until July 2011, at the earliest, at least at this point.
We are also working on the network contract that you will need to execute as well as the network specification sheets.
GRE Schedule 9 (base network charge rate) and specifically the GRE Schedule 26 rate (MISO transmission expansion
rate) continue to increase.
Hutchinson Utilities Commission MISO TO Analysis-
Total Projected Transmission Expenses for Jan 2011
through December 2011
$
1,695,312
Existing
MISO Load
Zone - NITS
Transmission Schedules
ITA
GRE LZ
Schedule 1
123,234
32,096
chedule 2
na
286,799
chedule 3 ASM
63,000
Schedule 9 NITS
na
2,845,078
Schedule 10
47,643
47,886
Schedule 16
na
na
Schedule 17
58,374
58,374
Schedule 26 RECB
35,210
Annual Transmission
Revenue Requirement from
2010 applied to 2011
na
$
1,317,880
Summary of Total
Schedules
(reduced
costs )
$
292,251
$
1,987,562
Memb Fee(Initial and
Annual )
na
$
2,500
HUC
Incremental
Change
Sum of
Schds
$
1,695,312
MRES Summary for Alternatives for Addressing Issues Related to
Integrated Transmission Agreement Raised by Great River Energy
1. Introduction
a. Integrated Transmission Agreement (ITA) — The ITA is a grandfathered
transmission agreement (GFA) that was written many years prior to
implementation of the Federal Energy Regulatory Commission's (FERC) Open
Access Transmission Tariff (OATT). The OATT provided for wholesale
transmission customers to utilize the transmission system on a non - discriminatory
basis. The implementation of the OATT concept first occurred in the late 1990s
and several additions to the concepts of the OATT have been ordered by FERC
since the initial orders. While the ITA has provided for a reasonable arrangement
to allow parties to share in costs associated with transmission infrastructure
needed to reliably serve themselves, GFAs are not generally structured to deal
with the numerous changes to transmission service that have occurred over the
last 10 -15 years, specifically related to the implementation of the Midwest
Independent Transmission System Operator (MISO) energy markets, and license
plate transmission pricing.
b. Great River Energy (GRE) conversations with Hutchinson Utilities Commission
(HUC)
i. In July, MRES received a call from HUC inquiring about updating the
Attachment O analysis that was completed in 2007. During that call, HUC
also indicated that GRE had suggested that HUC may not be complying
with the terms of the ITA. Specifically, GRE suggested that the market
purchases made by HUC, at times when HUC was not running its local
generation, were not allowed under the terms of the ITA.
ii. Based on the questions from HUC, and at the request of HUC staff, MRES
staff began conversations with GRE to understand the issue. MRES held
four conversations with GRE staff about the issue. One of the
conversations involved HUC staff as well.
iii. GRE indicated that it believed only energy purchases (regardless of
whether or not they were financial or physical delivery) from sources
within the ITA were allowed. In other words, HUC could only purchase
power and energy from parties in the ITA from Points of Input as defined
in Exhibit C of the ITA when not running RUC's local generation. This is
a very limited set of resources.
1
iv. GRE is taking the position that HUC cannot make general purchases from
the MISO market under the terms of the ITA. Any purchase from the
MISO market generally would require purchase of transmission service
(firm or non - firm).
v. GRE indicated that while it has had concerns about utilization of the ITA
for a number of years, it has not had the staff time available to fully
understand the issue or actively pursue discussions with HUC. GRE
indicated that it has held detailed discussions with Willmar on itsITA
arrangements for about one year now and anticipate resolving the issue in
the very near future with a filing to FERC whereby Willmar will take
network integrated transmission service (NITS), with the rates being
effective back to January 1, 2010. MRES is not familiar with the details
of this filing, but will review once a filing is made.
c. The experience of MRES with others in similar situations — While MRES has not
dealt with the ITA in question, MRES has dealt with similar ITAs in MISO where
MRES is a party, and in other instances where MRES is not a party. In those
prior situations, MRES transmission staff has urged the parties to the ITA ensure
they understand the limitations to the ITA, specifically that the ITA or lack of
NITS may not allow for MISO market purchases without acquiring additional
transmission service (firm or non - firm). Based on the knowledge of MRES of the
ITA, and experience with similar situations, MRES believes that GRE does have a
legitimate concern about the ITA not providing for HUC to make market
purchases for sources not defined in Exhibit C in the ITA. MRES is not aware of
any FERC complaint specifically related to an ITA arrangement; however, NITS
is the basis for facilitating energy transactions.
2. Alternatives — MRES staff believes that while GRE would show some patience with
regard to allowing HUC to work through a decision on what to do about the concerns
raised, GRE will likely grow impatient in the coming months. Based on some very
limited discussions about the timing of making a decision and potentially making
changes, MRES believes GRE may allow HUC, until the beginning of the year, to make
the change to NITS; but, if a status quo approach is chosen by HUC, GRE would likely
start the necessary internal actions to pursue resolution much sooner. In other words,
while GRE may wait for HUC to take NITS starting January 1, 2011, if HUC chooses a
status quo approach, they would likely want that decision from HUC in the coming
weeks.
a. Status Quo — In this alternative, HUC could chose to make no changes to the way
it is transacting in the MISO market. This would require GRE to take some kind
of action. MRES staff has not done any detailed analysis as to timing of either of
the alternatives, nor has MRES staff attempted to project an outcome as to the
success of GRE's potential pursuit of a remedy.
If the status quo alternative is pursued, there is a higher probability that GRE will
not be supportive in making any changes to the current transmission arrangements
or any other issues that may arise in the near future. While this is certainly a
business decision, an approach by HUC of status quo could damage HUC's
relationship with GRE in the long run. For example, if HUC chose the status quo
and waited for GRE to pursue other remedies, like a complaint to FERC or
through the arbitrator process in the ITA against HUC, GRE could take an
aggressive position in reviewing the HUC transmission cost information in the
Attachment O, or perhaps not be supportive in HUC's pursuit of NITS
(potentially significantly limiting HUC's ability to gain access to the MISO
market for economy purchases) by not allowing the existing GFA to be canceled
or not being cooperative in the MISO process to become a NITS customer.
i. GRE could pursue arbitration as provided for in the ITA (Article 7) — With
the requirement that any dispute be resolved via an arbitrator selected
through the American Arbitration Association, it seems highly unlikely
that GRE would attempt to reach resolution under the ITA due to the fact
this is a complicated transmission tariff issue. HUC may be better served
by pursuing this alternative, in my opinion, as the arbitrator is more likely
to provide a favorable ruling than a FERC complaint due to the fact that
these are complicated issues and an arbitrator likely wouldn't have
experience in them.
ii. GRE could pursue a complaint at FERC — GFA issues have been brought
to FERC multiple times throughout the past six years, with FERC
becoming increasingly inflexible in dealing with the GFA and how the
GFA could potentially limit the ability of the market to function properly.
b. Convert to Network Service — While this alternative does seem to be relatively
straight forward, in past experiences MRES staff has had, it is critical that the
existing MISO transmission owner (TO) (GRE in this case) be supportive when
working with MISO to convert the service being provided under the GFA to
NITS. Without support, there are numerous issues that could arise that have the
potential to cause delay, increase the cost of converting the service (potentially
requiring transmission studies), or potentially limit access to the MISO market
due to some unknown physical transmission limitation not directly the
responsibility of HUC.
3
If HUC chooses to pursue this alternative, there are three possible alternatives
available to pursue to limit the financial impact to HUC due to the additional
transmission costs being incurred. Each of the alternatives would provide for
recognition for HUC's existing transmission assets resulting in offsetting a
portion of the transmission charges to HUC. In each of the methods, HUC would
complete an Attachment O for review by MISO.
i. Pursue membership as a MISO TO directly — This alternative is the most
direct method of receiving revenue for any transmission facilities. MRES
is pursuing this method due to the need to get regional cost sharing for our
planned transmission investments and our desire to actively participate in
regional transmission development. In addition, while MRES cannot
specifically identify any limitations for recovery of existing transmission
investments, MRES would prefer to be an owner, and not be considered a
second class citizen.
ii. Pursue network credit via Section 30.9 of the MISO tariff — This method is
still relatively new, only being utilized by some transmission customers in
the MidAmerican Energy Company (MEC) transmission pricing zone in
Iowa for about one year. This alternative does appear to be reasonable
given that the TO is a cooperative and a responsive TO. GRE has
indicated it is planning to make a filing to FERC in the next few weeks to
make the needed changes to their Attachment O to allow for Willmar and
any others, as may be appropriate in the future, to recover their
transmission revenue requirement. It is presumed regional cost sharing
would not be provided for in this method. GRE indicated it would charge
a nominal administrative fee for processing of the credit. It isn't expected
to be a significant cost, only a few hundred dollars a month at most.
iii. Assign operational control to an existing MISO TO — This method is still
relatively new as well, only being utilized by Cedar Falls in the MEC
transmission pricing zone in Iowa for a few smaller transmission owners
for about one year. It is the understanding of MRES that Central
Minnesota Municipal Power Agency (CMMPA) is also doing this for
some of its members. This alternative does appear to be reasonable given
Cedar Falls is a cooperative and a responsive TO. This method would
require an agreement to assign operational control over to the existing
MISO TO who subsequently turns over operational control to MISO. It
would also require a revenue sharing agreement with that same MISO TO.
MRES is currently pursuing this alternative with one of its members.
MRES anticipates this being completed by December 1, 2010. MRES
would be willing to consider this for HUC, if desired. It is unclear
4
whether or not regional cost sharing could be utilized for new investments
by the entity assigning operational control to an existing TO.
iv. Other — There are potentially other alternatives; for example, a lease
agreement with another MISO TO. It is expected that this would be
similar to assigning operational control, but could cause other concerns
about lag in cost recovery, and potential review by FERC of any lease
expenses incurred by the MISO TO. This does not appear to be a
reasonable alternative at this point.
3. Recommended Actions
a. Update Attachment O Analysis completed in 2007 — MRES intends to send a
data request to HUC by September 15. Analysis should be completed a couple
weeks after receipt of information by MRES. MRES would suggest that HUC
not wait to make a decision as to what alternative to pursue while waiting for the
final Attachment O information to be finalized.
b. HUC decision on how to respond to GRE concerns — MRES is not making a
recommendation as to what alternative to take, but recommends that HUC keeps
GRE informed as to your decision making process.
MISO TRANSMISSION FACILITIES ASSIGNMENT AGREEMENT
This MISO Transmission Facilities Assignment Agreement ( "Agreement ") is dated as of
, 2011, and is by and between the Hutchinson Utilities Commission of
Hutchinson, Minnesota, a municipal corporation of the State of Minnesota ( "Hutchinson "), and
Missouri Basin Municipal Power Agency d/b /a Missouri River Energy Services, a body politic
and corporate organized under the laws of the State of Iowa and existing under the
intergovernmental cooperation laws of the States of Iowa, Minnesota, North Dakota and South
Dakota ( "MRES "). Hutchinson and MRES are sometimes referred to singly as "Party" and
collectively as "Parties ", with respect to the intent to assign operational control of qualifying
transmission facilities under the terms and conditions as follows:
Assignee: MRES
Assignor: Hutchinson
Governing Agreements: The Midwest Independent Transmission System Operator, Inc.
( "MISO ") Transmission, Energy and Operating Reserve Markets Tariff ( "Tariff'), effective
March 1, 2005 and subsequent revisions; Transmission Owner Agreement ( "TO
Agreement ") between MRES and MISO dated August 24, 2007; and future MISO Revenue
Sharing Agreement for the GRE Zone and Xcel Zone, to be negotiated and implemented by
the Parties.
Contract Term: This Agreement shall become effective as of the later of April 1, 2011 or the
date that Hutchinson enters into a Network Integrated Transmission Agreement with MISO
adding Hutchinson as a network customer. The initial term of this Agreement shall expire on
May 31, 2019. This Agreement shall automatically renew for additional periods of one (1) year
unless either Party gives written notice to the other Party of its intention to terminate this
Agreement not less than one (1) year prior to the end of the original term or any extension
thereof unless mutually agreed otherwise.
Transmission Facilities: Transmission facilities operated at 115 kV and 69 kV integrated
into the GRE rate zone of MISO, which integrated facilities are more fully set forth on
Attachment "A" (the "Hutchinson Transmission Facilities ").
Assignment: Hutchinson does hereby transfer operational control of the Hutchinson
Transmission Facilities, as set forth in Attachment "A ", to MRES during the term of this
Agreement and any renewal terms. Hutchinson shall retain physical control of the Hutchinson
Transmission Facilities along with the obligations to repair, maintain and insure these facilities
in accordance with good utility practices. MRES has no liability for, and by execution of this
agreement assumes no liability for, the Hutchinson Transmission Facilities.
Reassignment: Hutchinson acknowledges and agrees that MRES will fully reassign and
convey operational control of qualifying transmission facilities to MISO in accordance with
MISO requirements and Federal Energy Regulatory Commission ( "FERC ") law and policy.
NERC Compliance Responsibility: Hutchinson retains all responsibilities to comply with the
North American Electric Reliability Corporation ( "NERC ") rules and regulations.
Designated MISO Transmission Owner ( "TO ") Collection of Revenues: Hutchinson hereby
appoints MRES as its MISO TO agent for all purposes required under the TO Agreement and
for protesting or contesting, on its behalf, any errors in billing or related matters. On its behalf,
Hutchinson authorizes MRES to obtain rate recovery and revenue distribution from MISO and
other TOs as necessary.
Disbursement of Revenues Received: MRES shall, after collecting reasonable fees and
costs for its services and those of necessary engineering and legal consultants and subject to
any other relevant agreements with Hutchinson (including the Transmission Owner
Revenue Sharing Services Agreement between MRES and Hutchinson dated the same date
hereof), disburse the revenues received from MISO and other TOs for the use of the
Hutchinson Transmission Facilities to Hutchinson in an equitable manner.
Other MISO Charges: Hutchinson shall be responsible for and reimburse MRES for any other
miscellaneous MISO charges reasonably allocable to Hutchinson, which MRES may initially
pay on Hutchinson's behalf, including but not limited to administrative and scheduling charges
associated with the Hutchinson Transmission Facilities. Hutchinson shall also be responsible for
and reimburse MRES for Hutchinson's allocable share of MRES costs incurred in performing
it's TO agent function including all costs incurred under the TO Agreement with MISO.
The terms and conditions in this Agreement shall remain in effect for the term of the
transactions described herein.
MRES as to its signatory and Hutchinson as to its signatory each hereby represents and
warrants that the person executing this Agreement on its respective behalf is duly
authorized to do so, and that, by each execution set forth below, such party is hereby
duly and lawfully bound by this Agreement.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed
on the day and year set forth below.
MISSOURI BASIN MUNICIPAL POWER AGENCY
d /b /a MISSOURI RIVER ENERGY SERVICES
Title
HUTCHINSON UTILITIES COMMISSION
IC
Title
ATTACHMENT A
TO
TRANSMISSION FACILITIES ASSIGNMENT AGREEMENT
Hutchinson Utilities Commission owns transmission facilities operated at 115 kV and 69 kV
integrated in to the GRE and Xcel rate zones of the Midwest Integrated Transmission System
Operator, as follows:
Those transmission facilities to be assigned are specifically identified as:
Sources of Evidentiary Information:
Date: 52011
By: , General Manager
A -1
MRES- HUTCHINSON, MINNESOTA
TRANSMISSION OWNER REVENUE SHARING
SERVICES AGREEMENT
This Transmission Owner Revenue Sharing Service Agreement ( "Agreement ") is made
and entered into this _ day of , 2011, by and between Missouri Basin Municipal
Power Agency, d/b /a Missouri River Energy Services, a body corporate and politic
organized under the laws of the State of Iowa and existing under the intergovernmental
cooperation laws of the States of Iowa, Minnesota, North Dakota and South Dakota
( "MRES "), and the Hutchinson Utilities Commission of Hutchinson, Minnesota, a
municipal corporation of the State of Minnesota ( "Municipality ") (MRES and
Municipality may be referred to individually as a "Party" and collectively as "Parties ").
WHEREAS, Municipality; desires to obtain revenue from certain 115 kV and 69 kV
transmission facilities owned 1 5 kV an ti° kV T �' n Facilifes We ate with.
1 L ✓ 1\ ♦ Ull\l V l 1\ ♦ 11 Gi11J1111 JJ� �
the Great River Energyrg ( "rDE "', by Municipality and more particularly described in a
Transmission Facilities Assignment Agreement between MRES and Municipality dated
the same date hereof (the "Municipality Transmission Facilities "), which facilities are
integrated with the Great River Energy ( "GRE" LXcel Energy ( "Xcel ") and Midwest
Independent Transmission System Operator, Inc. ( "MISO ") Transmissientransmission
systems; and
WHEREAS, Municipality will turn over functional control of its " 5 kV and 69 kV
tmasmission the Municipality Transmission Facilities to MRES under-
Transmission
"
aspursuant to the terms of the came date Transmission Facilities Assignment
Agreement; and
WHEREAS, Municipality has received Network Integrated Transmission Service
(NITS) from MISO, and MRES had previously turned over to MISO functional control
to N4190-of other transmission facilities owned and/or controlled by MRES as part of the
MISO Transmission, Energy and Operating Reserve Market Tariff ( "Tariff') and the
Transmission Owner Agreement between MISO and MRES dated August 24, 2007; and
WHEREAS, MRES will also assign functional control to MISO of the 115 -V and 69
kV f6eil fies Municipality Transmission Facilities covered under the Transmission
Facilities Assignment Agreement; and further the Parties agree to cooperate to achieve
the objectives of this Agreement to provide Attachment O data, to follow MISO/FERC
requirements, to exchange information, audits and records appropriate to supporting this
Agreement, and to be protective of the status of all entities as non - taxable;
NOW THEREFORE, the Parties agree as follows:
1.0 INCORPORATION OF RECITALS SCHEDULES AND EXHIBITS All
recitals, schedules and exhibits identified in this Agreement and attached hereto
are hereby incorporated into the Agreement by this reference.
2.0 PROVISION OF SERVICES.
2.1 Based upon the information provided by Municipality, MRES shall take
all steps required to include the revenue requirement related to Mu ieipa ityls
tr^„sY,.,issio f eilities elud,- the Municipality Transmission Facilities
Assignment Agreement i ^1.161°a in the Annual Transmission Revenue
eluded Requirement for the GRE and Xcel pricing zones in MISO on an annual basis
and shall share with Municipality the Municipality's share of revenues attributed
to the 11: u ieipality's assigned r a nsfnissie wilitiesMunicipality Transmission
Facilities that MRES receives from MISO as set forth in this Agreement.
2.2 Municipality shall provide MRES annually, at a time specified by MRES,
wi&the following:
2.2.1 A copy of Municipality's most recent audited financial statement
2.2.2 A copy of the - Municipality's Attachment O, calculating the
annual revenue requirement for the integrated transmission assets for
which MISO transmission revenue is requested. This can be of either the
levelized form or the non - levelized form for utilities operating on a cash
basis, as MRES specifies.
2.2.3 Execution of a notarized Statement of Authenticity as to the
correctness of the financial statements and the resulting Attachment O
calculations.
2.2.4 Written notification to MRES with the details of how revenues are
to be transferred to the Municipality.
2.2.5 Any other information that MRES reasonably requests for the
purpose of carrying out its obligations under this Agreement.
3.0 MISO TRANSMISSION FACILITIES ASSIGNMENT AGREEMENT. This
Agreement will be established prier -wand executed in conjunction with the
Transmission Facilities Assignment Agreement.
4.0 TERM. This Agreement shall become effective upon the effective date of the
Transmission Facilities Assignment Agreement between the Parties. The "o
Transmission Rate ., al period normally begins T 1 , ends T 31
,
(]meep for- e initial period hat will ee' 'enee o"YYthe later of-April 1, 2014—,of
the date that „nieip l;tJ , begins to take network trnr,rissio se a tl..ug
from MISO based on the MISO Tariff -. cipality will not be entitled to receive
payments under this Agreement, as described in Section 5 0 unless and until the
Municipality Transmission Facilities are integrated into MISO for transmission
revenue sharing purposes and Municipality begins to take network transmission
service from MISO under the MISO Tariff. The initial term of this Agreement
expires May 31, 2019. This Agreement shall automatically renew for additional
periods of one (1) year unless either Party gives written notice to the other Party
of its intention to terminate this Agreement not less than one (1) year prior to the
end of the original term or any extension thereof, unless mutually agreed
otherwise.
5.0 PAYMENT. MRES anticipates receiving monthly transmission revenue sharing
payments from MISO paid through GRE and Xcel and paid through terms of a
the-individual zonal revenue sharing agreements to be negotiated and signed
between MRES, GRE, Xcel, MISO and possibly other MISO transmission
owners owning transmission facilities in the GRE and Xcel pricing zones. MRES
will establish reasonable accounting procedures to distribute shared monthly
transmission revenue received from MISO through GRE or Xcel on a prorated
basis of the summation of MISO approved MISO Attachment O annually
updated combined filings from MRES, Municipality, and other cities. MRES
wi11may deduct N=RES ez'��es--from the revenues with the balanee
fapNefdedrevenue remitted to Municipality.. costs incurred by MRES in
performing the services hereunder and a reasonable administrative charge
payable to MRES for such services. In the unlikely event that significant
payments are required to MISO, such as if refunds of transmission revenues are
ordered by MISO or FERC, Municipality will reimburse MRES on a timely basis
after proper notification.
6.0 TERMINATION.
6.1 MRES MISO Transmission Owner Status The continuation of MRES as a MISO
Transmission Owner is essential to the collection and processing of the
transmission revenue cash flow which is the fundamental premise for this
Agreement. If for any reason, MRES ceases, voluntarily or involuntarily, to
be a MISO Transmission Owner, this Agreement will terminate and the
Parties will work together to attempt to find an alternate Transmission
Owner to process Municipality's transmission revenue and to distribute any
remaining revenues.
6.2 Default in Payment. Upon default by Municipality in making any payments
lawfully required by MRES Municipality herein, this Agreement may be
terminated at the option of MRES, provided, however, before any such
termination, MRES shall give Municipality written notice pursuant to
Section 9.0 specifying the default and stating that this Agreement will be
terminated and forfeited within thirty (30) days after delivery of such
notice, unless such default is remedied within fifteen (15) days.
6.3 Contrary to Law. If at any time during the term of this Agreement, either
MRES or Municipality deteredetermines that it's continued
performance under the terms of this Agreement is contrary to law, then this
Agreement may be immediately terminated by written notice provided by
the terminating Party to the other Party.
7.0 FORCE MAJEURE.
7.1 Notice. In the event either Party fails wholly or in part to carry out its
obligations under this Agreement, and such failure is occasioned by or is in
consequence of a Force Majeure citienCondition (as defined below) and
if such Party gives written notice and particulars of the Force Majeure
eondifienCondition to the other Party as soon as reasonably possible, then
the obligations of the Party giving such notice insofar as they are affected
by such Force Majeure eendi-tio Condition will be suspended during the
continuance of the Force Majeure eenditie Condition.
7.2 Force Majeure Conditions. Force Majeure senditionsConditions are those
events or conditions not caused by, and beyond the reasonable control of,
the affected Party. Force Majeure eemlitionsConditions include, without
limitation: acts of God;i natural disaster,; war, insurrection or other
unlawful act against public order or authority; explosion, fire, freezing or
other accidents or acts of sabotage causing breakage of, machinery,
transmission lines, or equipment such that they prevent a Party from
performing its obligations hereunder.
7.3 Payment Obligation. The Parties agree that a change in price or market
condition does not constitute a Force Majeure Condition.
8.0 LIMITATION OF LIABILITY. MRES and its officers, directors, employees and
agents, shall not be liable for special, indirect, incidental, punitive or
consequential damages under, arising out of, due to, or in connection with its
performance or non - performance of this Agreement or any of its obligations
herein, whether based on contract, tort (including, without limitation,
negligence), strict liability, warranty, indemnity or otherwise.
9.0 NOTICES. Any notice. or other communication required or permitted under this
Agreement (collectively a "Notice ") shall be: (a) in writing and (b) addressed by
the sender to the other Party at the address or number and in the manner set forth
below. Any change in the information set forth below shall be made in writing
and delivered according to this section.
If to MRES: Director, Legal
3724 West Avera Drive
P. O. Box 88920
Sioux Falls, SD 57109 -8920
0
If to Municipality General Manager Hutchinson Utilities Commission
XXXX
Hutchinson, MN XXXX
Except as otherwise provided in this Agreement, each notice shall be effective
and shall be deemed delivered on the earlier of: (i) its actual receipt, if delivered
personally, by courier service, email, or by fax (on the condition that a copy of
the notice is mailed as set forth below on the same day and the sending Party has
confirmation of transmission receipt of the notice), or (ii) on the third day after
the notice is postmarked for mailing by first class, postage prepaid, certified, or
registered, United States mail, with return receipt requested (whether or not the
return receipt is subsequently received by the sender).
10.0 REPRESENTATIONS OF MRES. MRES represents and warrants as follows:
10.1 MRES is duly organized, validly existing and in good standing under the
laws of the State of Iowa and is authorized to conduct business in the
states in which it does business.
10.2 MRES has taken all such action; as may be necessary and proper to
authorize this Agreement, the execution and delivery hereof, and the
consummation of transactions contemplated hereby.
10.3 This Agreement is a legal, valid and binding obligation of MRES
enforceable in accordance with its terms.
11.0 MUNICIPALITY REPRESENTATIONS. Municipality represents and warrants
as follows:
11.1 Municipality is a municipal electric utility duly organized, validly
existing and in good standing under the laws of the State of Minnesota.
11.2 Municipality has taken all such action, as maybe necessary and proper to
authorize this Agreement, the execution and delivery hereof, and the
consummation of transactions contemplated hereby.
11.3 This Agreement is a legal, valid and binding obligation of Municipality
enforceable in accordance with its terms.
12.0 MISCELLANEOUS
12.1 Assignment. No Party hereto shall assign this Agreement or delegate any
of its duties, obligations, responsibilities or rights without the prior
written consent of the other Party, which consent shall not be
unreasonably withheld.
12.2 Third Parties. Nothing in this Agreement shall be construed as giving any
person, firm, corporation or other entity, other than the signatory Parties
hereto and their respective successors and permitted assigns, any right,
remedy or claim under or in respect to this Agreement or any provision
hereof.
12.3 Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of South Dakota.
12.4 Savings Clause. The invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions herein,
and the Agreement shall be construed in all respects as if such invalid or
unenforceable provisions were omitted.
12.5 Exclusive Remedies. The duties and obligations imposed by this
Agreement and the rights and remedies available hereunder shall be
limited as follows. The exclusive remedy of Municipality under this
Agreement is to recover funds remiRe to- received by MRES €er
undist ibuted tfmsfnissien revenues and f as described in
Section 5.0 which .are attributable to the Municipality
Transmission Facilities, if and to the extent MRES fails to remit these
funds to Municipality as required by this Agreement. The exclusive
remedy of MRES under this Agreement shall be the recovery from
Municipality of funds for overpayments of transmission revenues or-and
costs which may be refunded erTemitted "(including adders, true -
ups, penalties, etc.), implementation costs or charges, and fees for
t-rmsmissien- services provided by MRES. The Parties hereto waive every
other claim or form of damage arising at law or in equity.
12.6 Modification. This Agreement shall not be amended, changed, modified,
waived, discharged or terminated except in writing signed by the Party or
Parties against which enforcement of the change, waiver, modification or
amendment is sought.
12.7 Counterparts /Facsimile Copies. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be an
original, but all of which together shall constitute enone and the same
instrument. A facsimile copy of this Agreement and any signature thereon
shall be considered for all purposes as an original.
12.8 Further Assurances. The Parties hereto shall execute any and all further
assurance, documents or writings reasonably requested by the other Party
to carry out the terms and provisions of this Agreement.
6
12.9 Headings. The headings in this Agreement are for the purposes of
reference only and shall not limit or otherwise affect the meaning of the
respective sections.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly
executed on the day and year set forth below.
MISSOURI BASIN MUNICIPAL POWER AGENCY
d /b /a MISSOURI RIVER ENERGY SERVICES
IN
Title
HUTCHINSON UTILITIES COMMISSION
Title
8
MRES Summary for Alternatives for Addressing Issues Related to
Integrated Transmission Agreement Raised by Great River Energy
1. Introduction
a. Integrated Transmission Agreement (ITA) — The ITA is a grandfathered
transmission agreement (GFA) that was written many years prior to
implementation of the Federal Energy Regulatory Commission's (FERC) Open
Access Transmission Tariff (GATT). The OATT provided for wholesale
transmission customers to utilize the transmission system on a non - discriminatory
basis. The implementation of the OATT concept first occurred in the late 1990s
and several additions to the concepts of the OATT have been ordered by FERC
since the initial orders. While the ITA has provided for a reasonable arrangement
to allow parties to share in costs associated with transmission infrastructure
needed to reliably serve themselves, GFAs are not generally structured to deal
with the numerous changes to transmission service that have occurred over the
last 10 -15 years, specifically related to the implementation of the Midwest
Independent Transmission System Operator (MISO) energy markets, and license
plate transmission pricing.
b. Great River Energy (GRE) conversations with Hutchinson Utilities Commission
(HUC)
i. In July, MRES received a call from HUC inquiring about updating the
Attachment O analysis that was completed in 2007. During that call, HUC
also indicated that GRE had suggested that HUC may not be complying
with the terms of the ITA. Specifically, GRE suggested that the market
purchases made by HUC, at times when HUC was not running its local
generation, were not allowed under the terms of the ITA.
ii. Based on the questions from HUC, and at the request of HUC staff, MRES
staff began conversations with GRE to understand the issue. MRES held
four conversations with GRE staff about the issue. One of the
conversations involved HUC staff as well.
iii. GRE indicated that it believed only energy purchases (regardless of
whether or not they were financial or physical delivery) from sources
within the ITA were allowed. In other words, HUC could only purchase
power and energy from parties in the ITA from Points of Input as defined
in Exhibit C of the ITA when not running HUC's local generation. This is
a very limited set of resources.
1
iv. GRE is taking the position that HUC cannot make general purchases from
the MISO market under the terms of the ITA. Any purchase from the
MISO market generally would require purchase of transmission service
(firm or non - firm).
v. GRE indicated that while it has had concerns about utilization of the ITA
for a number of years, it has not had the staff time available to fully
understand the issue or actively pursue discussions with HUC. GRE
indicated that it has held detailed discussions with Willmar on itsITA
arrangements for about one year now and anticipate resolving the issue in
the very near future with a filing to FERC whereby Willmar will take
network integrated transmission service (NITS), with the rates being
effective back to January 1, 2010. MRES is not familiar with the details
of this filing, but will review once a filing is made.
c. The experience of MRES with others in similar situations — While MRES has not
dealt with the ITA in question, MRES has dealt with similar ITAs in MISO where
MRES is a party, and in other instances where MRES is not a party. In those
prior situations, MRES transmission staff has urged the parties to the ITA ensure
they understand the limitations to the ITA, specifically that the ITA or lack of
NITS may not allow for MISO market purchases without acquiring additional
transmission service (firm or non - firm). Based on the knowledge of MRES of the
ITA, and experience with similar situations, MRES believes that GRE does have a
legitimate concern about the ITA not providing for HUC to make market
purchases for sources not defined in Exhibit C in the ITA. MRES is not aware of
any FERC complaint specifically related to an ITA arrangement; however, NITS
is the basis for facilitating energy transactions.
2. Alternatives — MRES staff believes that while GRE would show some patience with
regard to allowing HUC to work through a decision on what to do about the concerns
raised, GRE will likely grow impatient in the coming months. Based on some very
limited discussions about the timing of making a decision and potentially making
changes, MRES believes GRE may allow HUC, until the beginning of the year, to make
the change to NITS; but, if a status quo approach is chosen by HUC, GRE would likely
start the necessary internal actions to pursue resolution much sooner. In other words,
while GRE may wait for HUC to take NITS starting January 1, 2011, if HUC chooses a
status quo approach, they would likely want that decision from HUC in the coming
weeks.
a. Status Quo — In this alternative, HUC could chose to make no changes to the way
it is transacting in the MISO market. This would require GRE to take some kind
2
of action. MRES staff has not done any detailed analysis as to timing of either of
the alternatives, nor has MRES staff attempted to project an outcome as to the
success of GRE's potential pursuit of a remedy.
If the status quo alternative is pursued, there is a higher probability that GRE will
not be supportive in making any changes to the current transmission arrangements
or any other issues that may arise in the near future. While this is certainly a
business decision, an approach by HUC of status quo could damage HUC's
relationship with GRE in the long run. For example, if HUC chose the status quo
and waited for GRE to pursue other remedies, like a complaint to FERC or
through the arbitrator process in the ITA against HUC, GRE could take an
aggressive position in reviewing the HUC transmission cost information in the
Attachment O, or perhaps not be supportive in HUC's pursuit of NITS
(potentially significantly limiting HUC's ability to gain access to the MISO
market for economy purchases) by not allowing the existing GFA to be canceled
or not being cooperative in the MISO process to become a NITS customer.
i. GRE could pursue arbitration as provided for in the ITA (Article 7) — With
the requirement that any dispute be resolved via an arbitrator selected
through the American Arbitration Association, it seems highly unlikely
that GRE would attempt to reach resolution under the ITA due to the fact
this is a complicated transmission tariff issue. HUC may be better served
by pursuing this alternative, in my opinion, as the arbitrator is more likely
to provide a favorable ruling than a FERC complaint due to the fact that
these are complicated issues and an arbitrator likely wouldn't have
experience in them.
ii. GRE could pursue a complaint at FERC — GFA issues have been brought
to FERC multiple times throughout the past six years, with FERC
becoming increasingly inflexible in dealing with the GFA and how the
GFA could potentially limit the ability of the market to function properly.
b. Convert to Network Service — While this alternative does seem to be relatively
straight forward, in past experiences MRES staff has had, it is critical that the
existing MISO transmission owner (TO) (GRE in this case) be supportive when
,working with MISO to convert the service being provided under the GFA to
NITS. Without support, there are numerous issues that could arise that have the
potential to cause delay, increase the cost of converting the service (potentially
requiring transmission studies), or potentially limit access to the MISO market
due to some unknown physical transmission limitation not directly the
responsibility of HUC.
3
If HUC chooses to pursue this alternative, there are three possible alternatives
available to pursue to limit the financial impact to HUC due to the additional
transmission costs being incurred. Each of the alternatives would provide for
recognition for RUC's existing transmission assets resulting in offsetting a
portion of the transmission charges to HUC. In each of the methods, HUC would
complete an Attachment O for review by MISO.
i. Pursue membership as a MISO TO directly — This alternative is the most
direct method of receiving revenue for any transmission facilities. MRES
is pursuing this method due to the need to get regional cost sharing for our
planned transmission investments and our desire to actively participate in
regional transmission development. In addition, while MRES cannot
specifically identify any limitations for recovery of existing transmission
investments, MRES would prefer to be an owner, and not be considered a
second class citizen.
ii. Pursue network credit via Section 30.9 of the MISO tariff — This method is
still relatively new, only being utilized by some transmission customers in
the MidAmerican Energy Company (MEC) transmission pricing zone in
Iowa for about one year. This alternative does appear to be reasonable
given that the TO is a cooperative and a responsive TO. GRE has
indicated it is planning to make a filing to FERC in the next few weeks to
make the needed changes to their Attachment O to allow for Willmar and
any others, as may be appropriate in the future, to recover their
transmission revenue requirement. It is presumed regional cost sharing
would not be provided for in this method. GRE indicated it would charge
a nominal administrative fee for processing of the credit. It isn't expected
to be a significant cost, only a few hundred dollars a month at most.
iii. Assign operational control to an existing MISO TO — This method is still
relatively new as well, only being utilized by Cedar Falls in the MEC
transmission pricing zone in Iowa for a few smaller transmission owners
for about one year. It is the understanding of MRES that Central
Minnesota Municipal Power Agency (CMMPA) is also doing this for
some of its members. This alternative does appear to be reasonable given
Cedar Falls is a cooperative and a responsive TO. This method would
require an agreement to assign operational control over to the existing
MISO TO who subsequently turns over operational control to MISO. It
would also require a revenue sharing agreement with that same MISO TO.
MRES is currently pursuing this alternative with one of its members.
MRES anticipates this being completed by December 1, 2010. MRES
would be willing to consider this for HUC, if desired. It is unclear
4
whether or not regional cost sharing could be utilized for new investments
by the entity assigning operational control to an existing TO.
iv. Other — There are potentially other alternatives; for example, a lease
agreement with another MISO TO. It is expected that this would be
similar to assigning operational control, but could cause other concerns
about lag in cost recovery, and potential review by FERC of any lease
expenses incurred by the MISO TO. This does not appear to be a
reasonable alternative at this point.
3. Recommended Actions
a. Update Attachment O Analysis completed in 2007 — MRES intends to send a
data request to HUC by September 15. Analysis should be completed a couple
weeks after receipt of information by MRES. MRES would suggest that HUC
not wait to make a decision as to what alternative to pursue while waiting for the
final Attachment O information to be finalized.
b. HUC decision on how to respond to GRE concerns — MRES is not making a
recommendation as to what alternative to take, but recommends that HUC keeps
GRE informed as to your decision making process.
5
MISO TRANSMISSION FACILITIES ASSIGNMENT AGREEMENT
This MISO Transmission Facilities Assignment Agreement ( "Agreement ") is dated as of
, 2011, and is by and between the Hutchinson Utilities Commission of
Hutchinson, Minnesota, a municipal corporation of the State of Minnesota ( "Hutchinson "), and
Missouri Basin Municipal Power Agency d/b /a Missouri River Energy Services, a body politic
and corporate organized under the laws of the State of Iowa and existing under the
intergovernmental cooperation laws of the States of Iowa, Minnesota, North Dakota and South
Dakota ( "MRES "). Hutchinson and MRES are sometimes referred to singly as "Party" and
collectively as "Parties ", with respect to the intent to assign operational control of qualifying
transmission facilities under the terms and conditions as follows:
Assignee: MRES
Assignor: Hutchinson
Governing Agreements: The Midwest Independent Transmission System Operator, Inc.
( "MISO ") Transmission, Energy and Operating Reserve Markets Tariff ( "Tariff'), effective
March 1, 2005 and subsequent revisions; Transmission Owner Agreement ( "TO
Agreement ") between MRES and MISO dated August 24, 2007; and future MISO Revenue
Sharing Agreement for the GRE Zone and Xcel Zone, to be negotiated and implemented by
the Parties.
Contract Term: This Agreement shall become effective as of the later of April 1, 2011 or the
date that Hutchinson enters into a Network Integrated Transmission Agreement with MISO
adding Hutchinson as a network customer. The initial term of this Agreement shall expire on
May 31, 2019. This Agreement shall automatically renew for additional periods of one (1) year
unless either Party gives written notice to the other Party of its intention to terminate this
Agreement not less than one (1) year prior to the end of the original term or any extension
thereof unless mutually agreed otherwise.
Transmission Facilities: Transmission facilities operated at 115 kV and 69 kV integrated
into the GRE rate zone of MISO, which integrated facilities are more fully set forth on
Attachment "A" (the "Hutchinson Transmission Facilities ").
Assignment: Hutchinson does hereby transfer operational control of the Hutchinson
Transmission Facilities, as set forth in Attachment "A ", to MRES during the term of this
Agreement and any renewal terms. Hutchinson shall retain physical control of the Hutchinson
Transmission Facilities along with the obligations to repair, maintain and insure these facilities
in accordance with good utility practices. MRES has no liability for, and by execution of this
agreement assumes no liability for, the Hutchinson Transmission Facilities.
Reassignment: Hutchinson acknowledges and agrees that MRES will fully reassign and
convey operational control of qualifying transmission facilities to MISO in accordance with
MISO requirements and Federal Energy Regulatory Commission ( "FERC ") law and policy.
NERC Compliance Responsibility: Hutchinson retains all responsibilities to comply with the
North American Electric Reliability Corporation ( "NERC ") rules and regulations.
Designated MISO Transmission Owner ( "TO ") Collection of Revenues: Hutchinson hereby
appoints MRES as its MISO TO agent for all purposes required under the TO Agreement and
for protesting or contesting, on its behalf, any errors in billing or related matters. On its behalf,
Hutchinson authorizes MRES to obtain rate recovery and revenue distribution from MISO and
other TOs as necessary.
Disbursement of Revenues Received: MRES shall, after collecting reasonable fees and
costs for its services and those of necessary engineering and legal consultants and subject to
any other relevant agreements with Hutchinson (including the Transmission Owner
Revenue Sharing Services Agreement between MRES and Hutchinson dated the same date
hereof), disburse the revenues received from MISO and other TOs for the use of the
Hutchinson Transmission Facilities to Hutchinson in an equitable manner.
Other MISO Charges: Hutchinson shall be responsible for and reimburse MRES for any other
miscellaneous MISO charges reasonably allocable to Hutchinson, which MRES may initially
pay on Hutchinson's behalf, including but not limited to administrative and scheduling charges
associated with the Hutchinson Transmission Facilities. Hutchinson shall also be responsible for
and reimburse MRES for Hutchinson's allocable share of MRES costs incurred in performing
it's TO agent function including all costs incurred under the TO Agreement with MISO.
The terms and conditions in this Agreement shall remain in effect for the term of the
transactions described herein.
MRES as to its signatory and Hutchinson as to its signatory each hereby represents and
warrants that the person executing this Agreement on its respective behalf is duly
authorized to do so, and that, by each execution set forth below, such party is hereby
duly and lawfully bound by this Agreement.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed
on the day and year set forth below.
MISSOURI BASIN MUNICIPAL POWER AGENCY
d /b /a MISSOURI RIVER ENERGY SERVICES
Title
HUTCHINSON UTILITIES COMMISSION
Title
2
ATTACHMENT A
TO
TRANSMISSION FACILITIES ASSIGNMENT AGREEMENT
Hutchinson Utilities Commission owns transmission facilities operated at 115 kV and 69 kV
integrated in to the GRE and Xcel rate zones of the Midwest Integrated Transmission System
Operator, as follows:
Those transmission facilities to be assigned are specifically identified as:
Sources of Evidentiary Information:
Date: , 2011
By: , General Manager
A -1
Rest Periods
Employees may take one 15- minute paid rest period during each four -hour work period. One
Brest periods is taken in the morning and the other rest period is taken in the aftemoon.afe taken
during the second and third houfs and between the simth and seventh hotws of the workda�-.
During the summer-, the aftemeen rest period shall be taken when the Direeter- deems it
Rest periods shall not be cumulative and shall not be utilized to compensate for
other absences.
PILOT Verbiage for Billing Insert
The Hutchinson Utilities Commission believes it is important that you, the customer, understand that a
portion of your payment is transferred to the City of Hutchinson to support the City's General Fund.
Effective November 29, 2006, pursuant to Resolution 174 and the Hutchinson Utilities Commission By-
Laws, Hutchinson Utilities Commission pays the City of Hutchinson 2.75% of its gross operating revenue.
Hutchinson Utilities Commission refers to this as Payment in Lieu of Taxes or "PILOT ". This money is part
of the rate structure that each customer is billed for their electric and natural gas. Sales tax is not
included in this calculation. At the bottom of your bill is a calculation to reflect the amount of money
transferred to the City of Hutchinson.
As mentioned, the 2.75% has been included in the rates since 2006. in e4eet, Tthis is not a rate increase.
You Are Invited
for the
Hutchinson Utilities Commission
Annual Breakfast Meeting
Wednesday, April 13, 2011
7:00 to 8:oo a.m.
Location:
Hutchinson Utilities Commission
225 Michigan Street SE
Hutchinson, Minnesota
Agenda
. 2oo6 & 2010 Rate Comparisons
Fuel Cost Adjustment
Natural Gas Supply Diversity
Power Cost Adjustment
Electric Supply Diversity
. Energy Conservation; Dollars
Allocated to Large Commercial
and Industrial Accounts
Please RSVP by April 1, zo»
Kim Koski: 320- 234 -0501 or kkoski@ci.hutchinson.mn.us
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