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01-02-2013 HUCMMINUTES Regular Meeting — Hutchinson Utilities Commission Wednesday, January 2, 2013 (December Regular Meeting) Call to order — 3:00 p.m. President Bordson called the meeting to order. Members present: President Dwight Bordson; Vice President Craig Lenz; Commissioner Anthony Hanson; Commissioner Monty Morrow; Attorney Marc Sebora; General Manager Michael Kumm. Absent: Secretary Leon Johnson 1. Approve Minutes of: November 26 and December 13, 2012 Special Meetings and November 28, 2012 Regular Meeting The minutes of the November 26 and December 13, 2012 special meetings and November 28, 2012 regular meeting were reviewed. The Board recommended changing the word `would' to `could' in the second paragraph of the November 26, 2012 special meeting minutes. A motion was made by Vice President Lenz, seconded by Commissioner Morrow to approve the minutes with the Board recommended change to replace the word `would' with `could' in the second paragraph of the November 26, 2012 special meeting minutes. Motion was unanimously carried. 2. Discuss HCVN No discussion held. 3. Ratify Payment of Bills for November 2012 The November 2012 payables were discussed. A motion was made by Vice President Lenz, seconded by Commissioner Hanson to ratify the payment of bills in the amount of $2,986,675.29. (detailed listing in payables book). Motion was unanimously carried. 4. Approve Financial Statements /Budget Year to Date GM Kumm presented the November 2012 financial statements /budget year -to -date and the updated work order sheets for natural gas and electric utilities. After discussion, a motion was made by Commissioner Hanson, seconded by Vice President Lenz to approve the financial statements /budget year -to -date. Motion was unanimously carried. GM Kumm presented a Nuclear Waste Storage Refund Agreement in which HUC will receive a settlement of $198,351.14. GM Kumm requested the Commission approve authorization for President Bordson to sign this agreement. The money will be put in the rate stabilization fund. A motion was made by Vice President Lenz, seconded by Commissioner Hanson to approve President Bordson to sign the Nuclear Waste Storage Refund Agreement. Motion was unanimously carried. (Agreement attached.) 1 GM Kumm discussed HUC received approximately $200,000 from MRES related to Ottertail exercising their option on one of three easements with Big Stone II. GM further explained the funds received will be used to pay down debt. 5. Approve Changes to Policy on Payments of HUC Payables GM Kumm presented the changes to the policy on payments of HUC payables. The date was changed from 2012 to 2013 in the second to last paragraph. This is a part of HUC annual review of policies. After discussion, a motion was made by Commissioner Hanson, seconded by Commissioner Morrow to approve the changes to the policy on payments of Hutchinson Utilities Commission payables. Motion was unanimously carried. (Policy attached.) 6. Review Parallel Generation Policy GM Kumm presented the parallel generation policy. This is part of HUC's policy review schedule and no changes were recommended by staff. 7. Approve 2012 Industrial Rebate This agenda item was tabled until the January regular meeting. 8. Approve 3M Natural Gas Transportation Agreement John Webster presented the 3M natural gas transportation agreement for 2013. A motion was made by Vice President Lenz, seconded by Commissioner Hanson to approve the 3M natural gas transportation agreement. Motion was unanimously carried. (Agreement attached.) 9. Approve HTI Natural Gas Transportation Agreement This agenda item was tabled until the January regular meeting. 10. Approve BP Agreements John Webster presented the renewal of the annual agreements with BP for natural gas services. A motion was made by Commissioner Morrow, seconded by Commissioner Hanson to approve the BP agreements. Motion was unanimously carried. (Agreements attached.) 11. Review Policies and Requirements Booklet GM Kumm presented changes to the policies and requirements booklet, sections: • Inserts with Utility Bills • Inaccessible Utility Equipment /Meters • Identity Theft — Red Flag Program No changes were recommended. 12. Approve Changes to Exempt and Non - Exempt Handbooks GM Kumm presented changes to the exempt and non - exempt handbooks, sections: • Disability Insurance (exempt only) • Promotions & Transfers • Layoffs • Voluntary Leave of Absence 2 The word `cost' was replaced with `premium' on the disability insurance policy (exempt only) due to the change in the disability insurance. The changes to promotions & transfers; layoffs; and voluntary leave of absence were to clean up verbiage and to provide clarity. A motion was made by Commissioner Hanson, seconded by Vice President Lenz to approve the changes to the exempt and non- exempt handbooks, sections: disability insurance (exempt only); promotions & transfers; layoffs; and voluntary leave of absence. Motion was unanimously carried. (Changes attached.) 13. Discuss PILOT Workshop Discussion held regarding scheduling the next PILOT workshop to discuss transfer items, natural gas transport and electric wholesale sales. 14. Discuss Criteria for New Commissioner Candidates Discussion held regarding HUC establishing more specific criteria for future Commission candidates. President Bordson requested Attorney Sebora distribute a sample Hutchinson Hospital board matrix to the Commissioners. The Board will review and discuss in January's regular commission meeting. 15. Communication from the City Administrator City Administrator Carter discussed outcomes of the truth in taxation, budgets and levies. City Council made a conscious effort to keep levies flat and keep rates flat. 16. Approve Requisition #5156 for Unit 5 Emissions and Performance Testing Steve Lancaster presented requisition #5156 for unit 5 emissions and performance testing which was budgeted. After discussion, a motion was made by Commissioner Hanson, seconded by Commissioner Morrow to approve requisition #5156 for unit 5 emissions and performance testing. Motion was unanimously carried. (Requisition attached.) 17. Division Reports Electric — Steve Lancaster • Started unit 5 on December 15. It misfired which put natural gas into the exhaust, resulting in an explosion which was contained within the exhaust system. No one was hurt. The emission testing was delayed two weeks. Repair for damages are part of the installation warranty. • Discussion held regarding posting internally for an engineering tech. • Discussion was held regarding HUC safety. GM Kumm will coordinate an HUC safety program presentation for January's regular meeting. • There was no interest in the internal posting for the plant electrician position; will now advertise the position. Finance — Jared Martig • Heating and air conditioning improvements to HUC office building are complete. HUC received a $1,000 energy conservation rebate. 3 Gas — John Webster • Conducting second interviews today for the welder service position. Business — Jan Sifferath • Energy conservation information sent out in billing and will be posted on HUC web site this week. • Total year -end revenue recapture of outstanding bills was approximately $31,000. 18. Legal Update Nothing to report Unfinished Business • Update from City Attorney on Patent for the Real -Time Auto - Suggestion for Nodal Delivery in Energy Networks GM Kumm provided patent attorney the flow chart and examples of how HUC has used the model. President Bordson requested Attorney Sebora follow up with the patent attorney on this item. • Discussion Regarding Pre -Pay for Natural Gas GM Kumm reported no update. • Discuss Credit Card Payments Jan Sifferath reported no update. New Business None There being no further business, a motion was made by Vice President Lenz, seconded by Commissioner Hanson to adjourn the meeting at 4:26 p.m. Motion was unanimously carried. ATTEST: Dwight Bordson, President 12 Leon Johnson, Secretary MINUTES Regular Meeting — Hutchinson Utilities Commission Wednesday, January 2, 2013 (December Regular Meeting) Call to order — 3:00 p.m. President Bordson called the meeting to order. Members present: President Dwight Bordson; Vice President Craig Lenz; Commissioner Anthony Hanson; Commissioner Monty Morrow; Attorney Marc Sebora; General Manager Michael Kumm. Absent: Secretary Leon Johnson 1. Approve Minutes of: November 26 and December 13, 2012 Special Meetings and November 28, 2012 Regular Meeting The minutes of the November 26 and December 13, 2012 special meetings and November 28, 2012 regular meeting were reviewed. The Board recommended changing the word `would' to `could' in the second paragraph of the November 26, 2012 special meeting minutes. A motion was made by Vice President Lenz, seconded by Commissioner Morrow to approve the minutes with the Board recommended change to replace the word `would' with `could' in the second paragraph of the November 26, 2012 special meeting minutes. Motion was unanimously carried. 2. Discuss HCVN No discussion held. 3. Ratify Payment of Bills for November 2012 The November 2012 payables were discussed. A motion was made by Vice President Lenz, seconded by Commissioner Hanson to ratify the payment of bills in the amount of $2,986,675.29. (detailed listing in payables book). Motion was unanimously carried. 4. Approve Financial Statements /Budget Year to Date GM Kumm presented the November 2012 financial statements /budget year -to -date and the updated work order sheets for natural gas and electric utilities. After discussion, a motion was made by Commissioner Hanson, seconded by Vice President Lenz to approve the financial statements /budget year -to -date. Motion was unanimously carried. GM Kumm presented a Nuclear Waste Storage Refund Agreement in which HUC will receive a settlement of $198,351.14. GM Kumm requested the Commission approve authorization for President Bordson to sign this agreement. The money will be put in the rate stabilization fund. A motion was made by Vice President Lenz, seconded by Commissioner Hanson to approve President Bordson to sign the Nuclear Waste Storage Refund Agreement. Motion was unanimously carried. (Agreement attached.) 1 GM Kumm discussed HUC received approximately $200,000 from MRES related to Ottertail exercising their option on one of three easements with Big Stone II. GM further explained the funds received will be used to pay down debt. 5. Approve Changes to Policy on Payments of HUC Payables GM Kumm presented the changes to the policy on payments of HUC payables. The date was changed from 2012 to 2013 in the second to last paragraph. This is a part of HUC annual review of policies. After discussion, a motion was made by Commissioner Hanson, seconded by Commissioner Morrow to approve the changes to the policy on payments of Hutchinson Utilities Commission payables. Motion was unanimously carried. (Policy attached.) 6. Review Parallel Generation Policy GM Kumm presented the parallel generation policy. This is part of HUC's policy review schedule and no changes were recommended by staff. 7. Approve 2012 Industrial Rebate This agenda item was tabled until the January regular meeting. 8. Approve 3M Natural Gas Transportation Agreement John Webster presented the 3M natural gas transportation agreement for 2013. A motion was made by Vice President Lenz, seconded by Commissioner Hanson to approve the 3M natural gas transportation agreement. Motion was unanimously carried. (Agreement attached.) 9. Approve HTI Natural Gas Transportation Agreement This agenda item was tabled until the January regular meeting. 10. Approve BP Agreements John Webster presented the renewal of the annual agreements with BP for natural gas services. A motion was made by Commissioner Morrow, seconded by Commissioner Hanson to approve the BP agreements. Motion was unanimously carried. (Agreements attached.) 11. Review Policies and Requirements Booklet GM Kumm presented changes to the policies and requirements booklet, sections: • Inserts with Utility Bills • Inaccessible Utility Equipment /Meters • Identity Theft — Red Flag Program No changes were recommended. 12. Approve Changes to Exempt and Non - Exempt Handbooks GM Kumm presented changes to the exempt and non - exempt handbooks, sections: • Disability Insurance (exempt only) • Promotions & Transfers • Layoffs • Voluntary Leave of Absence 2 MINUTES Regular Meeting — Hutchinson Utilities Commission Wednesday, January 2, 2013 (December Regular Meeting) Call to order — 3:00 p.m. President Bordson called the meeting to order. Members present: President Dwight Bordson; Vice President Craig Lenz; Commissioner Anthony Hanson; Commissioner Monty Morrow; Attorney Marc Sebora; General Manager Michael Kumm. Absent: Secretary Leon Johnson 1. Approve Minutes of: November 26 and December 13, 2012 Special Meetings and November 28, 2012 Regular Meeting The minutes of the November 26 and December 13, 2012 special meetings and November 28, 2012 regular meeting were reviewed. The Board recommended changing the word `would' to `could' in the second paragraph of the November 26, 2012 special meeting minutes. A motion was made by Vice President Lenz, seconded by Commissioner Morrow to approve the minutes with the Board recommended change to replace the word `would' with `could' in the second paragraph of the November 26, 2012 special meeting minutes. Motion was unanimously carried. 2. Discuss HCVN No discussion held. 3. Ratify Payment of Bills for November 2012 The November 2012 payables were discussed. A motion was made by Vice President Lenz, seconded by Commissioner Hanson to ratify the payment of bills in the amount of $2,986,675.29. (detailed listing in payables book). Motion was unanimously carried. 4. Approve Financial Statements /Budget Year to Date GM Kumm presented the November 2012 financial statements /budget year -to -date and the updated work order sheets for natural gas and electric utilities. After discussion, a motion was made by Commissioner Hanson, seconded by Vice President Lenz to approve the financial statements /budget year -to -date. Motion was unanimously carried. GM Kumm presented a Nuclear Waste Storage Refund Agreement in which HUC will receive a settlement of $198,351.14. GM Kumm requested the Commission approve authorization for President Bordson to sign this agreement. The money will be put in the rate stabilization fund. A motion was made by Vice President Lenz, seconded by Commissioner Hanson to approve President Bordson to sign the Nuclear Waste Storage Refund Agreement. Motion was unanimously carried. (Agreement attached.) 1 GM Kumm discussed HUC received approximately $200,000 from MRES related to Ottertail exercising their option on one of three easements with Big Stone II. GM further explained the funds received will be used to pay down debt. 5. Approve Changes to Policy on Payments of HUC Payables GM Kumm presented the changes to the policy on payments of HUC payables. The date was changed from 2012 to 2013 in the second to last paragraph. This is a part of HUC annual review of policies. After discussion, a motion was made by Commissioner Hanson, seconded by Commissioner Morrow to approve the changes to the policy on payments of Hutchinson Utilities Commission payables. Motion was unanimously carried. (Policy attached.) 6. Review Parallel Generation Policy GM Kumm presented the parallel generation policy. This is part of HUC's policy review schedule and no changes were recommended by staff. 7. Approve 2012 Industrial Rebate This agenda item was tabled until the January regular meeting. 8. Approve 3M Natural Gas Transportation Agreement John Webster presented the 3M natural gas transportation agreement for 2013. A motion was made by Vice President Lenz, seconded by Commissioner Hanson to approve the 3M natural gas transportation agreement. Motion was unanimously carried. (Agreement attached.) 9. Approve HTI Natural Gas Transportation Agreement This agenda item was tabled until the January regular meeting. 10. Approve BP Agreements John Webster presented the renewal of the annual agreements with BP for natural gas services. A motion was made by Commissioner Morrow, seconded by Commissioner Hanson to approve the BP agreements. Motion was unanimously carried. (Agreements attached.) 11. Review Policies and Requirements Booklet GM Kumm presented changes to the policies and requirements booklet, sections: • Inserts with Utility Bills • Inaccessible Utility Equipment /Meters • Identity Theft — Red Flag Program No changes were recommended. 12. Approve Changes to Exempt and Non - Exempt Handbooks GM Kumm presented changes to the exempt and non - exempt handbooks, sections: • Disability Insurance (exempt only) • Promotions & Transfers • Layoffs • Voluntary Leave of Absence 2 The word `cost' was replaced with `premium' on the disability insurance policy (exempt only) due to the change in the disability insurance. The changes to promotions & transfers; layoffs; and voluntary leave of absence were to clean up verbiage and to provide clarity. A motion was made by Commissioner Hanson, seconded by Vice President Lenz to approve the changes to the exempt and non- exempt handbooks, sections: disability insurance (exempt only); promotions & transfers; layoffs; and voluntary leave of absence. Motion was unanimously carried. (Changes attached.) 13. Discuss PILOT Workshop Discussion held regarding scheduling the next PILOT workshop to discuss transfer items, natural gas transport and electric wholesale sales. 14. Discuss Criteria for New Commissioner Candidates Discussion held regarding HUC establishing more specific criteria for future Commission candidates. President Bordson requested Attorney Sebora distribute a sample Hutchinson Hospital board matrix to the Commissioners. The Board will review and discuss in January's regular commission meeting. 15. Communication from the City Administrator City Administrator Carter discussed outcomes of the truth in taxation, budgets and levies. City Council made a conscious effort to keep levies flat and keep rates flat. 16. Approve Requisition #5156 for Unit 5 Emissions and Performance Testing Steve Lancaster presented requisition #5156 for unit 5 emissions and performance testing which was budgeted. After discussion, a motion was made by Commissioner Hanson, seconded by Commissioner Morrow to approve requisition #5156 for unit 5 emissions and performance testing. Motion was unanimously carried. (Requisition attached.) 17. Division Reports Electric — Steve Lancaster • Started unit 5 on December 15. It misfired which put natural gas into the exhaust, resulting in an explosion which was contained within the exhaust system. No one was hurt. The emission testing was delayed two weeks. Repair for damages are part of the installation warranty. • Discussion held regarding posting internally for an engineering tech. • Discussion was held regarding HUC safety. GM Kumm will coordinate an HUC safety program presentation for January's regular meeting. • There was no interest in the internal posting for the plant electrician position; will now advertise the position. Finance — Jared Martig • Heating and air conditioning improvements to HUC office building are complete. HUC received a $1,000 energy conservation rebate. 3 Gas — John Webster • Conducting second interviews today for the welder service position. Business — Jan Sifferath • Energy conservation information sent out in billing and will be posted on HUC web site this week. • Total year -end revenue recapture of outstanding bills was approximately $31,000. 18. Legal Update Nothing to report Unfinished Business • Update from City Attorney on Patent for the Real -Time Auto - Suggestion for Nodal Delivery in Energy Networks GM Kumm provided patent attorney the flow chart and examples of how HUC has used the model. President Bordson requested Attorney Sebora follow up with the patent attorney on this item. • Discussion Regarding Pre -Pay for Natural Gas GM Kumm reported no update. • Discuss Credit Card Payments Jan Sifferath reported no update. New Business None There being no further business, a motion was made by Vice President Lenz, seconded by Commissioner Hanson to adjourn the meeting at 4:26 p.m. Motion was unanimously carried. .111eon Johnson, Secretary ATTEST: dW'gh-t ordson, President 0 r Hutchinson Utilities Commission 225 Michigan Street SE Date: January 2, 2013 Hutchinson, Minnesota 55350 -1905 Attn: Mr. Steve Thompson Dwight Bordson President Craig Lenz Vice President Leon Johnson Secretary Monty Morrow Commissioner Anthony Hanson Commissioner Michael Kumm General Manager Tel 320 - 587 -4746 Fax 320 - 587 -4721 Re: Nuclear Waste Storage Refund Agreement Dear Mr. Thompson: Thank you for your letter dated September 11, 2012, and also its subsequent follow -up to the Nuclear Waste Storage Refund Agreement. This letter is in reference to that agreement. HUC understands its portion of the agreement is $198,351.14. We agree with the settlement amount contained in the agreement. Sincerely, /§'/A4ti,y,� Mike Kumm General Manager NUCLEAR WASTE STORAGE REFUND AGREEMENT BY THE CENTRAL MINNESOTA MUNICIPAL POWER AGENCY AND THE HUTCHINSON UTILITIES COMMISSION Effective .2012 NUCLEAR WASTE STORAGE REFUND AGREEMENT THIS NUCLEAR WASTE STORAGE REFUND AGREEMENT (the "Agreement ") is made effective as of , 2012 (the "Effective Date ") by and between the Central Minnesota Municipal Power Agency ( "CMMPA "), 459 South Grove Street, Blue Earth, Minnesota, a municipal power agency and political subdivision of the State of Minnesota and Hutchinson Utilities Commission ( "HUC "), 225 Michigan Street SE, Hutchinson, Minnesota, a statutory (or home rule charter) municipal utility commission and a political subdivision of the State of Minnesota. WHEREAS, the parties entered into a written Confirmation Agreement dated June 29, 2005 and amendments thereof, under which CMMPA purchased electrical energy for HUC from Xcel Energy d/b /a Northern States Power Minnesota ( "NSPM "). The purchases were made under NSPM's A15 schedule for transmittal to HUC. Marked Exhibits "A -1" and "A -2 ", attached hereto and incorporated herein by reference are the Confirmation Agreement and Amendment No. 1 thereto, and WHEREAS, NSPM's Schedule A15 included a charge per unit of energy for the storage of nuclear waste. NSPM was required to make this payment under the terms of the Nuclear Waste Policy Act. NSPM and other utilities brought action against the U.S. Department of Energy ( "DOE ") over DOE's refusal to accept spent nuclear fuel. Ultimately NSPM was successful in this litigation and is receiving a refund, some of which will be shared (after deduction of NSPM's legal fees and costs) with CMMPA. This refund to CMMPA is attributable, in part, to CMMPA purchases, on RUC's behalf, of cost based energy from NSPM under its Schedule A15. Marked Page 2 of 7 Exhibit `B ", attached hereto and incorporated herein by reference, is the calculation of the amount to be refunded to HUC, and WHEREAS, NSPM has sought approvals of its settlement with DOE and of its planned distribution of a portion of its refund to its wholesale requirements municipal customers, from the Federal Energy Regulatory Commission ( "FERC "), the Midwest Independent Transmission System Operator ( "MISO ") and the Minnesota Public Utility Commission ( "MPUC "). NSPM's calculation of the refund amounts due its wholesale requirements municipal customers can be obtained directly from NSPM. Marked Exhibit "C ", attached hereto and incorporated herein by reference is the email of James P. Johnson, Assistant General Counsel for NSPM, providing details on the NSPM refund and instructions for obtaining calculations of specific refund amounts. CMMPA has not intervened in any of the NSPM proceedings before FERC, MISO or MPUC due in part to the expense in terms of legal fees and staff time required for such interventions. CMMPA found it not cost effective to intervene, and Therefore, CMMPA has not independently calculated nor verified the current refund amount proposed to be distributed to CMMPA by NSPM. NOW THEREFORE, in consideration of the agreements and covenants set forth herein and other good and valuable consideration, the receipt and sufficient which is hereby acknowledged, and intending to be legally bound by this Agreement, the parties covenant and agree as follows: ARTICLE I RECITALS The Recitals hereinabove set forth are hereby made a part of this Agreement. Page 3 of 7 ARTICLE II SHARED COSTS Shared Costs. HUC agrees that CMMPA shall have the right to incur such costs and expenses as it shall deem necessary and desirable to effectuate this agreement, including, without limitation, professional staff time, retention of outside consultants and legal counsel. HUC hereby further agrees that any and all such costs and expenses incurred by or on behalf of CMMPA pursuant to this agreement or otherwise in connection with the NSPM refund will be appropriately allocated between HUC and CMMPA's other municipal customers similarly situated, proportioned to their A15 purchases from NSPM through CMMPA. HUC agrees to reimburse CMMPA for its pro rata share of such costs and expenses in accordance with the terms of this agreement. ARTICLE III LIABILITY 3.01 Limitation and Release of Liability to CMMPA. Neither CMMPA nor any of its directors, officers, shareholders, members, affiliates, employees, contractors or consultants shall be obligated to discharge, and each is hereby released by HUC from any liability of any kind to HUC that has resulted or may result in the future (whether or not resulting from the negligence of CMMPA, its directors, officers, shareholders, members, affiliates, employees, contractors, consultants or any other Person or entity whose negligence would be imputed to CMMPA) from the performance or non - performance of this Agreement or to the exercise by CMMPA of its rights, obligations or activities relating to the NSPM refund. 3.02 Waiver of Damages. Notwithstanding any other provision of this agreement, neither CMMPA nor any of its directors, officers, shareholders, members, affiliates, employees, contractors or consultants shall be liable to HUC for general, special, indirect, incidental, punitive Page 4 of 7 or consequential damages arising out of, due to, or in connection with the performance or non - performance by CMMPA (or any of its directors, officers, shareholders, members, affiliates, employees, contractors or consultants or any other person or entity whose negligence would be imputed to CMMPA) of this Agreement or the exercise of its rights, obligations or activities relating to the NSPM refund, whether based on contract, tort (including, without limitation, negligence), strict liability, warranty, indemnity or otherwise. 3.03 Indemnification. HUC acknowledges that CMMPA has not independently calculated nor verified the correctness of the refund amount NSPM proposes to distribute to CMMPA and that subsequently HUC has had the opportunity to calculate and verify said amount. HUC shall at all times assume liability for an shall indemnify and hold CMMPA harmless from any and all damages, losses, claims, demands, suits, recoveries, costs, legal fees and /or expenses arising out of the performance or non - performance by NSPM of its refund obligations, if any. 3.04 Limitations. Nothing contained herein shall be construed to create an association, joint venture, trust, or partnership, or impose a trust or partnership covenant, obligation, or liability on, or with regard to CMMPA. ARTICLE IV MISCELLANEOUS 4.01 Term. This Agreement shall be effective from and after the effective date and shall continue for a period extending through the completion of the refund activities. 4.02 Governing Law. This Agreement shall be interpreted and enforced in accordance with the Laws of the State of Minnesota, notwithstanding any conflict of law provision to the contrary. Page 5 of 7 4.03 Ca to ions. All titles, subject headings, section titles and similar items are provided for the purpose of reference and convenience and are not intended to affect the meaning of the content or scope of this Agreement. 4.04 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall constitute but one and the same agreement. Counterpart signatures may be delivered by facsimile or electronic transmission, each of which shall have the same force and effect as an original signed copy. 4.05 Authority. Each signatory to this Agreement represents that he /she has the authority to execute and deliver this Agreement on behalf of the Party set forth above his/her signature. 4.06 Entire Agreement. This Agreement shall supersede all other prior and contemporaneous undertakings or agreements, both written and oral, among the Parties relating to the subject matter of this Agreement. Page 6 of 7 IN WITNESS WHEREOF, the Parties hereby have caused their names to be hereunder subscribed by their officers thereunto duly authorized, intending thereby that this Agreement shall be effective as of the CENTRAL MINNESOTA MUNICIPAL POWER AGENCY Bob Elston, President HUTCHINSON UTILITIES COMMISSION By It:Zm n And B Michael Kumm, Its General Manager Page 7 of 7 Exhibit A -1 CONFIRMATION AGREEMENT This Confirmation Agreement ( "Agreement ") dated July 29, 2005 replaces in its entirety the Confirmation Agreement dated June 10, 2005 by and between Utilities Plus for the Central Minnesota Municipal Power Agency ( "CMMPA ") and Hutchinson Utilities Commission ( "HUC ") (hereinafter CM1APA and HUC are sometimes referred to singly as a "Party" and collectively as the "Parties "), and confirms the agreement with respect to an Interruptibility Credit and to the purchase of Capacity and associated Energy under the following terms and conditions: Seller: Central Minnesota Municipal Power Agency ( "CMMPA ") Buyer: Hutchinson Utilities Commission ( "HUC ") Governing Agreement: Mid- Continent Energy Marketers Association ( "MEMA ") Capacity and Energy Tariff, effective 12/2/2003 and the Midwest Independent System Operator ( "MISO ") Transmission and Energy Markets Tariff ( "TEMT Tariff'). Contract Term: Begins 00:01 June 13, 2005 and continues until either party gives a written one year notice of termination or modification to the Agreement with May 31, 2006 being the earliest such notice can be given. Notice by CMMPA can be given only if NSP cancels the NSP - CMMPA Confirmation Agreement dated May 9, 2005. Commodity: MEMA Service Schedule Q, MAPP Product M, General Purpose Energy Service. Contract Quantity: 30 MW of demand and energy available during the Contract Term. Price: The demand and energy prices shall be the applicable rates specified in NSP's Minnesota General Time of Day Service retail tariff ( "Rate Code A15 "), attached hereto, or any superseding rate schedule, in effect during the period the Commodity is delivered plus a Utilities Plus Customer Charge of $0.00175 per kWh. Applicable provisions of Rate Code A15 include customer charges, demand charges, energy charges, voltage discounts, resources adjustments, and applicable surcharges. However, the Competitive Service rider, Standby Service rider, Split Service provisions, and Optional Trial Service provided in their retail tariff are not available to HUC under this Agreement. A sample monthly bill calculation is attached hereto. The current Rate Code A15 charges for service at transmission voltage are: Customer Charge per month Demand Charge per month per kW $25.04 Oct -Mav Jun -Sep $4.26 $6.91 On Peak Energy Charge per kWh Off Peak Energy Charge per kNVh Energy Charge Credit per Month per kWh All kWh in Excess of 400 Hours Times the On Peak Period Billing Demand, Not to Exceed 50% of Total kWh $0.037407 $0.026943 $0.007 For the first month of this Agreement, the demand charge will be $4.15 per kW of Contract Quantity based on prorating the demand charge (18/30 times the quantity $9.26 minus $2.35 per kW voltage discount) and the energy charge credit will apply to all hours in excess of 240 times the on peak billing demand (18/30 times 400 hours) to reflect the number of days of the month the Agreement is effective (18) versus the total number of calendar days in the month (30). The terms "On Peak" and "Off Peak" shall be as defined in Rate Code Al as that schedule in effect at the time of delivery of the Commodity. At present, On Peak hours are defined per Rate Code A15 as 9:00 am until 9;00 pm Monday through Friday, except for the following holidays: New Year's Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. When a designated holiday occurs on Saturday, the preceding Friday will be designated a holiday. When a designated holiday occurs on a Sunday the following Monday will be designated a holiday. The Off Peak period is defined as all other hours. Total charges are subject to the adjustments provided for in the Fuel Clause Rider, the Conservation Improvement Program Adjustment Rider, the Environmental Improvement Rider, the State Energy Policy Rate Rider, the Renewable Development Rider, and the Renewable Cost Recovery Rider. These terms are defined in Rate Code Al 5. The Price shall be applied to the Contract Quantity each month. Notwithstanding the foregoing, NSP may in its sole discretion seek to modify any provision of Rate Code A15, including the rates specified therein, by making the requisite filing with the Minnesota Public Utilities Commission. Scheduling: CMMPA will sell and deliver, and HUC will purchase and receive the Contract Quantity of energy each hour of the Contract Term unless excused under the Curtailment provisions below. CMMPA will schedule the energy associated with this Agreement as a financial bilateral schedule one hour prior to the MISO scheduling deadline. Delivery Point: GRE.HUC until such time HUC notifies CMMPA that it wishes to assume responsibility for Transmission Service. At which time the Delivery Point will become NSP.SHERCOI or other agreed to point. Transmission and Losses: HUC shall be responsible for any ancillary service charges, congestion charges, and transmission energy losses, associated with transmitting energy to HUC under this Agreement. Prior to HUC assuming Transmission Service responsibility, if MISO charges HUC for transmission service to the Delivery Point, HUC shall reduce its payment to CMMPA in an amount equal to any such amount paid by HUC to MISO. Transmission Credit: When HUC assumes Transmission Service responsibility, CMMPA will provide a monthly credit to HUC in the amount of $1,180 per MW ($1.18 per kW) times the Contract Quantity in recognition of the fact that HUC will then be responsible for all transmission costs associated with this Agreement. This credit shall be adjusted in the event of tariff redesign during the contract term to reflect the transmission component cost of Rate Code A15. Interruptibility Credit: During times of system peak usage, NSP may declare a Peak Controlled Interrupt period ( "PCN). Declaration of PCI periods shall be at the sole discretion of NSP. CMMPA will endeavor to provide as much notice to HUC of a PCI period as CMMPA is given by NSP. CMMPA will notify HUC system control by phone and email (phone: 320 234 0541 or 320 234 0542 and email: control @ci.hutchinson.mn.us) at least one hour before any PCI period. CMMPA and HUC agree to reduce the energy schedule to zero (0) MW during NSP's PCI periods and for HUC to self - supply (either through their own generation, a purchase from a third party, or a reduction in load) the energy purchased under this agreement. CMMPA will make every effort to find a replacement supply during an NSP PCI. The price for the energy will be agreed to at the time of the interrupt. After each Contract Year ( "July 1 — June 30 "), CMMPA shall pay an Interruptibility Credit to HUC. The payment shall be calculated as follows: Interruptibility Credit = Contract Quantity (MW) times $24,000. If, following notification by CMMPA of PCI periods as described above, RUC failed to reduce their energy take from CMMPA under this Agreement to zero (0) MW during any PCI period of the previous Contract Year, no Interruptibility Credit payment will be made. After three (3) such failures in any Contract Year, CMMPA reserves the right to eliminate the Interruptibility Credit for the remainder of the Contract Term. If this Agreement is terminated on a date other than June 30, the Interruptibility Credit for such partial Contract Year shall be prorated by the ratio of (a) the period of time between the previous July 1 and the termination date and (b) 365 days. The duration and frequency of PCI periods shall be at the discretion of NSP. Control periods will normally occur when: a. NSP expects a reasonable possibility of system load levels surpassing the level for which NSP has sufficient accredited capacity under the Mid - Continent Area Power Pool Agreement, including reserve requirements, or b. In NSP's opinion, the reliability of the system is endangered. Curtailment: CMMPA shall be obligated to deliver energy to RUC at the Delivery Point and RUC shall be obligated to accept delivery of the energy at the Delivery Point except in the event of (i) Uncontrollable Forces as defined by the Governing Agreement; (ii) transmission is curtailed by any transmission provider in accordance with its transmission loading relief procedures; or (iii) during a PCI period. Termination Payment: In the event that there is an early termination of this Agreement pursuant to Section 6.2 of the Governing Agreement, the Non - Defaulting Party in calculating the Settlement Amount shall be entitled to disregard any Gains associated with this Agreement except to such extent that such Gains offsets a Settlement Amount that would be owed by the Defaulting Party calculated by summing the Gains and Losses for the other outstanding Transactions that the Non - Defaulting Party is terminating in accordance with Section 6.2. The Defaulting Party shall have no interest in or right of entitlement to, and shall not claim that it should be owed, any Settlement Amount that is attributable to any Gains that the Non - Defaulting Party may realize through a termination of the Agreement pursuant to Section 6.2. HUTCHINSON UTILITIES COMMISSION Signed nr`��-l% j e-t'� Print name (` 1 &L!d L • L/ti o1 t `� Title ��tA Date 16 S 4 Utilities Plus for CENTRAL MINNESOTA MUNICIPAL POWER AGENCY Signed Printname Title Cho Date , �; A tm D-5- Sample Monthly Bill (30 day summer month) Customer Charge: $25 Demand Charge: $9.26 per kW X 30,000 kW = $277,800 Voltage Discount (demand): $2.35 per kW X 30,000 kW = (70,500) Interruptibility Credit [1]: $2.00 per kW X 30,000 kW = (67,500) Delivery Credit [2]: $1.18 per kW X 30,000 kW = (35,400) Energy Charge (on peak): $0.038707 per kWh X 7,560,000 kWh = 292,625 Energy Charge (off peak): $0.028243 per kWh X 14,040,000 kWh = 393,532 Energy Charge Credit Energy: 21,600,000 kWh — (400 hrs X 30,000 kW) = 9,600,000 kWh Energy Charge Credit: $0.0070 per kWh X 9,600,000 kWh = (67,200) Voltage Discount (energy): $0.0013 per kWh X 21,600,000 kWh = (28,080) Adjustments [3] Fuel Clause Adjustment: $0.0050 per kWh X 21,600,000 kWh = 108,000 Renewable Cost Recovery: $0.00018 per kWh X 21,600,000 kWh = 3,888 State Energy Policy Rider: $0.000156 per kWh X 21,600,000 kWh = 3,370 Renewable Devel. Fund Rider: $0.000415 per kWh X 21,600,000 kWh = 8,964 Total before Conservation Improvement Rider $827,024 Conservation Improv. Rider: 1.39% X $827,024 11,496 Utilities Plus Cust. Charge: $0.00175 per kWh X 21,600,000 kWh = 37,800 Total $876,320 [1] The Interruptibility Credit is paid at the end of each Contract Year as described herein. [2] Delivery Credit is applicable only after HUC has accepted Delivery Service Responsibility. [3] Current adjustment rates are shown on Xcel web site www.xcelenergy.com 5 Exhibit A -2 AMENDMENT NO. I TO CONFIRMATION AGREEMENT This amendment ( "Amendment No. 1 ") shall confirm and modify the agreement reached on July 29, 2005, by and between Utilities Plus for the Central Minnesota Municipal Power Agency ( "CMMPA ") and Hutchinson Utilities Commission ( "HUC ") (hereinafter CMMPA and HUC are sometimes referred to herein as a Party or collectively as the "Parties "). WHEREAS CMMPA and HUC entered into a Confirmation Agreement (the "Agreement ") reached July 29, 2005 under which HUC agreed to terms associated with an Interruptibility Credit and the purchase of capacity and associated energy from CMMPA; WHEREAS CMMPA's source of supply for its performance under this Amendment is Northern States Power Company (NSP) acting through its agent, Xcel Energy Services, Inc. ( "Xcel "), and WHEREAS NSP and Xcel have required certain changes in their agreement with CMMPA for supplying the power required by the Confirmation Agreement and this Amendment No. 1, and WHEREAS the Minnesota Legislature has adopted certain renewable energy standards under Minnesota Statutes Section 21613.1691, which standards and the compliance therewith are required of CMMPA under this agreement. NOW THEREFORE for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree effective July 1, 2008 as follows:, 1. The definition of "Contract Term" contained in the Agreement is deleted and replaced with the following: Contract Term: June 13, 2005 through June 30, 2010. If not then terminated by one Party having provided the other Party with a minimum of twelve (12) months written notice to terminate, then this Letter Agreement shall continue until either Party provides the other Party with twelve (12) months written notice to terminate this Letter Agreement. Notice of termination by CMMPA can be given only if NSP cancels the NSP -CMMPA Confirmation Agreement dated May 9, 2005, as amended effective July 1, 2008 and as may be amended from time to time hereafter. 2. The definition of "Commodity" contained in the Agreement is deleted and replaced with the following: Commodity: Energy settled in the MISO day ahead market with provision for interruption under NSP's Peak Controlled Interrupt (PCI) program. 3. The definition of "Price" contained in the Agreement is deleted and replaced with the following: Price: The demand and energy prices shall be the applicable rates specified in NSP's Minnesota General Time of Day Service retail tariff ( "Rate Code A15 "), or any other superseding rate schedule, in effect during the period the Commodity is delivered, plus a Scheduling Charge of $0.00175 per kWh for the period June 13, 2005 to June 30, 2008 and a Scheduling Charge of CMMPA -HUC Confirmation Agreement Amendment No. 1 Page 1 of 6 $0.00150 per kWh for the two year commitment period from July 1, 2008 to June 30, 2010. If this Agreement is extended beyond June 30, 2010, the scheduling charge will be renegotiated, in good faith, at the time of extension. Applicable provisions of Rate Code A15 include customer charges, demand charges, on and off peak energy charges, energy charge credit, Fuel Clause Rider, voltage discount, and applicable surcharges including interim rate adjustments. NSP's retail customers are also subject to other adjustments provided for in various riders applied to Rate Cade A 15. The applicability of these other riders is set out in Rate Code Al 5. After July 1, 2008, in lieu of these other riders, the total charges to HUC will be subject to an overall surcharge of 4% of the total bill. In the event any of the costs designed to be recovered, during the term of this Amendment No. 1, by these other riders to Rate Code Al 5, are recovered through the Rate Code A 15 base rates as a result of an adjustment to rates approved by the Minnesota Public Utilities Commission, CMMPA will make an offsetting adjustment to the 4% surcharge to the extent such changes can be identified and quantified. In no case shall such surcharge be negative. The Competitive Service rider, Standby Service rider, Split Service provisions, and Optional Trial Service provided in the retail tariff shall not apply to RUC's purchases under this Agreement. The Rate Code Al charges for service at transmission voltage as of September 21, 2004 are: Customer Charge per month Oct -May Demand Charge per month per kW $4.26 On Peak Energy Charge per kWh Off Peak Energy Charge per kWh $25.04 Jun -Sep $6.91 $0.037407 $0.026943 Energy Charge Credit Per Month per kWh $0.007 All kWh in Excess of 400 Hours Times the On Peak Period Billing Demand, Not to Exceed 50% of Total kWh The terms "On Peak" and "Off Peak" shall be as defined in Rate Code Al 5 as that schedule is in effect at the time of delivery of the Commodity. At present, On Peak hours are defined per Rate Code A15 as 9:00 am until 9:00 pm Monday through Friday, except for the following holidays: New Year's Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. When a designated holiday occurs on Saturday, the preceding Friday will be designated a holiday. When a designated holiday occurs on a Sunday the following Monday will be designated a holiday. The Off Peak period is defined as all other hours. The Price shall be applied to the Contract Quantity each month as specified by the hourly energy amounts in the daily MISO Financial Schedule. All references to Rate Code A15, including any riders thereto, shall be of the version of such tariff (or any superceding tariff) as may be in effect at the time of any energy deliveries hereunder. CMMPA-HUC Confirmation Agreement Amendment No. 1 Page 2 of 6 You are hereby put on notice that NSP may, in its sole discretion, seek to modify any provision of Rate Code A15, including the rates specified therein or any riders thereto, by making the requisite filing with the Minnesota Public Utilities Commission. 4. The definition of "Scheduling" contained in the Agreement is deleted and replaced with the following: Scheduling: CMMPA will sell and deliver at the delivery point, and HUC will purchase and receive, at the delivery point, the Contract Quantity of energy each hour of the Contract Term unless NSP has declared a Peak Control Interrupt period described below. CMMPA will schedule the energy associated with this Agreement, in the MISO day ahead market, as a financial bilateral schedule ( "Finsched ") one hour prior to the MISO scheduling deadline. 5. The definition of "Delivery Point" contained in the Agreement is deleted and replaced with the following: Delivery Point: NSP.SHERCOI 6. The definition of "Transmission and Losses" in the Agreement is deleted and replaced with the following: MISO Congestion, Losses and Settlement: HUC shall directly settle with MISO for charges related to transmission service beyond the Point of Delivery, including but not limited to any congestion charges, losses or charges resulting from deviations between the Day Ahead bid and Real Time actual requirements. CMMPA shall provide a credit to HUC, provided that a corresponding credit is received by CMMPA from NSP, for MISO charges that flow through Rate Code A15 in an amount equal to the average MISO charges incurred by NSP each month, in $/MWh, times the number of MWhs delivered to HUC during that monthly billing period. CMMPA will enter a financial bilateral transaction schedule (Finsched) with a source CPNode of NSP.SHERCOI. The Finsched will settle in the MISO Real Time Settlement Market. CMMPA will adjust the Finsched in the event of a Schedule Interruption during the previous operating day. 7. The definition of "Transmission Credit" contained in the Agreement is deleted and replaced with the following: Transmission Credit: CMMPA will provide a monthly credit to HUC in the amount of $1180 per MW times the Contract Quantity in recognition of the fact that HUC is responsible for the transmission costs associated with the Agreement beyond the Point of Delivery. This credit shall be adjusted in the event of tariff redesign during the contract term to reflect the transmission component cost of NSP Rate Code A15. 8. The definition of "Intemiptability Credit" in the Agreement is deleted and replaced with the following: Interruptability Credit: During times of system peak usage, NSP may declare a Peak Controlled Interrupt period ( "PCI "). NSP shall have the right to interrupt the MISO scheduled deliveries to CMMPA -HUC Confirmation Agreement Amendment No. 1 Page 3 of 6 HUC in accordance with PCI procedures. CMMPA shall endeavor to provide a minimum of one hours notice to HUC or as much notice to RUC of a PCI period as CMMPA is given by NSP. CMMPA will notify HUC system control by phone and email (phone: 320 234 0541 or 320 234 0542 and email: control @ci.hutchinson.mn.us). After each Contract Year ( "July 1— June 30 "), an Interruptability Credit payment shall be made by CMMPA to HUC within a reasonable period of time, provided that HUC has complied with all PCI instructions in the Contract Year, an annual credit from July 2005 to June 30, 2008 of $24,000 per MW, from July 1, 2008 to June 30, 2009 of $20,000 per MW and from July 1, 2009 to June 30, 2010 of $21,000 per MW. The Credit will increase to $22,050 per MW the following year if the contract is extended one year. CONTRACT YEAR July 1, 2005 July 1, 2006 July 1, 2007 July 1, 2008 July 1, 2009 July 1, 2010 (if extended) 2011 forward (if extended) CREDIT ($ per/M)Y) $24,000 $24,000 $24,000 $20,000 $21,000 $22,050 as agreed to by the Parties The payment for each Contract Year shall be calculated as follows: Interruptability Credit = Maximum Contract Quantity (MW) times Contract Year Credit. If, following notification by CMMPA of PCI periods as described above, HUC fails to reduce its energy take from CMMPA under this Agreement to zero (0) MW during any PCI period during any month of the Contract term, no Interruptability Credit payment will be made. After three (3) such failures in any Contract Year, CMMPA reserves the right to eliminate the Interruptability Credit for the remainder of the Contract Term. If there are no control periods during the previous Contract Year, the Interruptability Credit shall be the Contract Quantity (MW) times the credit corresponding to that Contract Year. In connection with the Interruptability Credit provided for herein, CMMPA shall cut the financial schedule between CMMPA and the RUC to zero (0) during any PCI period. HUC reserves the right to replace the energy curtailed by CMMPA during this period by self - generating or by other third party purchases. CMMPA will make every effort to find a replacement supply during an NSP PCI. The price for the energy will be agreed to at the time of the interrupt and a FinSched will be entered in the MISO real time market. 9. The definition "Credit Support" is added to the Agreement as follows: Credit Support: HUC shall provide to CMMPA adequate credit guaranties of its payment obligations hereunder in a form and content reasonably acceptable to CMMPA. Such guaranties shall provide sufficient assurance to satisfy CMMPA's credit obligations to NSP and MISO for all contract quantities. 10. The application of the "Mobile- Sierra Doctrine" is added to the Agreement as follows: CMMPA -HNC Confirmation Agreement Amendment No. 1 Page 4 of 6 Mobile - Sierra Doctrine: The terms and conditions and the rates for service specified in this Agreement shall remain in effect for the term of the transaction described herein. Absent the Parties' written agreement, this Agreement shall not be subject to change by application of either Party pursuant to Section 205 or 206 of the Federal Power Act. Absent the agreement of all parties to the proposed change, the standard of review for changes to this Agreement whether proposed by a Party, a non -party or the Federal Regulatory Commission acting sua .sponte shall be the "public interest" standard of review set forth in United Gas Pipe Line v. Mobile Gas Service Corp., 350 U.S. 332 (1956) and Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956) (the "Mobile- Sierra doctrine "). 11. A provision entitled "Regulatory Treatment" is added to the Agreement as follows: Regulatory Treatment: In the event any state or federal regulatory jurisdiction issues a final order, which creates a significant detrimental effect on either Party, the affected Party may notify the other Party in writing. The Parties will have 30 days from the date of the written notice to negotiate new terms to offset such detrimental effect. In the event the Parties cannot reach agreement within the 30 -day period, the affected Party may provide 150 days notice to cancel the contract. 12. A provision entitled "Renewable Energy Compliance" is added to the Agreement as follows: Renewable Energy Compliance: Minnesota State Statutes § 216B.1691 requires electric utilities to make a good faith effort to generate or procure electricity from an eligible energy technology for at least one percent of retail electric sales in 2005, seven percent of retail electric sales in 2010 and as indicated in the statute for the years thereafter. Sales by CMMPA under this Agreement, as amended, are made to HUC in its role as a distribution utility. Therefore, CMMPA must comply with the renewable energy standards with respect to all of the quantities sold under this Agreement as amended. Because CMMPA is obligated to comply with the Renewable Energy Statute (all quantities purchased hereunder will be resold at retail by HUC), HUC confirms CMMPA's regulatory obligation and HUC agrees to reimburse CMMPA for any and all costs associated with such compliance. HUC reserves the right to procure renewable energy credits and assign them to CMMPA to fulfill the regulatory obligation. 13. All other terms and conditions of the Agreement remain unchanged and are hereby confirmed. CMMPA-HUC Confirmation Agreement Amendment No. 1 Page 5 of 6 In witness whereof the Parties have caused this Amendment No. I to be signed this of June, 2008. This document comprises the entirety of this Amendment. HUTCHINSON UTILITIES COMMISSION By: c Name: Michael L. Kumm Title: General Manager Date: June 32008 day CENTRAL, MINNESOTA MUNICIPAL POWER AGENCY By: �' -W-41-- Name: Bob Elston Title: President Date: June , 2008 CMMPA -HUC Confirmation Agreement Amendment No. I Page 6 of 6 Exhibit B Nuclear Waste Storage Charge Refund for Hutchison Charge per unit of Energy Description Total New Ulm Hutchinson Sleepy Eye Kasson CMMPA For Years 2004 - 2008 Xcei Volume 1,154,118 12.59% 77.62% 5.11% 2.15% 2.53% Refund Dollars $ 183,082.29 $ 23,050.97 $ 142,114.15 $ 9,351.53 $ 3,928.20 $ 4,637.44 For Years 2009 - 2010 Xcel Volume 286,608 0.00% 99.48% 0.00% 0.52% 0.00% Refund Dollars $ 58,391.20 $ - $ 58,088.05 $ - $ 303.15 $ - Total Dollars For Years 2004 - 2010 $ 23,050.97 $ 200,202.20 $ 9,351.53 $ 4,231.35 $ 4,637.44 Minus CMMPA Staff Time /Legal Costs $ (9,255.27) $ (1,851.05) $ (1,851.05) $ (1,851,05) $ (1,851.05) $ (1,851.05) Total Refund Per Entity $ 21,199.92 1 $ 198,351.14 1 $ 7,500.48 1 $ 2,380.30 1 $ 2,786.38 Exhibit C E -mail Dated December 19, 2011 from James P. Johnson, Assistant General Counsel for NSPM Subject: DOE Settlement Payment Credit filing - CONFIDENTIAL From: Johnson, James P [mailto.james.p Johnson @xcelenergy.com] Sent: Monday, December 19, 2011 1:59 PM To: 'James D. Larson'; Jablon, Robert A.; 'agalluci @boardmanlawfirm.com'; 'Terry Wol f Subject: DOE Settlement Payment Credit filing - CONFIDENTIAL Jim/Bob /Anita/Terry — As you are probably aware, NSPM recently reached a settlement with the DOE related to our longstanding litigation regarding DOE's refusal to accept spent nuclear fuel. The settlement provided for a $99 million payment earlier this year for spent fuel storage costs incurred from 1998 to 2008, and will provide future payments for 2009 to 2013 costs later. Over the past few months, NSPM and NSPW have filed bill credit proposals at their various state commissions. We are now attempting to finalize a similar filing to FERC, which would be submitted either by year end 2011 or in early January 2012. The purpose of this email is to provide a preview of the filing. We would obviously like to avoid controversy, if possible, to avoid delays in distribution of the payments to the eligible customers. There is not a lot of FERC precedent for proposed credits like this, and we are not aware of any other utility that has settled with DOE filing to provide credits to wholesale customers. There was a WE nuclear cost refund filing in 2007 related to the Point Beach sale, which was contested and went to settlement judge procedures. Unlike the initial WE filing, we are proposing to provide credits to "legacy" wholesale requirements customers who ceased (or will cease) purchases from NSPM or NSPW at cost -based rates after 1998. NSPW requirements customers purchasing under NSPW's stated or formula rates would be eligible for credits, and wholesale requirements customers who purchased from NSPM at rates indexed to our cost -based Minnesota retail rates would be eligible for a credit. In addition, if a municipal utility purchased cost -based requirements service from NSPM via an agency (rather than directly), we have included them in the group eligible for credits. There are also a few customers who started but then ceased purchases at the indexed NSPM rates, and they will be eligible to receive a credit for the period they purchased service. Note: the DOE settlement payments are not directly related to the 1 mil/kWH DOE storage charge that was included in the NSPW wholesale fuel adjustment clause, so we are not proposing to return the settlement dollars through the FCA. Attached are a summary of the planned filing, the transmittal letter draft, and spreadsheets with the detailed settlement credit calculations. The NSP Companies have applied a consistent methodology to calculate refunds to jurisdiction in all of our jurisdictions, so the numbers shown reflect the wholesale requirements shares of the NSP System, NSPM and NSPW totals. The numbers do not include actual interest earned, however, which would be added. We believe this is a fair proposal, and the NSP Companies would provide either direct payments or bill credits to the individual customers (or agencies) shortly after the final, non - appealable FERC order approving the methodology. If you have comments on the planned filing or questions about the calculations, feel free to give me a call. I cannot answer detailed questions about the numbers, but there are personnel who can. Given the proximity to the holidays, we understand you may not be able to provide feedback until after Jan 1. If you can provide feedback sooner, however, that would be great. (Note: I will be out of the office next week but checking emails periodically.) Please note that Ed Johnson and Libby Niesen will be reaching out to the individual municipal utilities this week to let them know about the upcoming filing and the amount of their specific initial credit. If I do not talk to you beforehand, please enjoy the holiday season. Jim Johnson James P. Johnson Xcel Energy I Responsible By Nature Assistant General Counsel 414 Nicollet Mall, 5th Floor Minneapolis, Minnesota 55401 P: 612 -215 -4592 F: 612 -215 -4544 E: james.p.johnson@xcelenerp-y.com WWW.XCELENERGY.COM Please consider the environment before printing this e-mail. This email is covered by the Electronic Communications Privacy Act, 18 USC Sections 2510- 2521. This email, and any attachments, may contain conrdeniipl, private and/or pri0eg,d material for the sole use of the intended recipient(s). Any review, use, distribution or disclosure by others is strictly prohibited. If you are not the intended recipient (or authorized to receive for the recipient), please contact the sender by reply mail and delete all copies of this message and any attachments. Amended n°^°^^bh°r 28, 2411 January 2, 2013 Policy on Payments of Hutchinson Utilities Commission Payables The Hutchinson Utilities Commission Accountant and Financial Manager are hereby authorized to issue warrant(s) drawn from the proper funds. (Resolution 153 was amended on March 25, 2009 and reads as follows): Resolution 153 authorizes HUC Accountant or HUC Financial Manager to transfer funds by wire or other electronic means. Claims shall be paid upon proper presentation during the year 20122013. This policy shall be reviewed on an annual basis. �rtawiNjo♦ rTll1T1ES Hutchinson Utilities Commission 225 Michigan Street Hutchinson Minnesota 55350 Dwight Bordson President Craig Lenz Vice President Leon Johnson Secretary Monty Morrow Commissioner Anthony Hanson Commissioner Michael Kumm General Manager Tel 320 -587 -4746 Fax 320- 587 -4721 AGREEMENT THIS AGREEMENT IS MADE BY AND BETWEEN HUTCHINSON UTILITIES COMMISSION, HEREINAFTER "HUC" AND MINNESOTA MINING AND MANUFACTURING CO., HEREINAFTER "3M ", ON THE FOLLOWING TERMS AND CONDITIONS. WHEREAS, 3M DESIRES TO PURCHASE, AND HUC SHALL PROVIDE, FIRM GAS FOR USE AT 3M'S HUTCHINSON NORTH AND SOUTH PLANTS: AND, WHEREAS, 3M DOES ACKNOWLEDGE THAT HUC WILL, W RELIANCE UPON THIS AGREEMENT, ENTER INTO AN AGREEMENT TO PROVIDE FIRM GAS AND TRANSPORTATION. WHEREAS, THE PURCHASE PRICE OF THE CONTRACT QUANTITIES SHALL BE BASED ON THE MONTHLY INSIDE FERC VENTURA INDEX, AS PUBLISHED BY PLATT'S "GAS DAILY ", PLUS /MINUS THE NNG VENTURA TO NBPL VENTURA MONTHLY PREMIUM. NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED, THE PARTIES MAKE THE FOLLOWING AGREEMENT: HUC SHALL PROVIDE. AND 3M SHALL ACCEPT, FIRM GAS COMMENCING JANUARY 1, 2013, AT 9:00 A.M. AND TERMINATING ON JANUARY 1, 2014, AT 9:00 A.M. PAGE 1 OF 4 3M SHALL PAY HUC BY THE FOLLOWING SCHEDULE DURING THE TERM OF THIS AGREEMENT: FLOW THROUGH ALL NATURAL GAS METERS COMMODITY INDEX TRANSPORTATION $0.36 /DTH MONTHLY PEAK DAY DEMAND $9.00 /MCF 2. HUTCHINSON AGREES TO PROVIDE DAILY SWING SUPPLY TO 3M AT THE APPLICABLE PRICE, AS PUBLISHED FOR THE DAY BY PLATT'S "GAS DAILY" IN ITS "DAILY PRICE SURVEY ($ /DTH)" FOR "NORTHERN, VENTURA" "MIDPOINT" ( "DAILY INDEX ") PLUS /MINUS $0.01. SWING SUPPLY IS DEFINED AS SUPPLY INCREASES OR DECREASES, FROM CONTRACTED LEVELS, NOMINATED AT LEAST 24 HOURS PRIOR TO THE START OF THE GAS DAY. 3. HUTCHINSON SHALL PROVIDE 3M WITH REAL-TIME BALANCING, BASED ON THE FOLLOWING' BEST EFFORTS IREALTIME SWING NOMINATED LESS THAN 24 HOURS PRIOR TO THE END OF THE GAS DAY ON A BEST EFFORTS BASIS, PRICED AT THE APPLICABLE PRICE, AS PUBLISHED FOR THE DAY BY PLATT'S "GAS DAILY" IN ITS "DAILY PRICE SURVEY ($ /DTH)" FOR "NORTHERN, VENTURA" "MIDPOINT" ( "DAILY INDEX "), PLUS /MINUS $0.15. 4. 3M SHALL PROVIDE TO HUC. BY THE END OF THE 1 5TH DAY OF THE MONTH PRIOR TO GAS FLOW THE BASE LOAD LEVEL OF NATURAL GAS REQUIRED FOR THE FOLLOWING MONTH. IN THE EVENT HUG HAS NOT RECEIVED THE BASE LOAD NOMINATION FROM 3M BY THE END OF THE 15TH DAY OF THE MONTH PRIOR TO THE GAS FLOW PAGE 2OF4 HUC SHALL NOMINATE THE CURRENT MONTH'S BASE LOAD LEVEL FOR THE FOLLOWING MONTH S. DURING THE TERM OF THIS AGREEMENT, HUC SHALL NOT BE LIABLE FOR STOPPAGE OF FLOW ON THE PIPELINE, NORTHERN BORDER PIPELINE COMPANY EOUIPMENT FAILURE, OR ANY OTHER FORCE MAJEURE WHICH AFFECTS THE FLOW OF GAS TO THE HUC BORDER STATIONS, OR ANY ACT OF GOD WHICH INTERRUPTS FLOW OF GAS ON THE PIPELINE. H. PAYMENT IS DUE FROM 3M ON OR BEFORE THE TENTH DAY FOLLOWING THE DATE THE BILL IS ISSUED BY HUC. PAGE 3OF4 THIS AGREEMENT SETS FORTH ALL TERMS AGREED UPON BETWEEN THE PARTIES, AND NO PRIOR ORAL OR WRITTEN AGREEMENTS SHALL BE BINDING. THIS AGREEMENT SHALL NOT BE ALTERED, AMENDED OR MODIFIED EXCEPT AS IN WRITING AND EXECUTED BY BOTH PARTIES. HUTCHINSON UTILITIES COMMISSION BY: NAME: --� TITLE: DATE: MINNESOTA MINING & MANUFACTURING BY: llapV( NAME: TITLE: Sorvf c' !r S j�0 f -5 DATE: 17 6- J04 PAGE 4 OF 4 FIRST AMENDMENT TO BASE CONTRACT FOR SALE AND PURCHASE OF NATURAL GAS This First Amendment to Base Contract for the Sale and Purchase of Natural Gas ( "Amendment ") is made and entered into as of November 1, 2012, (the "Effective Date ") by and between BP Canada Energy Marketing Corp. (`BPCEMC ") and Hutchinson Utilities Commission ( "HUC "). Terms used herein but not defined herein shall have the meanings ascribed to them in the Contract. WITNESSETH WHEREAS, BPCEMC and HUC are parties to that certain Base Contract for the Sale and Purchase of Natural Gas dated January 1, 2004 (the "Contract"); and WHEREAS, BPCEMC and HUC desire to amend the Contract as set forth below. NOW THEREFORE, in consideration of the mutual covenants and conditions contained herein, the parties agree as follows: A. The Contract is amended as follows: I. Section 2. Definitions The following temts shall be added within Section 2 with all sections thereunder being renumbered accordingly: " "Governmental Requirement(s)" shall mean any applicable laws, statutes, ordinances, orders, rules, regulations, rulings, decrees, policies having the effect of law and/or official governmental actions, whether of a federal, state, local or tribal nature. "Regulatory Event" shall mean a Governmental Requirement(s) (including but not limited to ones related to market rate caps (whether temporary or permanent), regulatory market requirements (such as those occurring under Dodd Frank), New Taxes, climate change ssessments, environmental regulations, export/import assessments, etc.) promulgated after the date of a transaction, which renders a arty (the "Affected Party") unable to continue to perform, either in whole or in part, because (i) such transaction is illegal or unenforceable, or (ii) the Government Requirement(s) materially changes the commercial and economic circumstances existing as of the date of the transaction and as a result negatively and significantly impacts the Affected Party's original economic expectations under the transaction. "New Taxes" shall mean any Taxes that (i) were not in effect on the date the transaction was entered into, or (ii) were not imposed by the taxing entity on a transaction on the date such transaction was entered into. "Taxes" shall mean any and all taxes, charges, licenses, levies, fees, penalties, permits, assessments or charges, or increases on any of the foregoing, (whether sales, use, gross receipts, excise, customs, duties or otherwise) which are claimed to be due by any federal, state, local or tribal government or any other governmental agency having jurisdiction to do so. The term "Taxes" shall not include ny employment or franchise taxes imposed upon either Party, nor any tax based upon a party's income or net worth. "" II. A new Section 3.6 shall be added as follows: "3.6 If a Regulatory Event occurs and the Affected Party is unable, after using commercially reasonable efforts, to avoid the inability to perform or the negative and significant economic impacts, the Affected Party shall be entitled to terminate and liquidate the transaction(s) affected by such Regulatory Event (the "Affected Transaction(s)"), subject to the following conditions: (i) The Affected Party must give the Non - Affected Party at least ten (10) Business Days prior written notice of its intent to terminate and liquidate the Affected Transaction(s). The Notice shall be the "Regulatory Event Notice to Terminate ", and shall specify the Early Termination Date, which shall be not more than twenty (20) Business Days after the date of the Regulatory Event Notice to Terminate. On the Early Termination Date, the Affected Party shall determine damages in accordance with Section 10 of the Agreement; provided however, that any and all costs otherwise allowed under Section 10 shall be excluded from the calculation, and provided further that the Market Value for each Terminated Transaction shall be determined by using the mid- point, as it may be estimated, between the bid price and the ask price for each Terminated Transaction; and (ii) Nothing herein shall prevent the other Party from disputing whether the Affected Party has the right to terminate and liquidate the Affected Transaction(s)." III. Section 11. Force Majeure shall be modified as follows: (i) In Section 11.3, delete the "and" in front of "(v) "; (ii) In Section 11.3, insert the following before the period at the end of the first sentence: " and (vi)" the occurrence of a Regulatory Event that renders a Party unable to continue to perform, either in whole or in part, under any transaction, or the occurrence of a Regulatory Event that has a material adverse economic impact on a Party. If a Party declares an event of Force Majeure based upon the event described in (vi), the event of Force Majeure shall terminate upon the earlier to occur of (a) the time a Party liquidates and terminates the affected transactions on the Early Termination Date in accordance with Section 3.6 or (b) the expiration of six (6) Business Days after the Notice of the event of Force Majeure is provided by the claiming Party unless a Regulatory Event Notice to Terminate has been declared by either Party in accordance with Section 3.6"; and (ii) Insert the following at the end of Section 11.5: "To the extent an event of Force Majeure occurs: (a) prior to curtailing or interrupting any transaction for a Firm obligation, Seller /Buyer shall first curtail or interrupt its interruptible delivery or purchase obligations, as applicable, and (b) Seller or Buyer will treat all similarly situated Firm customers in a fair and reasonable manner by allocating the supply or purchase of Firm Gas, as applicable, on a pro rata basis. If an event of Force Majeure impairs or prevents Seller from delivering or Buyer from purchasing Gas under this Contract and such event of Force Majeure continues (i) for a continuous period of time greater than ninety (90) Days or (ii) for more than one hundred and eighty (180) cumulative Days during any calendar year, the Party not claiming the event of Force Majeure may terminate and liquidate the transactions affected by such event of Force Majeure utilizing the same methodology (including rights and remedies) set forth under Section 3.6 for terminating and liquidating Affected Transactions with respect to Regulatory Events. Notwithstanding the foregoing, (a) if the Party claiming an event of Force Majeure proceeded with reasonable efforts to resolve the event or occurrence once it occurred in order to resume performance but performance under the Contract cannot resume until after the time periods set forth in (i), the Party not claiming the event of Force Majeure may not terminate and liquidate the transactions affected by such event of Force Majeure unless performance is not resumed within one hundred and eighty (180) Days from the event of Force Majeure." IV. Section 14. Miscellaneous. Add the following as Section 14.15: "As a condition to the obligations of the other Party under this Contract, HUC will provide the other Party hereto (i) certified copies of all ordinances, resolutions, public notices and other documents evidencing the necessary authorizations with respect to the execution, delivery and performance by HUC of this Contract and the transactions hereunder. HUC warrants and covenants that with respect to its contractual obligations hereunder and performance thereof, it will not claim immunity on the grounds of sovereignty or similar grounds with respect to itself or its revenues or assets from (a) 'suit, (b) jurisdiction of court (including a court located outside the jurisdication of its organization), (c) relief by way of injunction, order for specific performance or recovery of property, (d) attachment of assets, or (e) execution or enforcement of any judgment. B. Upon execution and prior to the commencement of each subsequent fiscal year of HUC during any Delivery Period, HUC has obtained all necessary budgetary approvals and certifications for payment of all of its obligations under this Contract for such fiscal year." C. Unless otherwise defined herein, all capitalized terms used herein shall have the respective meanings ascribed to them in the Agreement. D. Subject to the terms and provisions of this First Amendment, and except as expressly amended herein, the terms, conditions and provisions of the Agreement, as amended from time to time, are hereby ratified and confirmed and shall remain in full force and effect. E. This First Amendment shall be considered for all purposes as prepared through the joint efforts of the parties and shall not be construed against one party or the other as a result of the manner in which it was negotiated, prepared, drafted or executed. F. This First Amendment may be executed in two or more counterparts with the same effect as if all parties had executed an delivered the same copy, and when each party has executed and delivered a counterpart, all counterparts together shall constitute one agreement. G. This First Amendment shall be binding upon and inure to the benefit of the parties hereto, their successors and assigns. H. This First Amendment shall be governed by the laws of the State of New York, excluding, however, any conflict of laws rule which ould apply the law of another jurisdiction. 11-4 WITNESS WHEREOF, the parties, by their authorized representatives, have executed this First Amendment effective as of the date first written above. BP CANADA ENERGY MARKETING CORP. By: Name: Title HUTCHINSON UTILITIES COMMISSION I/ ZA Title: 51141enl-1 ,� ,, I OPERATIONAL AGENCY AGREEMENT This Agency Agreement (the "Agreement') is made and entered into this 1st day of January 2013, (the "Effective Date ") by and among Hutchinson Utilities Commission ( "Counterparty "), a municipal utility, and BP Canada Energy Marketing Corp. (`BP "), a Delaware corporation. Counterparty and BP are sometimes referred to herein individually as a "Earty' or collectively as the "Parties ". ARTICLE 1. DEFINITIONS AND INTERPRETATION. 1.1 Definitions. The following terms when used herein shall have the meanings set forth below `Bankruptcy" means with respect to any Party, (i) the filing by such Party of a petition or the commencement of, or the acquiescence in the commencement of, a proceeding or cause of action under any bankruptcy, insolvency or similar law providing for the protection from its creditors, or a Party having any such proceeding or cause of action filed or commenced against it; (ii) the seeking by such Party of the appointment of a trustee, receiver, liquidator, custodian or other similar official over it or any substantial part of its property, or consenting to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it; (iii) the making of an assignment or any general arrangement for the benefit of its creditors; (iv) such Party admitting its inability to pay its debts as they fall due; (v) such Party becoming bankrupt or insolvent (however documented or evidenced); or (vi) such Party making an general assignment for the benefit of its creditors. "Business Dav' means all Days except Saturdays, Sundays or Federal Reserve Bank holidays. "Commodity Charges" shall mean all commodity charges, ACA surcharges, GRI surcharges and other tariff charges assessed by a Pipeline pursuant to the approved tariff or governing documents of such Pipeline as a result of the actual transportation of Gas. "Dav" means a period of 24 consecutive hours, starting at 9:00 a.m. Central Clock Time on any calendar day. "Deliver Point(s)" shall mean the delivery point(s) specified in the Transportation Agreements. "Demand Charges" shall mean any and all demand /reservation charges assessed by a Pipeline pursuant to the approved tariff of such pipeline. "Fuel" means the quantity of Gas consumed by a Pipeline in transporting Gas and includes any provision by such pipeline for lost and unaccounted for Gas, as determined in accordance with the approved tariff or governing documents of such pipeline. "Gas" means any mixture of hydrocarbons and non - combustible gases in a gaseous state consisting primarily of methane. "Gas Supplier" means the seller of Gas to the Counterparty under theiterms of a Gas Supply Contract, which could be BP or another third party. "Gas Supply Contracts" means the contracts for the sale of Gas from an entity to Counterparty; as such contracts are identified on Exhibit A. "Gas Supply Obligations" means any Gas purchased by Counterparty from a party or entity under any of the Gas Supply Contracts. "Imbalance Charges" means any fees, penalties, costs or charges, (in cash or in kind) assessed by a Pipeline as a result of any differences between the actual measured quantities and scheduled quantities at a receipt or delivery po'fiYon any Day, whether as a result of a failure to satisfy the Pipeline's balance and/or nomination requirements, a violation of a volumetric condition imposed by the Pipeline on any point, or any other conditions/restraints allowing for any such assessment under the applicable tariff or governing documents. "Month" means the period beginning on the first Day of the calendar month and ending immediately prior to the commencement of the first Day of the next calendar month. "Pi eline' means any one, as applicable, of the pipelines (or storage facilities), including local distribution companies (LDCs), identified in the applicable Transportation Agreement(s). "Pipeline Capacity" means the capacity on the applicable Pipeline as contracted for by Counterparty pursuant to the applicable Transportation Agreement(s). "Receipt Point(s)" shall mean the receipt point(s) identified in the Transportation Agreements where the Counterparty receives Gas under the Gas Supply Contracts. "Term" shall have the meaning as set out in Article VI of this Agreement. "Transportation Agreements" means a contract for transportation or storage service entered into by and between Counterparty and the Pipeline as such agreements are identified on Exhibit A. ARTICLE IL APPOINTMENT OF AGENT 2.1 BP as Agent. Counterparty hereby appoints BP to serve as its exclusive agent to manage and administer the Gas Supply Contracts and the Transportation Agreements with respect to the specific duties set forth in Article III throughout the Term of this Agreement. BP shall have no authority to undertake actions on behalf of the Counterparty that are beyond the scope of the authorizations stated in this Agreement. Counterparty does not appoint BP to act as its general agent, or as an agent for any other purpose other than the express authorizations granted in this Agreement. In no event shall BP, in its capacity as agent or otherwise, take title to the Gas being transported under the Transportation Agreements. 2.2 Implementing Notices. Counterparty shall provide each Pipeline with notices under the applicable Transportation Agreement of the appointment of BP as agent in time for BP to administer and manage the contracts for which it has been given responsibility. Counterparty further agrees to take any and all actions necessary to facilitate such appointment, including but not limited to executing documents required by the Pipeline. 2.3 Governmental Requirements. The Parties agree that BP's services under this Agreement may be subject to local, state, or Federal laws, rules, and regulations ( "Governmental Requirements "). The Parties agree to comply with all Governmental Requirements applicable to this Agreement, and Counterparty agrees that it shall not require or request BP to perform any action, or to omit to perform any action, that BP reasonably believes is required under applicable Governmental Requirements. 2.4 Standard of Care. BP will perform its duties under this Agreement with the same standard of care that a similarly situated reasonably prudent party would perform the same duties for a similarly situated counterparty. 2.5 Fiduciary Obligation Disclaimer and Waiver. Notwithstanding the designation of BP as Counterparty's agent under the terms of this Agreement, Counterparty agrees that BP is not acting in a fiduciary capacity on Counterparty's behalf and accordingly the Parties do not have a relationship that imposes a higher duty of trust or confidence on BP than the standard imposed with respect to two parties engaged in an arms length agreement, and accordingly Counterparty expressly waives any and all claims that BP owes a fiduciary obligation to the Counterparty. In furtherance of the foregoing, Counterparty acknowledges that BP currently engages in substantially similar agency activities for other counterparties, and nothing herein shall in any manner be deemed to limit or prohibit BP's performance of such agency practices on behalf of such other parties, even to the extent that the Counterparty and any such other party may be involved in a business agreement with BP acting as agent for both parties. ARTICLE Ill. PERFORMANCE OBLIGATIONS 3.1 BP's Specific Responsibilities. BP shall satisfy the following responsibilities under the terns of this Agreement: (a) based on the timely instructions received from the Counterparty (or the party responsible for conveying any such instructions under the Gas Supply Contracts) with respect to the Gas Supply Obligations, prepare and submit daily and monthly nominations, as applicable, to facilitate Counterparty's receipt of such Gas at the applicable Receipt Point(s) from the party or entity identified under any Gas Supply Contracts and the transport of Counterparty's Gas using the Pipeline Capacity, less Fuel, to the Delivery Point(s); (b) on each Day, manage the applicable Pipeline Capacity on the Pipeline so as to minimize Imbalance Charges, if possible, related to the receipt and delivery of the Gas; (c) manage any critical Day events or operational issues affecting the Pipeline or any other industry developments or circumstances of which BP has become aware that may have a material effect on the transportation of Gas hereunder, including the suggestion of balancing alternatives to the Counterparty during any period; (d) manage the receipt and payment of invoices on the Pipelines on the Counterparty's behalf, with such invoicing being reflected in the charges owed to BP under the terms of this Agreement; (e) communicate to Counterparty any applicable Federal or state regulatory matter of which BP has become aware which may impact BP's performance of the services made the subject of this Agreement; (f) upon request, post any unused Pipeline Capacity for release in accordance with existing rules, regulations and governing tariffs; and (g) maintain an ongoing familiarity with the terms of the Transportation Agreements, including the pipeline tariffs and governing documents applicable thereto. 3.2 Counterparty's Responsibilities. In order to enable BP to perform its duties and obligations under this Agreement, Counterparty shall: (a) if required under the terms of the Gas Supply Contracts, timely provide information to BP to facilitate BP's nomination and scheduling obligations and other obligations under Sections 3.1 and 3.3 (if applicable) such that BP may timely nominate and schedule delivery of the Gas from the Receipt Point(s) to the Delivery Point(s), or cause the responsible party under the Subject Gas Supply Contracts to timely supply such information to BP; (b) take all actions in a timely manner required to effectuate BP's responsibilities, such as executing applicable agency agreements with the Pipelines, in order to enable BP to provide the services provided for under this Agreement; (c) provide any relevant information, contracts or related documentation in respect of the Gas Supply Contracts, and/or the Transportation Agreements as necessary; (d) on each Day, take any action not expressly the responsibility of BP under this Agreement to receive or cause to be received at the applicable Receipt Point(s) under the Transportation Agreements, quantities of Gas in the aggregate equivalent to the timely instructions provided to BP regarding such quantity of Gas scheduled for delivery to the Counterparty under the Gas Supply Contracts at the Receipt Point(s) to ensure that imbalances will not occur, such as updating and notifying BP of any operational changes or circumstances, if applicable, that may impact Counterparty's Gas requirements as soon as possible; (e) maintain in full force and effect during the Term, without suspension, the Gas Supply Contracts and the Transportation Agreements; (f) communicate to BP any applicable Federal or state regulatory matters of which the Counterparty becomes aware which may impact the Gas Supply Contracts or the Transportation Agreements; and (g) hold title at all times during the Term of this Agreement to any Gas made the subject of BP's agency services under this Agreement. 3.3 Gas Supply Services: (a) BP shall sell gas to Customer in accordance with the following general terms: (i) During the Term of this Agreement, BP shall provide Customer with Gas supply in accordance with Customer's requests for gas supply. All such gas will be delivered to Customer at the Receipt Points on a Firm, Firm Variable or Interruptible basis (as such terms are defined in the Gas Supply Contract with BP) as determined in consultation between BP and Customer from time to time. Customer shall pay BP for gas delivered and sold to it by BP, and BP shall pay Customer for gas delivered and sold to it by Customer, according to the pricing terms set out in Exhibit B. (ii) Not less than five Business Days prior to each month in which Gas is to be delivered to Customer, Customer shall advise BP of any Baseload Quantities of Gas it desires to purchase from BP on a Firm basis under the terms and conditions of the Gas Supply Contract by and between BP and Customer. (iii) When Customer requires additional Gas beyond the Gas supplied under the Gas Supply Contract(s) or by BP under 3.3(ii) above on any Day, BP shall sell and deliver each MMBtu of such additional Gas to the Customer under the terms and conditions set forth in the Gas Supply Contract by and between BP and the Customer at the Receipt Point(s) up to the level of Customer's remaining Pipeline Capacity on a Firm (Variable Quantity) basis provided Customer has advised BP of such additional Gas requirement no less than twenty four (24) hours prior to the start of the relevant gas Day and on an Interruptible basis where Customer has advised BP of such additional Gas requirement less than twenty four (24) hours prior to the start of the relevant gas Day. (iv) When Customer has excess Gas beyond its Gas requirements, BP shall purchase Gas in a quantity equivalent to each MMBtu of the excess Gas at the Receipt Point(s) under the terms and conditions set forth in the Gas Supply Contract by and between BP and the Customer on a Firm (Variable Quantity) basis if BP is advised of such excess Gas no less than twenty four (24) hours prior to the start of the relevant gas Day and on an Interruptible basis if advised of such excess Gas less than twenty four (24) hours prior to the start of the relevant gas Day at the applicable price specified in Exhibit B or as otherwise agreed to by the Parties . (v) From time to time, BP and Customer may agree, but are not obligated to agree, pursuant to the terms and conditions set forth in the Gas Supply Contract by and between BP and Customer for the sale of gas to Customer at Customer's ctygate that is in addition to gas transported through the Customer's Pipeline Capacity ( "Citygate Sales "). BP shall be permitted to charge Customer a transportation charge for such Citygate Sales as set forth in Exhibit B in addition to any commodity price that BP and Customer may agree to. (vi) provide Customer with 24 hour, 7 days per week, telephone access to BP employee that will receive and implement any supply adjustments that may be requested by Customer and are acceptable to the Pipelines.. (b) Notwithstanding the foregoing, BP shall confirm each gas purchase or sale transaction contemplated herein between BP and Customer by sending Customer a transaction confirmation in accordance with the confirmation procedure provided for in the Gas Supply Contract between BP and Customer and such transactions shall be subject to the terms and conditions of the Gas Supply Contract between BP and Customer. 3.4 Cover Damages. If BP fails to nominate and schedule the daily volumes required for the receipt and delivery of the Gas in accordance with the timely instructions received from the Counterparty (or the party responsible for conveying any such instructions under the Gas Supply Contracts), and as a result Counterparty is unable to receive such Gas at the Delivery Point(s), then Counterparty may cover the amount of Gas that was requested by Counterparty but that was not nominated/scheduled by BP with other Gas supplies using commercially reasonable efforts, and the cost of cover, if any, actually incurred by Counterparty shall be reimbursed by BP. Notwithstanding anything to the contrary set forth in this Agreement, the Parties acknowledge and agree that (a) BP shall not have any responsibility for determining the quantity of Gas, if any, that Counterparty should purchase under the Gas Supply Contracts to satisfy its requirements, (b) BP shall not be responsible for supplying any Gas to Counterparty under the terms of this Agreement, and (c) BP's responsibilities under this Agreement with respect to the Gas Supply Obligations are expressly limited to nominating and scheduling Gas on the Counterparty's behalf according to the Counterparty's instructions, which have been made in Counterparty's sole discretion and judgment, provided that they have been timely provided to BP, in addition to performing the other limited activities set forth in Sections 3.1 and 3.3 (if applicable). 3.5 Risk Allocation. Notwithstanding Section 3.3(b), Counterparty assumes all risks of (i) the failure of the Gas Supplier under the Gas Supply Contracts to deliver Gas at the applicable Receipt Point(s), (ii) the curtailment, interruption or the unavailability of the Pipeline Capacity due to an event of force majeure or otherwise, either in whole or in part, on the Pipeline, and (iii) the failure of the Gas to be transported and delivered to the Delivery Point(s) for any reason whatsoever not attributable to BP's failure to nominate and schedule in accordance with its duties under this Agreement. For purposes of clarity, with respect to the Gas Supply Obligations, BP shall have no liability to Counterparty under this Agreement by reason of any failure by a Gas Supplier, for any reason whatsoever, to deliver Gas under a Gas Supply Contract at the Receipt Point(s). Provided, however, if BP is the Gas Supplier under any of the Gas Supply Contracts, nothing in this section is intended to release or modify in any manner BP's obligations thereunder. 3.6 Responsibilitv for Charges. BP shall reimburse Counterparty for any liabilities, costs, damages, Imbalance Charges, Demand Charges and/or Commodity Charges actually incurred by Counterparty solely as a result of BP's negligent or willful failure to perform its obligations under Sections 3.1 or 3.3 (if applicable). Notwithstanding the preceding sentence, BP shall not be responsible for any of the foregoing if BP's failure to perform was caused in whole or in part by (i) Counterparty's failure to perform its obligations under Section 3.2, (ii) BP's adherence to instructions received from or on behalf of the Counterparty, or (iii) as a result of BP enforcing its rights and remedies due to a breach of this Agreement by Counterparty. Counterparty shall be responsible for any and all liabilities, costs, damages, Imbalance Charges, Demand Charges and/or Commodity Charges incurred by Counterparty which are not the express responsibility of BP under this Agreement. 3.7 Timely Instructions. The timeliness of the instructions provided by the Counterparty (or by the party responsible for conveying any such instructions under the Gas Supply Contracts) for purposes of Sections 3.1, 3.2 and 3.4 shall be determined by ascertaining whether BP was given a commercially reasonable amount of time from BP's receipt of the nomination and scheduling instructions from the Counterparty (or the responsible party) prior to the nominating and scheduling deadlines established by the applicable Pipeline. ARTICLE IV. CONSIDERATION 4.1 Agent's Compensation. In consideration of BP's performance of the agency services set forth under this Agreement, the Counterparty shall pay BP a fee of $0.01 for each MMBtu of third party Gas that is actually delivered by a Gas Supplier at the Receipt Point(s). 4.2 Audit Rights. A Party shall have the right, at its own expense, upon reasonable written notice to the other Party and at reasonable times on any Business Day, to examine and audit and to obtain copies of the relevant portion of the books, records, and telephone recordings of the other Party only to the extent reasonably necessary to verify the accuracy of any statement, charge, payment, or computation made under this Agreement. This right to examine, audit, and to obtain copies shall not be available with respect to proprietary information not directly relevant to this Agreement All invoices and billings shall be conclusively presumed final and accurate and all associated claims for under or overpayments shall be deemed waived unless such invoices or billings are objected to in writing, with adequate explanation and/or documentation, within one year after the Month that the service activities made the subject of the invoices or billings is performed. All retroactive adjustments under this section shall be paid in full by the Party owing payment within thirty (30) Days of the written notice after the substantiation of such inaccuracy. ARTICLE V. ACCOUNT STATEMENTS On or before the I& Day of each Month, BP shall deliver to Counterparty a statement that sets out for the previous Month a detailed calculation showing the amounts owed under this Agreement (whether for the reimbursement of transportation services paid to the Pipeline by BP on the Counterparty's behalf, the consideration owed to BP under Article IV, or otherwise), including any adjustments made in accordance with Articles IV or V. On or before the later of the 201h Day of the Month or ten (10) Days subsequent to the date that the statement is delivered by BP, the net amount of each statement shall be paid by the Party owing such amount to the Party owed such amount. In the event that the payment date is not a Business Day, the payment shall be due on the next Business Day. Any amounts owing by BP to Counterparty under Section 3.4 for cover damages shall be supported by appropriate documentation and information, and such amounts, if any, shall be netted in accordance with this section in the Month following the incurrence of such costs by Counterparty. If the invoiced party disputes an invoice in good faith, it shall nevertheless submit any undisputed portion of the invoice to the other Party. Provided further, that the disputing Party must, prior to disputing any invoice, provide supporting documentation for the dispute in accordance with industry practice to the other Party. The Parties shall attempt to resolve the dispute, and in the event they cannot, the Parties may exercise any and all rights and remedies available to such Party under this Agreement, at law or in equity. In addition to any such rights and remedies, if the disputing Party does not prevail in any subsequent litigation or proceeding with respect to such dispute, it shalt also owe the other Party interest at a rate equal to the lower of (i) the then - effective prime rate of interest published under "Money Rates" by The Wall Street Journal, plus two percent (2 %) per annum, or (ii) the maximum applicable interest rate allowed by law. All payments or reconciliations under this Agreement shall be made in United States currency. Payments under this Agreement shall be effected by wire transfer remittance as follows: To Counterparty: To BP: BANK: Citizens Bank & Trust Co. BANK: Bank ONE, Chicago, IL, Branch #100 ABA: 091901862 ABA: 071000013 ACCT: 000086 ACCT: 11 -22183 ARTICLE VI. TERM. This Agreement shall remain in effect from the period commencing on the Effective Date and ending December 31, 2013, and shall continue on a year to year basis thereafter unless terminated on not less than ninety (90) days written notice given by one of the Parties to the other (such period being the "Term "). Each Party's obligations regarding payment and indemnification hereunder shall survive the termination of this Agreement for a period of time equal to the time for which the applicable statute of limitations applies. ARTICLE VII. TAXES 7.1 Tax Matters. Each Party is responsible for the economic benefits and burdens related to the consideration received by such Party under this Agreement. Accordingly, each Party shall report to the Internal Revenue Service or any other applicable taxing authority, all information relevant to the economic benefits and burdens related to this Agreement and shall maintain the necessary records for such tax reporting. Each Party shall indemnify, defend and hold the other Party harmless as to any costs or liabilities claimed against or incurred by such other Party in connection with claims for Taxes made by third parties or entities, including governmental entities, arising out of the activities made the subject of this Agreement to the extent that such costs or liabilities arise from or relate to all or any portion of the obligations attributable to such Party. References to "costs" in connection with this section shall include all reasonable and necessary attorneys' fees and expenses, consultants' fees, travel expenses, and court costs, including costs incurred to enforce the indemnity obligations. 7.2 Responsibility for Sales and Similar Taxes. Counterparty shall be solely responsible for all taxes, fees, levies, penalties, licenses or charges imposed by any government authority (collectively "Taxes ") that are currently imposed on the purchase and delivery of the Gas Supply Obligations, including any Taxes attributable to the Counterparty's capacity on the Pipeline under the Transportation Agreements, and any new Taxes that might be imposed on such continued purchases and deliveries. With respect to BP's compensation under this Agreement, BP shall be responsible for any Taxes associated with such consideration. ARTICLE Vill. DEFAULT AND REMEDIES 8.1 Events of Default. The following actions or inactions by a Party shall constitute an "Event of Default" under this Agreement: (a) breach of any obligation under this Agreement (save and except for any breach by Counterparty of Sections 3.2(e) which is addressed hereinafter in subsections (c) -(f) or any breach by BP addressed in Section 3.4), if such breach is not cured by the Party in breach within ten (10) Business Days after written notice of such breach from the non - defaulting Party; (b) the Bankruptcy of a Party; (c) Counterparty allows a Gas Supply Contract or a Transportation Agreement to be suspended, in whole or in part, for a period of greater than five (5) consecutive Days; (d) Counterparty allows any Gas Supply Contract under which BP is a Gas Supplier to be terminated without having a replacement contract with BP for substantially the same quantity on the same material terms and conditions within three (3) Business Days after the original Gas Supply Contract with BP was terminated; (e) Counterparty allows any Gas Supply Contract to be terminated, other than one under which BP is the Gas Supplier, without having a replacement contract with another Gas supplier for substantially the same quantity on the same material terms and conditions within three (3) Business Days after the original Gas Supply Contract was terminated, or Counterparty fails to give BP prior written notice of such replacement contract within three (3) Business Days after such contract has been entered into by the Counterparty; or (f) Counterparty allows any of the Transportation Agreements to be terminated. 8.2 Remedies. If an Event of Default has occurred and is continuing, the non - defaulting Party may suspend performance on written notice to the defaulting Party and, at its election, terminate this Agreement on written notice to the defaulting Party. The non - defaulting Party must elect to terminate this Agreement within twenty (20) Business Days of the Event of Default or re- commence performance. During any time that BP suspends performance in accordance with this Section, it shall have no obligation to perform any services of any nature under this Agreement, until such time as the Counterparty has remedied the breach and provided notice thereof to BP. In the event BP resumes performance either as a result of not electing to terminate this Agreement or by informing the Counterparty in writing that it rescinds its suspension of performance, Counterparty shall take all necessary steps with its Gas Suppliers under the Gas Supply Contracts and/or the Pipelines under the Transportation Agreements to facilitate BP's performance under this Agreement. Termination of this Agreement shall not preclude or limit the non - defaulting Party from pursuing any other remedy available at law or in equity in respect of the Event of Default under this Agreement, including the pursuit of damages. ARTICLE IX. MISCELLANEOUS 9.1 No Partnership or Joint Venture. The obligations and liabilities of the Parties are intended to be several and not joint, and nothing contained in this Agreement shall be construed to create an association, trust, partnership or joint venture between the Parties, and each Party shall be liable individually and severally for its own obligations under this Agreement. Both Parties agree that their relationship is strictly as one of principal and agent, as limited by this Agreement and to the express purposes set forth in this Agreement. 9.2 Compliance with Governmental Requirements. BP and Counterparty shall comply with (i) the nomination and scheduling requirements on the terms and conditions set forth in this Agreement, as such requirements are provided in writing, orally or otherwise to BP by Counterparty (or the party responsible for conveying any such instructions under the Gas Supply Contracts), (ii) the Transportation Agreements covering the Pipeline Capacity, and the applicable tariffs or governing documents, and (iii) all applicable Governmental Requirements affecting the transportation and sale of Gas that are related to this Agreement. Without limiting the generality of the foregoing, if during the Term of this Agreement any governmental agency of competent jurisdiction should determine that the obligations and duties contemplated in this Agreement cannot be performed in accordance with applicable Governmental Requirements, wholly or in part, the Parties shall immediately suspend performance under this Agreement. BP and Counterparty shall, within ten Days of such a determination, meet to determine whether this Agreement can be revised so that the transactions contemplated herein can be performed fully in accordance with applicable Governmental Requirements. In the absence of a superseding written agreement between the Parties following such event and following such meeting, this Agreement shall terminate with no damages being owed by either Party to the other. 9.3 Further Assurances. The Parties agree to execute and deliver such additional instruments or documents as may be necessary to carry out the purposes of this Agreement. 9.4 Assienment. Neither Party may assign this Agreement to any third party without the express written consent of the other Party, which consent may not be unreasonably withheld. Any attempted assignment of this Agreement in violation of this Section shall be void and of no force and effect. This Agreement shall inure to the benefit of and bind the respective successors, heirs, representatives and permitted assigns of the Parties. 9.5 Governing Law and Jurisdiction. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Minnesota, without regard to its conflicts of laws rules or principles. The Parties hereby submit to the jurisdiction and venue of the courts in the State of Minnesota for purposes of any litigation related to the Agreement. 9.6 Notices. Any communications between the Parties hereto or notices provided herein to be delivered may be delivered to the following addresses: If to Counterparty: If to BP: Hutchinson Utilities Commission BP Canada Energy Marketing Corp. 225 Michigan Street PO Box 3092 Hutchinson, MN 55350 Houston, TX 77253 -3092 Phone: 320 - 234 -0507 Phone: 713- 323 -2000 Fax: 320 -587 -4721 Fax: 713 - 323 -0203 All notices and communications required or permitted to be delivered hereunder shall be in writing and shall be considered as properly delivered (i) when delivered in person, (ii) on the next delivery Day after placed with an overnight delivery service (including Federal Express, Emery, DHL, Air Borne and other similar overnight delivery services) and designated for next -Day service with proof of delivery, or (iii) if delivered by facsimile, upon the sending Party's transmission of such notice or communication with proof of successful transmission, provided that the Day on which such facsimile is transmitted is a Business Day. If the Day on which the facsimile is transmitted is not a Business Day or the transmission is made after 5:00 p.m. on a Business Day at the recipient's location, then such facsimile shall be deemed to have been delivered and received on the next following Business Day. Any Party shall have the right to change its address for notices hereunder to any other location within the continental United States by giving thirty (30) Days notice to the other Parties in the manner set forth hereinabove. 9.7 Release and Indemnity. BP agrees to fully indemnify, defend and hold Counterparty harmless, including its respective directors, officers, employees, agents and representatives, from and against any and all claims, causes of action, disputes, demands, threats of litigation or arbitration, costs, expenses, damages, injuries, obligations, liabilities, losses, liens, encumbrances, judgments, settlements, interests, awards of every kind and character without limitation, including any and all reasonable attorney's fees and expenses as well as costs of court or arbitration, arising from, under or as a result of claims related to title, personal injury (including death), and property damage, whether created by law, contract, strict liability, tort, judgment, voluntary settlement or in equity (collectively all of the foregoing being "Claims "), made by all persons or entities to the extent that such Claims are attributable to the negligence or willful misconduct of BP in performing its duties under this Agreement, unless BP is being indemnified for such Claims by Counterparty under this Agreement. Similarly, Counterparty agrees to fully indemnify, defend and hold BP harmless, including its respective directors, officers, employees, agents and representatives, from and against any and all Claims made by all persons or entities to the extent that such Claims are related in any manner to the Transportation Agreements or the Gas Supply Contracts, unless the Counterparty is being indemnified for such Claims by BP under this Agreement. 9.8 Limitation on Damages. Save and except to the extent it is related to any Party's indemnity obligations under this Agreement, no Party, nor its directors, trustees, agents, officers, or employees, shall be liable to any other Party, its directors, trustees, agents, officers, or employees, for any punitive, consequential, incidental, indirect, exemplary or special damages arising out of a claim related to this Agreement, whether as a result of breach of contract, breach of warranty, tort liability (including both negligence and strict liability), strict liability or otherwise. 9.9 Authoritv to Execute. Each of the Parties to this Agreement represents and warrants that, as of the Effective Date, (i) it has full and complete authority to enter into and perform this Agreement; (ii) the person who executes this Agreement on its behalf has full and complete authority to do so and is empowered to bind it thereby; and (iii) it is not insolvent and has not sought protection from its creditors in Bankruptcy or is otherwise the subject of Bankruptcy. 9.10 Miscellaneous. This Agreement may be executed in multiple counterparts, each of which shall constitute an original and all of which together shall constitute one and the same instrument. The headings and subheadings contained in this Agreement are used solely for convenience and do not constitute a part of this Agreement between the Parties and shall not be used to construe or interpret the provisions of this Agreement. Each provision of this Agreement is intended to be severable. If any provision of this Agreement is determined to be illegal, invalid or unenforceable, for any reason, then, insofar as is practical and feasible, the remaining portions of this Agreement shall be deemed to be in full force and effect as if such invalid provision was not contained herein. Except as expressly otherwise provided in this Agreement, all covenants, indemnities, representations, warranties, acknowledgments, agreements, rights and obligations of the Parties under this Agreement, that are capable of having effect after the termination of this Agreement for any reason, shall survive and remain in full force and effect beyond, and not be affected by, the termination of this Agreement. 9.11 NVaiver. One or more waivers of any provision of this Agreement by a Party shall not be construed as a waiver of a subsequent breach or requirement of the same provision, and the consent by a Party to or approval of any act or omission by a Party requiring the other Party's consent or approval shall not be deemed to waive or render unnecessary such other Party's consent to or approval of any subsequent similar act or omission by such Party. Any and all waivers of this Agreement shall only be binding on a Party to the extent that the waiver is in writing. 9.12 Entiretv and Amendments. This Agreement constitutes the entire agreement between the Parties regarding the services to be provided under this Agreement, and supersedes and replaces any prior and contemporaneous communications, understandings and agreements between Counterparty and BP related to such subject matter, whether written or verbal, express or implied. No modification, amendment, supplementation or alteration of the terms and provisions of this Agreement shall be or become effective except by written amendment executed by the duly authorized representative of the Parties. 9.13 Definitions. To the extent that any defined terms used in this Agreement are not otherwise defined herein, they shall have the definition set forth in the Gas Supply Contract by and between BP and the Counterparty. 9.14 Supersede & Replace Prior Agreement. This OAA supersedes and otherwise replaces in its entirety the Natural Gas Services Addendum dated December 31, 2010 (the "Prior Agreement "), which Prior Agreement is hereby terminated and deemed for all purposes to be of no further force or effect as of the effective date hereof. IN WITNESS WHEREOF, and with the intent to be legally bound, the Parties hereto have caused this Agreement to be executed by their duly authorized officers or representatives as of the Effective Date. HUTCHINSON UTILITIES COMMISSION BP CANADA ENERGY MARKETING CORP. r By: By: Name: j� _ L/ ct..� � LI „ 4,D,T Name: Title: �/�yj,'c�r ;� Title: Date: Date: Exhibit A Gas Supply Contracts 1. Base Contract for Sale and Purchase of Natural Gas dated January 1, 2004. Transportation A-greements Northern Natural Gas Contract #s 21279 and 102733 Exhibit B Pricing The following prices are applicable to gas sales pursuant to Section 3.3 of the Operational Agency Agreement: Baseload Volume (a) All monthly Firm Gas baseload purchases will be priced based on market conditions at the time Hutchinson makes their monthly Finn Gas baseload purchases. Hutchinson will have the flexibility to purchase monthly firm baseload gas by month or multi -month purchases. (b) Hutchinson shall have a choice of pricing mechanisms including but not limited to: monthly index, daily index, fixed price, and various structured products, for gas supplies from BP, subject to any applicable credit requirements being satisfied. Firm (Variable Ouantity) (a) If being purchased by Customer at Northern Border Trimont, the price per MMBtu shall be the Gas Daily NNG Ventura Index for the day of delivery minus $0.005. 3. Interruptible (less than 24 hours notice) (a) If being purchased by Customer at Northern Border Trimont, the price per MMBtu shall be the Gas Daily NNG Ventura Index for the day of delivery plus $0.12. Customer may at any time request a proposal from BP to convert any of the foregoing prices to fixed prices. BP shall make a proposal to Customer quoting a fixed price and the period of time for which that fixed price shall be applicable together with any other terms and conditions applicable to its proposal. Any such proposal shall take effect only upon a written confirmation thereof being executed by the authorized representatives of BP and Customer. 4. Buyer Turn Back Provision. Subject to the terms set forth in this Section, to the extent that any Firm (Variable Quantity) purchased by Buyer pursuant to Section 3.3(iii) or Interruptible purchased by Buyer pursuant to Section 3.3(iv), exceeds Buyer's Gas Requirements on a Day ( "Excess Gas ") , Buyer shall turn back to Seller an amount of Gas equal to the Excess Gas, for a financial adjustment to be made based on a formula equal to (i) the amount of Gas to be turned back by Buyer, multiplied by (ii) the difference between (a) the applicable Contract Price and (b) the GDD Price for the Day minus $.01 for Firm (Variable Quantity) and the GDD Price for the Day minus $.12 for Interruptible. The GDD Price means Gas Daily NNG Ventura Index for the day of delivery for deliveries to Ventura. EXEMPT ONLY DISABILITY INSURANCE HUC pays the entire premium test -of a long -term disability insurance policy for all staff employees. Information on disability insurance is available through the Customer /HR Manager. EXEMPT PROMOTIONS AND TRANSFERS The encourages individual advancement by providing opportunities for promotion and transfer as positions become available. Job vacancies shall be posted ten (10) working days. Employees desiring to be considered for the position must provide a letter of interest to the appropriate staff person by the deadline stated on the posting. All promoted employees shall serve a six (6) month probationary period during which time the promoted employee may be placed back in the employee's previous job classification at the sole discretion of the Staff Personnel, without loss of seniority. We encourage employees to discuss their career plans and goals with their Director or Manager. LAYOFFS T"e - UtilitYHUC retains its right to eliminate positions within the organization if the Commission deems it appropriate to do so. If a layoff occurs, t#°'HUC will provide four weeks' notice to affected employees. Layoffs will be based on skill, knowledge, utility needs and also employee's seniority. VOLUNTARY LEAVE OF ABSENCE The TesHUC may request employees to voluntarily take a leave of absence without pay for a specified period of time. NON - EXEMPT PROMOTIONS AND TRANSFERS The HUC encourages individual advancement by providing opportunities for promotion and transfer as positions become available. Job vacancies shall be posted ten (10) working days. Employees desiring to be considered for the position must provide a letter of interest to the appropriate staff person by the deadline stated on the posting. All promoted employees shall serve a six (6) month probationary period during which time the promoted employee may be placed back in the employee's previous job classification at the sole discretion of the Staff Personnel, without loss of seniority. We encourage employees to discuss their career plans and goals with their Director or Manager. LAYOFFS The— Uti1+tyHUC retains its right to eliminate positions within the organization if the Commission deems it appropriate to do so. If a layoff occurs, the - Ufi44y UC will provide four weeks' notice to affected employees. Layoffs will be based on the Utility's skill and knowledge needs and also employee's seniority. VOLUNTARY LEAVE OF ABSENCE The Ufilifie&HUC may request employees to voluntarily take a leave of absence without pay for a specified period of time. O LL O r M W cc Z VC_J CG C U W p J_ H M Z O TZ F: U H LP) T LO O O O z C O a) Z cn cn O U O W M 5 J cl) Lc) It C\l H�ZcoT =Z��� � (jNT� Z♦=♦ZNC°\j vvC = C) co G F... 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