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10-26-2011 HUCMRegular Meeting October 26, 2011 Members present: President Robert Hantge; Secretary Dwight Bordson; Commissioner Donald H. Walser; Commissioner Craig Lenz; Attorney Marc Sebora; General Manager Michael Kumm Member absent: Vice President Nordin President Hantge called the meeting to order at 3:01 p.m. President Hantge proposed the following changes to the agenda: 1. Strike item 13 2. Add Special Meeting /Closed Session at 4:37 for General Manager Special Contract 3. Strike Approve Minutes — September 28, 2011 Special Meeting. A motion was made by Commissioner Walser, seconded by Commissioner Lenz to make the proposed changes to the agenda. Motion was unanimously carried. The minutes of September 28, 2011 regular meeting were reviewed. A motion was made by Commissioner Walser, seconded by Secretary Bordson to approve the minutes as written. Motion was unanimously carried. The September 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 $4,158,783.07 (detailed listing in payables book). Motion was unanimously carried. GM Kumm presented the September 2011 financial statements /budget year -to -date. After discussion, a motion was made by Secretary Bordson, seconded by Commissioner Lenz to approve the financial statements /budget year -to -date. Motion was unanimously carried. At this time, Vice President Nordin arrived at the meeting: 3:07 p.m. GM Kumm presented Great River Energy Integration Agreement (Settlement Term Sheet) for approval. This is one of five agreements for HUC's transition to MISO. Negotiations were done with MRES representing Hutchinson Utilities Commission. GM Kumm explained this and the other agreements need to be completed by January 1, 2012, otherwise Great River Energy will continue to charge transmission costs with no credit for HUC revenue. After discussion, a motion was made by Commissioner Lenz, seconded by Commissioner Walser to approve the Great River Energy Integration Agreement (Settlement Term Sheet). Motion was unanimously carried. (Agreement attached.) GM Kumm presented the Joint Pricing Zone Agreement for approval. Again, MRES represented HUC in the negotiations. The Joint Pricing Zone Agreement streamlines the payment process allowing the revenue payments to go directly to Great River Energy. After discussion, a motion was made by Commissioner Walser, seconded by Commissioner Lenz to approve the Joint Pricing Zone Agreement. Motion was unanimously carried. (Agreement attached.) GM Kumm presented the Network Integration Transmission Service (NITS) Agreement for approval. This agreement is reviewed annually; therefore, it can be amended as HUC adds generation. After discussion, a motion was made by Secretary Bordson, seconded by Vice President Nordin to approve the Network Integration Transmission Service (NITS) Agreement. Motion was unanimously carried. (Agreement attached.) GM Kumm mentioned the agenda item 7 should read "Approve Termination of Integrated Transmission Agreement." GM Kumm discussed the Termination of Integrated Transmission Agreement (also called an ITA). HUC needs to terminate its existing ITA. The Agreement is currently being reviewed by SMPA, therefore, HUC may need to call a special meeting to have the Agreement approved before November 1; otherwise, it may cost HUC $75,000 per month. After discussion, a motion was made by Commissioner Lenz, seconded by Secretary Bordson to table approval of the Termination of Integrated Transmission Agreement until the next commission meeting. Steve Lancaster presented for approval the Advertisement for Bids for Switch Gear and Associated Relaying Equipment. Steve explained the date is not included because HUC does not have the specifications yet. After discussion, a motion was made by Vice President Nordin, seconded by Commissioner Walser to approve the Advertisement for Bids for Switch Gear and Associated Relaying Equipment. Motion was unanimously carried. (Advertisement for Bids attached.) GM Kumm presented policies and requirements booklet, sections: payment of your bill; automatic bill payment plan; budget payment plan; and explanation of billing procedure. No changes were recommended. GM Kumm presented changes to exempt and non - exempt handbooks, sections: purpose of handbook; sick leave; and sick /vacation leave donation. No changes recommended for section `purpose of handbook'. Recommended changes for sections `sick leave' (exempt only) and `sick /vacation leave donation' were made due to past practice and for clarification. After discussion, a motion was made by Commissioner Walser, seconded by Vice President Nordin to approve changes to the exempt and non- exempt handbooks, sections: `sick leave' (exempt only) and `sick /vacation leave donation'. Motion was unanimously carried. (Changes attached.) GM Kumm presented requisition #004624 for Cinta's Yearly Contract for Uniforms for a total of $29,925. There was no increase in cost from 2011. GM Kumm explained HUC is required to provide flame retardant clothing with the exception of outerwear. After discussion, a motion was made by Vice President Nordin, seconded by Commissioner Lenz to approve requisition #004624 for Cinta's Yearly Contract for Uniforms for a total of $29,925. Motion was unanimously carried. (Requisition attached.) GM Kumm presented requisition #004628 for Unit 1 LM -6000 Repair — Install Rotable 1St Stage HPC Blades for a total of $74,607.88. GM Kumm explained a borescope inspection is done annually for insurance reasons. Inspection results showed the blades need repair. After discussion, a motion was made by Commissioner Lenz, seconded by Vice President Nordin to approve requisition #004628 for Unit 1 LM -6000 Repair — Install Rotable 1St Stage HPC Blades for a total of $74,607.88. Motion was unanimously carried. (Requisition attached.) Division Reports Electric — Steve Lancaster • Nothing to report Natural Gas — John Webster • Met with United Farmers Coop in Brownton regarding their interest in transporting natural gas to their facility. • Attended MMGA meeting. City of Mahnomen approached MMUA and MMGA regarding their interest in a natural gas utility in their community. HUC's involvement in this may be to provide expertise. • Meeting with Skyview development customers interested in receiving natural gas service to their homes. Twenty of the 35 responded `yes'. Meeting is on October 7 at 7:00 p.m. at HUC. • MNOPS issued another alert notice; whenever a natural gas line is hit they need to be notified within a week. • Repaired the shorted casing on Adams Street. • Steve Lancaster, Dan Lang and I met with the City of Melrose regarding HUC automatic meter infrastructure. • Article regarding HUC's automatic meter infrastructure published in the October 2011 MMUA Resource newsletter. Business — Jan Sifferath • HUC health insurance broker received medical insurance quotes for 2012. Blue Cross Blue Shield quoted an 11 % increase and Medica a 15% increase over last year. Broker will try to negotiate with Medica to reduce their increase to Blue Cross Blue Shield's 11 %. Midwest Dental Benefits remains the same for 2012. Finance — Jared Martig • Unit 8 inventory was moved from downtown to the HUC distribution center. • Finance work orders to be completed this week. GM Kumm reported on the following: • MMUA creating a video production in which HUC was asked to be part of along with other utility companies. MMUA can edit out HUC portion for a fee and HUC could possibly use this video on HCVN during public power week. • Met with Senator Newman and Representative Shimanski a couple weeks ago to discuss national and EPA concerns along with salary cap issue. Legal Update Nothing to report Unfinished Business • Joint Action Agency President Hantge presented a handout of research done by Attorney Sebora on the Joint Action Agency. This research was forwarded to Peter Cooper of McGrann Shea Carnival Straughn & Lamb; awaiting their response. • Green Rate GM Kumm explained this will become part of the rate study by R.W. Beck. At this time, guests Jeremy Carter and Tom Kloss of the City of Hutchinson arrived: 3:59 p.m. • City of Hutchinson IT Position Vice President Nordin invited Jeremy Carter and Tom Kloss of the City of Hutchinson to discuss City's proposal to add another IT employee and share the costs with HUC through a shared service agreement to include a $20,572 increase from 2011. City is not interested in a fee for service agreement but a shared service agreement. After discussion, the Board agreed to move ahead with a 26% budget allocation based on PC count, with the commitment of City IT department to track staff time dedicated to Hutchinson Utilities Commission and revisit the shared service agreement in one year. After further discussion, a motion was made by Commissioner Walser, seconded by Secretary Bordson to approve the allocation of the increase of $20,572 from the 2011 fee for services of $75,280. Motion was unanimously carried. The Board further discussed the need to create an allocation mechanism for human resources and legal shared services. The Board asked GM Kumm to draft a proposal to include an estimate of human resources and legal shared services HUC would utilize in the next year along with what charges HUC is willing to pay for those services. GM Kumm will report back at the next regular commission meeting. • Electronic File Access for Commissioners The Board would like access to packets and related files electronically over a shared server. Currently, packets and related information are sent to the Board as PDF files via e -mail. Tom Kloss explained City Council members have Netbooks and receive their packets as an editable PDF file via e -mail and do not access the City servers. The Board inquired how HUC can make the transition to using Netbooks like City Council. Tom explained he will work on setting up access to a collaboration site where members are assigned a password to log into the site and access electronic files. New Business None There being no further business, a motion was made by Secretary Bordson, seconded by Commissioner Lenz to adjourn the meeting at 4:37 p.m. Motion was unanimously carried. ATTEST: Robert Hantge, President Dwight Bordson, Secretary Regular Meeting October 26, 2011 Members present: President Robert Hantge; Secretary Dwight Bordson; Commissioner Donald H. Walser; Commissioner Craig Lenz; Attorney Marc Sebora; General Manager Michael Kumm Member absent: Vice President Nordin President Hantge called the meeting to order at 3:01 p.m. President Hantge proposed the following changes to the agenda: 1. Strike item 13 2. Add Special Meeting /Closed Session at 4:37 for General Manager Special Contract 3. Strike Approve Minutes — September 28, 2011 Special Meeting. A motion was made by Commissioner Walser, seconded by Commissioner Lenz to make the proposed changes to the agenda. Motion was unanimously carried. The minutes of September 28, 2011 regular meeting were reviewed. A motion was made by Commissioner Walser, seconded by Secretary Bordson to approve the minutes as written. Motion was unanimously carried. The September 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 $4,158,783.07 (detailed listing in payables book). Motion was unanimously carried. GM Kumm presented the September 2011 financial statements /budget year -to -date. After discussion, a motion was made by Secretary Bordson, seconded by Commissioner Lenz to approve the financial statements /budget year -to -date. Motion was unanimously carried. At this time, Vice President Nordin arrived at the meeting: 3:07 p.m. GM Kumm presented Great River Energy Integration Agreement (Settlement Term Sheet) for approval. This is one of five agreements for HUC's transition to MISO. Negotiations were done with MRES representing Hutchinson Utilities Commission. GM Kumm explained this and the other agreements need to be completed by January 1, 2012, otherwise Great River Energy will continue to charge transmission costs with no credit for HUC revenue. After discussion, a motion was made by Commissioner Lenz, seconded by Commissioner Walser to approve the Great River Energy Integration Agreement (Settlement Term Sheet). Motion was unanimously carried. (Agreement attached.) GM Kumm presented the Joint Pricing Zone Agreement for approval. Again, MRES represented HUC in the negotiations. The Joint Pricing Zone Agreement streamlines the payment process allowing the revenue payments to go directly to Great River Energy. After discussion, a motion was made by Commissioner Walser, seconded by Commissioner Lenz to approve the Joint Pricing Zone Agreement. Motion was unanimously carried. (Agreement attached.) GM Kumm presented the Network Integration Transmission Service (NITS) Agreement for approval. This agreement is reviewed annually; therefore, it can be amended as HUC adds generation. After discussion, a motion was made by Secretary Bordson, seconded by Vice President Nordin to approve the Network Integration Transmission Service (NITS) Agreement. Motion was unanimously carried. (Agreement attached.) GM Kumm mentioned the agenda item 7 should read "Approve Termination of Integrated Transmission Agreement." GM Kumm discussed the Termination of Integrated Transmission Agreement (also called an ITA). HUC needs to terminate its existing ITA. The Agreement is currently being reviewed by SMPA, therefore, HUC may need to call a special meeting to have the Agreement approved before November 1; otherwise, it may cost HUC $75,000 per month. After discussion, a motion was made by Commissioner Lenz, seconded by Secretary Bordson to table approval of the Termination of Integrated Transmission Agreement until the next commission meeting. Steve Lancaster presented for approval the Advertisement for Bids for Switch Gear and Associated Relaying Equipment. Steve explained the date is not included because HUC does not have the specifications yet. After discussion, a motion was made by Vice President Nordin, seconded by Commissioner Walser to approve the Advertisement for Bids for Switch Gear and Associated Relaying Equipment. Motion was unanimously carried. (Advertisement for Bids attached.) GM Kumm presented policies and requirements booklet, sections: payment of your bill; automatic bill payment plan; budget payment plan; and explanation of billing procedure. No changes were recommended. GM Kumm presented changes to exempt and non - exempt handbooks, sections: purpose of handbook; sick leave; and sick/vacation leave donation. No changes recommended for section `purpose of handbook'. Recommended changes for sections 'sick leave' (exempt only) and 'sick/vacation leave donation' were made due to past practice and for clarification. After discussion, a motion was made by Commissioner Walser, seconded by Vice President Nordin to approve changes to the exempt and non- exempt handbooks, sections: `sick leave' (exempt only) and ` sick/vacation leave donation'. Motion was unanimously carried. (Changes attached.) GM Kumm presented requisition #004624 for Cinta's Yearly Contract for Uniforms for a total of $29,925. There was no increase in cost from 2011. GM Kumm explained HUC is required to provide flame retardant clothing with the exception of outerwear. After discussion, a motion was made by Vice President Nordin, seconded by Commissioner Lenz to approve requisition #004624 for Cinta's Yearly Contract for Uniforms for a total of $29,925. Motion was unanimously carried. (Requisition attached.) GM Kumm presented requisition #004628 for Unit 1 LM -6000 Repair — Install Rotable 1st Stage HPC Blades for a total of $74,607.88. GM Kumm explained a borescope inspection is done annually for insurance reasons. Inspection results showed the blades need repair. After discussion, a motion was made by Commissioner Lenz, seconded by Vice President Nordin to approve requisition #004628 for Unit 1 LM -6000 Repair — Install Rotable 1St Stage HPC Blades for a total of $74,607.88. Motion was unanimously carried. (Requisition attached.) Division Reports Electric — Steve Lancaster • Nothing to report Natural Gas — John Webster • Met with United Farmers Coop in Brownton regarding their interest in transporting natural gas to their facility. • Attended MMGA meeting. City of Mahnomen approached MMUA and MMGA regarding their interest in a natural gas utility in their community. RUC's involvement in this may be to provide expertise. • Meeting with Skyview development customers interested in receiving natural gas service to their homes. Twenty of the 35 responded 'yes'. Meeting is on October 7 at 7:00 p.m. at HUC. • MNOPS issued another alert notice; whenever a natural gas line is hit they need to be notified within a week. • Repaired the shorted casing on Adams Street. • Steve Lancaster, Dan Lang and I met with the City of Melrose regarding HUC automatic meter infrastructure. • Article regarding HUC's automatic meter infrastructure published in the October 2011 MMUA Resource newsletter. Business — Jan Sifferath • HUC health insurance broker received medical insurance quotes for 2012. Blue Cross Blue Shield quoted an 11 % increase and Medica a 15% increase over last year. Broker will try to negotiate with Medica to reduce their increase to Blue Cross Blue Shield's 11 %. Midwest Dental Benefits remains the same for 2012. Finance — Jared Martig • Unit 8 inventory was moved from downtown to the HUC distribution center. • Finance work orders to be completed this week. GM Kumm reported on the following: • MMUA creating a video production in which HUC was asked to be part of along with other utility companies. MMUA can edit out HUC portion for a fee and HUC could possibly use this video on HCVN during public power week. • Met with Senator Newman and Representative Shimanski a couple weeks ago to discuss national and EPA concerns along with salary cap issue. Legal Update Nothing to report Unfinished Business Joint Action Agency President Hantge presented a handout of research done by Attorney Sebora on the Joint Action Agency. This research was forwarded to Peter Cooper of McGrann Shea Carnival Straughn & Lamb; awaiting their response. • Green Rate GM Kumm explained this will become part of the rate study by R.W. Beck. At this time, guests Jeremy Carter and Tom Kloss of the City of Hutchinson arrived: 3:59 p.m. City of Hutchinson IT Position Vice President Nordin invited Jeremy Carter and Tom Kloss of the City of Hutchinson to discuss City's proposal to add another IT employee and share the costs with HUC through a shared service agreement to include a $20,572 increase from 2011. City is not interested in a fee for service agreement but a shared service agreement. After discussion, the Board agreed to move ahead with a 26% budget allocation based on PC count, with the commitment of City IT department to track staff time dedicated to Hutchinson Utilities Commission and revisit the shared service agreement in one year. After further discussion, a motion was made by Commissioner Walser, seconded by Secretary Bordson to approve the allocation of the increase of $20,572 from the 2011 fee for services of $75,280. Motion was unanimously carried. The Board further discussed the need to create an allocation mechanism for human resources and legal shared services. The Board asked GM Kumm to draft a proposal to include an estimate of human resources and legal shared services HUC would utilize in the next year along with what charges HUC is willing to pay for those services. GM Kumm will report back at the next regular commission meeting. • Electronic File Access for Commissioners The Board would like access to packets and related files electronically over a shared server. Currently, packets and related information are sent to the Board as PDF files via e -mail. Tom Kloss explained City Council members have Netbooks and receive their packets as an editable PDF file via e-mail and do not access the City servers. The Board inquired how HUC can make the transition to using Netbooks like City Council. Tom explained he will work on setting up access to a collaboration site where members are assigned a password to log into the site and access electronic files. New Business None There being no further business, a motion was made by Secretary Bordson, seconded by Commissioner Lenz to adjourn the meeting at 4:37 p.m. Motion was unanimously carried. Bordson, Secretary ATTEST: e antge, President Draft 10/25-18/2011 Integration Agreement Between Great River Energy And Hutchinson Utilities Commission This Integration Agreement ( "Agreement ") is made and entered into as of the day of 2011, by and between Great River Energy ( "GRE "), a cooperative corporation organized under the laws of the state of Minnesota, and Hutchinson Utilities Commission, an enterprise fund of the City of Hutchinson, a Minnesota Municipal Corporation ( "HUC ") , and any successors thereof, referred to herein collectively as "Parties" and singularly as "Party." Recitals WHEREAS, GRE, as successor to United Power Association ( "UPA "), and HUC, along with Southern Minnesota Municipal Power Association ( "SMMPA ",) are parties to an Integrated Transmission Agreement ( "ITA "), dated November 24, 1986, as amended, which is designated as Carved Out Grandfathered Agreement ( "GFA ") No. 451 of Attachment P of the MISO Open Access Transmission, Energy and Operating Reserve Markets Tariff ( "Tariff "); and WHEREAS, GRE and HUC are also parties to an agreement related to the ITA, the Settlement Agreement for MISO Schedule Fee Charges Relating to the Integrated Transmission Agreement, dated May 25, 2005 (the "MISO Fee Agreement "), which provides for settlement of certain MISO charges applicable to HUC; and WHEREAS, GRE and HUC are parties to an Operations and Maintenance Agreement, dated July 31, 2005 (the "O &M Agreement"); and WHEREAS, GRE became a Midwest Independent Transmission System Operator ( "MISO ") Transmission Owner on December 1, 2004; and WHEREAS, GRE operates a joint pricing zone within MISO, which is administered subject to a Joint Pricing Zone Revenue Allocation Agreement, dated April 30, 2010, (the "GRE Joint Pricing Zone Agreement "), to which both GRE and SMMPA are parties; and WHEREAS, HUC plans to become a MISO Network Integration Transmission Service ( "NITS ") customer for its entire load, effective January 1, 2012; and WHEREAS, HUC has contracted with Missouri River Energy Services ( "MRES ") to represent the transmission facilities owned by HUC as part ofwithmia the MISO transmission systemmadket; and WHEREAS, the Parties desire to concurrently terminate the ITA, including the MISO Fee Agreement, and transition the HUC load and HUC transmission facilities to the GRE joint pricing zone 1 Draft 10/2518/2011 and subject to the GRE Joint Pricing Zone Agreement, effective as of the Integration Date, as that term is defined in Section 1, of this Agreement; and WHEREAS, the Parties are separately proposing to the other parties to the GRE Joint Pricing Zone Agreement, revisions to the GRE Joint Pricing Zone Agreement suitable to integrate HUC load and HUC transmission facilities in the GRE joint pricing zone that are intended to become effective on the Integration Date; and WHEREAS, upon integration of the HUC load and HUC transmission facilities in the GRE joint pricing zone, GRE will be responsible to directly collect the amounts due from HUC for NITS provided by MISO to HUC, and HUC will be responsible to pay GRE such amounts; and WHEREAS, the Parties are entering into this Agreement to provide for the transition from the termination of the ITA to the integration of the HUC load and HUC transmission facilities in the GRE joint pricing zone under the terms of the revised GRE Joint Pricing Zone Agreement. Agreement NOW, THEREFORE, in consideration of the foregoing and of the mutual promises and undertakings set forth herein, the sufficiency of which is hereby acknowledged, the Parties agree as follows: 1. Integration of HUC Load and Transmission Facilities in GRE Joint Pricing Zone; Integration Date. The Parties agree to enter into such agreements and take such other actions as are necessary or appropriate to integrate the HUC load and HUC transmission facilities in the GRE joint pricing zone effective as of the later of the following: (i) January 1, 2012 or (ii) the date that HUC commences taking NITS service from MISO for all of the HUC load and integrates its transmission facilities under MISO operational and /or functional control, and (iii) the effective date of the acceptance by the Federal Energy Regulatory Commission ( "FERC") of the revisions to the GRE Joint Pricing Zone Agreement permitting the integration of the HUC load and HUC transmission facilities in the GRE joint pricing zone (the effective date will be referred to herein as the "Integration Date "). 2. Approvals; Regulatory Filings. The parties agree to reasonably cooperate to gain the approval of the other parties to the GRE Joint Pricing Zone Agreement for the revisions to the GRE Joint Pricing Zone Agreement that are necessary to incorporate the HUC load and HUC transmission facilities in the GRE joint pricing zone. The Parties agree to reasonably cooperate with MISO to submit all filings, including filings to FERC, required to approve the revisions to the GRE Joint 2 Draft 10/2518/2011 Pricing Zone Agreement on a schedule that reasonably provides for an effective date for such revisions of January 1, 2012. Such cooperation is not intended to affect either Party's current or future right to protest a specific provision included in such filings, including but not limited to the Parties' Attachment 0 transmission rate calculations and supporting data. 3. Joint Pricing Zone Load Reporting; Payment of Amounts Due for NITS. As of the Integration Date. GRE will report to MISO all load served by HUC. HUC agrees to comply with the MISO requirements for metering and load reporting, and will perform such functions in a manner comparable to the practices of the other parties within the GRE joint pricing zone, including but not limited to the practice of submitting gross load values that are not reduced for behind -the- meter generation. GRE will directly invoice HUC for the NITS provided by MISO to HUC. HUC agrees to make payments for NITS directly to GRE on a schedule and in a manner consistent with the schedule for payments and other settlements under the GRE Joint Pricing Zone Agreement. 4. Transmission Facilities Eligible for Joint Pricing Zone. All HUC transmission facilities included in the GRE joint pricing zone will meet the definition of Zonal Transmission Facilities, as that term is defined in the GRE Joint Pricing Zone Agreement. Generally, facilities will comply with the definition of Zonal Transmission Facilities if such facilities comply with the criteria for transmission facilities set forth in the "Midwest ISO Transmission Criteria for Review of New Member Transmission" and in a manner consistent with GRE's implementation of the Minnesota boundary guidelines, as each may be amended from time to time. Such criteria will apply to existing and future facilities owned by HUC, including the HUC -owned facilities located at the McLeod substation. 5. Operations. The Parties agree to reasonably cooperate to take such actions as are necessary to integrate HUC operations, including billing and settlement arrangements, within MISO operations as of the Integration Date. GRE and HUC agree to seek the agreement of MISO and the other parties to the GRE Joint Pricing Zone Agreement for GRE to settle the HUC Schedule 9 NITS payments within the GRE Joint Pricing Zone Agreement. The Parties also agree to amend the O &M Agreement to as is reasonably necessary due to the termination of the ITA and the integration of HUC load and HUC transmission facilities within the GRE joint pricing zone. 6. MISO Ancillary Services. HUC acknowledges and agrees that as of the date that HUC commences taking NITS service from MISO, to the extent that HUC requires ancillary services to serve its load, including Schedule 1 ( "Scheduling and Dispatch ") and Schedule 2 ( "Reactive Supply and Voltage Control "), the provision of such services will be governed by the terms of the MISO Tariff and HUC will arrange for and pay for such services. 7. NERC. After the Integration Date, GRE will continue to perform NERC Transmission Operator ( "TOP ") functions on behalf of HUC as required for the transmission facilities owned by HUC and operated by GRE within the GRE Local Balancing Area, as that term is defined in the Tariff. GRE 3 Draft 10/25-18/2011 will perform such services at no cost to HUC for so long as HUC has arrangements in place to take NITS service from MISO for its entire load and HUC is paying Schedule 1 charges in accordance with the MISO Tariff. With the exception of such TOP functions, HUC will be responsible for all other NERC and MRO standards requirements and reporting obligations applicable to HUC under other NERC designations. Upon the request of HUC, GRE will provide HUC with information and documents reasonably necessary for HUC to comply with its NERC and MRO obligations. GRE and HUC agree to negotiate in good faith a definitive agreement further detailing their respective obligations under this Section 7 prior to June 1, 2012. 8. Settlement Payments by GRE. In consideration for the early termination of the ITA, GRE agrees to pay to HUC the annual settlement payments indicated below. The settlement payments will become due and payable as described in this Section 8. Each annual payment will be divided into twelve (12) equal payments which will be due and payable by GRE on a monthly basis during the applicable year. GRE's obligation to make payments to HUC will commence on January 1, 2012. In the event that the Integration Date does not occur until after January 1, 2012, the monthly settlement payments will function as a credit in the calculation of the "Make Whole" payments, as described in Section 10(a), subject to the refund requirement set forth in Section 10(b). After the Integration Date, the monthly settlement payments will be credited against the net payment due and payable to HUC under the revised GRE Joint Pricing Zone Agreement. After the Integration Date, GRE's continuing obligation to make the monthly settlement payments to HUC as described herein will be subject to the conditions set forth in Section 9. In no event shall GRE be obligated to make total payments to HUC that exceed $1,000,000. Year Annual Payment 2012 $400,000 2013 $300,000 2014 $200,000 2015 $100,000 2016 $0 Total $1,000,000 9. Conditions to GRE Monthly Settlement Payment Obligation. After the Integration Date, GRE's monthly settlement payment obligation will remain in place as set forth in Section 8 for so long as HUC meets all of the following conditions: (a) the HUC transmission facilities remain within the GRE joint pricing zone and subject to the GRE Joint Pricing Zone Agreement through an 4 Draft 10/2518/2011 appropriate agency agreement with MRES or another MISO TO, or as a consequence of HUC becoming a MISO TO , and (be) HUC remains a MISO NITS customer for the entire HUC load, and (c) HUC makes timely payments to GRE for the NITS provided by MISO to HUC. the HUC lead Femains within the GRE jeffint PFi6iRg and ,.ubject to the GRE joint °Firing * ^^ "^~^^""^^* In the event that HUC fails to meet any of the foregoing conditions, dUFi.,^ the teFM of this Agreement, GRE's obligation to make monthly payments will immediately cease, and GRE will be entitled to take the actions necessary to amend the GRE Joint Pricing Zone Agreement to remove the HUC transmission facilities from the GRE joint pricing zone and eliminate the right of HUC to receive revenues in connection with such facilities. 10. Delay of Integration Date. a. In the event that the Integration Date is delayed, due to forces reasonably outside the control of HUC, past January 1, 2012, then HUC shall make "Make Whole" payments to GRE. The "Make Whole" payments will be determined as the monthly net of- (i) GRE's joint pricing zone charges to HUC for MISO NITS to serve the entire HUC load, (ii) the HUC load ratio share of the MISO Schedule 26 charges paid by GRE to MISO, (iii) recovery of the revenue requirement paid to HUC for the HUC transmission facilities, and (iv) the monthly settlement payment described in Section 8 of this Agreement. Such Make Whole payments shall be due and payable to GRE within fifteen (15) business days of receipt by HUC of an invoice for such payments. This Section 10(a) will apply only to delays of the Integration Date prior to June 1, 2012. During the period of such a delay, if any, the MISO Fee Agreement will remain in effect, and GRE will be entitled to separately bill and invoice HUC for the applicable charges under the MISO Fee Agreement. Ib. In the event that the Integration Date is delayed for any reason past June 1, 2012, GRE's obligations to make monthly settlement payments under this Agreement shall terminate and HUC will be obligated to refund to GRE the total amount of the monthly settlement payments that GRE has paid to HUC as part of the "Make Whole" payments described in Section 10(a) during the time period between January 1, 2012 and May 31, 2012. In the event of such a delay, HUC agrees to arrange for NITS service from MISO effective as of June 1, 2012 and the Parties further agree to negotiate in good faith revisions to the ITA and the MISO Fee Agreement consistent with HUC taking NITS service from MISO. Upon the completion of the (i) refund of the total amount of the monthly settlement payments, and the (ii) revisions to the ITA and MISO Fee Agreement, this Agreement will terminate. #:11. Post - Settlement Payment Period. Upon GRE's payment to HUC of the total amount of the settlement payments described in Section 8 (subiect to the conditions set forth in Section 9), HUC's obligation to make timely payments to GRE for the NITS provided by MISO to HUC will remain in effect for the remainder of the term of this Agreement. 5 Draft 10/253$/2011 33:12. Term. Unless eadieF teRninated as set fenh "^Fein, this Agreement is terminated prior to the Integration Date as set forth in Section 10(b), this Agreement shall remain in effect after the Integration Date for a period of five (5) years and continue thereafter for so long as the HUC transmission facilities are subiect to the GRE Joint Pricing Zone Agreement, through an agency agreement with a MISO TO, or otherwise. Starting on the third anniversary of the Integration Date, either HUC or GRE may terminate this Agreement by providing two (2) years prior written notice of its intent to terminate to the other Party. In the event of any such termination, the Parties shall reasonably cooperate to terminate the participation of HUC's agent, or HUC, as applicable, in the GRE Joint Pricing Zone Agreement concurrently with the termination of this Agreement. Notwithstanding the foregoing, this Agreement shall automatically terminate upon any termination of the GRE Joint Pricing Zone Agreement. until Dece beF 3 2016. 313. Notices. The addresses for delivery of notices under this Agreement shall be as follows: For GRE: Jean Cassell Mayhew Manager, Transmission Strategy & Business Planning 12300 Elm Creek Boulevard Maple Grove, MN 55369 -4718 For HUC: Michael Kumm General Manager Hutchinson Municipal Utilities 225 Michigan Street, SE Hutchinson, MN 55350 -1905 33:14. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota. 34:15. Conflicts. This Agreement is intended to be interpreted in a manner consistent with the MISO Tariff. In the event of a conflict between this Agreement and the MISO Tariff, the Parties agree to negotiate in good faith to amend this Agreement to implement as closely as reasonably possible the original intent of the Parties 35:16. Entire Agreement. This Agreement constitutes the final written expression of the Parties' agreement regarding the subject matter herein. All amendments must be in writing and signed by both Parties. A Draft 10/253,8/2011 16:17. Representation of Status. Each Party hereby represents and warrants that it has the legal capacity to enter into this Agreement and that the individuals who execute this Agreement have the full and complete authority to do so. IN WITNESS THEREOF, the Parties, by their duly authorized agents, have hereunder executed this Agreement. GREAT RIVER ENERGY A Minnesota cooperative corporation By: William Kaul, Vice President, Transmission HUTCHINSON UTILITIES COMMISSION An enterprise fund of the City of Hutchinson, a Minnesota Municipal Corporation By: Michael Kumm, General Manager 7 JOINT PRICING ZONE REVENUE ALLOCATION AGREEMENT This Joint Pricing Zone Revenue Allocation Agreement ( "Agreement ") is made and entered into as of the day of 2011, by and between Great River Energy ( "GRE "), a cooperative corporation organized under the laws of the state of Minnesota, Central Minnesota Municipal Power Agency ( "CMMPA "), a municipal corporation and political subdivision of the state of Minnesota, Missouri Basin Municipal Power Agency, a body corporate and politic organized under Chapter 28E of the Code of Iowa, doing business as Missouri River Energy Services ( "MRES "), Northern States Power Company, a Minnesota corporation ( "NSP "), and the Southern Minnesota Municipal Power Agency ( "SMMPA "), a municipal corporation and political subdivision of the state of Minnesota, and any successors thereof, which are referred to herein collectively as "Parties" and singularly as "Party." This Agreement is being made and entered by the Parties with respect to (1) the allocation of revenues that the Midwest Independent Transmission System Operator, Inc. ( "Midwest ISO" or "MISO ") distributes to the GRE pricing zone (a zone that includes facilities of CMMPA, GRE, MRES, NSP and SMMPA, and loads of CMMPA, GRE, MRES, NSP, and SMMPA, as applicable, hereinafter referred to as "GRE Zone ") and (2) charges for network transmission services and (3) the distribution of payments among the Parties for network use of each other's transmission facilities in the GRE pricing zone that are not billed by MISO. WITNESSETH: WHEREAS, GRE became a MISO Transmission Owner effective December 1, 2004, and owns certain transmission facilities in the GRE Zone; and WHEREAS, Willmar Municipal Utility ( "WMU ") owns transmission facilities in the GRE Zone and receives consideration for such ownership via the provisions of Section 30.9 of the MISO Tariff which results in WMU's facilities as being considered as part of GRE's facilities for the purposes of this Agreement; and WHEREAS, NSP became a MISO Transmission Owner effective February 1, 2002, and NSP owns certain transmission facilities in the GRE Zone; and WHEREAS, SMMPA became a MISO Transmission Owner effective April 1, 2006 and owns certain transmission facilities in the GRE Zone; and WHEREAS, CMMPA became a MISO Transmission Owner effective August 16, 2007; and WHEREAS, for purposes of this Agreement, CMMPA represents Elk River Municipal Utilities ( "ERMU ") with respect to certain transmission facilities in the GRE Zone; and 1 WHEREAS, ERMU has assigned operational control of its transmission facilities to CMMPA by way of a Transmission Facilities Assignment Agreement with contract term of January 1, 2008 to December 31, 2013; and WHEREAS, MRES became a MISO Transmission Owner effective February 24, 2011; and WHEREAS, for the purposes of this Agreement, MRES represents Hutchinson Municipal Utilities ( "HUC ") with respect to certain transmission facilities in the GRE Zone; and WHEREAS, HUC has assigned operational control of its transmission facilities to MRES by way of a MISO Transmission Facilities Assignment Agreement with a term that extends until May 31, 2019; and WHEREAS, the revenue requirements for each Party's Zonal Transmission Facilities, including the revenue requirements for the Zonal Transmission Facilities of the parties who have assigned their transmission facilities to CMMPA and MRES, are included in the MISO rates for the GRE Zone; and WHEREAS, MISO collects revenues for a pricing zone and remits those revenues to a single Transmission Owner regardless of the number of Transmission Owners within that zone; and WHEREAS, MISO distributes all revenues to GRE for the GRE Zone; and WHEREAS, MISO does not bill the Parties and does not collect revenues for the MISO network transmission service provided, as applicable, to CMMPA, GRE, NSP, MRES and SMMPA, in the GRE Zone; and WHEREAS, MISO does not bill the parties who have assigned their transmission facilities to other Parties and does not collect revenues for the MISO network service provided to such parties; and WHEREAS, this Agreement addresses the allocation of MISO revenues among the Parties identified herein so that each Party will recover its proportionate share of these MISO revenues; and WHEREAS, this Agreement also addresses payments among the Parties, including among the parties who have assigned their transmission facilities to other Parties, for network integration transmission service in the GRE Zone that is not billed by MISO. NOW, THEREFORE, in consideration of the mutual covenants set forth herein, the sufficiency of which is hereby acknowledged, the Parties hereto agree as follows: ARTICLE I DEFINITIONS F Capitalized terms used in this Agreement without other definitions will have the meanings set forth below or, if not set forth below, as defined in the Tariff: Agreement: This Joint Pricing Zone Revenue Allocation Agreement, including any attachments hereto, or amendments thereof. Annual Transmission Revenue Requirement ( "ATRR "): The Annual Transmission Revenue Requirement for each Party's Zonal Transmission Facilities, as indicated in that Party's Attachment O. In the case of CMMPA, the ATRR of the Zonal Transmission Facilities owned by ERMU will determine the CMMPA ATRR. In the case of MRES, the ATRR of the Zonal Transmission Facilities of HUC will determine the MRES ATRR. ATRR Allocator: The pro rata share of each Party's ATRR relative to the Zonal Revenue Requirement expressed to two decimal places and computed at least annually (and recalculated whenever there is a change to any Party's ATRR). Attachment O: Attachment O to the Tariff applicable to each Party. Facilities Value: The gross book value of the Zonal Transmission Facilities owned by each Party, as reflected in that Party's Attachment O. GRE's gross book value shall also include the gross book value of WMU's transmission facilities as included in WMU's Attachment O. In the case of CMMPA, the gross book value of the Zonal Transmission Facilities owned by ERMU shall be the CMMPA Facilities Value. In the case of MRES, the gross book value of the Zonal Transmission Facilities owned by HUC shall be the MRES Facilities Value. FERC or Commission: The Federal Energy Regulatory Commission or its successor. FPA: The Federal Power Act, 16 U.S.C. §§ 791a -825r, as amended by Pub. L. No. 109 -58, 119 Stat 594 (2005). Gross Book Value ( "GBV ") Allocator: The pro rata share of each Party's Facilities Value relative to the Total Facilities Value (in terms of gross book value), expressed to two decimal places and computed at least annually (and recalculated whenever a Party's Attachment O is updated). Governmental Authority: Any court, tribunal, agency, commission, or similar governing entity having jurisdiction over the applicable Party or subject matter. GRE Zone: Zone 8 of the Tariff, or its successor designation. GRE Zone Divisor: The sum of the Parties 12 CP loads located in the GRE Zone as detailed on each Party's Attachment O. Imputed Transmission Charge ( "ITC "): The monthly imputed charge for network integration transmission service utilized by each Party to serve its Network Load, if any, in the Joint Pricing Zone. 3 Integrated Transmission Agreement ( "ITA "): The Integrated Transmission Agreement, dated November 24, 1986, as amended, between and among GRE, SMMPA and HUC, which is Carved -Out Grandfathered Agreement No. 451 of Attachment P of the Midwest ISO Tariff. Inter -Zonal Revenues: Transmission revenues collected under Tariff Schedules 7, 8, and 9 for transactions outside of the GRE Zone. Inter -Zonal Revenues are collected by (or on behalf of) MISO under the Tariff, distributed to GRE for the Joint Pricing Zone, and allocated among the Parties using the GBV Allocator. Intra -Zonal Revenues: Revenues received under Tariff Schedules 7, 8, and 9 from transmission service provided within the GRE Zone for transactions inside the pricing zone. Intra -Zonal Revenues are collected by (or on behalf of) MISO under the Tariff, distributed to GRE for the Joint Pricing Zone, and allocated among the Parties using the ATRR Allocator. Joint Pricing Zone or JPZ: The GRE Zone, which includes the Zonal Transmission Facilities owned by the Parties hereto and Zonal Transmission Facilities for which all rights to receive revenues have been assigned to a Party. MISO Adjustments: Adjustments to Intra -Zonal Revenues or Inter -Zonal Revenues made by MISO after such revenues have been distributed to GRE. Credits or debits made by MISO to revenues for periods during which this Agreement is in effect will be added to, or subtracted from, the total amount of Inter -Zonal Revenues and Intra -Zonal Revenues available for distribution among the Parties. Monthly Network Revenues: The pro rata share of revenues associated with the Imputed Transmission Charge to which each Party is entitled, which is allocated using the ATRR Allocator. Monthly Net Revenues: The amount that each Party is entitled to receive (if this amount is positive) or obligated to pay (if this amount is negative) under this Agreement each month. Network Load: For a given month, each Party's system coincident peak load using the Zonal Transmission Facilities in the GRE Zone, as reported to GRE, excluding any load that already pays Tariff Schedule 9 charges directly to MISO. A Party's Network Load may be zero. In the case of MRES, the Network Load of HUC will determine the MRES Network Load. Parties: The signatories to this Agreement, including any entities that become signatories pursuant to Section 6.2 of this Agreement. Revenue Share: The revenues to which each Party is entitled prior to deduction of its Imputed Transmission Charge, which includes its Monthly Network Revenues, its share of Inter -Zonal Revenues, and its share of Intra -Zonal Revenues, as calculated on a monthly basis. CI Tariff: The Open Access Transmission, Energy and Operating Reserve Markets Tariff for the Midwest Independent Transmission System Operator, Inc. on file with the Commission as MISO FERC Electric Tariff, Fourth Revised Volume No. 1, or any successor tariff. Transmission Facilities Assignment Agreement: An agreement whereby a transmission owner assigns operational control of its transmission facilities to a MISO Transmission Owner that, in turn, turns operational control of the transmission facilities over to MISO. Total Facilities Value: The sum of the Parties' Facilities Values. Transmission Owner: A signatory to the Transmission Owners' Agreement that meets the criteria for the term "Owner" set forth therein and that has received approval from the Midwest ISO Board of Directors. Transmission Owners' Agreement: Agreement of Transmission Facilities Owners to Organize the Midwest Independent Transmission System Operator, Inc., a Delaware Non -Stock Corporation, on file with the FERC as Midwest Independent Transmission System Operator, Inc. FERC Electric Tariff, First Revised Rate Schedule No. 1, or any successor agreement. Zonal ITC: The sum of the Parties' Imputed Transmission Charges. Zonal Revenue Requirement: The sum of the Parties' Annual Transmission Revenue Requirements. Zonal Transmission Facilities: Facilities located in the GRE pricing zone that are classified as transmission pursuant to the Tariff and whose revenue requirements are not collected through Schedule 26 or 26A of the Tariff. Zonal Transmission Facilities shall exclude generation interconnection facilities and distribution facilities. Zonal Transmission Rate: The rate for monthly network transmission service provided in the Joint Pricing Zone under Tariff Schedule 9. The Zonal Transmission Rate is calculated using each Party's Annual Transmission Revenue Requirement and GRE Zone Divisor as contained in the Party's effective Attachment O. The Zonal Transmission Rate is recalculated any time there is a change in Attachment O impacting any Party's Annual Transmission Revenue Requirement, GRE Zone Divisor, or a change in the classification of a Party's Transmission Facilities included in the ATRR. ARTICLE 11 RELATIONSHIP BETWEEN MISO AND THE PARTIES 2.1 Relationship between MISO and the Parties. As the Tariff administrator and independent operator of a regional transmission system that includes the facilities in the 5 JPZ, MISO distributes Inter -Zonal Revenues and Intra -Zonal Revenues to GRE. Pursuant to the Transmission Owners' Agreement, each of the Parties is entitled to a portion of such Inter- and Intra -Zonal Revenues. 2.2 Relationship amongst the Parties. (a) GRE will bill, allocate and distribute all amounts due to, or owed by, the Parties under this Agreement. (b) CMIVIPA will be responsible to distribute the amounts due to ERMU and pay any amounts owed by ERMU to GRE. MRES will be responsible to distribute the amounts due to HUC and pay any amounts owed by HUC to GRE, except that GRE will directly settle with HUC the amounts HUC owes in connection with its network integration transmission service under the MISO Tariff. ARTICLE III REVENUE DISTRIBUTION METHOD 3.1 Annual Calculations. On an annual basis, or as otherwise necessary to reflect changes to Zonal Transmission Facilities, the Parties will update their respective Attachment 0 templates. GRE will use the Attachment 0 information to calculate the following: (a) Total Facilities Value; GBV Allocator. To determine the Total Facilities Value, GRE will calculate the sum of all Parties' Facilities Values. GRE will then determine a GBV Allocator for each Party based on the pro rata share of that Party's Facilities Value relative to the Total Facilities Value. (b) Zonal Revenue Requirement; ATRR Allocator. To determine the Zonal Revenue Requirement, GRE will calculate the sum of all Parties' Annual Transmission Revenue Requirements. GRE will then determine an ATRR Allocator for each Party based on the pro rata share of that Party's Annual Transmission Revenue Requirement relative to the Zonal Revenue Requirement. 3.2 Distribution of Calculations. The computations detailed in Section 3.1 (a) and 3.1 (b) above will be calculated any time there is a change in Attachment 0 impacting any Party's Facilities Value, Annual Transmission Revenue Requirement, or a change in the classification of a Party's Transmission Facilities included in the ATRR. GRE will provide the 3.1 (a) and 3.1 (b) calculations to the Parties within thirty (30) days of a change in the Attachment 0 data and calculations posted by MISO. 3.3 Monthly Calculations. The following computations will be made on a monthly basis: (a) Imputed Transmission Charge. To determine the Imputed Transmission Charge for each Party, GRE will multiply that Party's Network Load by the Zonal Lei Transmission Rate. A Party's Network Load and Imputed Transmission Charge may be zero. (b) Zonal ITC. To determine the Zonal ITC, GRE will calculate the sum of all Parties' Imputed Transmission Charges, if any, for the appropriate month. (c) Revenue Shares. To calculate the Revenue Share for each Party, GRE will determine the sum of the following three (3) numbers, as illustrated below: (i) the product of the Inter -Zonal Revenues for the preceding month (net of MISO Adjustments) and that Party's GBV Allocator; (ii) the product of the Intra -Zonal Revenues for the preceding month (net of MISO Adjustments) and that Party's ATRR Allocator; and (iii) that Party's Monthly Network Revenues calculated as the product of the Zonal ITC and that Party's ATRR Allocator. GRE Revenue Share = CMMPA Revenue Share = NSP Revenue Share = SMMPA Revenue Share = MIRES Revenue Share = Figure 1: Revenue Share (Illustration) GRE GBV Allocator X Inter -Zonal Revenues CMMPA GBV Allocator X Inter -Zonal Revenues NSP GBV Allocator X Inter -Zonal Revenues SMMPA GBV Allocator X Inter -Zonal Revenues MRES GBV Allocator X Inter -Zonal Revenues GRE ATRR Allocator X Intra -Zonal Revenues CMMPA ATRR Allocator X Intra -Zonal Revenues NSP ATRR Allocator X Intra -Zonal Revenues SMMPA ATRR Allocator X Intra -Zonal Revenues MRES ATRR Allocator X Intra -Zonal Revenues GRE ATRR Allocator X Zonal ITC CMMPA ATRR Allocator X Zonal ITC I NSP ATRR Allocator X Zonal ITC I SMMPA ATRR Allocator X Zonal ITC MRES ATRR Allocator X Zonal ITC (d) Monthly Net Revenues. To calculate the Monthly Net Revenues for each Party, GRE will subtract that Party's Imputed Transmission Charge, if any, from its Revenue Share. (e) Interim Calculation of GRE and SMMPA Monthly Net Revenues. During the period of time that SMMPA remains a party to the ITA, SMMPA's Monthly Net Revenues will be calculated as indicated in Attachment G, wherein calculation of SMMPA's Monthly Network Revenues and Imputed Transmission Charge exclude GRE's share of the Parties' network usage and network revenue requirements, respectively. Similarly, GRE's Monthly Network Revenues will be calculated as shown in Attachment F. This adjustment is solely between GRE and SMMPA and is intended to maintain their financial obligation to the ITA so long as SMMPA and GRE are both parties to the ITA. Nothing in this provision shall modify the calculation of Monthly Net Revenues for the other Parties to this Agreement nor shall the calculations result in Monthly Net Revenues different from what would be calculated if Attachments F and G were not in use. The illustration of SMMPA and GRE calculations is provided in Attachments F and G hereto. This section, and Attachments F and G, shall automatically cease to apply at such time as SMMPA withdraws from the ITA or the ITA is terminated in its entirety, without the need for any amendment hereto. However, SMMPA shall provide notice to all Parties of the effective date of its withdrawal from (or the termination of) the ITA. 3.4 Monthly Payments. The following payments will be made on a monthly basis. Payments shall be made by the twentieth day of each month. Payments should be made to the appropriate individual identified in Attachment A: (a) CMMPA Payment /Receipt. If CMMPA's Net Revenues are positive, then GRE will pay an amount equal to CMMPA's Net Revenues to CMMPA. If CMMPA's Net Revenues are negative, then CMMPA will pay an amount equal to CMMPA's Net Revenues to GRE. CMMPA will be responsible for distribution and collection of such amounts to or from ERMU. (b) NSP Payment /Receipt. If NSP's Net Revenues are positive, then GRE will pay an amount equal to NSP's Net Revenues to NSP. If NSP's Net Revenues are negative, then NSP will pay an amount equal to NSP's Net Revenues to GRE. (c) SMMPA Payment /Receipt. If SMMPA's Net Revenues are positive, then GRE will pay an amount equal to SMMPA's Net Revenues to SMMPA. If SMMPA's Net Revenues are negative, then SMMPA will pay an amount equal to SMMPA's Net Revenues to GRE. (d) MRES Payment /Receipt. If MRES Net Revenues are positive, then GRE will pay an amount equal to MRES's Net Revenues to MRES. If MRES's Net Revenues are negative, then MRES will pay an amount equal to MRES's Net Revenues to GRE. MRES will be responsible for distribution and collection of such amounts to or from HUC, except that GRE shall be responsible to settle any amounts due from HUC in connection with its network integration transmission service under the MISO Tariff. 3.5 Illustration of Revenue Allocation. Calculation of Joint Pricing Zone revenues or charges under this Article III is illustrated in Attachments B, C, D, E, F, G and H hereto, which show the implementation of the revenue - sharing provisions of this Agreement for a hypothetical period preceding execution of this Agreement. 3.6 Provision of Information. By the fifteenth day of each month, GRE will update the information in Attachments B, C, D, E, F, G and H, as applicable, for the preceding month 9 and distribute it to the other Parties, including the calculations for Revenue Share and Net Revenues for each Party, as well as Inter -Zonal Revenues and Intra -Zonal Revenues for the GRE Zone. 3.7 Data and Records Requirements. GRE will maintain records substantiating all revenues that it allocates, distributes, or receives under this Agreement. Each Party will maintain records substantiating all information they provide to GRE and documenting all amounts that they pay or receive under this Agreement. The records maintained by all Parties pursuant to this Section 3.7 shall be subject to the audit requirements of Section 8.9. 3.8 Billing Errors. The Parties shall be obligated to disclose to each Party any known, identified, or potential billing error(s) within 10 business days of the potential error being identified. The Parties agree that any such billing error, once validated, shall be settled retroactively to the start of the error or 12 calendar months from the date GRE is notified (or notifies the Parties) in writing of the error, whichever is shorter. Interest (calculated in accordance with the FERC's regulations at 18 CFR 35.19a) shall be applicable to the retroactive payments for billing errors that are settled per the terms of this provision. ARTICLE IV TERM AND WITHDRAWAL (a) Effective Date. The allocation and distribution of revenues set forth in Article III of this Agreement will be deemed effective for GRE, NSP and SMMPA as of July 1, 2009, and for CMMPA as of April 1, 2010, and for MRES as of January 1, 2012. 4.2 Termination. This Agreement will remain in effect for five years after the date of its execution and continue thereafter so long as the rates for service under the Tariff are zonal -based rates and GRE and at least one of the other Parties is a Transmission Owner. Starting on the third anniversary of the execution of this Agreement, any Party may terminate its participation in this Agreement by providing two (2) years' prior written notice of its intent to terminate. 4.3 Withdrawal from MISO. Notwithstanding Section 4.2, upon one year's prior written notice to the other Parties, a Party may withdraw from this Agreement if such Party is withdrawing from MISO. Up to and after its withdrawal, the withdrawing Party will be entitled to receive, or obligated to pay, revenues in accordance with Article III for the period up to its withdrawal. All of the withdrawing Party's other rights and obligations hereunder will terminate upon withdrawal from MISO, subject to financial settlement for the period ending on the date of termination. This Agreement will remain in effect for any Party not withdrawing unless (i) GRE withdraws from MISO or (ii) all Parties except GRE withdraw. In the event that GRE withdraws from 'MISO, GRE will negotiate in good faith with the other Parties to effectuate an equitable allocation of the 10 revenues and costs covered by this Agreement, applying a methodology that is consistent with the principles established by this Agreement. Nothing in this Agreement will be construed as affecting the rights of any Party hereto to: (i) unilaterally make an application to FERC to withdraw from MISO; or (ii) challenge such withdrawal from MISO by any other Party. 4.4 Material Changes to MISO Tariff. In the event that the Commission approves a change to the MISO Tariff that has a material impact on the revenue - sharing provisions in Article III of this Agreement, the Parties shall negotiate in good faith to amend this Agreement. If the Parties are unable to reach agreement on amendments to this Agreement, any Party may terminate its participation in the Agreement upon one year's prior written notice to the other Parties. ARTICLE V OTHER TARIFF SCHEDULES AND CHARGES 5.1 Revenues Collected Pursuant to Other Tariff Schedules. Unless specifically addressed by this Agreement, revenues collected by MISO pursuant to Tariff Schedules that are in effect at the time of execution of this Agreement, but are not explicitly referenced in this Agreement, will not be distributed under this Agreement. In the event that the Commission approves new Schedules to the Tariff, the Parties will negotiate in good faith to establish an equitable methodology for allocation of revenues collected thereunder, applying the principles established by this Agreement. 5.3 Revenues Collected for Wholesale Distribution Service on Distribution Facilities. Revenues received by GRE for Wholesale Distribution Service provided by any Party other than GRE shall be remitted by GRE to the appropriate Wholesale Distribution Service provider. Revenues received by GRE for Wholesale Distribution Service provided by GRE shall remain with GRE. ARTICLE VI AMENDMENT AND NEW PARTIES 6.1 Amendment. This Agreement may be amended only by a written instrument duly executed by all of the Parties. No modification to any of the provisions herein will be binding on any of the Parties unless approved in writing by all of the Parties. 6.2 New Parties. In order to share in distribution of revenues on a comparable basis with the other Parties to this`Agreement, a new Transmission Owner in the Joint Pricing Zone may become a Party to this Agreement, as amended to include such new Party. ARTICLE VII DISPUTE RESOLUTION 11 7.1 Dispute Resolution Process. Any dispute or controversy relating to this Agreement shall be referred to one or more designated representative(s) of each affected Party for resolution on an informal basis as promptly as practicable. Any Party may initiate this process by providing written notice of the dispute to the other Parties. In the event that the Parties are unable to resolve the dispute within sixty (60) days, the dispute may be referred to formal alternative dispute resolution processes if mutually agreeable to the Parties. If no satisfactory resolution is reached, the processes set forth in this provision will terminate. Thereafter, such dispute or controversy may be submitted to any Governmental Authority having jurisdiction under applicable law. 7.2 Reimbursement. Any amounts owed by any Party upon the resolution of a dispute shall be paid within ten (10) days following resolution of that dispute, including interest from the original due date at a rate equal to the FERC Electric Interest Rate, unless otherwise agreed by the Parties. ARTICLE VIII MISCELLANEOUS PROVISIONS 8.1 Descriptive Headings. The descriptive headings in this Agreement have been inserted for convenience of reference and shall not affect the construction of this Agreement. 8.2 Governing Law and Venue. This Agreement shall be interpreted and enforced according to the laws of the State of Minnesota, except to the extent preempted by the laws of the United States of America. Any action arising hereunder that involves questions of state law shall be instituted and litigated in the courts of Minnesota. 8.3 Successors and Assigns. This Agreement shall inure to the benefit of, and be binding upon, the Parties' successors and assigns. 8.4 Delivery of Notices. Notices required under this Agreement shall be provided to the parties identified in Attachment A to this Agreement. Any notice required under this Agreement will be deemed to have been given either: i) upon delivery, if sent by certified mail /return receipt requested or overnight courier; or ii) upon confirmation, if given by other reliable means. 8.5 Entire Agreement. This Agreement, including any attachments hereto, constitutes the entire agreement among the Parties with respect to the subject matter of this Agreement, and its interpretation shall not be affected by previous or contemporary oral or written representations made by any Party unless such representations are contained in this Agreement. 8.6 Counterparts. This Agreement may be executed in counterparts, all of which will constitute one agreement and will have the same force and effect as an original instrument. 12 8.7 Section 206 Right. Each Party will retain all rights it may have pursuant to Section 206 of the Federal Power Act., 16 U.S.C. § 824e, amended by Pub. L. No. 109 -58, §§ 1285- 86, 119 Stat. 594, 980 -81 (2005). 8.8 Section 205 Right. During the term of this Agreement, the provisions hereof will not be subject to any changes pursuant to the provisions of Section 205 of the Federal Power Act, 16 U.S.C. § 824d, absent the agreement of all Parties hereto. The standard of review for any changes other than those expressly provided for herein will be the "public interest" standard of review set forth in United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956) and Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956). 8.9 Audits. The Parties will maintain and retain for six (6) years the books and records needed to substantiate the calculations performed pursuant to Article III, and all data substantiating allocation of revenues or costs under this Agreement, unless FERC record retention requirements establish a retention requirement longer than 6 years for a Party; if so, the FERC retention requirements shall apply. Any Party may conduct, at its own expense, audits of any other Party's books and records that relate to this Agreement. Such audits will be conducted at reasonable, mutually agreed -upon times, and the Parties will cooperate in good faith to effectuate such audits. 8.10 Regulatory Approval. This Agreement is subject to regulatory approvals. In the event that FERC or any Governmental Authority disapproves or refuses to accept this Agreement in whole or in part, this Agreement will cease to be effective, except that the Parties will be obligated to attempt expeditiously and in good faith to negotiate a substitute agreement that addresses the reasons for such refusal or disapproval. In negotiating a substitute agreement, no Party will be required to accept any change that would reasonably be expected to reduce its expected economic benefit from the transaction. 8.11 Limitations. Nothing contained herein shall be construed to create an association, joint venture, trust, or partnership. Each Party will remain liable for its share of charges or assessments incurred under the Tariff or Transmission Owners' Agreement, including congestion costs, lost revenue charges, exit fees and comparable costs. 8.12 Indemnification. Each Party shall indemnify and save each other Party harmless from all damages, losses, claims, costs, legal fees, and /or expenses for injury to or death of any person, or damage to any property, resulting from the operation of facilities controlled by it within the Joint Pricing Zone, unless caused by the negligence or intentional wrongdoing of one of the other Parties. 13 IN WITNESS THEREOF, the Parties, by their duly authorized agents, have hereunder executed this Agreement. GREAT RIVER ENERGY A Minnesota Cooperative Corporation William Kaul, Vice President, Transmission Date CENTRAL MINNESOTA MUNICIPAL POWER AGENCY A Minnesota Municipal Corporation in Bob Elston, President Date MISSOURI BASIN MUNICIPAL POWER AGENCY, D /B /A MISSOURI RIVER ENERGY SERVICES Ray Wahle, Director Power Supply and Operations Date NORTHERN STATES POWER COMPANY A Minnesota Corporation Teresa Mogensen, Vice President, Transmission Xce) Energy Services Inc. Authorized Agent for Northern States Power Company, A Minnesota Corporation Date 14 SOUTHERN MINNESOTA MUNICIPAL POWER AGENCY A Minnesota Municipal Corporation By: David P. Geschwind, Director of Operations and COO Date 15 ATTACHMENT A Addresses for Delivery of Notices and Billings Notices: Great River Energy: Jean Mayhew, Manager, Transmission Strategy & Business Planning 12300 Elm Creek Blvd. Maple Grove, MN 55369 Central Minnesota Municipal Power Agency: Steve Thompson, Deputy Chief Executive Officer 459 South Grove St. Blue Earth, MN 56013 Direct: 507 - 526 -2193 Fax: 507 - 526 -2527 Missouri River Energy Services: Terry Wolf, Manager of Transmission Services 3724 West Avera Drive Sioux Falls, SD 57109 -8929 Northern States Power Company: Greg Gorski, Transmission Account Representative 414 Nicollet Mall, MP8 Minneapolis, MN 55401 Southern Minnesota Municipal Power Agency: Richard Hettwer, Manager of Power Delivery 500 First Avenue SW Rochester, MN 55902 in Billings and Payments: Great River Energy: Attn: Mail Stop 200 12300 Elm Creek Blvd. Maple Grove, MN 55369 Central Minnesota Municipal Power Agency: Larry Blaine, Chief Financial Officer 459 South Grove St. Blue Earth, MN 56013 Direct: 507 - 526 -2193 Fax: 507 - 526 -2527 Missouri River Energy Services: Terry Wolf, Manager of Transmission Services 3724 West Avera Drive PO Box 88920 Sioux Falls, SD 57109 -8929 Northern States Power Company: Scott Hart, Accountant, Transmission 55015 th Street Denver, CO 80202 Southern Minnesota Municipal Power Agency: Attn: Accounts payable 500 First Avenue SW Rochester, MN 55902 17 Alternative Forms of Delivery of Notices (telephone, facsimile or email): Great River Energy: Jean Mayhew, Manager, Transmission Strategy & Business Planning JMayhew @grenergy.com Direct: 763 - 445 -5955 Facsimile: 763 - 445 -6755 Cell Phone: 612 - 308 -8257 Central Minnesota Municipal Power Agency: Larry Blaine, Chief Financial Officer 459 South Grove St. Blue Earth, MN 56013 LarryB @cmmpa.org Direct: 507 -526 -2193 Fax: 507 - 526 -2527 Northern States Power Company: Greg Gorski, Transmission Account Representative gregory.e.gorski@xcelenergy.com Direct: 612 - 330 -7516 Facsimile: Cell Phone: Southern Minnesota Municipal Power Agency: Richard Hettwer, Manager of Power Delivery Rj.hettwer @smmpa.org Direct: 507- 292 -6451 Facsimile: 507 - 292 -6414 IN Attachment B trii `iiteii:'fririsrit�ssi`rr" eta ' °e ' r�;° >` GBV Allocator Network Load (kW) Zonal Transmission Rate ($ /kW) Imputed Transmission Charge GRE Monthly Network Revenues GRE 927,130 $ 4.6800 $4,338,968.40 ;�b xh2oiiat1TG:';>: Gross Book Value GBV Imputed Transmission GBV Allocator Inter -Zonal Revenues and Adjustments MISO Monthly Revenues and Adjustments Charge ATRR Allocator Monthly Network Revenues 93.89% GRE GRE GRE NSP $311,120.08 2.02% Inter -Zonal Revenues GRE $4,338,968.40 $ 103,602.64 Intra -Zonal Revenues and Adjustments MRES (HUC) $254,042.44 Intra -Zonal Revenues ATRR Allocator SMMPA $233,455.02 GRE Intra -Zonal Revenues MISO Adjustments to Intra -Zonal Revenues CMMPA (ERMU) $0.00 MRES (HUC) Intra -Zonal Revenuesi Totall $5,137,585.94 92.41%1 $ 4,747,417.92 DEFINITIONS TPF - Trnamission Participation Factor RTOR - Regional Transmission Through and Out Revenue GBV - Gross Book Value 19 Gross Book Value GBV Facilities Value $ GBV Allocator Inter -Zonal Revenues and Adjustments MISO Monthly Revenues and Adjustments GBV Allocator Inter -Zonal Revenues 339,827,567 93.89% GRE GRE Basic Transmission Service Revenue - GBV Basis Basic Transmission Service Revenue - TPF Basis MISO Adjustments to Inter -Zonal Revenues $ 78,770.00 $ 31,580.00 $ - 7,293,632 2.02% Inter -Zonal Revenues $ 110,350.00 93.89% $ 103,602.64 Intra -Zonal Revenues and Adjustments MISO Monthly Revenues and Adjustments ATRR Allocator Intra -Zonal Revenues ATRR Allocator NSP GRE GRE Intra -Zonal Revenues MISO Adjustments to Intra -Zonal Revenues $ 80,762.00 $ - 92.41% MRES (HUC) Intra -Zonal Revenuesi $ 80,762.00 92.41% $ 74,628.62 3.73% y* OWN 0.12% DEFINITIONS TPF - Trnamission Participation Factor RTOR - Regional Transmission Through and Out Revenue GBV - Gross Book Value 19 Gross Book Value GBV Facilities Value $ GBV Allocator NSP 5,875,652 1.62% GRE (includes WMU) 339,827,567 93.89% MRES (HUC) 8,488,483 2.35% SMMPA 7,293,632 2.02% CMMPA ERMU 474,277 0.13% Total Facilities Value 361,959,611 100.00% Annual Transmission Revenue Requirement ATRR ATRR $ ATRR Allocator NSP 715,369 1.32% GRE (includes WMU) 50,050,403 92.41% MRES (HUC) 1,313,931 2.43% SMMPA 2,019,776 3.73% CMMPA ERMU 64,332 0.12% Zonal Revenue Requirement 54,163,811 100.00% DEFINITIONS TPF - Trnamission Participation Factor RTOR - Regional Transmission Through and Out Revenue GBV - Gross Book Value 19 Attachment C ,, 4 W, „ . l2svende Saiiri'ctr'>iitMl Network Load (kW) Zonal Transmission Rate Imputed Transmission ($/kW) I Charge 0 1 $ 4.68001 $0.00 I DEFINITIONS TPF - Trnamission Participation Factor RTOR - Regional Transmission Through and Out Revenue GBV - Gross Book Value 20 Imputed Transmission Facilities Value $) GBV Allocator NSP Charge ATRR Allocator Monthly Network Revenues 339,827,567 93.89% CMMPA (ERMU) CMMPA (ERMU) NSP $311,120.08 8,488,483 2.35% GRE $4,440,952.70 0.13% Total Facilities Value MRES (HUC) $254,042.44 Annual Transmission Revenue Requirement (ATRR) ATRR $) SMMPA $233,455.02 715,369 1.32% CMMPA (ERMU) $0.00 92.41% MRES (HUC) Total $5,239,570.24 0.12% $ 6,223.20 DEFINITIONS TPF - Trnamission Participation Factor RTOR - Regional Transmission Through and Out Revenue GBV - Gross Book Value 20 Gross Book Value (GBV) Facilities Value $) GBV Allocator NSP 5,875,652 1.62% GRE (includes WMU) 339,827,567 93.89% MRES (HUC) 7,293,632 2.02% SMMPA 8,488,483 2.35% CMMPA (ERMU) 474,277 0.13% Total Facilities Value 361,959,611 100.00% Annual Transmission Revenue Requirement (ATRR) ATRR $) ATRR Allocator NSP 715,369 1.32% GRE (includes WMU) 50,050,403 92.41% MRES (HUC) 1,313,931 2.43% SMMPA 2,019,776 3.73% CMMPA (ERMU) 64,332 0.12% Zonal Revenue Requirement 54,163,811 100.00% DEFINITIONS TPF - Trnamission Participation Factor RTOR - Regional Transmission Through and Out Revenue GBV - Gross Book Value 20 Attachment D >. Retienue Sharing for NSP- Network Load (kW) NSP 64,952 Zonal Transmission Rate ($ /kW) 4.6800 Imputed Transmission Charge NSP ($303,975.36) 7 .Zonal and Adjustments Imputed Transmission Inter -Zonal Revenues GBV Allocator NSP Charge ATRR Allocator Monthly Network Revenues $ 78,770.00 $ 31,580.00 $ - 93.89% NSP NSP NSP $303,975.36 $ 1,791.30 Intra -Zonal Revenues and Adjustments GRE $4,440,952.70 Intra -Zonal Revenues Total Facilities Value MRES (HUC) $254,042.44 NSP Intra -Zonal Revenues MISO Adjustments to Intra -Zonal Revenues SMMPA $233,455.02 715,369 Intra -Zonal Revenuesl CMMPA (ERMU) $0.00 $ 1,066.66 MRES (HUC) Totall $5,232,425.52 1.32%1 $ 69,107.31 MISO Monthly Revenues Inter -Zonal Revenues and Adjustments and Adjustments GBV Allocator Inter -Zonal Revenues GBV Allocator NSP NSP NSP Basic Transmission Service Revenue - GBV Basis Basic Transmission Service Revenue - TPF Basis MISO Adjustments to Inter -Zonal Revenues $ 78,770.00 $ 31,580.00 $ - 93.89% MIRES (HUC) Inter -Zonal Revenues $ 110,350.00 1.62% $ 1,791.30 Intra -Zonal Revenues and Adjustments MISO Monthly Revenues and Adjustments ATRR Allocator Intra -Zonal Revenues Total Facilities Value 361,959,611 NSP NSP Intra -Zonal Revenues MISO Adjustments to Intra -Zonal Revenues $ 80,762.00 $ - NSP 715,369 Intra -Zonal Revenuesl $ 80,762.00 1.32%l $ 1,066.66 DEFINITIONS TPF - Trnamission Participation Factor RTOR - Regional Transmission Through and Out Revenue GBV - Gross Book Value 1 21 Gross Book Value GBV Facilities Value $ GBV Allocator NSP 5,875,652 1.62% GRE (includes WMU) 339,827,567 93.89% MIRES (HUC) 7,293,632 2.02% SMMPA 8,488,483 2.35% CMMPA ERMU 474,277 0.13% Total Facilities Value 361,959,611 100.00% Annual Transmission Revenue Requirement (ATRR) ATRR ($) ATRR Allocator ( %) NSP 715,369 1.32% GRE (includes WMU) 50,050,403 92.41% MRES (HUC) 1,313,931 2.43% SMMPA 2,019,776 3.73% CMMPA (ERMU) 64,332 0.12% Zonal Revenue Requirement 54,163,811 1 100.00% DEFINITIONS TPF - Trnamission Participation Factor RTOR - Regional Transmission Through and Out Revenue GBV - Gross Book Value 1 21 Attachment E S . �` • ��4f� ..°�'` ree 5`¢'," Hx"? _;' T. <::'L4^ -'F N �.1t1GJfa[iri 1Qr JM39i7�J1. .t..,',:.••.;a,;Z0n4l'tTC. .. ` 4 Ir►i °dWd— T6nsmisSioh Ghai 'e' Facilities Value $ GBV Allocator NSP 5,875,652 Imputed Transmission GRE Network Load (kW) Zonal Transmission Rate Imputed Transmission ATRR Allocator Revenues ($ /kW) Charge SMMPA SMMPA 0 SMMPA 48,738 $ 4.6800 $228,093.84 $4,440,952.70 .t..,',:.••.;a,;Z0n4l'tTC. .. ` 4 Gross Book Value GBV Facilities Value $ GBV Allocator NSP 5,875,652 Imputed Transmission GRE Monthly Network 93.89% Charge ATRR Allocator Revenues SMMPA 8,488,483 SMMPA SMMPA NSP $311,120.08 Total Facilities Value 361,959,611 GRE $4,440,952.70 ATRR $ ATRR Allocator MRES (HUC) $254,042.44 1.32% GRE SMMPA $228,093.84 MRES (HUC) 1,313,931 CMMPA ERMU $0.00 2,019,776 3.73% Totall $5,234,209.06 3.73% $ 195,184.38 DEFINITIONS TPF - Trnamission Participation Factor RTOR - Regional Transmission Through and Out Revenue GBV - Gross Book Value 22 Gross Book Value GBV Facilities Value $ GBV Allocator NSP 5,875,652 1.62% GRE 339,827,567 93.89% MRES (HUC) 7,293,632 2.02% SMMPA 8,488,483 2.35% CMMPA ERMU 474,277 0.13% Total Facilities Value 361,959,611 100.00% Annual Transmission Revenue Requirement ATRR ATRR $ ATRR Allocator NSP 715,369 1.32% GRE 50,050,403 92.41% MRES (HUC) 1,313,931 2.43% SMMPA 2,019,776 3.73% CMMPA ERMU 64,332 0.12% Zonal Revenue Requirement 54,163,811 100.00% DEFINITIONS TPF - Trnamission Participation Factor RTOR - Regional Transmission Through and Out Revenue GBV - Gross Book Value 22 Attachment F = lii>�au {ed..�'arismiSS'rcin Gha a ;_ - �;`= x�;• Network Load (kW) Zonal Transmission Rate ($ /kW) Imputed Transmission Charge MRES (HUC) MRES (HUC) 53,036 $ 4.6800 ($248,208.48) DEFINITIONS TPF - Trnamission Participation Factor RTOR - Regional Transmission Through and Out Revenue GBV - Gross Book Value 23 Facilities Value $ GBV Allocator Imputed Transmission ATRR Allocator Monthly Network 1.62% Charge 339,827,567 Revenues MRES (HUC) 7,293,632 MRES (HUC) MRES (HUC) NSP $311,120.08 CMMPA ERMU 474,277 GRE $4,440,952.70 361,959,611 100.00% MRES (HUC) $254,042.44 ATRR Allocator NSP SMMPA $233,455.02 GRE (includes WMU) 50,050,403 CMMPA ERMU) $0.00 1,313,931 2.43% Total $5,239,570.24 2.43% $ 127,103.94 DEFINITIONS TPF - Trnamission Participation Factor RTOR - Regional Transmission Through and Out Revenue GBV - Gross Book Value 23 Facilities Value $ GBV Allocator Gross Book Value GB NSP 5,875,652 1.62% GRE (includes WMU) 339,827,567 93.89% MRES (HUC) 7,293,632 2.02% SMMPA 8,488,483 2.35% CMMPA ERMU 474,277 0.13% Total Facilities Value 361,959,611 100.00% Annual Transmission Revenue Requirement ATRR ATRR $ ATRR Allocator NSP 715,369 1.32% GRE (includes WMU) 50,050,403 92.41% MRES (HUC) 1,313,931 2.43% SMMPA 2,019,776 3.73% CMMPA ERMU 64,332 0.12% Zonal Revenue Requirement 54,163,811 100.00% DEFINITIONS TPF - Trnamission Participation Factor RTOR - Regional Transmission Through and Out Revenue GBV - Gross Book Value 23 Attachment G :rr NSP Revenue Value DEFINITIONS TPF - Tmamission Participation Factor RTOR - Regional Transmission Through and Out Reve GBV - Gross Book Value 339,827,567 8,488,483 50,050,403 2,019,776 24 0.12% A B C D =AxBxC Zonal Transmission Rate Monthly Network Network Load (kW) $ /kW ATRR Allocator Revenues NSP SMMPA SMMPA 64,952 GRE N/A SMMPA 48,738 3.82% CMMPA ERMU Total 113,690 $ 4.6800 3.82% $ 20,334.21 A B C D =AxBxC Zonal Transmission Rate Imputed Transmission Network Load kW $/kW ATRR Allocator % Charge SMMPA SMMPA NSP GRE 1.35% SMMPA 48,738 N/A CMMPA ERMU 3.82% 0.12% Total 48,738 $ 4.68001 5.30%1$ 12,082.21 NSP Revenue Value DEFINITIONS TPF - Tmamission Participation Factor RTOR - Regional Transmission Through and Out Reve GBV - Gross Book Value 339,827,567 8,488,483 50,050,403 2,019,776 24 0.12% Attachment H aR#Xe'r $ 5tiaff 6 'R 07 b ; a •. • h ;, ". ,, , =: _ : e"sY> G Va' od tr Ga Facilities Value $ A B GRE D =Ax 927,130 $ 4.6800 G Va' od tr Ga Facilities Value $ A B C D =Ax 1.66% Network Load kW ) Zonal Transmission Rate ($ /kW) ATRR Allocator Monthly Revei NSP GRE SMMPA CMMPA ERMU 2.39% CMMPA ERMU GRE GF 64,952 927,130 N/A 354,665,979 94.70% Annual Transmission Revenue Requirement ATRR Total 992,082 $ 4.68001 94.70% $ 4 GRE (includes WMU) 50,050,403 94.70% C D =Ax 3.82% A B 0.12°/ Network Load kW ) Zonal Transmission Rate ($/kW) ATRR Allocator % Imputed Ta Cha NSP GRE SMMPA CMMPA ERMU GRE GF 927,130 1.35% 94.70% 0.00% 0,12% Total 927,130 $ 4.6800 96.18% $ 4 G Va' od tr Ga Facilities Value $ GBV Allocator M Gross Book Value GBV NSP 5,875,652 1.66% GRE (includes WMU) 339,827,567 95.82% SMMPA 8,488,483 2.39% CMMPA ERMU 474,277 0.13% Total Facilities Value 354,665,979 100.00% Annual Transmission Revenue Requirement ATRR ATRR $ ATRR Allocator NSP 715,369 1.35% GRE (includes WMU) 50,050,403 94.70% SMMPA 2,019,776 3.82% CMMPA ERMU 64,332 0.12°/ Zonal Revenue Re uiremenl 52,849,880 100.001/6 DEFINITIONS TPF - Trnamission Participation Factor RTOR - Regional Transmission Through and Out Reve GBV - Gross Book Value 25 Transaction Specification Sheet for Network Integration Transmission Service Dated as of _ 11"1 6 : OASIS Subclass (Contract) AREF# 1.0 In accordance with the Service Agreement, dated as of 11I01%201.1 , by and between the Midwest ISO and Hutchinson Utilities Commission (HUC) (Transmission Customer), the Transmission Customer requests a transaction of Network Integration Transmission Service. 2.0 Nature of Transmission Request: This request for Network Integration Service is due to _conversion of GFA service for the City of Hutchinson, MN. 3.0 Type of Transmission Service: The Network Integration Service requested is under the Tariff. A description of the services requested are as follows: Network Transmission Service to Hutchinson, MN load in the GRE LBA. Specific local facilities needed to provide the service are None 4.0 Term of Transaction: _10 years Start Date: _01/01/2012 00:00:00 EST Termination Date: 01/01/2022 00:00:00 EST 5.0 Description of capacity and energy to be transmitted by Transmission Provider: 65 MW of peak transmission capacity initially, then increasing to 68 MW by 2021, see attached load forecast Note: Include the electric control areas in which the transaction originates and terminates. 6.0 Point(s) of Receipt: _GRE. Delivering Party: _MISO 7.0 Point(s) of Delivery: _ GRE, GRE.HUC Receiving Party: _HUC load in the GRE LBA_ 8.0 Network Resources 8.1 Transmission Customer Generation Owned or Leased: Resource Capacity (MW) Capacity Designated As Network Resource Designated Interfaces HUC Unit 2 2.0/2.0 (sum/win) YES Internal HUC Unit 3 3.9/3.9 ( sum/win) YES Internal HUC Unit 4 3.9/3.9 (sum/win) YES Internal HUC Unit 8 10.0/13.3 (sum/win) YES Internal HUC Unit 1 41.0/41.0 (sum/win) Partial - 21 MW designated Internal HUC Unit S 10.0 /10.0 (sum/win) YES Internal HUC Unit 9 22.0/24.3 ( sum/win) YES Internal 20 MW of Unit 1 is committed to a sale between HUC and Southern Minnesota Municipal Power Agency (SMMPA). 8.2 Transmission Customer Generation Purchased: Resource Capacity Capacity Designated Designated As Interfaces Network Resource MRES System 15 MW YES MISO Purchase from Aggregate Deliverable Units Note: Attach operating information and description to comply with the Tariff and 18 CFR Section 2.20. 9.0 Network Load 9.1 Transmission Customer Network Load: Network Load Transmission Voltage Level GRE.HUC 65 MW 115 and 69 kV 9.2 Description: a) Receipt/Delivery Point Electrical Characteristics: b) _ GRE & Xcel Interface; _HUC 3M; 115 kV delivery; bus # 619952; _HUC Plant 1; 69 kV delivery; bus # 619953; _ _HUC Plant 2; 69 kV delivery; bus # 619954; _ _HUC HTI; 69 kV delivery; bus # 619956; Note: Please include a Single -Line Diagram if the Delivery Point has Direct Assignment Facilities or Wholesale Distribution Service is necessary. C) Expected Transmission Profile: _See Attached Notes: (1) Provide seasonal peaks for the four latest periods. (2) Provide average weekly load profiles for the four latest seasonal periods (in numbers and graphs). d) Historical Load Information: _See Attached Notes: (1) Provide monthly clock hour Coincident Peak Demands (at time of local Control Area System Demand) for each of the last twelve months. (2) Provide monthly clock hour Non - Coincident Peak Demands (Network Load Highest Demand) for each of the last twelve months. (3) Provide monthly energy for each of the last twelve months. e) Forecasted Load Information: _ See Attached Notes: (1) Provide projected summer and winter seasonal peak demands for each of the next ten (10) years. (2) Provide projected energy for each of the next ten (10) years. f) Interruptible Load: NA 10.0 Description of Transmission Customers Transmission System: _Service to distribution voltage_ 11.0 Designation of party(ies) subject to reciprocal service obligation: NA 12.0 Name(s) of any Intervening Systems providing transmission service: 13.0 14.0 Party Responsible for Providing Real Power Losses: HUC Firmness of Service: _Yearly Firm 15.0 Reservation Priority: _NERC Level 7_ 16.0 Deposit: NA 17.0 Note: Please provide calculation. Creditworthiness: _No Changes_ Any credit request should be addressed to the following: Name: Title: Phone: Fax: E -mail: 18.0 Service under this Agreement may be subject to some combination of the charges detailed below, and will be determined in accordance with the terms and conditions of the Tariff. 18.1 Transmission Service Charge: 18.2 System Impact and/or Facilities Study Charge(s): 18.3 Network Upgrade: 18.4 Direct Assignment Facilities Charge: 18.5 Ancillary Services Charges: 18.6 Charges for Wholesale Distribution Service: NOTE: See Exhibit WDS enclosed. 18.7 Redispatch Charge: 18.8 Power Factor Requirements (if applicable): 19.0 Any notice or request made to the Transmission Customer regarding this Agreement shall be made to the following representative as indicated below: Name: Title: Phone: Fax: _Michael Kumm _General Manager _(320) 234 -0505_ E -mail: _mkumm @ci.hutchinson.mn.us 20.0 The Tariff, Service Agreement and Network Operating Agreement are incorporated herein and made a part hereof. IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their respective authorized officials. Midwest ISO Transmission Customer By: Name: Title: Date: Planning Concurrence By: _ Date: Operations Concurrence By: Date: IM _Michael Kumm General Manager_ 11/01/2011 The Midwest ISO executes this Transaction Specification Sheet and Network Operating Agreement subject to review by the Midwest ISO and the local Transmission Owner identifying any and all operating restrictions associated with this network service. Once identified, these operating restrictions will be added to the Network Operating Agreement. The Midwest ISO will not be responsible for redispatch costs associated with this service until these operating restrictions are identified and included in the Network Operating Agreement with the Transmission Customer. Exhibit 1— Load details HUC Non - coincident peaks Year Month MW MWhr 2010 9 45 24000 2010 10 44 24000 2010 11 44 24000 2010 12 45 25000 2011 1 44 26000 2011 2 45 23000 2011 3 42 25000 2011 4 44 23000 2011 5 48 25000 2011 6 59 27000 2011 7 62 32000 2011 8 59 30000 HUC Forecasted load Year Sum MW Win MW MWhr 2011 65 45 309000 2012 65 45 310000 2013 66 45 312000 2014 66 45 313000 2015 66 45 315000 2016 67 46 316000 2017 67 46 318000 2018 67 46 319000 2019 68 46 321000 2020 68 46 322000 2021 68 47 324000 Advertisement for Bids for "Switch Gear and Associated Relaying Equipment" Hutchinson Utilities Commission Hutchinson, Minnesota Notice is hereby given that the Hutchinson Utilities Commission of the City of Hutchinson, Hutchinson, Minnesota, hereinafter referred to as the Owner, will receive sealed Bids at the Hutchinson Utilities office until 2 p.m. (CST) on the XXXXXXXXXX 2011, and will publicly open and read aloud such Bids on the following equipment: "Switch Gear and Associated Relaying Equipment" Proposals shall be properly endorsed and delivered in an envelope marked, "Switch Gear and Associated Relaying Equipment" and shall be addressed to: Hutchinson Utilities Commission, 225 Michigan Street SE, Hutchinson, Minnesota 55350, Attn: Mr. Steve Lancaster. Bids shall be supplied in both hardcopy and electronic format. The name and address of the Bidder shall be clearly indicated on the outside of the package containing the Bid. Bidder shall provide one (1) original (clearly marked as such) and 1 copy of the Bid along with 1 CD disks containing electronic PDF files of their Bid. All proposals shall be submitted on the Bidder's own letterhead, in facsimile of the Bid Form enclosed within the Specifications, or by utilizing the Bid Form enclosed with the Specifications by typing the official name of the Bidder at the top of the form. Each Bid shall be accompanied by a Bid Bond, made payable to the Hutchinson Utilities Commission of the City of Hutchinson, Hutchinson, Minnesota, in the amount of five percent (5 %) of the Bid, as a guarantee that the Bidder will enter into the proposed Contract after the Bid has been accepted. The successful Bidder shall furnish a Performance Bond B in an amount equal to one- hundred percent (100 %) of the Contract price to the Owner prior to the approval of the Contract. No Bidder may withdraw his Bid or Proposal for a Period of thirty (30) days after date of opening of Bids. At the aforementioned time and place, or at such later time and place as the Owner then may fix, the Owner will act upon Proposals received and with its sole discretion may award Contract for the furnishing of said equipment. Specifications may be obtained by contacting Mr. James Booty, HDR Engineering Inc., 701 Xenia Avenue South, Minneapolis, MN. Telephone number 763- 591 -5471. The Hutchinson Utilities Commission of the City of Hutchinson, Hutchinson, Minnesota reserves the right to reject any and all Bids, or Bid irregularities. By President Date ATTES By Secretary Date �d-411 EXEMPT SICK LEAVE 1. Sick leave shall be granted to all probationary and non - probationary employees at a rate of eight (8) hours per month. 2. Sick leave may be granted for absence from duty because of personal illness, or; after mpletion of probationary pefie , for the illness of an immediate family member on the same terms the employee is able to use sick leave benefits for their own illness, including appointments for necessary medical, dental or eye care, legal quarantine, or brief emergency situation (not to exceed one day) in the immediate family. 3. Sick leave cannot be accumulated beyond 720 hours. After the accumulation of 720 hours, a payback of one -third of the amount over 720 hours will be made annually on or about February 1. 4. On retirement or upon death before retirement, a payback of one -third of the amount over 240 hours will be made. If the employee resigns or is dismissed, the above payment shall not be made. In case of death during employment, the unused sick leave will be paid to his/her estate on the same ratio as above. 5. Requests for sick leave consideration in case of other emergency situations may be brought to the Director. 6. A maximum of five days sick leave may be allowed when necessary in the case of death in the immediate family. 7. If an employee becomes ill and must stay home from work, he /she shall notify their Director, Manager or Supervisor before their work day begins. 8. If an employee becomes ill during his /her regular work day, they shall notify their Director, Manager or Supervisor that it is necessary to leave due to illness. 9. Employees may be required to submit a medical certificate for any sick leave, at the discretion of the Director, Manager or Supervisor. 10. The use or claim of sick leave for a purpose not authorized may be cause for disciplinary action. 11. For the purpose of accumulating additional vacation or sick leave, an employee using earned vacation or sick leave is considered to be in a paid or working status. 12. Employees that are injured while engaged in after hours' employment of others or while self employed, shall not be covered under the Utility's Sick Leave Policy, or Worker's Compensation benefits. 13. An employee who is determined to be eligible for workers compensation benefits during absence from duty will receive such benefits pursuant to Section entitled "Worker's Compensation" in Exempt Employee Handbook. 14. The Employer shall comply with the Family and Medical Leave Act, the Minnesota Parental Leave Act and the Americans with Disabilities Act. EXEMPT SICK/VACATION LEAVE DONATION The HUC recognizes that a catastrophic illness and /or serious health condition of an employee or immediate family member (spouse or dependent child) may deplete an employee's available paid leave (sick/vacation/compensatory time). This policy is meant to provide employees with the option of assisting fellow employees at such a time. HUC employees having accrued sick or vacation leave will be allowed to donate a portion of such accrued leave to fellow employees experiencing a catastrophic illness and /or serious health condition suffered by the employee, the employee's spouse, or the employee's dependent child(ren). A catastrophic illness and /or serious health condition includes but is not limited to, heart attack, stroke, organ transplant, or other life threatening illness or debilitating condition as defined by a physician's diagnosis. The donation of leave from one employee to another shall be subject to the following terms and conditions. 1. An employee is only eligible to receive donated leave for time lost from normal work hours due to a life threatening disease or condition as defined above. 2. An employee will be eligible to receive donated leave only after the employee's accrued sick, vacation, and compensatory time have been exhausted. 3. All requests to receive donated leave must be in writing to the General Manager and must be accompanied by supporting medical data. The requests will be reviewed by the General Manager and must be approved to become effective. 4. No full time employee will be allowed to receive more than a total of twenty (20) work days or 160 hours of donated leave per single major life threatening disease or condition. There is no limit on catastrophic events per year. 5. An employee may only use donated leave up to the time of eligibility for a long -term disability benefit (if applicable), or for the maximum number of days allowed to be donated, whichever occurs first. 6. A full time employee may donate no more than sixteen (16) hours of leave per calendar year to a single fellow employee. This shall not be construed to prohibit donating sixteen (16) hours per year to additional employees. Leave donation will be calculated using time and not an equivalent cash amount. 7. An employee who is donating paid leave must do so from the employee's accrued sick and /or vacation leave balance. 8. A written request to donate leave must be made to the Business Customer /HR Manager on forms designated by HUC for that purpose. The Business Customer /HR Manager shall submit all requests to the General Manager for final approval. All donations made will be kept confidential. 9. The General Manager shall have the right to deny use of donated leave or limit its use if it is determined to be in the best interests of HUC. The Business Division 'as paFt of the payroll function) will subtr-ae Donated leave will be subtracted from the donor's accumulated balance and added to the requested employee as part of to he payroll function. Donated time will be processed and used by the date of submission until the eligible amount of donated leave is reached. Contributions of leave hours exceeding the eligible amount will be returned to the donating employee, and will not be transferred. Donated hours will be used in the order they are received. NON - EXEMPT SICK/VACATION LEAVE DONATION The HUC recognizes that a catastrophic illness and /or serious health condition of an employee or immediate family member (spouse or dependent child) may deplete an employee's available paid leave (sick/vacation/compensatory time). This policy is meant to provide employees with the option of assisting fellow employees at such a time. HUC employees having accrued sick or vacation leave will be allowed to donate a portion of such accrued leave to fellow employees experiencing a catastrophic illness and /or serious health condition suffered by the employee, the employee's spouse, or the employee's dependent child(ren). A catastrophic illness and /or serious health condition includes but is not limited to, heart attack, stroke, organ transplant, or other life threatening illness or debilitating condition as defined by a physician's diagnosis. The donation of leave from one employee to another shall be subject to the following terms and conditions. 1. An employee is only eligible to receive donated leave for time lost from normal work hours due to a life threatening disease or condition as defined above. 2. An employee will be eligible to receive donated leave only after the employee's accrued sick, vacation, and compensatory time have been exhausted. 3. All requests to receive donated leave must be in writing to the General Manager and must be accompanied by supporting medical data. The requests will be reviewed by the General Manager and must be approved to become effective. 4. No full time employee will be allowed to receive more than a total of twenty (20) work days or 160 hours of donated leave per single major life threatening disease or condition. There is no limit on catastrophic events per year. 5. An employee may only use donated leave up to the time of eligibility for a long -term disability benefit (if applicable), or for the maximum number of days allowed to be donated, whichever occurs first. 6. A full time employee may donate no more than sixteen (16) hours of leave per calendar year to a single fellow employee. This shall not be construed to prohibit donating sixteen (16) hours per year to additional employees. Leave donation will be calculated using time and not an equivalent cash amount. 7. An employee who is donating paid leave must do so from the employee's accrued sick and /or vacation leave balance. 8. A written request to donate leave must be made to the Business- Customer /HR Manager on forms designated by HUC for that purpose. The Busi=ness Customer /HR Manager shall submit all requests to the General Manager for final approval. All donations made will be kept confidential. 9. The General Manager shall have the right to deny use of donated leave or limit its use if it is determined to be in the best interests of HUC. The Business Division 'as of the pa oil function } ubtr-aet— dDonated leave will be subtracted from the donor's accumulated balance and eredit the hou rs —added to the requested employee as part of the payroll function. Donated time will be processed and used by the date of submission until the eligible amount of donated leave is reached. Contributions of leave hours exceeding the eligible amount will be returned to the donating employee, and will not be transferred. Donated hours will be used in the order they are received. NG Li. O LL z _O F- U) D W w O ,55 ,^ V/ G 0 N W F- D z Cl) V z 2 1* N CD O z O a) Of z O U) CCO) C O U c N LO w M F' U J �F—Zco ti r- z Z z rte. 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