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10-25-2017 HUCCPHUTCHINSON UTILITIES COMMISSION AGENDA REGULAR MEETING October 25th, 2017 3:00 p.m. 1. CONFLICT OF INTEREST 2. APPROVE CONSENT AGENDA a. Approve Minutes b. Ratify Payment of Bills 3. APPROVE FINANCIAL STATEMENTS 4. OPEN FORUM 5. COMMUNICATION a. City Administrator b. Divisions C. Legal d. General Manager 6. POLICIES a. Review Policies i. Investment Policy ii. Disconnection of Residential Services by Utilities iii. Disconnection of Commercial Services by Utilities iv. Health & Safety v. Accidents & Injuries vi. Unsafe Conditions or Practices vii. Employee Right -To -Know b. Approve Changes i. Budget Payment Plan ii. Explanation of Billing Procedure 7. UNFINISHED BUSINESS a. Update on Pack Gas Discussions 8. NEW BUSINESS a. Rollover of Northern Natural Gas Transportation Contract #21279 b. Approval of Generator Contract 9. ADJOURN MINUTES Regular Meeting — Hutchinson Utilities Commission Wednesday, September 27, 2017 Call to Order — 3:00 p.m. In the absence of President Monty Morrow, Vice President Anthony Hanson called the meeting to order at 3:00 p.m. Members present: Vice President Anthony Hanson; Secretary Mark Girard; Commissioner Robert Wendorff; and Commissioner Don Martinez. Others present: General Manager Jeremy Carter; Attorney Marc Sebora. 1. Conflict of Interest There were no conflicts of interest noted. 2. Approve Consent Agenda a. Approve Minutes b. Ratify Payment of Bills Motion by Girard, second by Martinez to approve the Consent Agenda. Motion carried unanimously. 3. Approve Financial Statements General Manager Carter presented the financial statements. Jared Martig mentioned the Natural Gas division is very similar to last year. However, Electric division was down. He also stated that we are still learning the BS&A software, there was a wire transfer that did not post in July before the financial statements were created so the July financials showed an increase in cash of roughly $1 M and it should have been around $600k. The breakeven cash for August as shown on this financial statement should be roughly $400k higher but year to date is correct. General Manager Carter noted Electric division was down 12%. There was a day difference in consumption days from August 2016 compared to August 2017. Gas consumption is up 7% over the same period in 2016. Balance sheet is looking good. We are trending as we should. TransAlta sales were down due to the cooler weather. Dave Hunstad reviewed Work Order section on Capital projects with the School Road and Roberts Road project. We doubled the budget on the school road bridge, it was not supposed to happen but there were issues that needed to be addressed. Since we doubled, we are now forgoing others. We were still able to hit bottom line. Commissioner Hanson asked about Plant 1 Door and Window Replacement. Mr. Blake stated that it was cancelled for now. Motion by Martinez, second by Wendorff to approve the financial statements. Motion carried unanimously. 4. Open Forum -none 5. Communication a. City Administrator— Matt Jaunich i. Mr. Jaunich communicated that the hotel project is to start middle/end of October. ii. High Field Apartments, phase 1 is 80% complete and scheduled to be open November 1. Half of the complex is already rented out. 107mliql7re MI, i. Dan Lang, Engineering Services Manager —nothing to report ii. Dave Hunstad, Electric Transmission/Distribution Manager— nothing to report iii. Randy Blake, Production Manager — Jeremy, Marc, Jim Booty and I are working on the contract, hopefully in a week will have it finalized. Commissioner Hanson inquired if we are still on schedule. General Manager Carter assured him and the board that we are still on track even with the contract delays. We are working on the contract language and we still have a few clean up items. Final contract should be ready within next few business days and will send it out to the commission to have a special meeting to move forward. iv. John Webster, Natural Gas Division Manager -nothing to report v. Jared Martig, Financial Manager — Working on touching up our billing process. Thought we would send bills out on time this month but we had problems with our bandwidth. Last month we mentioned to shrink the bills by taking off the graphs; this is something we are going to be working on. As far as the mail delivery, not sure what happened, all bills were postmarked September 11 but customers were not receiving their bills until late that week. Commissioner Hanson inquired if billing department has received any calls from customers on receiving their bills late. General Manager Carter stated that we have. There seemed to have been many things going on with the delivery of bills, making payments and website issues. We did send a letter to the Hutchinson Leader to let our customers know that we apologize for any inconvenience and that customers are our number 1 priority. We also have not charged any late fees. However, we did have conversations with the Leader because the apology was not included in the Press Release just that we are working on resolving the issues. We also did post on our website letting our customers know they are our Number 1 priority, that we apologize for any inconvenience, and we are working on resolving the problems and making changes in a timely fashion. General Manager Carter added that the staff has been talking about the need to create a buffer to get the bills out sooner. We are working through changing some of our calendar dates and due dates and making sure they are not the same due date as the City bills. General Manager Carter asked the Board if you do receive any calls from our customers to let them know we empathize with them and we understand how it effects the families. 2 General Manager Carter added that we did talk to our bill printing company and they reassured us that all the bills were placed in the mail on November 11. We have checked into a local printing company but we will still have a 2-3 day lag because all mail goes through the cities. Commissioner Hanson inquired if there is a way we can electronically send out bills. General Manager Carter explained that we do have that option, but not everyone has signed up to receive his or her bills electronically. The people that are signed up receive their bill as soon as we create it. We are going to be promoting E -Bills during our Open House Appreciation Dinner next Tuesday October 3. c. Brenda Ewing, Human Resources — Nothing to report d. General Manager — Jeremy Carter i. Working through Generator contracts ii. Followed up with Cost of Service study this week, they are getting close. October information should be coming out soon. Prompting them to give us more of a timeline since they are not giving us an exact date iii. Updating PILOT information. Talked with committee and need to get more information together. Need to think about how this is going to impact the Cost of Service study with an October/November timeline. Sooner we can get information out and back the better. Need to have the Board think about dates iv. Attending different webinars on battery storage, electric vehicles..etc v. Had rating call with Moodys this week. Went well, they asked a lot of general questions- could tell they still have to go back through information and look at financials. Our rating is an Al. They had us in the upper level but the downgraded HUC a notch because of the high concentration of consumption by two customers. It was brought up the third company coming to town will help diversify the load portfolio. Question was raised what happens when one leaves? We feel we are still stable. 3M is not going anywhere and HTI/TDK is more financially stable, they are in a better position from before the acquisition. We have three big players that are taking our concentration but we also have many other commercial companies in town. It will take about a week on our rating. We think they will at least reaffirm our Al rating, but are hopeful it will be graded up a notch to the Aa3 rating. All positive but when I hear I will share info with you. e. Legal — Marc Sebora —Working on generator contracts. 6. Policies a. Review Policies i. Automatic Bill Payment Plan ii. Required Clothing iii. Small Hand Tools iv. Safety Glasses 3 b. Approve Changes i. Errors in Billing —as noted ii. Payment of Your Bill — as noted, but also added more modifications under Payment Methods; remove old payment center phone number and will list our local phone number, add E -check, add savings/checking account, add online reoccurring credit card payment. iii. Recognition Policy -Service Awards and Retirement Gifts - as noted. Motion by Girard, second by Wendorff, to approve the policy changes as recommended. Motion carried unanimously. 7. Unfinished Business a. Update of Pack Gas Discussions General Manager Carter noted there is no new information to report at this time. 8. New Business a. Approval of Bond Resolution Mr. Carter noted this is the final step for the Commission. Commission has to give authorization for bond sale on October 10th for City Council. We have a resolution out here of $17,455,000. This also calls for 2003 redemption of bonds. There is a point in the process where we can deny the bids. We will have a sense to that by knowing how many have come in and who the players are going to be. If we get indication at that time, we can pull the bond offer off and table until the following month. We will have time along the process to see if things look good and will communicate them. We do not foresee that happening, everything that seems to be in the market looks good. Motion by Wendorff, second by Girard, to approve the Bond Resolution. Motion carried unanimously. b. Declare Surplus Items Mr. Carter noted this is more or less housekeeping. We have new fleet that has come in so we are asking the board to approve declaring surplus items. Staff is estimating $30-$40K in sale proceeds that will go back into the fleet program. Commissioner Wendorff inquired if these have already been replaced. Mr. Hunstad verified they have and that the bucket truck just came in last week. Motion by Martinez, second by Wendorff, to approve the Declare Surplus Items. Motion carried unanimously. 9. 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O O O O O O H Q Cia H H H H H H H H H HUTCHINSON UTILITIES COMMISSION COMBINED DIVISIONS FINANCIAL REPORT FOR SEPTEMBER, 2017 2017 2016 Di % Chnq 1 2017 2016 Combined Division $ 26,121,330 $ 25,825,159 $ 45.9% $ 1,631,291 Customer Revenue $ 2,523,355 $ 2,570,541 $ (47,185) Sales for Resale $ 179,440 $ 123,003 $ 56,437 NU Transportation $ 94,810 $ 94,332 $ 479 Electric Division Transfer $ 54,308 $ 53,931 $ 378 Other Revenues $ 38,238 $ 42,581 $ (4,343) Interest Income $ 10,538 $ 13,307 $ (2,769) TOTAL REVENUES $ 2,900,690 $ 2,897,694 $ 2,996 (1.8%) $ 26,121,330 $ 25,825,159 $ 45.9% $ 1,631,291 $ 1,452,051 $ 0.5% $ 667,291 $ 614,688 $ 0.7% $ 488,774 $ 485,375 $ (10.2%) $ 521,249 $ 464,693 $ (20.8%) $ 101,879 $ 42,661 $ pi . 296,171 179,240 52,604 3,400 56,557 59,218 0.1%1 $ 29,531,814 $ 28,884,625 $ 647,189 2.2%1 $ 41,038,548 72.0% Salaries & Benefits 75% of Year Comp. Chnq Full Yr Bud % of Bud 1.1% $ 36,743,052 71.1% 12.3% $ 2,310,110 70.6% 8.6% $ 734,878 90.8% 0.7% $ 651,700 75.0% 12.2% $ 498,808 104.5% 138.8% $ 100,000 101.9% 2.2%1 $ 41,038,548 72.0% Salaries & Benefits $ 451,743 $ 514,899 $ (63,156) (12.27%) $ 4,150,998 $ 4,332,389 $ (181,391) (4.2%) $ 6,005,227 69.1% Purchased Commodities $ 1,295,918 $ 1,315,716 $ (19,798) (1.5%) $ 14,783,760 $ 14,274,080 $ 509,681 3.6% $ 20,990,267 70.4% Transmission $ 243,293 $ 184,980 $ 58,314 31.5% $ 2,169,601 $ 1,764,208 $ 405,393 23.0% $ 2,550,000 85.1% Generator Fuel/Chem. $ 63,641 $ 46,740 $ 16,901 36.2% $ 769,502 $ 986,388 $ (216,885) (22.0%) $ 1,249,801 61.6% Depreciation $ 317,333 $ 313,000 $ 4,333 1.4% $ 2,856,000 $ 2,817,000 $ 39,000 1.4% $ 3,808,000 75.0% Transfers (Elect./City) $ 154,003 $ 150,657 $ 3,345 2.2% $ 1,386,023 $ 1,343,871 $ 42,152 3.1% $ 1,700,647 81.5% Operating Expense $ 151,279 $ 157,271 $ (5,992) (3.8%) $ 1,652,594 $ 1,495,890 $ 156,704 10.5% $ 2,583,006 64.0% Debt Interest $ 63,382 $ 67,676 $ (4,294) (6.3%) $ 570,441 $ 609,084 $ (38,644) 6.3% $ 760,588 75.0% TOTAL EXPENSES $ 2,740,592 $ 2,750,939 $ (10,347) (0.4%) $ 28,338,920 $ 27,622,910 $ 716,010 2.6% $ 39,647,536 71.5% NET PROFIT/(LOSS) $ 160,098 $ 146,755 $ 13,343 9.1% $ 1,192,894 $ 1,261,715 $ (68,821) (5.45%) $ 1,391,013 85.8% September September YTD YTD 2017 HUC 2017 2016 Change 2017 2016 Change Budget Target Gross Margin % 35.7% 37.1% -1.3% 31.5% 33.2% -1.7% 30.0% IIIIIIIIIIII� Operating Income Per Revenue $ (%) 6.2% 6.3% -0.1% 4.4% 5.5% -1.1% 4.5% Net Income Per Revenue $ (%): 5.5% 5.1% 0.5% 4.0% 4.4% -0.3% 3.4% Electric Division Customer Revenue Sales for Resale Other Revenues Interest Income TOTALREVENUES Salaries & Benefits Purchased Power Transmission Generator Fuel/Chem. Depreciation Transfers (Elect./City) Operating Expense Debt Interest TOTAL EXPENSES NET PROFIT/(LOSS) HUTCHINSON UTILITIES COMMISSION ELECTRIC DIVISION FINANCIAL REPORT FOR SEPTEMBER, 2017 $ 357,542 75% of Year Comp. 2017 2016 (13.8%) 2E %Chna 2017 2016 (4.4%) 2E %Chna Full Yr Bud %of Bud $ 2,128,896 $ 2,174,791 $ (45,895) (2.1%) $ 19,248,515 $ 19,182,451 $ 66,064 0.3% $ 25,185,461 76.4% $ 179,440 $ 123,003 $ 56,437 45.9% $ 1,631,291 $ 1,452,051 $ 179,240 12.3% $ 2,310,110 70.6% $ 18,979 $ 23,504 $ (4,525) (19.3%) $ 307,860 $ 279,021 $ 28,840 10.3% $ 280,200 109.9% $ 5,269 $ 6,654 $ (1,385) (20.8%) $ 50,939 $ 21,330 $ 29,609 138.8% $ 50,000 101.9% $ 2,332,584 $ 2,327,951 $ 4,633 0.2% $ 21,238,606 $ 20,934,854 $ 303,752 1.5% $ 27,825,771 76.3% $ 357,542 $ 414,748 $ (57,206) (13.8%) $ 3,253,107 $ 3,402,458 $ (149,350) (4.4%) $ 4,727,135 68.8% $ 1,076,915 $ 1,077,977 $ (1,062) (0.1%) $ 10,821,186 $ 10,449,422 $ 371,764 3.6% $ 14,208,043 76.2% $ 243,293 $ 184,980 $ 58,314 31.5% $ 2,169,601 $ 1,764,208 $ 405,393 23.0% $ 2,550,000 85.1% $ 63,641 $ 46,740 $ 16,901 36.2% $ 769,502 $ 986,388 $ (216,885) (22.0%) $ 1,249,801 61.6% $ 233,333 $ 225,000 $ 8,333 3.7% $ 2,100,000 $ 2,025,000 $ 75,000 3.7% $ 2,800,000 75.0% $ 123,408 $ 116,803 $ 6,605 5.7% $ 1,110,674 $ 1,043,397 $ 67,277 6.4% $ 1,333,516 83.3% $ 102,780 $ 123,717 $ (20,937) (16.9%) $ 1,162,976 $ 1,041,517 $ 121,459 11.7% $ 1,746,330 66.6% $ 2,124 $ 2,551 $ (427) (16.7%) $ 19,116 $ 22,959 $ (3,844) 16.7% $ 25,488 75.0% $ 2,203,036 $ 2,192,516 $ 10,520 0.5% $ 21,406,164 $ 20,735,350 $ 670,814 3.2% $ 28,640,313 74.7% $ 129,548 $ 135,436 $ (5,887) (4.3%) $ (167,558) $ 199,504 $ (367,062) (184.0%) $ (814,542) 20.6% The Electric division in September 2017 had a net profit decline of $5,887. Decreased Customer Revenue was offset by increased Sales for Resale. Sales for Resale of $179,440 consisted of $11,379 in market sales, $34,400 in the monthly tolling fee from Transalta, $37,661 in energy sales to Transalta, and $96,000 in capacity sales to SMMPA. September 2016 Sales for Resale of $123,003 consisted of $11,105 in market sales, $34,400 in monthly tolling fees from Transalta, $10,998 in Transalta energy sales, and $66,500 in capacity sales to SMMPA. September 2015 Sales for Resale of $168,117 consisted of $7,011 market sales, $34,400 in Transalta tolling fees, $84,706 in Transalta energy sales, and capacity sales to SMMPA for $42,000. Overall Purchased Power decreased by $1,062. MRES purchases increased by $46,197 and market purchases decreased by $47,259 due to needing less. The power cost adjustment for September 2017 was $.0039/kwhr bringing in an additional $80,220 of revenue for the month and $1,300,599 for the year. Last year's power cost adjustments through September of 2016 generated $687,476 in additional revenue. 75% of Year Comp. 2017 2016 2E %Chna 2017 2016 2E %Chna Full Yr Bud %of Bud Electric Division Residential 4,133,503 4,059,035 74,468 1.83% 37,459,101 38,725,895 (1,266,794) (3.27%) 50,432,797 74.3% All Electric 118,752 118,018 734 0.62% 1,687,772 1,750,916 (63,144) (3.61%) 2,611,705 64.6% Small General 1,436,670 1,419,262 17,408 1.23% 13,498,175 13,495,764 2,411 0.02% 17,085,853 79.0% Large General 6,748,480 6,193,840 554,640 8.95% 56,754,385 55,778,728 975,657 1.75% 79,262,499 71.6% Industrial 11,221,000 11,824,000 (603,000) (5.10%) 103,419,000 106,900,000 (3,481,000) (3.26%) 134,707,856 76.8% Total KWH Sold 23,658,405 23,614,155 44,250 0.19% 212,818,433 216,651,303 (3,832,870) (1.77%) 284,100,710 74.9% 71 September September YTD YTD 2017 HUC 2017 2016 Change 2017 2016 Change Budget Target Gross Margin % 30.5% 33.2% -2.7% 24.6% 27.1% -2.5% 22.5% Operating Income Per Revenue $ (%) 4.8% 5.6% -0.8% -1.8% 0.7% -2.5% -3.0% Net Income Per Revenue $ (%): 5.6% 5.8% -0.3% -0.8% 1.0% -1.7% -2.9% IIIIIIIIIIIIIIIIIIIII Customer Revenue per KWH: $0.0884 $0.0906 -$0.0021 $0.0899 $0.0880 $0.0019 $0.0881 pp Total Power Supply Exp. per KWH: $0.0679 $0.0657 $0.0022 $0.0744 $0.0701 $0.0043 $0.0758 The Electric division in September 2017 had a net profit decline of $5,887. Decreased Customer Revenue was offset by increased Sales for Resale. Sales for Resale of $179,440 consisted of $11,379 in market sales, $34,400 in the monthly tolling fee from Transalta, $37,661 in energy sales to Transalta, and $96,000 in capacity sales to SMMPA. September 2016 Sales for Resale of $123,003 consisted of $11,105 in market sales, $34,400 in monthly tolling fees from Transalta, $10,998 in Transalta energy sales, and $66,500 in capacity sales to SMMPA. September 2015 Sales for Resale of $168,117 consisted of $7,011 market sales, $34,400 in Transalta tolling fees, $84,706 in Transalta energy sales, and capacity sales to SMMPA for $42,000. Overall Purchased Power decreased by $1,062. MRES purchases increased by $46,197 and market purchases decreased by $47,259 due to needing less. The power cost adjustment for September 2017 was $.0039/kwhr bringing in an additional $80,220 of revenue for the month and $1,300,599 for the year. Last year's power cost adjustments through September of 2016 generated $687,476 in additional revenue. HUTCHINSON UTILITIES COMMISSION GAS DIVISION FINANCIAL REPORT FOR SEPTEMBER, 2017 Gas Division 75% of Year Comp. 2017 2016 2E Gas Division 2E %Chna Full Yr Bud %of Bud Customer Revenue $ 394,459 $ 395,750 $ (1,291) Transportation $ 94,810 $ 94,332 $ 479 Electric Div. Transfer $ 54,308 $ 53,931 $ 378 Other Revenues $ 19,259 $ 19,077 $ 182 Interest Income $ 5,269 $ 6,654 $ (1,385) TOTAL REVENUES $ 568,106 $ 569,743 $ (1,636) Salaries & Benefits $ 94,201 $ 100,151 $ (5,950) Purchased Gas $ 219,003 $ 237,739 $ (18,735) Operating Expense $ 48,499 $ 33,554 $ 14,945 Depreciation $ 84,000 $ 88,000 $ (4,000) Transfers (City) $ 30,594 $ 33,854 $ (3,260) Debt Interest $ 61,258 $ 65,125 $ (3,867) TOTAL EXPENSES $ 537,556 $ 558,424 $ (20,867) NET PROFIT/(LOSS) $ 30,550 $ 11,319 $ 19,231 Gas Division 75% of Year Comp. 2017 2016 Di %Chnq 2017 2016 Di %Chnq Full Yr Bud %of Bud Residential 7,047,826 Commercial 10,322,437 Industrial 48,908,793 75% of Year Comp. %Chng 2017 2016 252,431,071 192,084,209 562,014,585 2E %Chna Full Yr Bud %of Bud (0.3%) $ 6,872,815 $ 6,642,707 $ 230,107 3.5% $ 11,557,591 59.5% 0.5% $ 667,291 $ 614,688 $ 52,604 8.6% $ 734,878 90.8% 0.7% $ 488,774 $ 485,375 $ 3,400 0.7% $ 651,700 75.0% 1.0% $ 213,389 $ 185,672 $ 27,717 14.9% $ 218,608 97.6% (20.8%) $ 50,939 $ 21,330 $ 29,609 138.8% $ 50,000 101.9% (0.3%) $ 8,293,209 $ 7,949,772 $ 343,437 4.3% $ 13,212,777 62.8% (5.9%) $ 897,891 $ 929,931 $ (32,040) (3.4%) $ 1,278,092 70.3% (7.9%) $ 3,962,574 $ 3,824,657 $ 137,917 3.6% $ 6,782,224 58.4% 44.5% $ 489,618 $ 454,373 $ 35,245 7.8% $ 836,676 58.5% (4.5%) $ 756,000 $ 792,000 $ (36,000) (4.5%) $ 1,008,000 75.0% (9.6%) $ 275,348 $ 300,474 $ (25,125) (8.4%) $ 367,131 75.0% 0.0% $ 551,325 $ 586,125 $ (34,800) JL22L $ 735,100 75.0% (3.7%) $ 6,932,757 $ 6,887,560 $ 45,196 0.7% $ 11,007,223 63.0% 169.9%1 $ 1,360,452 $ 1,062,211 $ 298,241 28.1% $ 2,205,554 61.7% 75% of Year Comp. 2017 2016 Di %Chnq 2017 2016 Di %Chnq Full Yr Bud %of Bud Residential 7,047,826 Commercial 10,322,437 Industrial 48,908,793 6,833,058 8,536,659 46,749,453 214,768 1,785,778 2,159,340 3.14% 20.92% 4.62% 250,394,497 207,281,856 604,750,191 252,431,071 192,084,209 562,014,585 (2,036,574) 15,197,647 42,735,606 (0.81%) 7.91% 7.60% 449,582,000 420,183,000 786,836,000 55.7% 49.3% 76.9% Total CF Sold 66,279,056 62,119,170 4,159,886 6.70% 1,062,426,544 1,006,529,865 55,896,679 5.55% 1,656,601,000 64.1% September September YTD YTD 2017 HUC 2017 2016 Change 2017 2016 Change Budget Target Gross Margin % 58.0% 53.8% 4.1% 49.5% 49.6% -0.1% 46.2% IIIIIIIIIIIIIIIIIIIIIIII �� Operating Income Per Revenue $ (%) 12.4% 9.3% 3.1% 20.6% 18.6% 2.0% 20.6% Net Income Per Revenue $ (%): 5.6% 2.1% 3.5% 16.9% 13.7% 3.2% �pyN�NNpNp�p�p�p�N� 17.0% ��MflIII�IIIIIIIIIIppIIppIIppIIppIIpp Contracted Customer Rev. per CF: $0.0035 $0.0037 -$0.0002 $0.0038 $0.0033 $0.0005 $0.0041 �NIIIIIIIIII Customer Revenue per CF: $0.0129 $0.0146 -$0.0016 $0.0100 $0.0107 -$0.0007 $0.0096 Total Power Supply Exp. per CF: $0.0034 $0.0040 ($0.0006) $0.0038 $0.0039 ($0.0001) $0.0042 Net Profit for September 2017 increased by $19,231 in the gas division with all revenues and expenses in line with September 2017. The fuel credit adjustment for September 2017 was $1.42378/MCF providing credits to the customers of $32,080 for the month and $452,077 for the year. Fuel credit adjustments totalled $44,625 through September of 2016. Current Assets UnrestrictedlUndesignated Cash Cash Petty Cash Designated Cash Capital Expenditures - Current Yr Payment in Lieu of Taxes Rate Stabilization - Electric Rate Stabiliation - Gas Catastrophic Funds Restricted Cash Bond Interest Payment 2003 Bond Interest Payment 2012 Debt Service Reserve Funds Total Current Assets Receivables Accounts (net of uncollectible allowances) Interest Total Receivables HUTCHINSON UTILITIES COMMISSION BALANCE SHEET - CONSOLIDATED SEPTEMBER 30, 2017 Electric Gas Total Total Division Division 2017 2016 Net Change Total (YTD) 6,800,630.48 4,718,361.34 11,518,991.82 10,745,490.78 773,501.04 680.00 170.00 850.00 850.00 - 276,382.84 1,268,223.77 1,544,606.61 753,652.90 790,953.71 829,200.00 367,131.00 1,196,331.00 1,305,256.00 (108,925.00) 314,539.41 - 314,539.41 397,193.34 (82,653.93) - 646,058.37 646,058.37 580,306.36 65,752.01 400,000.00 100,000.00 500,000.00 500,000.00 - 137,946.88 - 137,946.88 125,356.93 12,589.95 - 1,792,175.03 1,792,175.03 1,422,541.74 369,633.29 - 2,188,694.02 2,188,694.02 2,188,694.02 - 8,759,379.61 11,080,813.53 19,840,193.14 18,019,342.07 1,820,851.07 2,038,517.90 478,480.73 2,516,998.63 2,542,807.27 (25,808.64) 22,224.58 9,191.09 31,415.67 - 31,415.67 2,060,742.48 487,671.82 2,548,414.30 2,542,807.27 5,607.03 Other Assets Inventory 1,180,370.26 410,446.63 1,590,816.89 1,507,246.76 83,570.13 Prepaid Expenses 34,058.23 59,791.09 93,849.32 20,111.52 73,737.80 Sales Tax Receivable 171,689.40 - 171,689.40 142,602.21 29,087.19 Deferred Outflows- Electric 1,746,060.00 - 1,746,060.00 388,200.00 1,357,860.00 Deferred Outflows - Gas - 582,020.00 582,020.00 129,400.00 452,620.00 Total Other Assets 3,132,177.89 1,052,257.72 4,184,435.61 2,187,560.49 1,996,875.12 Total Current Assets 13,952,299.98 12,620,743.07 26,573,043.05 22,749,709.83 3,823,333.22 Capital Assets Land & Land Rights 690,368.40 3,901,323.35 4,591,691.75 4,590,287.00 1,404.75 Depreciable Capital Assets 89,041,771.88 41,260,565.70 130,302,337.58 129,510,003.63 792,333.95 Accumulated Depreciation (52,105,925.34) (15,081,901.36) (67,187,826.70) (63,560,667.19) (3,627,159.51) Construction - Work in Progress 1,241,519.27 266,943.31 1,508,462.58 726,748.92 781,713.66 Total Net Capital Assets 38,867,734.21 30,346,931.00 69,214,665.21 71,266,372.36 (2,051,707.15) Total Assets 52,820,034.19 42,967,674.07 95,787,708.26 94,016,082.19 1,771,626.07 Current Liabilities Current Portion of Long-term Debt Bonds Payable Bond Premium Accounts Payable Accrued Expenses Accrued Interest Accrued Payroll Total Current Liabilities Long -Term Liabilities Noncurrent Portion of Long-term Debt 2003 Bonds 2012 Bonds Bond Premium 2012 Pension Liability- Electric Pension Liability- Nat Gas Accrued Vacation Payable Accrued Severance Deferred Outflows - Electric Deferred Outflows - Nat Gas Total Long -Term Liabilities Net Position Retained Earnings Total Net Position HUTCHINSON UTILITIES COMMISSION BALANCE SHEET - CONSOLIDATED SEPTEMBER 30, 2017 Electric Gas Total Division Division 2017 125,000.00 2,729,665.19 8,495.75 42,471.77 2,905,632.71 465,000.00 4,226,202.00 286,389.60 66,478.09 569,910.00 5,613,979.69 1,220,000.00 185,608.32 713,850.81 245,033.50 56, 315.51 2,420,808.14 15,195, 000.00 1,515,800.91 1,408,734.00 92,553.90 25,572.23 189,970.00 18,427,631.04 1,345,000.00 185,608.32 3,443,516.00 253,529.25 98,787.28 5,326,440.85 465,000.00 15,195, 000.00 1,515,800.91 4,226,202.00 1,408,734.00 378,943.50 92,050.32 569,910.00 189,970.00 24,041,610.73 Total 2016 1,285,000.00 185,608.32 3,974,407.39 270,704.28 234,909.43 5,950,629.42 590,000.00 16,415,000.00 1,701,409.23 2,775,239.00 925,080.00 356,049.33 90,772.86 396,226.00 132,076.00 23,381,852.42 44,300,421.79 22,119,234.89 66,419,656.68 64,683,600.35 44,300,421.79 22,119,234.89 66,419,656.68 64,683,600.35 Net Change Total (YTD) 60,000.00 (530,891.39) (17,175.03) (136,122.15) (624,188.57) (125,000.00) (1,220,000.00) (185,608.32) 1,450,963.00 483,654.00 22, 894.17 1,277.46 173,684.00 57,894.00 659,758.31 1,736,056.33 1,736,056.33 Total Liabilities and Net Position 52,820,034.19 42,967,674.07 95,787,708.26 94,016,082.19 1,771,626.07 Hutchinson Utilities Commission Cash -Designations Report, Combined 9/30/2017 Savings, Checking, Investments varies varies Total Operating Funds Debt Reserve Requirements Bond Covenants - sinking fund Debt Reserve Requirements Bond Covenants -1 year Max. P & I Total Reserve Requirement varies 19,840,193.14 20,021,536.40 (181,343.26) 19,840,193.14 20,021,536.40 (181,343.26) 1,930,121.91 1,754,656.27 175,465.64 2,188,694.02 2,188,694.02 - 4,118,815.93 3,943,350.29 175,465.64 Operating Reserve Min 60 days of 2017 Operating Bud. 5,973,256.00 5,973,256.00 Rate Stabalization Funds HUC Change in 960,597.78 Financial Charter 1,196,331.00 Balance, Balance, Cash/Reserve 500,000.00 Institution Current Interest Rate Annual Interest September 2017 August 2017 Position 3.06 12,080,184.78 12,080,184.78 RONA 0.80% 0.05% 1.31% 2.17% Savings, Checking, Investments varies varies Total Operating Funds Debt Reserve Requirements Bond Covenants - sinking fund Debt Reserve Requirements Bond Covenants -1 year Max. P & I Total Reserve Requirement varies 19,840,193.14 20,021,536.40 (181,343.26) 19,840,193.14 20,021,536.40 (181,343.26) 1,930,121.91 1,754,656.27 175,465.64 2,188,694.02 2,188,694.02 - 4,118,815.93 3,943,350.29 175,465.64 Operating Reserve Min 60 days of 2017 Operating Bud. 5,973,256.00 5,973,256.00 Rate Stabalization Funds HUC 960,597.78 960,597.78 PILOT Funds Charter 1,196,331.00 1,196,331.00 Catastrophic Funds Risk Mitigation Amount 500,000.00 500,000.00 Capital Reserves 5 Year CIP ( 2017-2021 Fleet & Infrastructure Maintenance) 3,450,000.00 3,450,000.00 Total Earmarked Funds 3.06 12,080,184.78 12,080,184.78 YE YE YE YE YTD HUC 2013 2014 2015 2016 2017 Target Debt to Asset 29.7% 28.8% 32.0% 32.2% 30.7% Current Ratio 2.08 2.26 2.52 3.06 3.78 18,112,875 RONA 0.80% 0.05% 1.31% 2.17% 1.42% Ftt Change in Cash Balance (From 12/31/14 to 9/30/2017) Month End Electric Elec. Change Natural Gas Gas Change Total Total Change 9/30/2017 8,759,380 11,080,814 19,840,193 12/31/2016 8,612,801 146,579 9,500,074 1,580,740 18,112,875 1,727,318 12/31/2015 6,170,790 2,442,011 9,037,373 462,701 15,208,163 2,904,712 12/31/2014 3,598,821 2,571,969 6,765,165 2,272,208 10,363,986 4,844,177 Hutchinson Utilities Commission Cash -Designations Report, Electric 9/30/2017 Savings, Checking, Investments varies varies Total HUC Operating Funds Debt Restricted Requirements Bond Covenants - sinking fund varies 19,840,193.14 20,021,536.40 (181,343.26) 19,840,193.14 20,021,536.40 (181,343.26) 137,946.88 125,406.25 12, 540.63 Operating Reserve Min 60 days of 2017 Operating Bud. 4,306,719.00 4,306,719.00 Rate Stabalization Funds $400K -$1.2K Change in 314,539.41 Financial Charter 829,200.00 Balance, Balance, Cash/Reserve 400,000.00 Institution Current Interest Rate Annual Interest September 2017 August 2017 Position Current Ratio 2.77 8,600,458.41 8,600,458.41 3.57 4.15 1.81 NN �I Savings, Checking, Investments varies varies Total HUC Operating Funds Debt Restricted Requirements Bond Covenants - sinking fund varies 19,840,193.14 20,021,536.40 (181,343.26) 19,840,193.14 20,021,536.40 (181,343.26) 137,946.88 125,406.25 12, 540.63 Operating Reserve Min 60 days of 2017 Operating Bud. 4,306,719.00 4,306,719.00 Rate Stabalization Funds $400K -$1.2K 314,539.41 314,539.41 PILOT Funds Charter 829,200.00 829,200.00 Catastrophic Funds Risk Mitigation Amount 400,000.00 400,000.00 Capital Reserves 5 Year CIP ( 2017-2021 Fleet & Infrastructure Maintenance) 2,750,000.00 2,750,000.00 Total Designated Funds Current Ratio 2.77 8,600,458.41 8,600,458.41 3.57 4.15 YE YE YE YE YTD APPA Ratio HUC 2013 2014 2015 2016 2017 5K -10K Cust. Target Debt to Asset Ratio 8.0% 7.4% 13.2% 16.1% 16.1% 29.5% VIII Current Ratio 2.77 2.48 2.95 3.57 4.15 1.81 NN �I RONA -2.7% -3.1% -1.2% -0.4% -0.3% NA >0% Hutchinson Utilities Commission Cash -Designations Report, Gas 9/30/2017 Savings, Checking, Investments varies varies Total HUC Operating Funds Debt Restricted Requirements Bond Covenants - sinking fund Debt Restricted Requirements Bond Covenants -1 year Max. P & I Total Restricted Requirements varies 19,840,193.14 20,021,536.40 (181,343.26 19,840,193.14 20,021,536.40 (181,343.26 1,792,175.03 1, 629, 250.02 162,925.01 2,188,694.02 2,188,694.02 - 3,980,869.05 3,817,944.04 162,925.01 Operating Reserve Min 60 days of 2017 Operating Bud. 1,666,537.00 1,666,537.00 Rate Stabalization Funds $200K -$600K Change in 646,058.37 Financial Charter 367,131.00 Balance, Balance, Cash/Reserve 100,000.00 Institution Current Interest Rate Annual Interest September 2017 August 2017 Position Current Ratio 1.31 3,479,726.37 3,479,726.37 2.59 3.33 TBD N �l1l Savings, Checking, Investments varies varies Total HUC Operating Funds Debt Restricted Requirements Bond Covenants - sinking fund Debt Restricted Requirements Bond Covenants -1 year Max. P & I Total Restricted Requirements varies 19,840,193.14 20,021,536.40 (181,343.26 19,840,193.14 20,021,536.40 (181,343.26 1,792,175.03 1, 629, 250.02 162,925.01 2,188,694.02 2,188,694.02 - 3,980,869.05 3,817,944.04 162,925.01 Operating Reserve Min 60 days of 2017 Operating Bud. 1,666,537.00 1,666,537.00 Rate Stabalization Funds $200K -$600K 646,058.37 646,058.37 PILOT Funds Charter 367,131.00 367,131.00 Catastrophic Funds Risk Mitigation Amount 100,000.00 100,000.00 Capital Reserves 5 Year CIP ( 2017-2021 Fleet & Infrastructure Maintenance) 700,000.00 700,000.00 Total Earmarked Funds Current Ratio 1.31 3,479,726.37 3,479,726.37 YE YE YE YE YTD HUC 2013 2014 2015 2016 2017 APGA Ratio Target Debt to Asset 58.6% 55.6% 54.8% 51.5% 48.5% TBD VIII Current Ratio 1.31 2.07 2.17 2.59 3.33 TBD N �l1l RONA 5.8% 4.3% 4.7% 5.6% 3.8% TBD gp�� W � L t i 2 C L v 7 � U ' 2�� O O O O O Q Q Q Q N N N N N_ Q Q Q Q Q Q Q ZZZZ�� zzzzzzz O N N N N O - - - O- -00&000N 00000N M O M N 1- O O M m N V r (0 M O N W W -(C V M M V O CA (0 M CA r (0 (0 N (0 mm Inmm!n oom 000000 V V CO M 0) N M I- M r O O O O M O N 00 O 0 M r (A O r N M M M M r O O O O M N N O M N (A N CA O r M N r co M (0 00 00 r O O W O O M (A r CO M r (O M s V (O t� 7 In 00000000000 00000000O0 0 0 0 00 9999999999 N O O M M O O N 0000000000 M O M I- 1- 0 0 M 0000000000 M N V N (0 M O (\I O O 0 0 0 0 0 0 0 O 0 0 0 0 M V M M V M M M M M M O M M O O CF) (0 (0 CF) r (0 (0 V V V V V V (0 r N M (0 M O M M (0 r (0 N N N N N N N N O O (\I N 0 N N N N O M N M M M M M M O O M M 0000 000 O V V 00 V O 00 00 0 N 0 0 O O M M M O O 00 CF) M V N O M N N 0 O N N (\I O M O_ O M r r CF) (0 W r O (\I V O M O M V O (0 (A M N (A co (A V V r M M M M M V V CF) V A N V M N O M CA V O V V V V V V M r N N M M O V M M (0 M N N N N N N N N O O N N M N N N N O M N 0 0 0 0 0 0 0 0 0 O 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 O 0 0 0 0 0 0 00100 0 0 0 0 0 0 0 0 0 O0 0 0 0 0 0 0 O 0000000000 0 0 0 0 0 0 0 O 0 0 0 0 0 0 0 0 0 O 0 0 0 0 0 0 0 O oouiuiuiuiouiui o 0000000 0 V V V V V V (0 I- N M M M O M M M M O N N N N N N N N O O N (\I M N N N N 1 O OD OD OD OD N T N M O O T T O O O O O OO O O O O O O O O O O 0 o N N N N N N N N N M o O N N N N N N N C-4 66 0 I'- I'- I'- (n 1' Ln O N N N N O N N N N 0 0 0 0 0 0 O N N N 6) O 6 6) 6 O OOO 000- 0000- 00000-0 (0 (0 (0 (0 (0 r (0 r (0 (0 (0 (0 (0 (0 (0 (0 000000000 0000000 N N N N N N N N N N N N N N N N 021- 1- 1- 1- 0 1- 1-1-000007 0 0 N O N N o 0 o N N N N N N Cn V 6 Cn 6 O M M M V V V O 00000000- 0000000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 M N (0 O M O O M O M O w OO N o N 00 O W r 00') (0 N N N N N N N 0 0 0 0 0 0 0 0 0 0 o 0 0 0 0 o 00 0000000 Ol0 0 0010000 0M (0 M O (A M(0 W r l00 m N O .000 CA r 0000 .O N N N N N N N M M N F Z W m O N N N N N N N C C y0 C C C C C ~ m m Z a a a a a a a U U U p o J N N N N N N J J J m 3 3 3 3 3 3 3 m 0 U U U U U U LL LL LL 0 N N N N N N N N N N N N N N O m C C C C C C C ON 0(`M E 0 0 0 0 0 0 0 0 0 N N N N N N N O) O) O) O) O) O) O) O) 0) C C C C C C C N N N N N N N N N LL LL LL LL LL LL LL LL LL N N N N N N N ((O U U U U U U U N � a -I O d + ti N > O V W M O N N O a (A (A M M O O O N N O m ON 0(`M m r m v l00 l00 o N N ((O Imi) a J.. O (0 M M^ v% m d! i O0 M M N CO _ I- O 1- M NN 0 r N O O 10 L6ow f0, ao N Qi C6 . > J o N i i i 0 o fV u) N M V M N � � + J N M V M N y Ct of N i y O O O O o O o O o O o O o O o o o o o o o in Oo O O O O O O O O O O O ri ri o o In o In O W M M Co s o o 1: T m -ol M M N p > co o c U O r O O W N O -p U (n N O m O O O [O Ip N C O O O O O O u a O oA M u0 C ^ 7 6c� co (NO (0 (A O n 2 ..,. N � (0 M M (O 'IOU (y r V M O O �,. p (V co F F cy; `� � O o 0 o 0 0 O � co N O O (A O O O .. r O O N M N m (NO 1 O r V M O O / W N U I ~ N o m o Q U 1 o a �Com O o Eo N ~ c m O 2 E.� W IL N N .2 W O (] o 3 E f0+1 U (7 o`w o C7 ELECTRIC DIVISION Operating Revenue September 2017 CLASS AMOUNT KWH /KWH Street Lights $0.60 11 $0.05455 Electric Residential Service $413,870.88 4,133,503 $0.10013 All Electric Residential Service $12,503.13 118,752 $0.10529 Electric Small General Service $141,426.64 1,436,670 $0.09844 Electric Large General Service $637,018.49 6,748,480 $0.09439 Electric Large Industrial Service $887,230.19 11,221,000 $0.07907 Total $2,092,049.93 23,658,416 $0.08843 Power Adjustment $0.00339 Rate Without Power Adjustment $0.08504 Electric Division Year -to -Date 02017$Amount 02016$Amount M2017KWH/10 02016 KWH/10 25,000,000 24,000,000 23,000,000 22,000,000 21,000,000 20,000,000 19,000,000 18,000,000 17,000,000 16,000,000 15,000,000 14,000,000 13,000,000 12,000,000 11,000,000 10,000,000 9,000,000 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 Street Lights Residential All Elec. Small Gen. Large Gen. Large For Resale Total Resid. Srv. Srv. Industrial NOTE: Sales for resale includes capacity sales, market sales and Transalta sales. NATURAL GAS DIVISION Operating Revenue September 2017 CLASS AMOUNT MCF/$ MCF Residential $87,377.46 7,048 $12.39748 Commercial $89,168.99 10,322 $8.63873 Large Industrial $217,912.99 48,909 $4.45548 Total $394,459.44 66,279 $5.95150 Fuel Adjustment -$0.00142 Rate Without Fuel Adjustment $7.37150 Natural Gas Division Year -to -Date ® 2017 $ Amount 0 2016 $ Amount ® 2017 MCF 0 2016 MCF 10,000,000 9,000,000 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 9T Gas Residential Gas Commercial Large Industrial Total e eliability � Outage Pie Chart Causes Pie Chart Start Date: 01/01/2017 End Date: 09/30/2017 Top-level Cause IM EgOpment 130/ Hutchinson Utilities Commission Substation: Circuit: Report on Outage: �... ( count Duration Storm 13"x"„ Page 1 of 2 R a httpsa/reliability.publicpower.orglreports/causes-pie-chartlutilityl9l?start date 01%2F01.... 1011812017 eReliability I Outage Pie Chart Outage Cause Electrical Failure Equipment Damage Tree Storm Total IDOWE.T�ng Strong Carnmuni ties Count 8 10!THM https://reliability.publiepower.org/reports/causes-pie-chart/utility/91 ?start--date=0 I %2FO I ... 10/18/2017 eReliability � IEEE Statistics IEEE Statistics Report Hutchinson Utilities Commission Page I of 2 Start Date Minimum event duration (in minutes) 01/01/2017 End Date Maximum event duration (in minutes) 09/30/2017 Remove Major Events? Substation Top-level Cause Circuit IIII----- ----- Exclude Loss of Supply 0 EME Failure Greater Transmission Loss of Generating Unit https:Hreliability.publiepower.org/'reports/ieee-statistics/utility/9 I ?start- date=O I %2FO 1%... 10/18/2017 F�M ASAI (percent) 99.9988% CAIDI (minutes) 103.894 SAIDI (minutes) 4.326 SAIFI (number of interruptions) 0.0416 Range Results Event Count 8 AMERICAN Powering Strong CornrnuriOia�, https:Hreliability.publicpower.org/reports,/ieee-statisties/utility/91 ?start,-.date::=O I %2FO I %... 10/18/2017 Work Order qtKEinfign 11701 Plant I Door & Window Replacement 11702 Unit #8 Field Breaker/Voltage Control 11703 Unit #8 Boiler Non -Return Valve 11704 Plant 1 Alarm Panel Upgrade 11705 Unit #1 Control System Batteries 11706 Plant 1 Electrical Panel Upgrades 11707 Unit #1 Gas Valve Upgrade 11708 Units 6 and 7 xffl��, T Total Total Percentage Materials Labor Budgeted Actual Difference !;o�Ieted $ 150,000.00 $ 20,000.00 $ 170,000.00 $ 7,943.87 $ (162,056.13) Cancel 95,000.00 5,000.00 $ 100,000.00 112,065.16 $ 12,065.16 50% 40,000.00 1,000-00 $ 41,000.00 20,224.37 $ (20,775.63) 100% 10,000.00 6,000.00 $ 16,000.00 - $ (16,000.00) 0% 8,500.00 - $ 8,500.00 1,816.97 $ (6,683.03) 100% 10,000.00 $ 10,000.00 172.20 $ (9,827.80) 0% - $ - 57,959.49 $ 57,959.49 100% $ - 397,796.65 $ 397,796.65 25% $ 163,500.00 $ 12,000.00 $ 175,500.00 $ 590,034.84 $ 414,534.84 Work Order 2gjgjpt!gLn 21701 Pole Repair or Replacement 21702 Hutch Substation Roof Replacement 21703 Station Equipment 21704 Poless, Towers, Fixtures N Hwy 15 Fr 12A 21705 Right of Way Clearing 21706 Duct for econductor 21707 econductor Feeder 17 21708 econductor Feeder 16 21709 Hutchinson High School 21710 New Developments 21711 Hutchinson High School 21712 Transformer Replacements 21713 New Developments 21714 Meters Electric Distribution Total Total Percentage Materials Labor 13 gets Actual Difference Completed 15,000.00 15,000.00 - $ (15,000.00) 0% 10,000.00 10,000.00 - $ (10,000.00) 0% 10,000.00 - 10,000.00 - $ (10,000m) 0% 10,000.00 5,000.00 15,000.00 - $ (15,000.00) 0% 2,500.00 2,500.00 182.00 $ (2,318.00) 0% 20,000.00 65,000.00 85,000.00 105,299.55 $ 20,299.55 95% 45,000.00 45,000.00 90,000.00 207,306.77 $ 117,306.77 95% 20,000.00 25,000.00 45,000.00 445.89 $ (44,554.11) 0% 35,000.00 25,000.00 60,000.00 33,755.03 $ (26,244.97) 75®/ 50,000.00 - 50,000.00 45,596.37 $ (4,403.63) 80% 25,000.00 1,000.00 26,000.00 21,660.17 $ (4,339.83) 100% 40,000.00 10,000.00 50,000.00 - $ (50,000.00) 0% 50,000.00 - 50,000.00 5,023.72 $ (44,976.28) 80% 30,000.00 30,000.00 6,685.08 $ (23,314.92) 20% is 60,000.00 $ 178,500.00 $ 538,500.00 $ 425,954.58 $ (112,545.42) Work Order Description 51701 Vactron 51702 F550 Dump Truck 51703 F550 Super Duty Bucket Truck 51704 Tractor Backhow 51705 Lift Total Total Percentage AMdjeted Actual Difference Completed 60,000.00 37,864.00 22,136.00 100% 30,000.00 - 30,000.00 0% 130,000.00 - 130,000.00 0% 60,000.00 61,827.19 (1,827.19) 100% 17,000.00 16,733.20 $ (266.80) 100% Total Percentage Natural Gas Difference �g2 �Ieted 1,40435 Work - $ (503,000.00) Cancel 226.50 Total Order 29KEiRtgn Materials Labor §Md eted 61701 Transmission Lateral to HCP - ROW Easements $ 500,000.00 $ 3,000.00 $ 503,000.00 $ 61702 Transmission Lateral to HCP - Materials and Permits $ 500,000.00 $ 3,000.00 $ 503,000.00 $ 61703 Interconnect Station - Hanska 200,000.00 10,000.00 $ 210,000.00 61704 Misc Developments and Improvements 30,000.00 15,000.00 $ 45,000.00 61705 Specific Gravity Meter - Hutchinson 40,000.00 1,000.00 $ 41,000.00 61706 SCADA Equipment - Hanska 15,000.00 5,000.00 $ 20,000.00 61708 Regulator Station Improvements 15,000.00 3,000.00 $ 18,000.00 61709 Service Lines 55,000.00 20,000.00 $ 75,000.00 61710 Meters, Regulators, AMI Modules 70,000.00 3,500.00 $ 73,500.00 61711 Industrial Metering and Regulation 20,000.00 3,500.00 $ 23,500.00 61712 Gas Detection Equipment 5,000.00 - $ 5,000.00 $ 1,450,000.00 $ 67,000.00 $ 1,517,000,00 $ Total Percentage Actual Difference �g2 �Ieted 1,40435 $ (501,595.25) Cancel - $ (503,000.00) Cancel 226.50 $ (209,773,50) Cancel 101,04186 $ 56,043.86 0% 6,758.49 $ (34,241.51) 100% 163.39 $ (19,836.61) Cancel - $ (18,000.00) 0% 54,226.22 $ (20,773.78) 10% 74,480.94 $ 980.94 5% 10,472.08 $ (13,027.92) 0% - $ (5,000.00) 0% 248,776.23 $ (1,268,223.77) HUTCHINSON UTILITIES COMMISSION ��*N�' Board Action Form 'or, Hits iiiiiiiiiiiiiiiiiiiiiillillillillillillilliillillillillillillilliillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillilI Agenda Item: Review Policies Presenter: Jeremy Carter Agenda Item Type: Time Requested (Minutes): 5 Review Policies Attachments: Yes BACKGROUND/EXPLANATION OFAGENDA ITEM: As part of HUC's standard operating procedures, a continual policy review is practiced. This month, the following policies were reviewed and no changes are recommended on these policies at this time: i. Investment Policy ii. Disconnection of Residential Services by Utilities iii. Disconnection of Commercial Services by Utilities iv. Health & Safety v. Accidents & Injuries vi. Unsafe Conditions or Practices vii. Employee Right -To -Know BOARD ACTION REQUESTED: None Fiscal Impact: Included in current budget: Budget Change: PROJECT SECTION: Total Project Cost: Remaining Cost: INVESTMENT POLICY ADOPTED OCTOBER 28, 2015 HUTCHINSON UTILITIES COMMISSION INVESTMENT POLICY PURPOSE The purpose of this policy is to establish specific guidelines Hutchinson Utilities Commission will use in the investment of Commission funds. It will be the responsibility of the General Manager and Financial Manager to invest Commission Funds in order to attain the highest market rate of return with the maximum security while meeting the daily cash flow demands of the Commission and protecting the capital of the overall portfolio. Investments will be made in accordance with all state and local statutes governing the investment of public funds. II. SCOPE The General Manager and Financial Manager are responsible for the investing of all financial assets of the Hutchinson Utilities Commission, excluding pension funds. These funds are accounted for in the Commission's Audited Financial Statements and Supplementary Information. III. PRUDENCE Investments shall be made with judgment and care, not for speculation, but for investment, considering the probable safety of the capital as well as the probable income to be derived. The standard of prudence to be used by investment officials shall be the "prudent person" standard and shall be applied in the context of managing the overall portfolio. Investment officers acting in accordance with this policy, with MN Statutes, Chapter 118A, and exercising due diligences shall be relieved of personal responsibility for an individual security's risk or market price change, provided that reasonable action is taken to control adverse developments and unexpected deviations are reported in a timely manner. C)R.IFrTI\/F A. Safety - Safety of principal is of critical importance to the investment program. Investments of the Commission shall be undertaken in a manner that seeks to ensure the preservation of principal in the overall portfolio. The objective will be to mitigate credit risk and interest rate risk. 1. Credit Risk - the risk of loss due to failure of the security issuer or backer, will be minimized by: - Limiting investments to the types of securities listed in Section VIII of this investment policy. - Pre -qualifying the financial institutions, broker/dealers, intermediaries, and advisors with which the Commission will do business in accordance with Section VII. Hutchinson Utilities Commission Investment Policy Page 2 HUTCHINSON UTILITIES COMMISSION INVESTMENT POLICY - Diversifying the investment portfolio so that the impact of potential losses from any one type of security or from any one individual issuer will be minimized. Insurance or collateral may be required to ensure return of principal. 2. Interest Rate Risk — the risk that the market value of securities in the portfolio will fall due to changes in market interest rates will be minimized to: - Provide for liquidity by reviewing cash flow requirements and make investments to meet the shorter cash flow needs, thereby avoiding the need to sell securities in the open market prior to maturity. - Manage the average maturity of the overall portfolio to be consistent with the risk of the Commission. B. Liquidity - The Commission's investment portfolio will remain sufficiently liquid to enable the Commission to meet all operating requirements reasonably anticipated. The portfolio will be structured so that the portfolio emphasizes liquidity and consists largely of securities with active secondary or resale markets (dynamic liquidity). A portion of the portfolio may be placed in money market mutual funds or local government investment pools which offer same day liquidity for short-term funds. C. Yield - The Commission's investment portfolio shall be designed with the objective of attaining a market rate of return. The core of investments is limited to low-risk securities in anticipation of earning a fair return relative to the risk being assumed. Securities shall generally be held until maturity with the following exceptions: • A security with declining credit may be sold early to minimize loss of principal. • A security swap would improve the quality, yield, or target duration in the portfolio. • Liquidity needs of the portfolio require that the security be sold. IV. DELEGATION OF AUTHORITY Authority to manage the Commission's investment program is derived from MS 118A which authorizes the Commission to invest any funds not presently needed in obligations in which commission debt service funds may be invested. This law applies to all types of funds not presently needed, including all general, special revenue, permanent, trust or other funds regardless of source or purpose. Under this chapter a Government Entity may invest idle funds in state or national banks, savings and loan associations, or credit unions. No person may engage in an investment transaction except as provided under the terms of this policy and the procedures established by the policy. Management responsibility for the investment program is hereby delegated to the General Manager and Financial Manager, who shall be responsible for all transactions. The Financial Manager shall establish procedures for the operation of the investment program, consistent with this policy. Such procedures may include delegation of authority to persons responsible for investment transactions. Hutchinson Utilities Commission Investment Policy Page 3 HUTCHINSON UTILITIES COMMISSION INVESTMENT POLICY V. ETHICS AND CONFLICTS OF INTEREST The General Manager and Finance Staff involved in the investment process shall refrain from conducting personal business activity that could conflict with proper execution of the investment program, or which could impair their ability to make impartial investment decisions. Investment staff shall annually disclose to the Commission any material financial interests as required by state statute. Investment staff shall subordinate their personal investment transactions to those of the Commission, particularly with regard to the time of purchases and sales, and shall refrain from undertaking personal investment transactions with the same individual with whom business is conducted on behalf of the Commission. VI. AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS The Commission will annually, by resolution, approve depositories and a list of financial institutions authorized to provide investment services. A. Only approved security broker/dealers, selected by creditworthiness, shall be utilized, with a minimum of $10,000,000 capital and at least five years of operation. B. Financial institutions must be qualified as a "depository" by the Hutchinson Utilities Commission; these may include "primary" dealers or regional dealers that qualify under Securities & Exchange Commission Rule 15C3-1 (Uniform Net Capital Rule). C. All investments must be insured, or registered, or securities must be held by the Commission or its agent in the Commission's name. D. No public deposit shall be made except in a qualified public depository, as established by state laws. E. When investments purchased by the Commission are held in safekeeping by a broker/dealer, they must provide asset protection of $500,000 through Securities Investor Protection Corporations (SIPC), and at least another $2,000,000 Supplemental Insurance Protection, provided by the broker dealer. F. Before engaging in investment transactions with the Hutchinson Utilities Commission, the supervising officer at the securities broker/dealer shall submit a certification of "Notification to Broker and Certification by Broker Pursuant to MN Statute 118A". Said certification will state that the broker/dealer has reviewed the investment policies and objectives, as well as applicable state law, and agrees to disclose potential conflicts or risk to public funds that might arise out of business transactions between the securities broker/dealer firm and the Commission. All financial institutions shall agree to undertake reasonable efforts to preclude imprudent transactions involving the Commission's funds. VII. AUTHORIZED AND SUITABLE INVESTMENTS It shall be the policy of the Hutchinson Utilities Commission that available funds be invested to the best rates obtainable at the time of investment in conformance with the legal and administrative guideline outlined herein. US Treasury Obligations and Federal Agency Hutchinson Utilities Commission Investment Policy Page 4 HUTCHINSON UTILITIES COMMISSION INVESTMENT POLICY Securities will be given preference when the yields are equal to or greater than alternative investments. The investments of the Hutchinson Utilities Commission will be made in accordance with Minnesota Statutes, section 118A, which lists all permissible investments for Government Entities. COLLATERAL Interest-bearing deposits in authorized depositories must be fully insured or collateralized. Collateralization will be required on Certificates of Deposits (where the dollar amount is in excess of FDIC coverage). In order to anticipate market changes and provide a level of security for all funds, the collateralization level will be 110% of the market value of principal and accrued interest. When the pledged collateral consists of notes secured by first mortgages, the collateral level will be 140% of the market value of principal and accrued interest. Collateral shall be deposited in the name of the Commission, subject to release by the Financial Manager. VIII. SAFEKEEPING AND CUSTODY Securities purchased shall be held in a segregated account for the Commission's benefit at a third party trustee as safekeeping agent. The investment dealer or bank in which the security is purchased shall issue a confirmation ticket to the Commission listing the specific instrument, issuer, coupon, maturity, CUSIP number, purchase or sale price, transaction date, and other pertinent information. The financial service provider which executes the transaction on the Commission's behalf shall deliver all securities on a delivery versus payment method (DVP) to the designated third party. Delivery versus payment (DVP) is a way of controlling the risk to which securities market participants are exposed. Delivery of securities (i.e. the change in their ownership) is done simultaneously with payment. This means that neither the buyer nor the seller is exposed to the risk that the other will default. The Commission may not invest in securities that are uninsured. Securities will be held in the Commission's designated accounts. Investments, contracts and agreements may be held in safekeeping with: - Any Federal Reserve bank; - Any bank authorized under the laws of the United States or any state to exercise corporate trust powers, including, but not limited to, the bank from which the investment is purchased. - A primary reporting dealer in United States government securities to the Federal Reserve Bank of New York; or - A securities broker-dealer having its principal executive office in Minnesota, licensed under chapter 80A, or an affiliate of it, and regulated by the Securities and Exchange Commission; provided that the government entity's ownership of all securities is evidenced by written acknowledgments identifying the securities by the names of Hutchinson Utilities Commission Investment Policy Page 5 HUTCHINSON UTILITIES COMMISSION INVESTMENT POLICY the issuers, maturity dates, interest rates, CUSIP number, or other distinguishing marks. IX. DIVERSIFICATION The Financial Manager or investment designee will attempt to diversify its investments according to type and maturity. The Commission will attempt to match its investments with anticipated cash flow requirements. Extended maturities may be utilized to take advantage of higher yields. Diversifications strategies shall be determined and revised periodically by the Commission for all funds. A. Institutions — Diversity between financial institutions used. a. The Financial Manager or investment designee will attempt to diversify its investments amongst investment companies, keeping in mind that some temporary fluctuations may occur throughout the year (i.e. GO Bonds for projects, etc.) b. No funds may be invested in any one investment company in excess of the amount insured by it. B. Maturities — Diversity in length of maturities. a. Investments shall be made to assure that funds are constantly available to meet immediate payment requirements b. No investments shall be made with a term of more than 10 years.. C. Investments —The Commission should maintain a diversity of investments. a. Depending on market conditions, with the exception of US Treasury Securities, authorized pools, and Federal Agencies (backed by the full faith and credit of the US Government or its agencies), no more than 50% of the Commission's total investment portfolio may be invested in any one of the following: Certificates of Deposit or Commercial Paper. X. POOLING OF INVESTMENTS For the purpose of making the maximum amount of funds available for investment, the cash for Commission Funds, as listed in Part II, is pooled in an investment account. Interest earnings are allocated among the various funds based upon their average cash balance. XI. INVESTMENT POLICY ADOPTION The Commission's Investment Policy shall be adopted by resolution by the Hutchinson Utilities Commission. The Policy shall be reviewed on an annual basis and any modifications made thereto must be approved by the Hutchinson Utilities Commission. Hutchinson Utilities Commission Investment Policy Page 6 HUTCHINSON UTILITIES COMMISSION INVESTMENT POLICY APPENDIX A — MS STATUTE 118A. DEPOSIT AND INVESTMENT OF LOCAL PUBLIC FUNDS. 118A.01 DEFINITIONS. Subdivision l.Application. The definitions in this section apply to sections 118A.01 to 118A.06. Subd. 2.Government entity. (a) "Government entity" means a county, city, town, school district, hospital district, public authority, public corporation, public commission, special district, any other political subdivision, except an entity whose investment authority is specified under chapter 11A or 356A. (b) For the purposes of sections 118A.02 and 118A.03 only, the term includes an American Indian tribal government entity located within a federally recognized American Indian reservation. Subd. 3.Financial institution. "Financial institution" means a savings association, commercial bank, trust company, credit union, or industrial loan and thrift company. Subd. 4.Public funds. "Public funds" means all general, special, permanent, trust, and other funds, regardless of source or purpose, held or administered by a government entity, unless otherwise restricted. History: 1996 c 399 cert 1 ,s 21 1999 c 151s 39 118A.02 DEPOSITORIES; INVESTING: SALES, PROCEEDS, IMMUNITY. Subdivision l.Designation; delegation. (a) The governing body of each government entity shall designate, as a depository of its funds, one or more financial institutions. (b) The governing body may authorize the treasurer or chief financial officer to: (1) designate depositories of the funds; (2) make investments of funds under sections 118A.01 to 118A.06 or other applicable law; or (3) both designate depositories and make investments as provided in this subdivision. Hutchinson Utilities Commission Investment Policy Page 7 HUTCHINSON UTILITIES COMMISSION INVESTMENT POLICY Subd. 2.Sale; proceeds; immunity, if loss. (a) The treasurer or chief financial officer of a government entity may at any time sell obligations purchased pursuant to this section and the money received from such sale, and the interest and profits or loss on such investment shall be credited or charged, as the case may be, to the fund from which the investment was made. (b) Neither such official nor government entity, nor any other official responsible for the custody of such funds, shall be personally liable for any loss sustained from the deposit or investment of funds in accordance with the provisions of sections 118A.04 and 118A.05. History: 1996 c 399 cert 1 ,s 3 118A.03 WHEN AND WHAT COLLATERAL REQUIRED. Subdivision 1.For deposits beyond insurance. To the extent that funds on deposit at the close of the financial institution's banking day exceed available federal deposit insurance, the government entity shall require the financial institution to furnish collateral security or a corporate surety bond executed by a company authorized to do business in the state. For the purposes of this section, "banking day" has the meaning given in Federal Reserve Board Regulation CC, Code of Federal Regulations, title 12, section 229.2(f), and incorporates a financial institution's cutoff hour established under section 336.4-108. Subd. 2.In lieu of surety bond. The following are the allowable forms of collateral in lieu of a corporate surety bond: (1) United States government Treasury bills, Treasury notes, Treasury bonds; (2) issues of United States government agencies and instrumentalities as quoted by a recognized industry quotation service available to the government entity; (3) general obligation securities of any state or local government with taxing powers which is rated "A" or better by a national bond rating service, or revenue obligation securities of any state or local government with taxing powers which is rated "AA" or better by a national bond rating service; (4) general obligation securities of a local government with taxing powers may be pledged as collateral against funds deposited by that same local government entity; (5) irrevocable standby letters of credit issued by Federal Home Loan Banks to a municipality accompanied by written evidence that the bank's public debt is rated "AA" or better by Moody's Investors Service, Inc., or Standard & Poor's Corporation; and (6) time deposits that are fully insured by any federal agency. Hutchinson Utilities Commission Investment Policy Page 8 HUTCHINSON UTILITIES COMMISSION INVESTMENT POLICY Subd. 3. Amount. The total amount of the collateral computed at its market value shall be at least ten percent more than the amount on deposit at the close of the financial institution's banking day, except that where the collateral is irrevocable standby letters of credit issued by Federal Home Loan Banks, the amount of collateral shall be at least equal to the amount on deposit at the close of the financial institution's banking day. The financial institution may furnish both a surety bond and collateral aggregating the required amount. Subd. 4.Assignment. Any collateral pledged shall be accompanied by a written assignment to the government entity from the financial institution. The written assignment shall recite that, upon default, the financial institution shall release to the government entity on demand, free of exchange or any other charges, the collateral pledged. Interest earned on assigned collateral will be remitted to the financial institution so long as it is not in default. The government entity may sell the collateral to recover the amount due. Any surplus from the sale of the collateral shall be payable to the financial institution, its assigns, or both. Subd. 5.Withdrawal of excess collateral. A financial institution may withdraw excess collateral or substitute other collateral after giving written notice to the governmental entity and receiving confirmation. The authority to return any delivered and assigned collateral rests with the government entity. Subd. 6.Default. For purposes of this section, default on the part of the financial institution includes, but is not limited to, failure to make interest payments when due, failure to promptly deliver upon demand all money on deposit, less any early withdrawal penalty that may be required in connection with the withdrawal of a time deposit, or closure of the depository. If a financial institution closes, all deposits shall be immediately due and payable. It shall not be a default under this subdivision to require prior notice of withdrawal if such notice is required as a condition of withdrawal by applicable federal law or regulation. Subd. 7. Safekeeping. All collateral shall be placed in safekeeping in a restricted account at a Federal Reserve bank, or in an account at a trust department of a commercial bank or other financial institution that is not owned or controlled by the financial institution furnishing the collateral. The selection shall be approved by the government entity. History: 1996 c 399 cert Is 4; 2003 c 51s 15,16; 2004 c 151s 1,2; 2004 c 174s 2; 2007 c 44 s 7; 2007 c 57 cert 3s 39; 2008 c 154 cert 10s 1 Hutchinson Utilities Commission Investment Policy Page 9 HUTCHINSON UTILITIES COMMISSION INVESTMENT POLICY 118A.04 INVESTMENTS. Subdivision 1.What may be invested. Any public funds, not presently needed for other purposes or restricted for other purposes, may be invested in the manner and subject to the conditions provided for in this section. Subd. 2.United States securities. Public funds may be invested in governmental bonds, notes, bills, mortgages (excluding high-risk mortgage-backed securities), and other securities, which are direct obligations or are guaranteed or insured issues of the United States, its agencies, its instrumentalities, or organizations created by an act of Congress. Subd. 3.State and local securities. Funds may be invested in the following: (1) any security which is a general obligation of any state or local government with taxing powers which is rated "A" or better by a national bond rating service; (2) any security which is a revenue obligation of any state or local government with taxing powers which is rated "AA" or better by a national bond rating service; and (3) a general obligation of the Minnesota housing finance agency which is a moral obligation of the state of Minnesota and is rated "A" or better by a national bond rating agency. Subd. 4.Commercial papers. Funds may be invested in commercial paper issued by United States corporations or their Canadian subsidiaries that is rated in the highest quality category by at least two nationally recognized rating agencies and matures in 270 days or less. Subd. 5.Time deposits. Funds may be invested in time deposits that are fully insured by the Federal Deposit Insurance Corporation or bankers acceptances of United States banks. Subd. 6.High-risk mortgage-backed securities. For the purposes of this section and section 118A.05, "high-risk mortgage-backed securities" are: (a) interest -only or principal -only mortgage-backed securities; and (b) any mortgage derivative security that: (1) has an expected average life greater than ten years; (2) has an expected average life that: Hutchinson Utilities Commission Investment Policy Page 10 HUTCHINSON UTILITIES COMMISSION INVESTMENT POLICY (i) will extend by more than four years as the result of an immediate and sustained parallel shift in the yield curve of plus 300 basis points; or (ii) will shorten by more than six years as the result of an immediate and sustained parallel shift in the yield curve of minus 300 basis points; or (3) will have an estimated change in price of more than 17 percent as the result of an immediate and sustained parallel shift in the yield curve of plus or minus 300 basis points. Subd. 7.Temporary general obligation bonds. Funds may be invested in general obligation temporary bonds of the same governmental entity issued under section 429.091 subdivision 7 469.178 subdivision 5 or 475.61_ subdivision 6. Subd. 8.Debt service funds. Funds held in a debt service fund may be used to purchase any obligation, whether general or special, of an issue which is payable from the fund, at such price, which may include a premium, as shall be agreed to by the holder, or may be used to redeem any obligation of such an issue prior to maturity in accordance with its terms. The securities representing any such investment may be sold by the governmental entity at any time, but the money so received remains part of the fund until used for the purpose for which the fund was created. Any obligation held in a debt service fund from which it is payable may be canceled at any time unless otherwise provided in a resolution or other instrument securing obligations payable from the fund. Subd. 9.Broker; statement and receipt. (a) For the purpose of this section and section 118A.05, the term "broker" means a broker-dealer, broker, or agent of a government entity, who transfers, purchases, sells, or obtains securities for, or on behalf of, a government entity. (b) Prior to completing an initial transaction with a broker, a government entity shall provide annually to the broker a written statement of investment restrictions which shall include a provision that all future investments are to be made in accordance with Minnesota Statutes governing the investment of public funds. (c) A broker must acknowledge annually receipt of the statement of investment restrictions in writing and agree to handle the government entity's account in accordance with these restrictions. A government entity may not enter into a transaction with a broker until the broker has provided this written agreement to the government entity. (d) The state auditor shall prepare uniform notification forms which shall be used by the government entities and the brokers to meet the requirements of this subdivision. History: 1996 c 399 cert 1 ,s 5 Hutchinson Utilities Commission Investment Policy Page 11 HUTCHINSON UTILITIES COMMISSION INVESTMENT POLICY 118A.05 CONTRACTS AND AGREEMENTS. Subdivision l.May enter into. In addition to other authority granted in sections 118A.01 to 118A.06, government entities may enter into contracts and agreements as follows. Subd. 2.Repurchase agreements. Repurchase agreements consisting of collateral allowable in section 118A.04, and reverse repurchase agreements may be entered into with any of the following entities: (1) a financial institution qualified as a "depository" of public funds of the government entity; (2) any other financial institution which is a member of the Federal Reserve System and whose combined capital and surplus equals or exceeds $10,000,000; (3) a primary reporting dealer in United States government securities to the Federal Reserve Bank of New York; or (4) a securities broker-dealer licensed pursuant to chapter 80A, or an affiliate of it, regulated by the Securities and Exchange Commission and maintaining a combined capital and surplus of $40,000,000 or more, exclusive of subordinated debt. Reverse agreements may only be entered into for a period of 90 days or less and only to meet short-term cash flow needs. In no event may reverse repurchase agreements be entered into for the purpose of generating cash for investments, except as stated in subdivision 3. Subd. 3.Securities lending agreements. Securities lending agreements, including custody agreements, may be entered into with a financial institution meeting the qualifications of subdivision 2, clause (1) or (2), and having its principal executive office in Minnesota. Securities lending transactions may be entered into with entities meeting the qualifications of subdivision 2 and the collateral for such transactions shall be restricted to the securities described in this section and section 118A.04. Subd. 4.Minnesota joint powers investment trust. Government entities may enter into agreements or contracts for: (1) shares of a Minnesota joint powers investment trust whose investments are restricted to securities described in this section and section 118A.04; (2) units of a short-term investment fund established and administered pursuant to regulation 9 of the Office of the Comptroller of the Currency, in which investments are restricted to securities described in this section and section 118A.04; Hutchinson Utilities Commission Investment Policy Page 12 HUTCHINSON UTILITIES COMMISSION INVESTMENT POLICY (3) shares of an investment company which is registered under the Federal Investment Company Act of 1940 and which holds itself out as a money market fund meeting the conditions of rule 2a-7 of the Securities and Exchange Commission and is rated in one of the two highest rating categories for money market funds by at least one nationally recognized statistical rating organization; or (4) shares of an investment company which is registered under the Federal Investment Company Act of 1940, and whose shares are registered under the Federal Securities Act of 1933, as long as the investment company's fund receives the highest credit rating and is rated in one of the two highest risk rating categories by at least one nationally recognized statistical rating organization and is invested in financial instruments with a final maturity no longer than 13 months. Subd. 5.Guaranteed investment contracts. Agreements or contracts for guaranteed investment contracts may be entered into if they are issued or guaranteed by United States commercial banks, domestic branches of foreign banks, United States insurance companies, or their Canadian subsidiaries, or the domestic affiliates of any of the foregoing. The credit quality of the issuer's or guarantor's short- and long-term unsecured debt must be rated in one of the two highest categories by a nationally recognized rating agency. Should the issuer's or guarantor's credit quality be downgraded below "A", the government entity must have withdrawal rights. History: 1996 c 399 crrt Is 6; 1997 c 219s 1; 2000 c 493s 1; 2005 c 152 crrt Is 2 118A.06 SAFEKEEPING; ACKNOWLEDGEMENTS. Investments, contracts, and agreements may be held in safekeeping with: (1) any Federal Reserve bank; (2) any bank authorized under the laws of the United States or any state to exercise corporate trust powers, including, but not limited to, the bank from which the investment is purchased; (3) a primary reporting dealer in United States government securities to the Federal Reserve Bank of New York; or (4) a securities broker-dealer having its principal executive office in Minnesota, licensed under chapter 80A, or an affiliate of it, and regulated by the Securities and Exchange Commission; provided that the government entity's ownership of all securities is evidenced by written acknowledgments identifying the securities by the names of the issuers, maturity dates, interest rates, CUSIP number, or other distinguishing marks. History: 1996 c 399 crr l Is 7;.�'.O..:1..O.....c......:'..3.4..._s:.......2.. Hutchinson Utilities Commission Investment Policy Page 13 HUTCHINSON UTILITIES COMMISSION INVESTMENT POLICY 118A.07 ADDITIONAL INVESTMENT AUTHORITY. Subdivision 1.Authority provided. As used in this section, "governmental entity" means a city with a population in excess of 200,000 or a county that contains a city of that size. If a governmental entity meets the requirements of subdivisions 2 and 3, it may exercise additional investment authority under subdivisions 4, 5, and 6. Subd. 2.Written policies and procedures. Prior to exercising any additional authority under subdivisions 4, 5, and 6, the governmental entity must have written investment policies and procedures governing the following: (1) the use of or limitation on mutual bond funds or other securities authorized or permitted investments under law; and (2) specifications for and limitations on the use of derivatives; (3) the final maturity of any individual security; (4) the maximum average weighted life of the portfolio; (5) the use of and limitations on reverse repurchase agreements; (6) credit standards for financial institutions with which the government entity deals; (7) credit standards for investments made by the government entity. Subd. 3.Oversight process. Prior to exercising any authority under subdivisions 4, 5, and 6, the governmental entity must establish an oversight process that provides for review of the government entity's investment strategy and the composition of the financial portfolio. This process shall include one or more of the following: (1) audit reviews; (2) internal or external investment committee reviews; and (3) internal management control. Additionally, the governing body of the governmental entity must, by resolution, authorize its treasurer to utilize the additional authorities under this section within their prescribed limits, and in conformance with the written limitations, policies, and procedures of the governmental entity. If the governing body of a governmental entity exercises the authority provided in this section, the treasurer of the governmental entity must annually report to the governing body on the findings of the oversight process required under this subdivision. If the Hutchinson Utilities Commission Investment Policy Page 14 HUTCHINSON UTILITIES COMMISSION INVESTMENT POLICY governing body intends to continue to exercise the authority provided in this section for the following calendar year, it must adopt a resolution affirming that intention by December 1. Subd. 4.Repurchase agreements. A government entity may enter into repurchase agreements as authorized under section 118A.05, provided that the exclusion of mortgage-backed securities defined as "high-risk mortgage-backed securities" under section 118A.04 subdivision 6, shall not apply to repurchase agreements under this authority if the margin requirement is 101 percent or more. Subd. 5.Reverse repurchase agreements. Notwithstanding the limitations contained in section 118A.05 subdivision 2, the county may enter into reverse repurchase agreements to: (1) meet cash flow needs; or (2) generate cash for investments, provided that the total securities owned shall be limited to an amount not to exceed 130 percent of the annual daily average of general investable monies for the fiscal year as disclosed in the most recently available audited financial report. Excluded from this limit are: (i) securities with maturities of one year or less; and (ii) securities that have been reversed to maturity. There shall be no limit on the term of a reverse repurchase agreement. Reverse repurchase agreements shall not be included in computing the net debt of the governmental entity, and may be made without an election or public sale, and the interest payable thereon shall not be subject to the limitation in section 475.55. The interest shall not be deducted or excluded from gross income of the recipient for the purpose of state income, corporate franchise, or bank excise taxes, or if so provided by federal law, for the purpose of federal income tax. Subd. 6.Options and futures. A government entity may enter into futures contracts, options on futures contracts, and option agreements to buy or sell securities authorized under law as legal investments for counties, but only with respect to securities owned by the governmental entity, including securities that are the subject of reverse repurchase agreements under this section that expire at or before the due date of the option agreement. History: 1996 c 399 cert 1 ,s 8 Hutchinson Utilities Commission Investment Policy Page 15 HUTCHINSON UTILITIES COMMISSION INVESTMENT POLICY 118A.08 NO SUPERSEDING EFFECT. Except as provided in Laws 1996, chapter 399, article 1, section 11, sections 118.01 to 118A.06 shall not supersede any general or special law relating to the deposit and investment of public funds. History: 1996 c 399 cert 1 ,s 9 Hutchinson Utilities Commission Investment Policy Page 16 Disconnection of Residential Services by HUC 1. Residential utility service shall be disconnected for any of the following reasons: • Failure to pay by the deadline on a delinquent account or failure to comply with the terms of the budget payment plan. • Failure to contact HUC to gain protection from disconnection under the Cold Weather Rule. • Failure to maintain the payment agreement established under the Cold Weather Rule. • Failure to comply with deposit requirement. • Failure to pay for merchandise or charges for non-utility service billed by HUC. • Payment of bill with a dishonored check. • Failure to provide authorized utility personnel access to utility equipment. • HUC shall disconnect residential utility service, without notice, where service has been reconnected without HUC's authorization. • HUC shall disconnect residential utility service, without notice, where it has reasonable evidence that utility service is being obtained by potentially unsafe devices or potentially unsafe methods that stop or interfere with the proper metering of the utility service. • HUC may disconnect residential utility service, without notice, where a dangerous condition exists for as long as the condition exists. • At the request of the property owner, as long as it's currently in owner's name. • At the request of the realtor/bank, as long as it's currently in their name. • If an account owner or property owner does not notify us, within three (3) business days following disconnection of service for non-payment, a final bill will be processed and the account will be closed. 2. HUC must have a Landlord Agreement on file acknowledging that landlord/owner will be responsible for all utility charges after the read-out date requested by a tenant. Failure of the landlord/owner to execute this form will lead to a shut off of services on the read-out date requested from tenant. 3. For all items mentioned in number 1 and 2 above, a disconnect/reconnect fee shall be applied. The disconnect/reconnect fee is as follows: • A $40 trip charge to disconnect. • A $40 trip charge to reconnect, payment shall be made with cash, money order or credit card during regular business hours. • After hours reconnection will follow the After Hours Reconnection Policy. 4. In the event that the customer pays after the deadline given on the disconnect letter, and the payment is processed before physical disconnection, a $40 Removal from Disconnect List Fee will be applied to their account. 5. If a realtor/bank requests to have service reconnected for one day in order to perform an inspection, a $40 trip charge to reconnect and a $40 disconnect charge will be •• -• 6. In the event of unauthorized use of, or tampering with the equipment of HUC, a tampering charge of $100 will be assessed to the customer's account. The appropriate law enforcement agency will be notified. HUC reserves the right to charge the customer for the cost of repairs to the equipment of HUC. 7. A dishonored payment will be assessed a $30 processing fee. 8. A dishonored payment to avoid disconnection, orto get reconnected, will be assessed a $30 processing fee; plus: • A $40 trip charge to deliver a door hanger, giving customer 24 hours to make payment good with cash, money order or credit card. 9. HUC is not required to furnish residential service under conditions requiring operation in parallel with Backup generating equipment connected to the customer's system if such operation is hazardous or may interfere with its own operations or service to other customers or operation as a condition or rendering service under such circumstances. FAILURE TO RESPOND TO THE DISCONNECT NOTICE SET FORTH ON THE BILL OR FAILURE TO PAY FOR SERVICES RENDERED BY HUC MAY RESULT IN THE DISCONNECTION OF SERVICES TO THE PROPERTY WITHOUT ANY ADDITIONAL NOTICE TO THE CUSTOMER. IT IS THE CUSTOMER'S RESPONSIBILITY TO PAY FOR SERVICES RENDERED AND TO ADVISE HUC OF ANY CHANGE IN ADDRESS. NEITHER HUC NOR THE CITY OF HUTCHINSON, NOR ANY OF THE AGENTS, EMPLOYEES OR REPRESENTATIVES OF THE CITY OF HUTCHINSON OR HUC, WILL BE RESPONSIBLE FOR ANY DAMAGES OR CLAIMS INCURRED AS A RESULT OF THE DISCONNECTION OF SERVICES. Residential utility service may not be disconnected or refused for any of the following reasons: • Delinquency in payment for services by a previous occupant of the premises to be served. • Failure to pay for a different rate classification of utility service. • Failure to pay the account of another customer as guarantor thereof. • Failure to pay charges arising from any underbilling occurring more than 1 year prior to the current billing and due to any misapplication of rates or faulty metering. • If a customer is on the Budget Payment Plan and has a credit balance on account. Disconnection of Commercial Services by HUC 1. Commercial utility service shall be disconnected for any of the following reasons: • Failure to pay by the deadline on a delinquent account. • Failure to comply with deposit requirement. • Failure to pay for merchandise or charges for non-utility service billed by HUC. • Payment of bill with a dishonored check. • Failure to provide authorized HUC personnel access to utility equipment. • HUC shall disconnect commercial utility service, without notice, where service has been reconnected without HUC's authorization. • HUC shall disconnect commercial utility service, without notice, where it has reasonable evidence that utility service is being obtained by potentially unsafe devices or potentially unsafe methods that stop or interfere with the proper metering of the utility service. • HUC may disconnect commercial utility service, without notice, where a dangerous condition exists for as long as the condition exists. • At the request of the property owner, as long as it's currently in owner's name. • At the request of the realtor/bank, as long as it's currently in their name. 2. HUC must have a Landlord Agreement on file acknowledging that landlord/owner will be responsible for all utility charges after the read-out date requested by a tenant. Failure of the landlord/owner to execute this form will lead to a shut off of services on the read-out date requested from tenant. 3. For all items mentioned in number 1 and 2 above, a disconnect/reconnect fee shall be applied. The disconnect/reconnect fee is as follows: • A $40 trip charge to disconnect. • A $40 trip charge to reconnect, payment shall be made with cash, money order or credit card during regular business hours. • After hours reconnection will follow the After Hours Reconnection Policy. 4. In the event that the customer pays after the deadline given on the disconnect letter, and the payment is processed before physical disconnection, a $40 Removal from Disconnect List Fee will be applied to their account. 5. If a realtor/bank requests to have service reconnected for one day in order to perform an inspection, a $40 trip charge to reconnect and a $40 disconnect charge will be applied. 6. In the event of unauthorized use of, or tampering with the equipment of HUC, a tampering charge of $100 will be assessed to the customer's account. The appropriate law enforcement agency will be notified. HUC reserves the right to charge the customer for the cost of repairs to the equipment of HUC. 7. A dishonored payment will be assessed a $30 processing fee. 8. A dishonored payment made to avoid disconnection, or to get reconnected, will be assessed a $30 processing fee; plus: • A $40 trip charge to deliver a door hanger, giving customer 24 hours to make payment good with cash, money order or credit card. 9. HUC is not required to furnish commercial service under conditions requiring operation in parallel with Backup generating equipment connected to the customer's system if such operation is hazardous or may interfere with its own operations or service to other customers or operation as a condition or rendering service under such circumstances. FAILURE TO RESPOND TO THE DISCONNECT NOTICE SET FORTH ON THE BILL OR FAILURE TO PAY FOR SERVICES RENDERED BY HUC MAY RESULT IN THE DISCONNECTION OF SERVICES TO THE PROPERTY WITHOUT ANY ADDITIONAL NOTICE TO THE CUSTOMER. IT IS THE CUSTOMER'S RESPONSIBILITY TO PAY FOR SERVICES RENDERED AND TO ADVISE HUC OF ANY CHANGE IN ADDRESS. NEITHER HUC NOR THE CITY OF HUTCHINSON, NOR ANY OF THE AGENTS, EMPLOYEES OR REPRESENTATIVES OF THE CITY OF HUTCHINSON OR HUC, WILL BE RESPONSIBLE FOR ANY DAMAGES OR CLAIMS INCURRED AS A RESULT OF THE DISCONNECTION OF SERVICES. Commercial utility service may not be disconnected or refused for any of the following reasons: • Delinquency in payment for services by a previous occupant of the premises to be served. • Failure to pay for a different rate classification of utility service. • Failure to pay the account of another customer as guarantor thereof. • Failure to pay charges arising from any underbilling occurring more than 1 year prior to the current billing and due to any misapplication of rates or faulty metering. EXEMPT SECTION 6 - HEALTH AND SAFETY HUC is very concerned about the safety of its employees and the public HUC serves. All employees are required to follow all HUC safety rules and make the safety of themselves, their co-workers, and the public a priority. To encourage a safe workplace, the Commission has adopted the APPA — Utilities Safety Handbook. Compliance with the APPA is "mandatory and is considered a requirement for employment". NON-EXEMPT SECTION 6 — HEALTH AND SAFETY HUC is very concerned about the safety of its employees and the public HUC serves. All employees are required to follow all HUC safety rules and make the safety of themselves, their co-workers, and the public a priority. To encourage a safe workplace, The Commission has adopted the APPA — Utilities Safety Handbook. Compliance with the APPA is "mandatory and is considered a requirement for employment". EXEMPT ACCIDENTS AND INJURIES Employees must immediately report to a Director, Manager or Supervisor job-related illnesses, all accidents and injuries (regardless how minor) that occur during the course of employment with HUC. The Employee and Supervisor must fill out and sign an accident report. If a supervisor is not available and the nature of injury or illness requires immediate treatment, the employee is to go to the nearest available medical facility for treatment and, as soon as possible, notify his/her supervisor of the action taken. In the case of a serious emergency, 911 should be called. If the injury is not of an emergency nature, but requires medical attention, the employee will report it to the supervisor and make arrangements for a medical appointment. Worker's compensation benefits and procedures to return to work will be applied according to applicable state and federal laws. HUC contracts with Corvel as the worker's compensation managed care provider. Pursuant to Minnesota Law, HUC has established a labor-management safety committee that investigates or reviews all accidents to identify causes of the accidents and suggest ways to prevent reoccurrence of the accident. The safety committee may request to interview any employee involved in an accident or any employee who may have knowledge of an accident. All employees are required to cooperate with the safety committee. NON-EXEMPT ACCIDENTS AND INJURIES Employees must immediately report to a Director, Manager or Supervisor job-related illnesses, all accidents and injuries (regardless how minor) that occur during the course of employment with HUC. The Employee and Supervisor must fill out and sign an accident report. If a supervisor is not available and the nature of injury or illness requires immediate treatment, the employee is to go to the nearest available medical facility for treatment and, as soon as possible, notify his/her supervisor of the action taken. In the case of a serious emergency, 911 should be called. If the injury is not of an emergency nature, but requires medical attention, the employee will report it to the supervisor and make arrangements for a medical appointment. Worker's compensation benefits and procedures to return to work will be applied according to applicable state and federal laws. HUC contracts with Corvel as the worker's compensation managed care provider. Pursuant to Minnesota Law, HUC has established a labor-management safety committee that investigates or reviews all accidents to identify causes of the accidents and suggest ways to prevent reoccurrence of the accident. The safety committee may request to interview any employee involved in an accident or any employee who may have knowledge of an accident. All employees are required to cooperate with the safety committee. EXEMPT UNSAFE CONDITIONS OR PRACTICES Employees are required to report to a Director, Manager or Supervisor any unsafe conditions or practices they observe, including failure of a co-worker to follow safety rules or procedures. NON-EXEMPT UNSAFE CONDITIONS OR PRACTICES Employees are required to report to a Director or Manager any unsafe conditions or practices they observe, including failure of a co-worker to follow safety rules or procedures. EXEMPT EMPLOYEE RIGHT -TO -KNOW Minnesota's Employee Right -to -Know law requires HUC to inform employees when they may be exposed to hazardous substances, harmful physical agents, or infectious agents. HUC has adopted a written Employee Right -to -Know program. HUC has evaluated and reevaluates the work sites to determine the presence of hazardous substances. Employees shall become familiar with the location of Safety Data Sheets (SDS) in their work area. NON-EXEMPT EMPLOYEE RIGHT -TO -KNOW Minnesota's Employee Right -to -Know law requires HUC to inform employees when they may be exposed to hazardous substances, harmful physical agents, or infectious agents. HUC has adopted a written Employee Right -to -Know program. HUC has evaluated and reevaluates the work sites to determine the presence of hazardous substances. Employees shall become familiar with the location of Safety Data Sheets (SDS) in their work area. HUTCHINSON UTILITIES COMMISSION ��*N�' Board Action Form 'or, Hits iiiiiiiiiiiiiiiiiiiiiillillillillillillilliillillillillillillilliillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillilI Agenda Item: Approve Policy Changes Presenter: Jeremy Carter Agenda Item Type: Time Requested (Minutes): 5 App Changes to Policies Attachments: Yes BACKGROUND/EXPLANATION OFAGENDA ITEM: As part of HUC's standard operating procedures, a continual policy review is practiced. The following revisions to the policies below are recommended. i. Budget Payment Plan ii. Explanation of Billing Procedure BOARD ACTION REQUESTED: Approve Policy Changes Fiscal Impact: Included in current budget: Budget Change: PROJECT SECTION: Total Project Cost: Remaining Cost: Budget Payment Plan A budget payment plan is available to residential customers who have been at their present location for a minimum of 12 continuous months. Procedures are in place for setting up and reviewing the budget payment plan calculation. Changes to the budget payment amount are made at the discretion of the Customer Service Department based on the customer's average bill from the previous 12 months. Customers will be notified, in writing, of any changes. A customer may concurrently participate in the budget payment plan aiiid Il,sy automatic bank payment plan or urecurrling cre6t cards. Explanation of Billing Procedure A bill for services is sent to the address provided by the customer approximately 3 to 5 days after the meters have been read. The customer has approximately 10 days to pay the bill in full by the stated due date. In accordance with state law, the City of Hutchinson and its related entities shall have 35 days to pay bills in full. Bills paid after the due date will incur the following charges: • A 1% per month late payment charge on any unpaid balance. • A $15 processing fee. A late notice warning of pending disconnection is mailed to the customer and provides the customer with approximately 40 .....te 20 days to pay the bill or contact the Customer Service Department to make other arrangements. Examples of other arrangements may include establishing a budget payment plan or payments by other agencies on the customer's behalf. Failure to make payment by the stated due date and time will be considered a violation of the notice of pending disconnection. If full payment or other arrangements have not been made by the deadline, HUC personnel are sent to the meter location to disconnect utility services (see disconnection of services section). • A notice will also be included on the next month's billing warning of pending disconnection. Customers should refer to previously sent disconnection letter for details of date and time of disconnection. IT IS THE CUSTOMER'S RESPONSIBILITY TO PAY BILLS ON TIME AND IN FULL. A dishonored payment will be assessed a $30 processing fee. A dishonored payment made to avoid disconnection, to get reconnected, or for a deposit for service will be assessed a $30 processing fee; plus: a. A $40 trip charge to deliver a door hanger, a notice advising the customer they have 24 hours to make the full notice payment. Acceptable forms of payment include cash, money order or credit card. b. A $40 trip charge to disconnect service if payment is not received in the form of cash, money order or credit card. C. A $40 trip charge to reconnect service with payment made in the form of cash, money order or credit card. IT IS THE CUSTOMER'S RESPONSIBILITY TO KEEP HUC FULLY ADVISED OF ANY CHANGE OF ADDRESS. HUTCHINSON UTILITIES COMMISSION ��*N�' Board Action Form 'or, Hits iiiiiiiiiiiiiiiiiiiiiillillillillillillilliillillillillillillilliillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillilI Agenda Item: Approval of Rollover of Northern Natural Gas transportation contract No. 21279. Presenter: John Webster Agenda Item Type: Time Requested (Minutes): 2 New Business Attachments: Yes BACKGROUND/EXPLANATION OFAGENDA ITEM: Hutchinson Utilities maintains 100 Dth/day of capacity on the Northern Natural Gas Company (NNG) transmission system. Maintaining capacity on the NNG system provides for a secondary supply of natural gas to the City of Hutchinson in the event of a catastrophic failure to the Hutchinson Utilities' natural gas transmission line. BOARD ACTION REQUESTED: Approval of rollover of Northern Natural Gas Contract No. 21279, Amendment No. 27 Fiscal Impact: $11,000 Included in current budget: Yes Budget Change: PROJECT SECTION: Total Project Cost: Remaining Cost: Northern „m Natural Gas A BERKSHIRE HATHAWAY ENERGY COMPANY Northern Natural Gas Company Amendment to TF Throughput Service Agreement Date: 10/09/2017 Shipper Name: HUTCHINSON UTILITY COMMISSION Contract No.: 21279 (Agreement) Amendment No.: 27 WHEREAS, the entitlement in this Agreement expires 10/31/2018 and is subject to Grandfathered Rollover Rights; and WHEREAS, Shipper desires to rollover this Agreement for five (5) years at the maximum tariff rates; NOW THEREFORE, the Agreement is amended as follows: 1. The volume, term, and/or point provisions are amended as follows: a. The term of the Agreement is extended through 10/31/2023. b. The contract maximum daily quantities, primary receipt and delivery points, and terms are set forth on Appendices "A" and "B." c. The Appendices to the Agreement are deleted in their entirety and the Appendices "A" and "B" attached hereto and incorporated herein by reference are substituted therefor. All references to Appendix "A" or Appendix "B" shall be deemed to refer to the Appendices attached hereto. 2. Shipper shall pay Northern's maximum rates and charges plus all applicable surcharges in effect from time to time. 3. Other Provisions Permitted by Tariff Under the Applicable Rate Schedule and pursuant to Section 58 of the GENERAL TERMS AND CONDITIONS of Northern's FERC Gas Tariff: TO THE FULLEST EXTENT PERMITTED BY LAW, EACH OF THE PARTIES HERETO WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS AGREEMENT. EACH PARTY FURTHER WAIVES ANY RIGHT TO CONSOLIDATE ANY ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. 4. The parties agree that a facsimile or other electronic version of this document, when properly executed and transmitted, shall be considered for all purposes to be an original document, and shall be deemed for all purposes to be signed and constitute a binding agreement. The entire agreement must be faxed or transmitted to Northern. Upon Northern's acceptance and execution, an executed copy will be returned via FAX to the number appearing on the faxed offer or such other number as directed or otherwise electronically transmitted. 5. This Agreement, as amended, constitutes the entire agreement between the parties with respect to the subject matter of this Agreement and shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. No promises, agreements or warranties additional to this Agreement other than as may be contained in Northern's FERC Gas Tariff will be deemed to be a part of this Agreement nor will any alteration, amendment or modification be effective unless confirmed in writing by the parties. The effective date of this Amendment is 11/01/2018. Except as amended herein, all provisions of the Agreement are hereby confirmed by the parties to be and remain in full force and effect. NORTHERN NATURAL GAS COMPANY HUTCHINSON UTILITY COMMISSION By: �� By: Title: Vice President, Customer Service & Business Title: Development Date: 10/09/2017 Date: LN Title: Date: O O W x I IE a) O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O ti Q CL v � d W Q Q o ZD U Q � x F fT O rr O w CQ th oc O Ca N 41- o � N \O \ \ u � - - - � ƒ \ \ § § / » � * . . . x E � - & 7 - - - � - - - z � \ / 4 \Q ® \ 2 » \ \ \ w \ / h 3 \ _ # ( ( n / HUTCHINSON UTILITIES COMMISSION Board Action Form &F,WK, Agenda Item: Approval of Caterpillar Generator Contract Presenter: Jeremy Carter Agenda Item Type: Time Requested (Minutes): 5 New Business Attachments: Yes BACKGROUND/EXPLANATION OF AGENDA ITEM: On August 29th, 2017 the Commission approved awarding the two generator installation project to Caterpillar. Since that time HDR, Caterpillar, and HUC staff have been finalizing an extensive contract that lays out the time -lines, performance guarantees, technical specification, and a host of other contractual language to ensure a successful project in the end. It was not anticipated that working through the final contract language would exceed the 60 day time frame from the original submittal date from Caterpillar. However, because of the extended length of time past the original 60 days the original exchange rate of 1.138 that the price was calculated on between the Euros and US dollars is no longer applicable. At the time of contract execution the new exchange rate of 1.1749 is being used in the final contract price. In effect it takes the original bid approved from $8,836,959.06 to $9,123,500.18. A change in exchange rate pricing of $286,541.12. The current contact language before the commission for approval reflects the current exchange rate applied to the original bid price. Contract execution is the final step in commencing the project. In addition, the bond financing has been finalized and the bond proceeds will be delivered by the end of October. Staff is recommending approval of the contract. BOARD ACTION REQUESTED: Approve Caterpillar Contract Fiscal Impact: $9,123,500.18 Included in current budget: Budget Change: PROJECT SECTION: Total Project Cost: Remaining Cost: October 19, 2017 Mr. Jeremy Carter General Manager Hutchinson Utilities Commission 225 Michigan Street SE Hutchinson, MN 55350 SUBJECT: HUC Units 6 and 7 Procurement CAT Agreement Dear Mr. Carter, Negotiations and discussion have been completed with the selected responsible bidder, Caterpillar Power Systems, LLC (CAT) and final pricing has been determined for the furnishing of specified units, certain auxiliary systems and services. Original pricing by CAT was based on the USD/Euro exchange rate stated in their proposal of July 14, 2017. Their proposal indicated that they would hold the USD pricing firm until September 14, 2017. Agreement on final technical and commercial details and terms was reached with CAT on the 181h of October. Accordingly the final pricing is also based on the USD/Euro exchange rate being quoted by the European Central Bank for that day. We believe that this is a fair and acceptable practice for projects of this nature. We recommend acceptance of the agreement with the effective date being the date of signature by the HUC. Sincerely, HDR Engineering, Inc. rProJames W. Booty, PE James Manager hdirinc.corn 701 Xenia Avenue South, Suite 600, Minneapolis, MN 55416-3636 (763)591-5400 UTWAQW401111 THIS AGREEMENT is by and between Hutchinson Utilities Commission ("Buyer") and Caterpillar Power Generation Systems LLC ("Seller"). Buyer and Seller hereby agree as follows: ARTICLE 1, — GOODS AND, SPECIAL SERVICES 1.01 Seller shall furnish the Goods and Special Services as specified or indicated in the Contract Documents. 2.01 The Project, of which the Goods and Special Services may be the whole or only a part, is identified as follows. Unit 6 & 7 - Internal Combustion (IC) Engin /Generator Sets and Auxiliaries MJ 141 4MIFTMeTrMT11 101 The Contract Documents for the Goods and Special Services have been prepared by HDR. Engineering, Inc. ("Engineer"), which is acting as Buyer's representative, assume alll duties and responsibilities, and have the rights and authority assigned to Eingineer in the Contract Documents in connection with Seller's furnishing of Goods and Special Services. I 44 4 ffi Avenue NE Hutchinson, MN 55350 On foundations prepared by others. 5.01 Milestones A. Days for Submittal of technical information,, Shop Drawings and Samples: Seller shall submit all Shop Drawings and Samples, required by the Contract Documents to Buyer for Engineer's review and approval according to the Exhibit 7.,03 ("Basic Engineering Deliverables List—Rev3"). It is the intent of the parties that (1) Engineer conduct such review and issue its approval, or a denial accompanied by substantive comments regarding information needed to gain approval, within 15 working days of Seller's submittal of such technical information, Shop Drawings and Samples ("Submittals"). If more than one resubmittal is necessary for 10059265 1 lutchinson Utilities Commission Engine/Generator -- Units 6 & 7 170RM OF AGREEWNT 00 52 00 - Rage I Procurement 2. $3000.00 for each day after the time expired as specified in Paragraph 5.01B, subject to appropriate relief as provided in these Contract Documents, B. The maximum aggregate amount of belay Liquidated Damages shall not exceed 5% of the Contract Price, A. Buyer and Seller agreeto the following in the event that each Engine / Generator installed fails to meet the Capacity and Heat Rate Guarantees ("Performance Liquidated IDamages") during the Performance Tests-, 1. As to Heat Rate, Seller shall pay liquidated damages to Buyer in the amount of $ 1,130 / BTU/kWh of excessive (heat rate measured on a per generator set basis above the Guaranteed Generator Set Heat (Rate as, specified in Exhibit 7.02. The Heat Rate Liquidated Damages will be limited to a maximum of 5% of the Contract Price,. 2. As to Capacity: ' Seller shall pay liquidated damages to Buyer in the amount of $ 975 / kW below the Guaranteed Generator Set Output as specified in Exhibit 7.02, measured on a per generator set basis. The Capacity Liquidated Damages will be limited to a maximum of 5% of the Contract Price. 3. As to Lube Oil consumption: Seller shall pay liquidated damages to Buyer in the amount of $,1,000 per gram per operating hour above the Guaranteed Lube Oil Consumption as specified in Exhibit 7.02, imeasured on a per generator set basis. The (Lube Oil Liquidated Damages will be limited to a maximum of 5% of the Contract Price. B, The Performance Tests, shall be conducted by Seller utilizing Buyer's personnel in accordance with, the approved Finial Test Procedure, Buyer's personnel shall act under the supervision of Seller's technical personnel. The effective date of the completion of the Equipment Performance Test shall be deemed to be the day the Minimum Guaranteed Generator Set Output, Maximum Guaranteed Generator Set Heat Rate and Post -Treatment Guaranteed Emissions Data are achieved according to the Plant Performance Report as defined in Exhibit 7,,02. 5.05 Aggregate CAP for Liquidated Damages: Buyer and Seller agree that if Buyer shall be damaged by (i) delay or (ii) the failure of Seller to meet the Guaranteed Generator Set Power Output, Guaranteed Generator Set Heat Rate, or the Guaranteed Lube Oil Consumption, then (a) it would be impracticable or extremely difficult to ascertain: the resulting actual damage, (b) any sums which would be payable under this Article 5 are in the nature of liquidated damages and not a penalty, and (c) any such payment represents a reasonable estimate of compensation for the losses that may be anticipated from such failure, and (d) payments made under Articles 5.03, and 5.04 shall, without duplication, be the sole and exclusive measure of damages and remedy for Buyer with respect to the Generator Sets achieving the Guaranteed Power Output, Guaranteed Heat (Rate, and Guaranteed Lube Oil Consumption or delay in the Schedule of Deliveries.Once payment of such liquidated damages has been accomplished or the limits on liquidated damages set forth herein have been reached, Seller shall be relieved of any further liability in respect of the respective default or deficient performance. Notwithstanding any provision of this Contract to 10059265 Hutchinson Utilities Commission Procurement Engiine/Generator — Units 6 & 7 FT)C.M OF AGRErMrwr I- 00 52 00 - Page 3 the contrary, under no circumstances shall Seller be liable to Buyer for any amount of liquidated damages , in the aggregate, greater than 15% of the Contract Price for failure to meet the Guaranteed Power Output, Guaranteed Heat Rate, and Guaranteed Lube! Oil Consumption MT411MITM 6.01 Buyer shall pay Seller for furnishing the Goods and Special Services in accordance with the Contract Documents as follows: A. A Lump Sum of $9,123,500.18 (net of State Sales taxes) as provided in Article 7 of this Agreement, as follows: 1. Engine generator & Auxiflaries, (Base) $8,672,372.58 2. SCR & APC Equipment for 19% Ammonia System. $111,091,38 t. Neutral Girouncling Reactor $60,858.76 4. Exhaust Stack Extension $2210,2510.73 5, Maintenance Platform Furnish and Install $58,926.73 m7n= M 7.01 Submittal and Processing of Payment A. Seller shall submit Applications for Payment in accordance with Article 10 of the General Conditions,. Applications for Payment will be processed by Engineer as provided in the General Conditions, 7'02 Progress Payments; Retainage; Payment Schedule A. Buyer shall make milestone progress payments on account of the Contract Price on the basis of Seller's Applications for Payment as follows: 1. Twenty-five percent (25%) of the Contract Price shall be due and payable within 30 days after the Effective Date, 2. Ten percent (10%) of the Contract Price shall become payable upon delivery of all submittals as provided in exhibit 7'.03. 3. Ten Percent (10%) of the Contract Price shall become payable upon receipt a report confirming the successful completion of the factory acceptance test defined in Exhibit 7,06, W059265 Hutchinson thifitiesCommission Engine/Gencrator — Units 6 & 7 FORM OFAGRU-MMENT 00 52 00 - Page 4 Pr=imment 4. Forty-five percent (45%) of the Contract Price shall become payable upon (i) loading of the Engines for shipment, and (H) delivery of a bill of lading, packing list, and insurance certificate for the shipment. S. Five percent (5,%) of the, Contract Price shall become payable immedlately following the offloading of the last Engine to the foundation at the Point of Destination. 6. Two percent (2%) of the Contract Price shall become payable immediately following the delivery of the auxiliary equipment at the Point of Destination., T. Two percent (2%) of the Contract Price will be paid to Seller upon Start - Up Commissioning Complete as defined in the Specifications, 8. One percent (1%) of the Contract Price will be paid to SeHer upon Final Inspection. B. The Contract Price, with the exception of the initial twenty-five percent (25%) payment which must be made by SWIFT transfer, may, at Buyer's discretion, be made by wire transfer lin accordance with instructions to be provided by Seller C!. If the initial (25%) payment described in Article 7.02 AA is not paid into Seller's account according to the time llilmits established in Article 7.02 A.1, Seller shall be entitled to request an equivalent adjustment of the Delivery Schedules as well as reimbursement for additional cost arising from the postponement which for the purpose of calculation shall be considered at 03% of the outstanding amount per month of postponement. If the initial payment is not made within 150 days of the Effective Date, Seller may treat such failure as, reasonable ground for termination of the Contract. In such event, Buyer shall pay a cancellation fee of 6% of the Contract Price. D, Upon receipt Applications for Payment submitted in accordance with Paragraph 10.01.A.1 of the General Conditions and accompanied by Engineer's recommendation of payment in accordance with Paragraph 10.02.A of the General Conditions, an amount of the Contract Price as listed above. E. In the event Change �Orders a:re issued they shall be reflected lin the next scheduled payment. 7.,03 Final Payment k Upon receipt of the final Application for Payment accompanied by Engineer's recommendation of payment, Buyer shall pay Seller the amount recommended by Engineer, less any sum, Buyer is entitled to set off against Engineer's recommendation, including but not limited to delay and/or performance liquidated damages, B, Final Application for Payment must allso be accompanied by a completed and executed Certificate of Compliance (Minnesota Revenue IC134). Certificate may be secured from the (Minnesota Department of Revenue., 10059265 Hulchinson Utilities Commission Procurement Engine/Generator Units 6 & 7 FORM OF AGREEML,,N,r 00 52 40 - Page 5 ARTICLE 8 — INTEREST 8.01 Ail monies not paid when due as provided in Article 10 of the General Conditions shall bear linterest at 60/6 per annum. ARTICLE 91 — SELLER'S REPRESENTATIONS 9.011 In order to induce Buyer to enter into this Agreement, Selier makes the following representations: A. Seller has examined and carefully studied the Contract Documents and the other related data identified in the Bidding Documents,, as applicable to Selleir's obligations identified in Article I above,. B. Seller has visited the IPolint of IDestiination and site where the Goods are to be installed or Special Services will be provided and become familiar with and is satisfied as to the observable local conditions that may affect cost, progress, and the furnishing of the Goods and Special Services, C. Seller is familiar with and is satisfied as to all Laws and Regulations that may affect cost, progress, and the furnishing of the Goods and Special Services. D. Seller has carefully studied, considered, and correlated the information known to Selleir; information commonly known to sellers of similar goods doing business in the locality of the Point of Destination and the site where the Goods will be installed or where Special Services will be provided; information and observations obtained from Seller's visits, if any, to the Point of Destination and site where the Goods are to be installed or Services will be provided; and any reports and drawings identified in the Bidding Documents regarding the Point of Destination and the site where the Goods will be installed or where Special Services will be provided', with respect to the effect of such information, observations, and documents on the cost, progress, and performance of SeHeir's obligations under the Contract Documents. E. Seller Ihas given Engineer written notice of all conflicts, errors, ambiguities, or discrepancies that Seller has discovered in the Contract Documents, and the written resolution (if any) thereof by Engineer is acceptable to Seller. F. The Contract Documents are generally sufficient to indicate and convey understanding of all terms and conditions for furnishing Goods and Special Services. F�'A"IbItNW 10.01 Contents A. The Contract Documents consist of the following. - 1. This Agreement (pages -.1.._ to inclusive); 2. Performance Bond (pages I to 3 , inclusive); B. Payment Bond (pages __1. to 3 , inclusive); 10059265 Hutchinson Utilities Commission Engine/Gencrator — Units 6 & 7 FORM OF AGREEMENT 00 52 00 - Page 6 PrOCUrcinent 4. General Conditions (pages I to _36 , inclusive); 5. Supplementary Conditions (pages I to 4 , inclusive); 6. Specifications as listed in table of contents of the Project Manual, (Divisions 01, 05, 26, & Appendix A)Units 6 and 7 — Internal Combustion (IC) Engine / Generator Set and Auxiliaries, Dated June, 2017 and as supplemented by technical clarifications & deviations (document: 10.,01—A.6—Technical Devi atio n s—rev6). 7, Exhibits to this Agreement (enumerated as follows): Documentation submitted by Seller prior to Contract Signing: 01. Scope of Supply M atirix_Rev 6, 02, Performance Report. Rev 9 03. Basic Engineering Delliverables List—Rev 3 04. Spare Parts List 05. Design Criteria—Rev 3 06. Factory Acceptance Tests—Rev 2 07. Performance Tests Procedures—Rev 5 08, Engine Tools List 8, The following which may be delivered or issued on or after the Effective Date of the Agreement and are not attached hereto: a. Notice to Proceed; b. Change Order(s); c, Work Change Directive(s)., d. Turbo Charger Tools List B. The documents listed in Paragraph 10.01.A are attached to this Agreement (except as expressly noted otherwise above), c. There are no Contract Documents other than those listed above in this Article 10, D. The Contract Documents may only be amended, or supplemented as provided in Paragraph 3.04 of the General Conditions. 1005926,5 1 futchinson Utilities Commission Engine/Generator Units ,6&7 FORM OF AGREEMENT 00 52 010 - Pagc 7 Procurement E. In case of any discrepancies or conflicts between the Contract Documents, the documents shall govern in the following order of precedence: 1.. This Agreement; 2. Geinerall Conditions; 3. Supplementary Conditions; 4. Specifications; 5. Drawings; and 61, Exhibits R 11.01 Terms A. Terms used in this Agreement will have the meanings indicated in the General Conditions and the Supplementary Conditions, 11.02 Successors and Assigns A. Buyer and Seller each binds itself, its partners, successors, assigns, and' legal representatives to the other party hereto, its partners, successors, assigns, and legal representatives in respect to all' covenants, agreements, and obligations contained in the Contract Documents,, 11,03 Severability A. Any provision or part of the Contract Documents Iheld to be void or unenforceable under any Law or Regulation shall be deemed stricken, and all remaining provisions 'shall continue to be valid and binding upon Buyer and Seller, The Contract Documents shall be reformed to replace such stricken provision or part thereof with a valid andl enforceable provision that comes as close as possible to expressing the intention of the stricken provision, 11.04 Anti -Corruption Certifications A. The parties certify that they have not engaged in corrupt, fraudulent, collusive, or coercive practices in competing for or in executing the Contract. For the purposes of this Paragraph 11.04: 1. "corrupt practice" means the offering, giving, receiving, or soliciting of anything of value likely to influence the action of a public official in the bidding process or in the Contract execution; 2. "fraudulent practice" means an intentional misrepresentation of facts made (a) to influence the bidding process or the execution of the Contract to the detriment of Buyer, (b) to establish Bid or Contract prices at artificiial non-competitive levels, or (c) to deprive Buyer of the benefits of free and open competition; 10059265 Hutchinson Utilities Commission Procurement EnginelGencrator — Un its 6 & 7 FORM OF AGREEMENT 00 52 00 - Page 8 B. "collusive practice" means a scheme or arrangement between two or moire Bidders, with or without the knowledge of Buyer, a purpose of which is to establish Bid prices at artificial, non-competitive levels; and 4. "coercive practice" means harming or threatening to harm, directly or indirectly, persons or their property to influence their participation in the bidding process or affect the execution of the Contract. 11,05 Limitations k Buyer and Seller waive against each other, and against the other's officers, directors, members, partners, employees, agents, consultants, and subcontractors, any and all claims for or entitlement to incidental, indirect, or consequential daimages arising out of, resulting from, or related to the Contract, The terms of this mutual waiver do not apply to or limit any claim by either Buyer or Seller against the other based on, any of the: following: (a) contribution or indemnification, (b) costs, losses, or damages attributable to personal or bodily injury, or death, or to injury to or destruction of the tangible property of others, or (c) intentional or reckless wrongful conduct. The total habiii,ty of Seller to Buyer arising out of the performance or non- performance of the Contract, whether based on warranty, contract, or negligence shall not exceed in the, aggregate a sum equal to oline hundred percent (1001%) of the Contract Price minus (i) Liquidated Damages paid by Seller pursuant to Article 5 and draws by Buyer against any bank guarantee obtained by Seller for Buyer's benefit, and (H) any undisputed amount of the Contract Price not paid by Buyer to Seller in accordance with this Contract. The terms of this limit of liability do not apply to claims made by Buyer against Seller for: (a) indemnification, (b) costs, losses, or damages attributable to peirsonall or bodily injury or death, or to injury to or destruction of the tangible property of IBuyeir, or (c) lintentional or reckless wrongful' conduct. 11.06 Other Provisions Seller and Buyer shall have no right, plower or authority to assign this Agreement or any portion thereof, either voluntarily or involuntarily, or by operation of law. Notwithstanding the foregoing, Seller may at any time assign any or all of its rights, or delegate its duties, under this Contract to another subsidiary or entity within Seller's corporate structure. If such assignment comprises the obligation to deliver Goods, such a SeRer assignment shall not relieve Seller of its obligations uinder this Contract, However, nothing lien the foregoing shall restrict Seller from using subcontractors for Seller's performance of this, Agreement. 10059265 Hutchinson I Jfil ifies Commission EngindGencrator — Units 6 & 7 FORM OFAGREEMEN'r 00 52 00 - Page 9 Procurement V-1 IN WITNESS WHEREOF, Buyer and Seller have signed this Agreement. Counterparts have been delivered to Buyer and Seller. All portions of the Contract Documents have been signed or identified by Buyer and Seller or oin their behalf. This Agreement will be! effective oin Agreement). Buyer: Hutchinson Utilities Commission_,___ (which is the Effective Date of the Seller: Caterpillar Power_Qgnerdj�iga Svsterrm,LLC By By: [Corporate Seal) rCorporate Seal] Attest: Address for giving notice: Designated Representative: Name. Title: Addiress: Phone: wag;Q6116W Attest -F,_ By. [Corporate Seal] Attest:— 17 Address for giving notice: z, fat o (jr 0 >( Agent for service of process,: (If Seller is a corporation or a partnership, attach evidence of authority to sign.) Designated Representative: N a rn e: Title: c Add iress, P "`7 hone: - ZVOISM 10059265 1 lutchins,on Utilities Commission Procurement Enginel(jeneralor — Units 6 & 7 FORM OFAGREEMEN I' GO 52 00 - Page 10 CERTIFICATE OAF INCUMBENCY .1, David M. Masterson, being the duly elected and acting Secretary of Caterpillar Power Generation Systems L.L.C., a Delaware corporation (the "Company"), do hereby certify that the following persons are duly elected and acting officers of the Company: Office President Vice President Assistant Secretary Treasurer Manager STATE OF )SS COUNTY OF Jerome Fredrick Vannitamby Claudio Martino Seth Calve:n Prager Jerome Fredrick Vannitam by Jerome Fredrick Vannitamby Subscribed and sworn to before me this Lj— day of 2017. MICHELLE MERKELT S Notary Pub#c, State of Texas Conim, Exo1res 1 11-012c17 1p/1 041040 Nolary ID 12961335-6 5651149vl 1, " ;IrlAI Notary Public This document has important legal consequences; consultation with an attorney is encouraged with respect to its use or modification. This document should be adapted to the particular circumstances of the contemplated Project and the controlling Laws and Regulations. 00 70 00 STANDARD GENERAL CONDITIONS FOR PROCUREMENT CONTRACTS Prepared by F—dWuuuuan ENGNEERS .JOINT C I 'PI-IAS'f and Issued and Published Jointly by C ] C.. AGC O merit 'V6^M;a+w"rS;t4ttpdY k,�ra�,n�,x wlW Nair H6CMaAk"a�^.'kCNRu0.Po '�" A1111111 E ox �� s_ n�u Y �a wu%mui.rt (o�nu emirs kddA11Rdip' r" MwC' k ""-m+,,a�'R✓d ASCEAmerican Society of Civil Engineers National Society of Professional Engineers Professional Engineers in Private Practice AMERICAN COUNCIL OF ENGINEERING COMPANIES AMERICAN SOCIETY OF CIVIL ENGINEERS ASSOCIATED GENERAL CONTRACTORS OF AMERICA PROFESSIONAL ENGINEERS IN PRIVATE PRACTICE A Practice Division of the NATIONAL SOCIETY OF PROFESSIONAL ENGINEERS 10059265 2017.10.17 Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 Standard General Conditions — Procurement Contracts Copyright © 2010: National Society of Professional Engineers 1420 King Street, Alexandria, VA 22314-2794 (703) 684-2882 http://www,nspe.org American Council of Engineering Companies 1015 15th Street N.W., Washington, DC 20005 (202) 347-7474 http://www,acec.org American Society of Civil Engineers 1801 Alexander Bell Drive, Reston, VA 20191-4400 (800) 548-2723 http://www,asce.org Associated General Contractors of America 2300 Wilson Boulevard, Suite 400, Arlington, VA 22201-3308 (703) 548-3118 The copyright for EJCDC P-700 is owned jointly by the four EJCDC sponsoring organizations listed above. The National Society of Professional Engineers (NSPE) is the Copyright Administrator for the EJCDC documents; please direct all inquiries and requests regarding EJCDC copyrights to NSPE. NOTE: EJCDC publications may be purchased at www.e`cdc.or , or from any of the four sponsoring organizations above. 10059265 2017.10.17 Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 Standard General Conditions — Procurement Contracts TABLE OF CONTENTS Page ARTICLE 1 - DEFINITIONS AND TERMINOLOGY......................................................................... 1 1.01 Defined Terms............................................................................................................................ 1 1.02 Terminology............................................................................................................................... 4 ARTICLE 2 - PRELIMINARY MATTERS........................................................................................... 5 2.01 Delivery of Bonds...................................................................................................................... 5 2.02 Evidence of Insurance................................................................................................................ 5 2.03 Copies of Documents................................................................................................................. 5 2.04 Commencement of Contract Times; Notice to Proceed............................................................. 5 2.05 Designated Representatives........................................................................................................ 5 2.06 Progress Schedule...................................................................................................................... 5 2.07 Preliminary Conference.............................................................................................................. 6 2.08 Safety...................................................................................................................................... 6 ARTICLE 3 - CONTRACT DOCUMENTS: INTENT AND AMENDING .......................................... 6 3.01 Intent........................................................................................................................................... 6 3.02 Standards, Specifications, Codes, Laws and Regulations.......................................................... 6 3.03 Reporting and Resolving Discrepancies.................................................................................... 7 3.04 Amending and Clarifying Contract Documents......................................................................... 8 ARTICLE 4 - BONDS AND INSURANCE........................................................................................... 8 4.01 Bonds..........................................................................................................................................8 4.02 Insurance.................................................................................................................................... 9 4.03 Licensed Sureties and Insurers................................................................................................... 9 ARTICLE 5 - SELLER'S RESPONSIBILITIES.................................................................................... 9 5.01 Supervision and Superintendence.............................................................................................. 9 5.02 Labor, Materials and Equipment.............................................................................................. 10 5.03 Laws and Regulations.............................................................................................................. 10 5.04 Or Equals.................................................................................................................................. 10 5.05 Taxes........................................................................................................................................ 11 5.06 Shop Drawings and Samples.................................................................................................... 11 5.07 Continuing Performance.......................................................................................................... 13 5.08 Seller's Warranties and Guarantees......................................................................................... 13 5.09 Indemnification........................................................................................................................ 15 5.10 Delegation of Professional Design Services............................................................................ 16 ARTICLE 6 - SHIPPING AND DELIVERY........................................................................................ 17 6.01 Shipping................................................................................................................................... 17 6.02 Delivery.................................................................................................................................... 17 6.03 Risk of Loss.............................................................................................................................. 17 6.04 Progress Schedule.................................................................................................................... 18 ARTICLE 7 - CHANGES: SCHEDULE AND DELAY...................................................................... 18 7.01 Changes in the Goods and Special Services............................................................................. 18 7.02 Changing Contract Price or Contract Times............................................................................ 18 10059265 2017.10.17 Hutchinson Utilities Commission Procurement Engine/Generator Set - Units 6 & 7 Standard General Conditions - Procurement Contracts 007000-i ARTICLE 8 - BUYER'S RIGHTS........................................................................................................ 19 8.01 Inspections and Testing............................................................................................................ 19 8.02 Non -Conforming Goods or Special Services........................................................................... 20 8.03 Correction Period..................................................................................................................... 22 ARTICLE 9 - ROLE OF ENGINEER................................................................................................... 22 9.01 Duties and Responsibilities...................................................................................................... 22 9.02 Clarifications and Interpretations............................................................................................. 22 9.03 Authorized Variations.............................................................................................................. 22 9.04 Rejecting Non -Conforming Goods and Special Services........................................................ 22 9.05 Decisions on Requirements of Contract Documents................................................................ 22 9.06 Claims and Disputes................................................................................................................. 23 ARTICLE10 - PAYMENT................................................................................................................... 24 10.01 Applications for Progress Payments........................................................................................ 24 10.02 Review of Applications for Progress Payments....................................................................... 24 10.03 Amount and Timing of Progress Payments............................................................................. 25 10.04 Suspension of or Reduction in Payment.................................................................................. 25 10.05 Final Application for Payment................................................................................................. 25 10.06 Final Payment........................................................................................................................... 26 10.07 Waiver of Claims..................................................................................................................... 26 ARTICLE 11 - CANCELLATION, SUSPENSION, AND TERMINATION ...................................... 26 11.01 Cancellation..............................................................................................................................26 11.02 Suspension of Performance by Buyer...................................................................................... 27 11.03 Suspension of Performance by Seller....................................................................................... 27 11.04 Breach and Termination........................................................................................................... 27 ARTICLE 12 - LICENSES AND FEES................................................................................................ 28 12.01 Intellectual Property and License Fees..................................................................................... 28 12.02 Seller's Infringement................................................................................................................ 29 12.03 Buyer's Infringement............................................................................................................... 29 12.04 Reuse of Documents................................................................................................................. 30 12.05 Electronic Data......................................................................................................................... 30 ARTICLE 13 - DISPUTE RESOLUTION............................................................................................ 31 13.01 Dispute Resolution Method...................................................................................................... 31 ARTICLE 14 - MISCELLANEOUS..................................................................................................... 31 14.01 Giving Notice........................................................................................................................... 31 14.02 Controlling Law....................................................................................................................... 31 14.03 Computation of Time............................................................................................................... 31 14.04 Cumulative Remedies.............................................................................................................. 32 14.05 Survival of Obligations............................................................................................................ 32 14.06 Entire Agreement..................................................................................................................... 32 10059265 2017.10.17 Hutchinson Utilities Commission Procurement Engine/Generator Set - Units 6 & 7 Standard General Conditions - Procurement Contracts 007000 -ii STANDARD GENERAL CONDITIONS FOR PROCUREMENT CONTRACTS ARTICLE 1 - DEFINITIONS AND TERMINOLOGY 1.01 Defined Terms A. Whenever used in the Bidding Requirements or Contract Documents and printed with initial capital letters, the terms listed below will have the meanings indicated which are applicable to the singular or plural thereof. In addition to terms specifically defined, terms with initial capital letters in the Contract Documents include references to identified articles and paragraphs, and the titles of other documents or forms. 10059265 2017.10.15 1. Addenda—Written or graphic instruments issued prior to the opening of Bids which clarify, correct, or change the Bidding Requirements or the proposed Contract Documents. 2. Agreement—The written instrument signed by both Buyer and Seller covering the Goods and Special Services and which lists the Contract Documents in existence on the Effective Date of the Agreement. 3. Application for Payment—The form acceptable to Buyer which is used by Seller in requesting progress and final payments and which is accompanied by such supporting documentation as is required by the Contract Documents. 4. Bid— The offer or proposal of a Seller submitted on the prescribed form setting forth the prices for the Goods and Special Services to be provided. 5. Bidder—The individual or entity that submits a Bid directly to Buyer. 6. Bidding Documents—The Bidding Requirements and the proposed Contract Documents (including all Addenda). 7. Bidding Requirements—The advertisement or invitation to bid, Instructions to Bidders, Bid security of acceptable form, if any, and Bid Form with any supplements. 8. Buyer—The individual or entity purchasing the Goods and Special Services. 9. Change Order—A document which is signed by Seller and Buyer and authorizes an addition, deletion, or revision to the Contract Documents or an adjustment in the Contract Price or the Contract Times, issued on or after the Effective Date of the Agreement. Change Orders may be the result of mutual agreement by Buyer and Seller, or of resolution of a Claim. Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 Standard General Conditions — Procurement Contracts 007000-1 10059265 2017.10.15 10. Claim—A demand or assertion by Buyer or Seller seeking an adjustment of Contract Price or Contract Times, or both, or other relief with respect to the terms of the Contract. A demand for money or services by a third party is not a Claim. 11. Contract—The entire and integrated written agreement between Buyer and Seller concerning the Goods and Special Services. The Contract supersedes prior negotiations, representations, or agreements, whether written or oral. 12. Contract Documents—Those items so designated in the Agreement. Shop Drawings and other Seller submittals are not Contract Documents, even if accepted, reviewed, or approved by Engineer or Buyer. 13. Contract Price—The moneys payable by Buyer to Seller for furnishing the Goods and Special Services in accordance with the Contract Documents as stated in the Agreement. 14. Contract Times—The times stated in the Agreement by which the Goods must be delivered and Special Services must be furnished. 15. Drawings—That part of the Contract Documents prepared or approved by Engineer which graphically shows the scope, extent, and character of the Goods and Special Services to be furnished by Seller. Shop Drawings and other Seller submittals are not Drawings as so defined. 16. Effective Date of the Agreement—The date indicated in the Agreement on which it becomes effective, but if no such date is indicated, it means the date on which the Agreement is signed and delivered by the last of the two parties to sign and deliver. 17. Engineer—The individual or entity designated as such in the Agreement. 18. Field Order—A written order issued by Engineer which requires minor changes in the Goods or Special Services but which does not involve a change in the Contract Price or Contract Times as confirmed by Buyer and Seller. 19. General Requirements—Sections of Division 1 of the Specifications. The General Requirements pertain to all sections of the Specifications. 20. Goods—The tangible and movable personal property that is described in the Contract Documents, regardless of whether the property is to be later attached to realty. 21. Goods and Special Services—The full scope of materials, equipment, other items, and services to be furnished by Seller, including Goods, as defined herein, and Special Services, if any, as defined herein. This term refers to both the Goods and the Special Services, or to either the Goods or the Special Services, and to any portion of the Goods or the Special Services, as the context requires. Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 Standard General Conditions — Procurement Contracts 007000-2 10059265 2017.10.15 22. Laws and Regulations; Laws or Regulations—Any and all applicable laws, rules, regulations, ordinances, codes, and orders of any and all governmental bodies, agencies, authorities, and courts having jurisdiction. 23. Milestone—A principal event specified in the Contract Documents relating to an intermediate completion date or time prior to the Contract Times. 24. Notice of Award—The written notice by Buyer to the Successful Bidder stating that upon timely compliance by the Successful Bidder with the conditions precedent listed therein, Buyer will sign and deliver the Agreement. 25. Notice to Proceed—A written notice given by Buyer to Seller fixing the date on which the Contract Times commence to run and on which Seller shall start to perform under the Contract. 26. Point of Destination—The specific address of the location where delivery of the Goods shall be made, as stated in the Agreement. 27. Project—The total undertaking of which the Goods and Special Services may be the whole, or only a part. 28. Project Manual—The documentary information prepared for bidding and furnishing the Goods and Special Services. A listing of the contents of the Project Manual is contained in its table of contents. 29. Samples—Physical examples of materials, equipment, or workmanship that are representative of some portion of the Goods and Special Services and -which establish the standards by which such portion of the Goods and Special Services will be judged. 30. Seller—The individual or entity furnishing the Goods and Special Services. 31. Shop Drawings—All drawings, diagrams, illustrations, schedules, and other data or information which are specifically prepared or assembled by or for Seller and submitted by Seller to illustrate some portion of the Goods and Special Services. 32. Special Services—Services associated with the Goods to be furnished by Seller as required by the Contract Documents. 33. Specifications—That part of the Contract Documents consisting of written requirements for materials, equipment, systems, standards and workmanship as applied to the furnishing of the Goods and Special Services, and certain administrative requirements and procedural matters applicable thereto. 34. Successful Bidder—The Bidder submitting a responsive Bid, to whom Buyer makes an award. Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 Standard General Conditions — Procurement Contracts 007000-3 35. Supplementary Conditions—That part of the Contract Documents which amends or supplements these General Conditions. 36. Work Change Directive—A written statement to Seller issued on or after the Effective Date of the Agreement and signed by Buyer ordering an addition, deletion, or other revision in the Contract Documents with respect to the Goods and Special Services. A Work Change Directive will not change the Contract Price or the Contract Times but is evidence that the parties expect that the change ordered or documented by a Work Change Directive will be incorporated in a subsequently issued Change Order following negotiations by the parties as to its effect, if any, on the Contract Price or Contract Times. 1.02 Terminology A. The words and terms discussed in Paragraphs 1.02.13 and 1.02.0 are not defined, but have the indicated meanings when used in the Bidding Requirements or Contract Documents. B. Intent of Certain Terms or Adjectives: 10059265 2017.10.15 L The Contract Documents include the terms "as allowed," "as approved," "as ordered," "as directed" or terms of like effect or import to authorize an exercise of professional judgment by Engineer. In addition, the adjectives "reasonable," "suitable," "acceptable," "proper," "satisfactory," or adjectives of like effect or import are used to describe an action or determination of Engineer as to the Goods and Special Services. It is intended that such exercise of professional judgment, action, or determination will be commercially reasonable and will be solely to evaluate, in general, the Goods and Special Services for compliance with the requirements of and information in the Contract Documents and conformance with the design concept of the completed Project as a functioning whole as shown or indicated in the Contract Documents (unless there is a specific statement indicating otherwise). The use of any such term or adjective shall not be effective to assign to Engineer any duty or authority to supervise or direct the furnishing of Goods or Special Services or any duty or authority to undertake responsibility contrary to any other provision of the Contract Documents. 2. The word "non -conforming" when modifying the words "Goods and Special Services," "Goods," or "Special Services," refers to Goods and Special Services that fail to conform to the Contract Documents. 3. The word "receipt" when referring to the Goods, shall mean the physical taking and possession by the Buyer under the conditions specified in Paragraph 8.01.13.3. 4. The word "day" means a calendar day of 24 hours measured from midnight to the next midnight. 5. The word "furnish," when used in connection with the Goods and Special Services shall mean to supply and deliver said Goods to the Point of Destination (or some other specified Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 Standard General Conditions — Procurement Contracts 007000-4 location) and to perform said Special Services fully, all in accordance with the Contract Documents. C. Unless stated otherwise in the Contract Documents, words or phrases that have a well-known technical or construction industry or trade meaning are used in the Contract Documents in accordance with such recognized meaning. ARTICLE 2 - PRELIMINARY MATTERS 2.01 Delivery of Bonds A. When Seller delivers the executed counterparts of the Agreement to Buyer, Seller also shall deliver such bonds as Seller may be required to furnish. 2.02 Evidence of Insurance A. When Seller delivers the executed counterparts of the Agreement to Buyer, Seller shall deliver to Buyer, with copies to each additional insured identified by name in the Supplementary Conditions, certificates of insurance (and other evidence of insurance which either of them or any additional insured may reasonably request) which Seller is required to purchase and maintain in accordance with Article 4. 2.03 Copies of Documents A. Buyer shall furnish Seller up to five printed or hard copies of the Contract Documents. Additional copies will be furnished upon request at the cost of reproduction. 2.04 Commencement of Contract Times; Notice to Proceed A. The Contract Times will commence to run on the thirtieth day after the Effective Date of the Agreement or, if a Notice to Proceed is given, on the day indicated in the Notice to Proceed. A Notice to Proceed may be given at any time within 30 days after the Effective Date of the Agreement. In no event will the Contract Times commence to run later than the sixtieth day after the day of Bid opening or the thirtieth day after the Effective Date of the Agreement, whichever date is earlier. 2.05 Designated Representatives A. Buyer and Seller shall each designate its representative at the time the Agreement is signed. Each representative shall have full authority to act on behalf of and make binding decisions in any matter arising out of or relating to the Contract. 2.06 Progress Schedule A. Within 15 days after the Contract Times start to run, Seller shall submit to Buyer and Engineer an acceptable progress schedule of activities, including at a minimum, Shop Drawing and Sample submittals, tests, and deliveries as required by the Contract Documents. No progress payment will be made to Seller until an acceptable schedule is submitted to Buyer and Engineer. 10059265 2017.10.15 Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 Standard General Conditions — Procurement Contracts 007000-5 B. The progress schedule will be acceptable to Buyer and Engineer if it provides an orderly progression of the submittals, tests, and deliveries to completion within the specified Milestones and the Contract Times. Such acceptance will not impose on Buyer or Engineer responsibility for the progress schedule, for sequencing, scheduling, or progress of the work nor interfere with or relieve Seller from Seller's full responsibility therefor. Such acceptance shall not be deemed to acknowledge the reasonableness and attainability of the schedule. 2.07 Preliminary Conference A. Within 20 days after the Contract Times start to run, a conference attended by Seller, Buyer, Engineer and others as appropriate will be held to establish a working understanding among the parties as to the Goods and Special Services and to discuss the schedule referred to in Paragraph 2.06.A, procedures for handling Shop Drawings and other submittals, processing Applications for Payment, and maintaining required records. 2.08 Safety A. Buyer and Seller shall comply with all applicable Laws and Regulations relating to the safety of persons or property, or to the protection of persons or property from damage, injury, or loss. When Seller's personnel, or the personnel of any subcontractor to Seller, are present at the Point of Destination or any work area or site controlled by Buyer, the Seller shall be responsible for the compliance by such personnel with any applicable requirements of Buyer's safety programs that are made known to Seller. ARTICLE 3 - CONTRACT DOCUMENTS: INTENT AND AMENDING 3.01 Intent A. The Contract Documents are complementary; what is called for by one is as binding as if called for by all. B. Any labor, documentation, services, materials, or equipment that may reasonably be inferred from the Contract Documents or from prevailing custom or trade usage as being required to produce or furnish the indicated Goods and Special Services will be provided, whether or not specifically called for, at no additional cost to Buyer. C. Clarifications and interpretations of, or notifications of minor variations and deviations in, the Contract Documents, will be issued by Engineer as provided in Article 9. 3.02 Standards, Specifications, Codes, Laws and Regulations A. Reference to standards, specifications, manuals, or codes of any technical society, organization, or association, or to Laws and Regulations, whether such reference be specific or by implication, shall mean the standard, specification, manual, code, or Laws and Regulations in effect at the time of opening of Bids (or on the Effective Date of the Agreement if there were no Bids), except as may be otherwise specifically stated in the Contract Documents. 10059265 2017.10.15 Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 Standard General Conditions — Procurement Contracts 007000-6 B. No provision of any such standard, specification, manual or code, or any instruction of a supplier shall be effective to change the duties or responsibilities of Buyer or Engineer, or any of their subcontractors, consultants, agents, or employees from those set forth in the Contract Documents, nor shall any such provision or instruction be effective to assign to Buyer or Engineer, or any of their consultants, agents, or employees any duty or authority to supervise or direct the performance of Seller's obligations or any duty or authority to undertake responsibility inconsistent with the provisions of the Contract Documents. 3.03 Reporting and Resolving Discrepancies A. Reporting Discrepancies: 1. Seller's Review of Contract Documents Before the Performance of the Contract: Before performance of the Contract, Seller shall carefully study and compare the Contract Documents and check and verify pertinent figures therein and all applicable field measurements. Seller shall promptly report in writing to Engineer any conflict, error, ambiguity, or discrepancy which Seller discovers or has actual knowledge of and shall obtain a written interpretation or clarification from Engineer before proceeding with the furnishing of any Goods and Special Services affected thereby. 2. Seller's Review of Contract Documents During the Performance of the Contract: If, during the performance of the Contract, Seller discovers any conflict, error, ambiguity, or discrepancy within the Contract Documents or between the Contract Documents and any provision of any Law or Regulation applicable to the performance of the Contract, any standard, specification, manual or code, or of any instruction of any Supplier, Seller shall promptly report it to Engineer in writing. Seller shall not proceed with the furnishing of the Goods and Special Services affected thereby until an amendment to or clarification of the Contract Documents has been issued. 3. Seller shall not be liable to Buyer or Engineer for failure to report any conflict, error, ambiguity, or discrepancy in the Contract Documents unless Seller had actual knowledge thereof. B. Resolving Discrepancies: Except as may be otherwise specifically stated in the Contract Documents, the provisions of the Contract Documents shall take precedence in resolving any conflict, error, ambiguity, or discrepancy between the provisions of the Contract Documents and: 10059265 2017.10.15 1. the provisions of any standard, specification, manual, code, or instruction (whether or not specifically incorporated by reference in the Contract Documents); or 2. the provisions of any Laws or Regulations applicable to the furnishing of the Goods and Special Services (unless such an interpretation of the provisions of the Contract Documents would result in violation of such Law or Regulation). Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 Standard General Conditions — Procurement Contracts 007000-7 3.04 Amending and Clarifying Contract Documents A. The Contract Documents may be amended to provide for additions, deletions, and revisions to the Goods and Special Services or to modify contractual terms and conditions by a Change Order. B. Buyer may issue a Work Change Directive providing for additions, deletions, or revisions to the Goods and Special Services, in which case (1) the Contract Price shall be equitably adjusted to account for any reasonable and necessary credits to Buyer for any such deletion, or for costs (including reasonable overhead and profit) incurred by Seller to accommodate such an addition or revision and (2) the Contract Times shall be equitably adjusted to account for any impact on progress and completion of performance. Such adjustments subsequently shall be duly set forth in a Change Order. C. The requirements of the Contract Documents may be supplemented, and minor variations and deviations in the Goods and Special Services may be authorized, by one or more of the following ways: 1. A Field Order; 2. Engineer's approval of a Shop Drawing or Sample (subject to the provisions of Paragraph 5.06.D.3); or 3. Engineer's written interpretation or clarification. ARTICLE 4 - BONDS AND INSURANCE 4.01 Bonds A. Seller shall furnish to Buyer performance and payment bonds, each in an amount at least equal to the Contract Price, as security for the faithful performance and payment of all of Seller's obligations under the Contract Documents. These bonds shall remain in effect until 1) one year after the date when final payment becomes due or 2) completion of the correction period specified in Paragraph 8.03, whichever is later, except as provided otherwise by Laws or Regulations or by the Contract Documents. Seller shall also furnish such other bonds as are required by the Contract Documents. B. All bonds shall be in the form prescribed by the Contract Documents except as provided otherwise by Laws or Regulations, and shall be executed by such sureties as are named in the current list of "Companies Holding Certificates of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring Companies" as published in Circular 570 (amended) by the Financial Management Service, Surety Bond Branch, U.S. Department of the Treasury. All bonds signed by an agent or attorney-in-fact must be accompanied by a certified copy of that individual's authority to bind the surety. The evidence of authority shall show that it is effective on the date the agent or attorney-in-fact signed each bond. C. If the surety on any bond furnished by Seller is declared bankrupt or becomes insolvent or its right to do business is terminated in any state where any part of the Project is located or it ceases 10059265 2017.10.15 Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 Standard General Conditions — Procurement Contracts 007000-8 to meet the requirements of Paragraph 4.0l.B, Seller shall promptly notify Buyer and Engineer and shall, within 20 days after the event giving rise to such notification, provide another bond and surety, both of which shall comply with the requirements of Paragraphs 4.01.B and 4.02. 4.02 Insurance A. Seller shall provide insurance of the types and coverages and in the amounts stipulated in the Supplementary Conditions. B. Failure of Buyer to demand certificates of insurance or other evidence of Seller's full compliance with these insurance requirements or failure of Buyer to identify a deficiency in compliance from the evidence provided shall not be construed as a waiver of Seller's obligation to maintain such insurance. C. Upon assignment of this Contract, Seller shall comply with the written request of assignee to provide certificates of insurance to assignee. D. Buyer does not represent that insurance coverage and limits established in this Contract necessarily will be adequate to protect Seller. E. The insurance and insurance limits required herein shall not be deemed as a limitation on Seller's liability under the indemnities granted to Buyer in the Contract Documents. 4.03 Licensed Sureties and Insurers A. All bonds and insurance required by the Contract Documents to be purchased and maintained by Buyer or Seller shall be obtained from surety or insurance companies that are duly licensed or authorized in the jurisdiction in which the Project is located to issue bonds or insurance policies for the limits and coverages so required. Such surety and insurance companies shall also meet such additional requirements and qualifications as may be provided in the Supplementary Conditions. ARTICLE 5 - SELLER'S RESPONSIBILITIES 5.01 Supervision and Superintendence A. Seller shall supervise, inspect, and direct the furnishing of the Goods and Special Services competently and efficiently, devoting such attention thereto and applying such skills and expertise as may be necessary to perform its obligations in accordance with the Contract Documents. Seller shall be solely responsible for the means, methods, techniques, sequences, and procedures necessary to perform its obligations in accordance with the Contract Documents. Seller shall not be responsible for the negligence of Buyer or Engineer in the design or specification of a specific means, method, technique, sequence, or procedure that is shown or indicated in and expressly required by the Contract Documents. 10059265 2017.10.15 Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 Standard General Conditions — Procurement Contracts 007000-9 5.02 Labor, Materials and Equipment A. Seller shall provide competent, qualified and trained personnel in all aspects of its performance of the Contract. B. All Goods, and all equipment and material incorporated into the Goods, shall be as specified, and unless specified otherwise in the Contract Documents, shall be: 1. new, and of good quality; 2. protected, assembled, connected, cleaned, and conditioned in accordance with the original manufacturer's instructions; and 3. shop assembled to the greatest extent practicable. 5.03 Laws and Regulations A. Seller shall give all notices required by and shall comply with all Laws and Regulations applicable to the performance of its obligations in accordance with the Contract Documents. Except where otherwise expressly required by such Laws and Regulations, neither Buyer nor Engineer shall be responsible for monitoring Seller's compliance with any Laws or Regulations. B. If Seller furnishes Goods and Special Services knowing or having reason to know that such furnishing is contrary to Laws or Regulations, Seller shall bear all claims, costs, losses, and damages (including but not limited to all fees and charges of engineers, architects, attorneys, and other professionals and all court or arbitration or other dispute resolution costs) arising out of or relating to such performance. It shall not be Seller's responsibility to make certain that the Specifications and Drawings are in accordance with Laws and Regulations, but this provision shall not relieve Seller of Seller's obligations under Paragraph 3.03. C. Changes in Laws or Regulations not known at the time of opening of Bids (or, on the Effective Date of the Agreement if there were no Bids) having an effect on the cost or time of performance shall be the subject of an adjustment in Contract Price or Contract Times. If Buyer and Seller are unable to agree on entitlement to or on the amount or extent, if any, of any such adjustment, a Claim may be made therefor as provided in Paragraph 9.06. 5.04 Or Equals A. Whenever the Goods, or an item of material or equipment to be incorporated into the Goods, are specified or described in the Contract Documents by using the name of a proprietary item or the name of a particular supplier or manufacturer, the specification or description is intended to establish the type, function, appearance, and quality required. Unless the specification or description contains or is followed by words reading that no like, equivalent, or "or -equal" item is permitted, other items of material or equipment or material or equipment of other suppliers or manufacturers may be submitted to Buyer for Engineer's review. 10059265 2017.10.15 Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 Standard General Conditions — Procurement Contracts 007000-10 If in Engineer's sole discretion, such an item of material or equipment proposed by Seller is functionally equal to that named and sufficiently similar so that no change in related work will be required, it may be considered by Engineer as an "or -equal" item. 2. For the purposes of this paragraph, a proposed item of material or equipment may be considered functionally equal to an item so named only if: a. in the exercise of reasonable judgment, Engineer determines that: 1) it is at least equal in quality, durability, appearance, strength, and design characteristics; 2) it will reliably perform at least equally well the function imposed by the design concept of the completed Project as a functioning whole; 3) it has an acceptable record of performance and availability of responsive service; and b. Seller certifies that if approved: 1) there will be no increase in any cost, including capital, installation or operating costs, to Buyer; and 2) the proposed item will conform substantially to the detailed requirements of the item named in the Contract Documents. B. Engineer's Evaluation: Engineer will be allowed a reasonable time within which to evaluate each proposal or submittal made pursuant to Paragraph 5.04.A. Engineer will be the sole judge of whether to accept or reject such a proposal or submittal. No "or -equal" will be ordered, manufactured or utilized until Engineer's review is complete, which will be evidenced by an approved Shop Drawing. Engineer will advise Buyer and Seller in writing of any negative determination. Notwithstanding Engineer's approval of an "or -equal" item, Seller shall remain obligated to comply with the requirements of the Contract Documents. C. Special Guarantee: Buyer may require Seller to furnish at Seller's expense a special performance guarantee or other surety with respect to any such proposed "or -equal." D. Data: Seller shall provide all data in support of any such proposed "or -equal" at Seller's expense. 5.05 Taxes A. Seller shall be responsible for all taxes and duties arising out of the sale of the Goods and the furnishing of Special Services. All taxes are included in the Contract Price, except as noted in the Supplementary Conditions. 5.06 Shop Drawings and Samples A. Seller shall submit Shop Drawings and Samples to Buyer for Engineer's review and approval in accordance with the schedule required in Paragraph 2.06.A. All submittals will be identified as required and furnished in the number of copies specified in the Contract Documents. The data shown on the Shop Drawings will be complete with respect to quantities, dimensions, specified performance and design criteria, materials, and similar data to show Engineer the services, materials, and equipment Seller proposes to provide. 10059265 2017.10.15 Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 Standard General Conditions — Procurement Contracts 007000-11 B. Where a Shop Drawing or Sample is required by the Contract Documents, any related work performed prior to Engineer's approval of the pertinent submittal will be at the sole expense and responsibility of Seller. C. Submittal Procedures: 1. Before submitting each Shop Drawing or Sample, Seller shall have determined and verified: a. all field measurements (if required), quantities, dimensions, specified performance criteria, installation requirements, materials, catalog numbers, and similar information with respect thereto; and b. that all materials are suitable with respect to the indicated application, fabrication, shipping, handling, storage, assembly, and installation pertaining to the furnishing of Goods and Special Services. 2. Seller shall also have reviewed and coordinated each Shop Drawing or Sample with the Contract Documents. 3. Each submittal shall bear a stamp or include a written certification from Seller that Seller has reviewed the subject submittal and confirmed that it is in compliance with the requirements of the Contract Documents. Both Buyer and Engineer shall be entitled to rely on such certification from Seller. 4. With each submittal, Seller shall give Buyer and Engineer specific written notice of any variations that the Shop Drawing or Sample may have from the requirements of the Contract Documents. This notice shall be both in a written communication separate from the submittal and by specific notation on each Shop Drawing or Sample. D. Engineer's Review: 1. Engineer will provide timely review of Shop Drawings and Samples. 2. Engineer's review and approval will be only to determine if the Goods and Special Services covered by the submittals will, after installation or incorporation in the Project, conform to the information given in the Contract Documents and be compatible with the design concept of the completed Project as a functioning whole. 3. Engineer's review and approval shall not relieve Seller from responsibility for any variation from the requirements of the Contract Documents unless Seller has complied with the requirements of Paragraph 5.06.C.4 and Engineer has given written approval of each such variation by specific written notation thereof incorporated in or accompanying the Shop Drawing or Sample. Engineer's review and approval shall not relieve Seller from responsibility for complying with the requirements of Paragraph 5.06.C.1. E. Resubmittal Procedures: 10059265 2017.10.15 Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 Standard General Conditions — Procurement Contracts 007000-12 1. Seller shall make corrections required by Engineer and shall return the required number of corrected copies of Shop Drawings and submit, as required new Samples for review and approval. Seller shall direct specific attention in writing to any revisions other than the corrections called for by Engineer on previous submittals. 5.07 Continuing Performance A. Seller shall adhere to the progress schedule established in accordance with Paragraph 2.06.A., and the Goods shall be delivered and the Special Services furnished within the Contract Times specified in the Agreement. B. Seller shall carry on furnishing of the Goods and Special Services and adhere to the progress schedule during all disputes or disagreements with Buyer. No furnishing of Goods and Special Services shall be delayed or postponed pending resolution of any disputes or disagreements, except as permitted by Paragraphs 11.03 or 11.04, or as Buyer and Seller may otherwise agree in writing. 5.08 Seller's Warranties and Guarantees A. Seller warrants and guarantees to Buyer that the title to the Goods conveyed shall be proper, its transfer rightful, and free from any security interest, lien, or other encumbrance. Seller shall defend, indemnify, and hold Buyer harmless against any liens, claims, or demands contesting or affecting title of the Goods conveyed. B. Seller warrants and guarantees to Buyer that all Goods will be free from defects in materials and workmanship ("Equipment Warranty") for a period first to expire: (i) ending twelve (12) months after the Project has first been placed in service or upon demonstrated capability to support such service or has been commissioned, or (ii) ending eighteen (18) months from the date of first shipment (the "Warranty Period"). If a defect in material or workmanship occurs during the Warranty Period, Seller will during normal working hours and through a Caterpillar dealer or other source approved by Seller: (1) provide to Buyer, at Seller's election, new, remanufactured, or Seller -approved repaired parts or assembled components needed to correct the defect (items replaced under the Equipment Warranty will become the property of Seller), and (2) lubricating oil, filters, antifreeze, and other service items made unusable due to the defect, as required. Seller shall provide reasonable or customary labor and/or technical direction needed to correct the defect, including labor to disassemble/reassemble the affected Goods, as required. In such case Seller shall provide reasonable travel expenses for authorized mechanics, including meals, mileage, and lodging. All replacement parts and repaired parts are warranted for twelve (12) months, not to exceed twelve (12) months from the original Warranty Period. Seller's sole liability and responsibility, and Buyer's sole and exclusive remedy, with respect to the Equipment Warranty shall be limited to the remedies set forth above. C. Seller's warranty and guarantee hereunder excludes defects or damage caused by: 10059265 2017.10.15 abuse, improper modification, improper maintenance, unauthorized installation, or improper operation by persons other than Seller; or Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 Standard General Conditions — Procurement Contracts 007000-13 2. corrosion or chemical attack, unless corrosive or chemically -damaging conditions were disclosed by Buyer in the Contract Documents and the Contract Documents required the Goods to withstand such conditions; 3. failures resulting from attachments, fixtures, housings, accessory items and parts not sold or approved by Seller 4. use in a manner contrary to Seller's written instructions for installation, operation, and maintenance; or 5. normal wear and tear under normal usage. D. Seller's obligation to furnish the Goods and Special Services in accordance with the Contract Documents shall be absolute. None of the following will constitute an acceptance of Goods and Special Services that are non -conforming, or a release of Seller's obligation to furnish the Goods and Special Services in accordance with the Contract Documents: 1. observations by Buyer or Engineer; 2. recommendation by Engineer or payment by Buyer of any progress or final payment; 3. use of the Goods by Buyer; 4. any acceptance by Buyer (subject to the provisions of Paragraph 8.02.D.1) or any failure to do so; 5. the issuance of a notice of acceptance by Buyer pursuant to the provisions of Article 8; 6. any inspection, test or approval by others; or 7. any correction of non -conforming Goods and Special Services by Buyer. E. Buyer shall promptly notify Seller of any breach of Seller's warranties or guarantees and shall: (a) Provide Seller timely notice of any claim under the Equipment Warranty with sufficient detail and promptly make the Goods available for repair; 10059265 2017.10.15 (b) Take steps to prevent a defect from becoming more severe; (c) Provide Seller with reasonable access to the Goods and allow Seller reasonable use of existing Site infrastructure (including the use of tools, tackle, lifting equipment and the like); (d) Perform all required maintenance (including the use of the specified grades of fuel, oil, lubricants, and coolant) in accordance with Seller's recommendations and replace necessary items due to normal wear and tear; (e) Allow Seller access to all electronically stored data and allow Seller to take samples of all operating media; Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 Standard General Conditions — Procurement Contracts 007000-14 (f) Pay any and all costs not expressly set forth as obligations of Seller, including costs for Seller to investigate potential warranty claims not caused by a defect in material or workmanship of the Equipment; and (g) Send or work with Seller's agent to send, at Seller' request and at Seller's cost, parts replaced under the Equipment Warranty, properly packed, to the addressee nominated by Seller, and assist Seller with any necessary customs clarifications for re-export.. F. Seller makes no implied warranties under this Contract, including WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. All other representations to the original Buyer, and all other obligations or liabilities, including liability for incidental, indirect, exemplary, special, or consequential damages as well as for loss of product, loss of profit (except any profit of Seller from this Contract), loss of use, losses resulting from or related to downtime of the Equipment or the cost of replacement power. Remedies under this warranty are limited to the provision of material and services as specified herein. Seller's sole liability and responsibility and Buyer's sole and exclusive remedy with respect to this warranty shall be limited to the remedies set forth above. 5.09 Indemnification A. To the fullest extent permitted by Laws and Regulations, Seller shall indemnify and hold harmless Buyer and Engineer, and the officers, directors, members, partners, employees, agents, consultants, contractors, and subcontractors of each and any of them from and against all claims, costs, losses, and damages relating to third party bodily injury or property damage (including but not limited to all fees and charges of engineers, architects, attorneys, and other professionals and all court or arbitration or other dispute resolution costs) arising out of or relating to the performance of Seller's obligations under the Contract Documents, provided that any such claim, cost, loss, or damages attributable to bodily injury, sickness, disease, or death, or to injury to or destruction of tangible property (other than the Goods themselves), including the loss of use resulting therefrom, but only to the extent caused by any negligent act or omission of Seller, or any individual or entity directly or indirectly employed by Seller or anyone for whose acts Seller may be liable. B. In any and all claims against Buyer or Engineer or any of their respective assignees, consultants, agents, officers, directors, members, partners, employees, agents, consultants, contractors, or subcontractors, by any employee (or the survivor or personal representative of such employee) of Seller, any subcontractor, any supplier, or any individual or entity directly or indirectly employed by any of them to furnish any of the Goods and Special Services, or anyone for whose acts any of them may be liable, the indemnification obligation under Paragraph 5.09.A shall not be limited in any way by any limitation on the amount or type of damages, compensation, or benefits payable by or for seller or any such subcontractor, supplier, or other individual or entity under workers' compensation acts, disability benefit acts, or other employee benefit acts. 10059265 2017.10.15 Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 Standard General Conditions — Procurement Contracts 007000-15 C. The indemnification obligations of Seller under Paragraph 5.09.A shall not extend to the liability of Engineer and Engineer's officers, directors, partners, employees, agents, and consultants arising out of: the preparation or approval of, or the failure to prepare or approve, maps, Drawings, opinions, reports, surveys, Change Orders, designs, or Specifications; or 2. giving directions or instructions, or failing to give them, if that is the primary cause of the injury or damage. D. To the fullest extent permitted by Laws and Regulations, Buyer shall indemnify and hold harmless Seller, and the officers, directors, members, partners, employees, agents, consultants, contractors, and subcontractors of each and any of them from and against all claims, costs, losses, and damages relating to third party bodily injury or property damage (including but not limited to all fees and charges of engineers, architects, attorneys, and other professionals and all court or arbitration or other dispute resolution costs) arising out of or relating to the performance of Buyer or Engineer's obligations under the Contract Documents, provided that any such claim, cost, loss, or damages attributable to bodily injury, sickness, disease, or death, or to injury to or destruction of tangible property, including the loss of use resulting therefrom, but only to the extent caused by any negligent act or omission of Seller, Engineer or any individual or entity directly or indirectly employed by Seller or Engineer or anyone for whose acts Seller or Engineer may be liable. 5.10 Delegation of Professional Design Services A. Seller will not be required to provide professional design services unless such services are specifically required by the Contract Documents or unless such services are required to carry out Seller's responsibilities for furnishing the Goods and Special Services. Seller shall not be required to provide professional services in violation of applicable law. B. If professional design services or certifications by a design professional related to the Goods and Special Services are specifically required of Seller by the Contract Documents, Buyer and Engineer will specify all performance and design criteria that such services must satisfy. Seller shall cause such services or certifications to be provided by a properly licensed professional, whose signature and seal shall appear on all drawings, calculations, specifications, certifications, Shop Drawings and other submittals prepared by such professional. Shop Drawings and other submittals related to the Goods and Special Services designed or certified by such professional, if prepared by others, shall bear such professional's written approval when submitted to Engineer. C. Buyer and Engineer shall be entitled to rely upon the adequacy, accuracy and completeness of the services, certifications or approvals performed by such design professionals, provided Buyer and Engineer have specified to Seller all performance and design criteria that such services must satisfy. D. Pursuant to this Paragraph 5. 10, Engineer's review and approval of design calculations and design drawings will be only for the limited purpose of checking for conformance with performance and design criteria given and the design concept expressed in the Contract 10059265 2017.10.15 Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 Standard General Conditions — Procurement Contracts 007000-16 Documents. Engineer's review and approval of Shop Drawings and other submittals (except design calculations and design drawings) will be only for the purpose stated in Paragraph 5.06.D.2. E. Seller shall not be responsible for the adequacy of the performance or design criteria required by the Contract Documents. ARTICLE 6 - SHIPPING AND DELIVERY 6.01 Shipping A. Seller shall select the carrier and bear all costs of packaging, transportation, insurance, special handling and any other costs associated with shipment and delivery. 6.02 Delivery A. Seller shall deliver the Goods F.O.B. the Point of Destination in accordance with the Contract Times set forth in the Agreement, or other date agreed to by Buyer and Seller. B. Seller shall provide written notice to Buyer at least 10 days before shipment of the manner of shipment and the anticipated delivery date. The notice shall also include any instructions concerning special equipment or services required at the Point of Destination to unload and care for the Goods. Seller shall also require the carrier to give Buyer at least 24 hours notice by telephone prior to the anticipated time of delivery. C. Buyer will be responsible and bear all costs for unloading the Goods from carrier. D. Buyer will assure that adequate facilities are available to receive delivery of the Goods during the Contract Times for delivery set forth in the Agreement, or another date agreed by Buyer and Seller. E. No partial deliveries shall be allowed, unless permitted or required by the Contract Documents or agreed to in writing by Buyer. 6.03 Risk of Loss A. Risk of loss and insurable interests transfer from Seller to Buyer upon Buyer's receipt of the Goods. B. Notwithstanding the provisions of Paragraph 6.03.A, if Buyer reasonably rejects the Goods as non -conforming, the risk of loss on such Goods shall remain with Seller until Seller corrects the non -conformity or Buyer accepts the Goods. If rejected Goods remain at the Point of Destination pending modification and acceptance, then Seller shall be responsible for arranging adequate protection and maintenance of the Goods at Seller's expense. 10059265 2017.10.15 Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 Standard General Conditions — Procurement Contracts 007000-17 6.04 Progress Schedule A. Seller shall adhere to the progress schedule established in accordance with Paragraph 2.06 as it may be adjusted from time to time as provided below. 1. Seller shall submit to Engineer for acceptance (to the extent indicated in Paragraph 2.06) proposed adjustments in the progress schedule that will not result in changing the Contract Times. Such adjustments will comply with any provisions of the General Requirements applicable thereto. 2. Proposed adjustments in the progress schedule that will change the Contract Times shall be submitted in accordance with the requirements of Article 7. Adjustments in Contract Times may only be made by a Change Order. ARTICLE 7 - CHANGES: SCHEDULE AND DELAY 7.01 Changes in the Goods and Special Services A. Buyer may at any time, without notice to any surety, make an addition, deletion, or other revision to the Contract Documents with respect to the Goods and Services, within the general scope of the Contract, by a Change Order or Work Change Directive. Upon receipt of any such document, Seller shall promptly proceed with performance pursuant to the revised Contract Documents (except as otherwise specifically provided). B. If Seller concludes that a Work Change Directive issued by Buyer affects the Contract Price or Contract Times, then Seller shall notify Buyer within 15 days after Seller has received the Work Change Directive, and submit written supporting data to Buyer within 45 days after such receipt. If Seller fails to notify Buyer within 30 days, Seller waives any Claim for such adjustment. If Buyer and Seller are unable to agree on entitlement to, or on the amount or extent, if any, of an adjustment in the Contract Price or Contract Times, or both, that should be allowed as a result of a Work Change Directive, a Claim may be made therefor as provided in Paragraph 9.06. C. Seller shall not suspend performance while Buyer and Seller are in the process of making such changes and any related adjustments to Contract Price or Contract Times. 7.02 Changing Contract Price or Contract Times A. The Contract Price or Contract Times may only be changed by a Change Order. B. Any Claim for an adjustment in the Contract Price or Contract Times shall be based on written notice submitted by the party making the Claim to the Engineer and the other party to the Contract in accordance with the provisions of Paragraph 9.06. C. If Seller is prevented from delivering the Goods or performing the Special Services within the Contract Times for any unforeseen reason beyond its control and not attributable to its actions or inactions, then Seller shall be entitled to an adjustment of the Contract Times to the extent attributable to such reason. Such reasons include but are not limited to acts or neglect by Buyer, inspection delays, fires, floods, epidemics, abnormal weather conditions, acts of God, and other 10059265 2017.10.15 Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 Standard General Conditions — Procurement Contracts 007000-18 like matters. If such an event occurs and delays Seller's performance, Seller shall notify Buyer in writing within 30 days of knowing or having reason to know of the beginning of the event causing the delay, stating the reason therefor. D. Seller shall not be entitled to an adjustment in Contract Price or Contract Times for delays within the control of Seller. Delays attributable to and within the control of Seller's subcontractors or suppliers shall be deemed to be delays within the control of Seller. E. If Seller is prevented from delivering the Goods or furnishing the Special Services within the Contract Times due to the actions or inactions of Buyer, Seller shall be entitled to any reasonable and necessary additional costs arising out of such delay to the extent directly attributable to Buyer. F. Neither Buyer nor Seller shall be entitled to any damages arising from delays which are beyond the control of both Buyer and Seller, including but not limited to fires, floods, epidemics, abnormal weather conditions, acts of God, and other like matters. ARTICLE 8 - BUYER'S RIGHTS 8.01 Inspections and Testing A. General: 10059265 2017.10.15 1. The Contract Documents specify required inspections and tests. The Goods shall be subject to Seller's normal inspections and standard tests at the Seller's facility. Buyer shall have the rights to witness such factory inspections and tests. Buyer shall have the right to perform, or cause to be performed, reasonable inspections of the Goods at the Point of Destination. Seller shall allow Buyer a reasonable time to witness or perform such inspections or tests. 2. Seller shall reimburse Buyer for all expenses, except for travel, lodging, and subsistence expenses of Buyer's and Engineer's representatives, for inspections and tests specified in the Contract Documents. If as the result of any such specified testing the Goods are determined to be non -conforming, then Seller shall also bear the travel, lodging, and subsistence expenses of Buyer's and Engineer's representatives, and all expenses of re- inspection or retesting. Buyer shall bear all expenses of inspections and tests that are not specified in the Contract Documents (other than any re -inspection or retesting resulting from a determination of non- conformity, as set forth in Paragraph 8.0l.A.2 immediately above); provided, however, that if as the result of any such non-specified inspections or testing the Goods are determined to be non -conforming, then Seller shall bear all expenses of such inspections and testing, and of any necessary re -inspection and retesting. 4. Seller shall provide Buyer timely written notice of the readiness of the Goods for all inspections, tests, or approvals which the Contract Documents specify are to be observed by Buyer prior to shipment. Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 Standard General Conditions — Procurement Contracts 007000-19 5. Buyer will give Seller timely notice of all specified tests, inspections, and approvals of the Goods which are to be conducted at the Point of Destination. 6. If, on the basis of any inspections or testing, the Goods appear to be conforming, Buyer will give Seller prompt notice thereof. If on the basis of said inspections or testing, the Goods appear to be non -conforming, Buyer will give Seller prompt notice thereof and will advise Seller of the remedy Buyer elects under the provisions of Paragraph 8.02. 7. Neither payments made by Buyer to Seller prior to any tests or inspections, nor any tests or inspections shall constitute acceptance of non -conforming Goods, or prejudice Buyer's rights under the Contract. B. Inspection on Delivery: Buyer or Engineer will visually inspect the Goods upon delivery solely for purposes of identifying the Goods and general verification of quantities and observation of apparent condition in order to provide a basis for a progress payment. Such visual inspection will not be construed as final or as receipt of any Goods and Special Services that, as a result of subsequent inspections and tests, are determined to be non -conforming. 2. Within ten days of such visual inspection, Buyer shall provide Seller with written notice of Buyer's determination regarding conformity of the Goods. In the event Buyer does not provide such notice, it will be presumed that the Goods appear to be conforming and that Buyer has acknowledged their receipt upon delivery. 3. If, on the basis of the visual inspection specified in Paragraph 8.01.13.1, the Goods appear to be conforming, Buyer's notice thereof to Seller will acknowledge receipt of the Goods. C. Final Inspection: After all of the Goods have been incorporated into the Project, tested in accordance with such testing requirements as are specified, and are functioning as indicated, Buyer or Engineer will make a final inspection. 2. If, on the basis of the final inspection, the Goods are conforming, Buyer's notice thereof will constitute Buyer's acceptance of the Goods. If, on the basis of the final inspection, the Goods are non -conforming, Buyer will identify the non -conformity in writing. 8.02 Non -Conforming Goods and Special Services A. If, on the basis of inspections and testing prior to delivery, the Goods and Special Services are found to be non -conforming, or if at any time after Buyer has acknowledged receipt of delivery and before Buyer has made its Final Inspection, Buyer reasonably determines that the Goods and Special Services are non -conforming and provides Seller with a detailed written description of the non -conformity, then Seller shall promptly, without cost to Buyer and at Seller's election, either correct such non -conforming Goods and Special Services, or, if Goods are rejected by 10059265 2017.10.15 Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 Standard General Conditions — Procurement Contracts 00 70 00-20 Buyer, remove and replace the non -conforming Goods with conforming Goods, including all work required for reinstallation. B. Buyer's Rejection of Non -Conforming Goods: 1. If Buyer elects to reject the Goods in whole or in part, Buyer's notice to Seller will describe in sufficient detail the non -conforming aspect of the Goods. If Goods have been delivered to Buyer, Seller shall promptly, and within the Contract Times, remove and replace the rejected Goods. 2. Seller shall bear all costs, losses and damages attributable to the removal and replacement of the non -conforming Goods as provided in Paragraph 8.02.E. 3. Upon rejection of the Goods, Buyer retains a security interest in the Goods to the extent of any payments made and expenses incurred in their testing and inspection. C. Remedying Non -Conforming Goods and Special Services: 1. If Buyer elects to permit the Seller to modify the Goods to correct the non-conformance, then Seller shall promptly provide a schedule for such modifications and shall make the Goods conforming within a reasonable time. 2. If Buyer notifies Seller in writing that any of the Special Services are non -conforming, Seller shall promptly provide conforming services acceptable to Buyer. If Seller fails to do so, Buyer may delete the Special Services and reduce the Contract Price a commensurate amount. D. Buyer's Acceptance of Non -Conforming Goods: Instead of requiring correction or removal and replacement of non -conforming Goods discovered either before or after final payment, Buyer may accept the non -conforming Goods. Seller shall bear all reasonable costs attributable to Buyer's evaluation of and determination to accept such non -conforming Goods as provided in Paragraph 8.02.E. E. Seller's obligations shall include the costs of the correction or removal and replacement of the non- conforming Goods and the replacement of property of Buyer and others destroyed by the correction or removal and replacement of the non -conforming Goods, and obtaining conforming Special Services from others. F. Buyer's Rejection of Conforming Goods: 10059265 2017.10.15 If Buyer asserts that Goods and Special Services are non -conforming and such Goods and Special Services are determined to be conforming, or if Buyer rejects as non -conforming Goods and Special Services that are later determined to be conforming, then Seller shall be entitled to reimbursement from Buyer of costs incurred by Seller in inspecting, testing, correcting, removing, or replacing the conforming Goods and Special Services, including but not limited to fees and charges of engineers, architects, attorneys and other professionals, and all court or Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 Standard General Conditions — Procurement Contracts 00 70 00-21 arbitration or other dispute resolution costs associated with the incorrect assertion of non- conformance or rejection of conforming Goods and Special Services. 8.03 Correction Period A. Seller's responsibility for correcting all non -conformities in the Goods and Special Services will extend for a period of one year after the earlier of the date on which Buyer has placed the Goods in continuous service or the date of final payment, or for such longer period of time as may be prescribed by Laws or Regulations or by the terms of any specific provisions of the Contract Documents. ARTICLE 9 - ROLE OF ENGINEER 9.01 Duties and Responsibilities A. The duties and responsibilities and the limitations of authority of Engineer are set forth in the Contract Documents. 9.02 Clarifications and Interpretations A. Engineer will issue with reasonable promptness such written clarifications or interpretations of the Contract Documents as Engineer may determine necessary, which shall be consistent with or reasonably inferable from the overall intent of the Contract Documents. Such written clarifications and interpretations will be binding on Buyer and Seller. If either Buyer or Seller believes that a written clarification or interpretation justifies an adjustment in the Contract Price or Contract Times, either may make a Claim therefor. 9.03 Authorized Variations A. Engineer may authorize minor deviations or variations in the Contract Documents by: 1) written approval of specific variations set forth in Shop Drawings when Seller has duly noted such variations as required in Paragraph 5.06.C.4, or 2) a Field Order. 9.04 Rejecting Non -Conforming Goods and Special Services A. Engineer will have the authority to disapprove or reject Goods and Special Services that Engineer believes can reasonably demonstrate to be non -conforming. Engineer will also have authority to require special inspection or testing of the Goods or Special Services as provided in Paragraph 8.01 whether or not the Goods are fabricated or installed, or the Special Services are completed. 9.05 Decisions on Requirements of Contract Documents A. Engineer will be the initial interpreter of the Contract Documents and judge of the acceptability of the Goods and Special Services. Claims, disputes and other matters relating to the acceptability of the Goods and Special Services or the interpretation of the requirements of the Contract Documents pertaining to Seller's performance will be referred initially to Engineer in writing with a request for a formal decision in accordance with this paragraph. 10059265 2017.10.15 Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 Standard General Conditions — Procurement Contracts 00 70 00-22 B. When functioning as interpreter and judge under this Paragraph 9.05, Engineer will not show partiality to Buyer or Seller and will not be liable in connection with any interpretation or decision rendered in good faith in such capacity. The rendering of a decision by Engineer pursuant to this Paragraph 9.05 with respect to any such Claim, dispute, or other matter (except any which have been waived by the making or acceptance of final payment as provided in Paragraph 10.07) will be a condition precedent to any exercise by Buyer or Seller of such rights or remedies as either may otherwise have under the Contract Documents or by Laws or Regulations in respect of any such Claim, dispute, or other matter. 9.06 Claims and Disputes A. Notice: Written notice of each Claim relating to the acceptability of the Goods and Special Services or the interpretation of the requirements of the Contract Documents pertaining to either party's performance shall be delivered by the claimant to Engineer and the other party to the Agreement within 15 days after the occurrence of the event giving rise thereto, and written supporting data shall be submitted to Engineer and the other party within 45 days after such occurrence unless Engineer allows an additional period of time to ascertain more accurate data. B. Engineer's Decision: Engineer will review each such Claim and render a decision in writing within 30 days after receipt of the last submittal of the claimant or the last submittal of the opposing party, if any. C. If Engineer does not render a formal written decision on a Claim within the time stated in Paragraph 9.06.B., Engineer shall be deemed to have issued a decision denying the Claim in its entirety 31 days after receipt of the last submittal of the claimant or the last submittal of the opposing party, if any. D. Engineer's written decision on such Claim or a decision denying the Claim in its entirety that is deemed to have been issued pursuant to Paragraph 9.06.C, will be final and binding upon Buyer and Seller 30 days after it is issued unless within 30 days of issuance Buyer or Seller appeals Engineer's decision by initiating the mediation of such Claim in accordance with the dispute resolution procedures set forth in Article 13. E. If Article 13 has been amended to delete the mediation requirement, then Buyer or Seller may appeal Engineer's decision within 30 days of issuance by following the alternative dispute resolution process set forth in Article 13, as amended; or if no such alternative dispute resolution process has been set forth, Buyer or Seller may appeal Engineer's decision by 1) delivering to the other party within 30 days of the date of such decision a written notice of intent to submit the Claim to a court of competent jurisdiction, and 2) within 60 days after the date of such decision instituting a formal proceeding in a court of competent jurisdiction. F. No Claim for an adjustment in Contract Price or Contract Times will be valid if not submitted in accordance with this Paragraph 9.06. G. The parties agree to endeavor to avoid or resolve Claims through direct, good faith discussions and negotiations whenever practicable. Such discussions and negotiations should at the outset 10059265 2017.10.15 Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 Standard General Conditions — Procurement Contracts 00 70 00-23 address whether the parties mutually agree to suspend the time periods established in this Paragraph 9.06; if so, a written record of such mutual agreement should be made and jointly executed. ARTICLE 10 - PAYMENT 10.01 Applications for Progress Payments A. Seller shall submit to Buyer for Engineer's review Applications for Payment filled out and signed by Seller and accompanied by such supporting documentation as is required by the Contract Documents and also as Buyer or Engineer may reasonably require. The timing and amounts of progress payments shall be as stipulated in the Agreement. 1. The first application for Payment will be submitted after review and approval by Engineer of all Shop Drawings and of all Samples required by the Contract Documents. 2. The second Application for Payment will be submitted after receipt of the Goods has been acknowledged in accordance with Paragraph 8.01.13 and will be accompanied by a bill of sale, invoice, or other documentation reasonably satisfactory to Buyer warranting that Buyer has rightfully received good title to the Goods from Seller and that, upon payment, the Goods will be free and clear of all liens. Such documentation will include releases and waivers from all parties with viable lien rights. In the case of multiple deliveries of Goods, additional Applications for Payment accompanied by the required documentation will be submitted as Buyer acknowledges receipt of additional items of the Goods. 10.02 Review of Applications for Progress Payments A. Engineer will, within seven working days after receipt of each Application for Payment, either indicate in writing a recommendation of payment and present the Application to Buyer, or return the Application to Seller indicating in writing Engineer's reasons for refusing to recommend payment. In the latter case, Seller may make the necessary corrections and resubmit the Application. 10059265 2017.10.15 1. Engineer's recommendation of payment requested in the first Application for Payment will constitute a representation by Engineer, based on Engineer's review of the Application for Payment and the accompanying data, that the Shop Drawings and Samples have been reviewed and approved as required by the Contract Documents and Seller is entitled to payment of the amount recommended. 2. Engineer's recommendation of payment requested in the Application for Payment submitted upon Buyer's acknowledgment of receipt of the Goods will constitute a representation by Engineer, based on Engineer's review of the Application for Payment and the accompanying data Seller is entitled to payment of the amount recommended. Such recommendation will not constitute a representation that Engineer has made a final inspection of the Goods, that the Goods are free from non -conformities, acceptable or in conformance with the Contract Documents, that Engineer has made any investigation as to Buyer's title to the Goods, that exhaustive or continuous inspections have been made to check the quality or the quantity of the Goods beyond the responsibilities specifically Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 Standard General Conditions — Procurement Contracts 007000-24 assigned to Engineer in the Contract Documents or that there may not be other matters or issues between the parties that might entitle Seller to additional payments by Buyer or Buyer to withhold payment to Seller. 3. Engineer may refuse to recommend that all or any part of a progress payment be made, or Engineer may nullify all or any part of any payment previously recommended if, in Engineer's opinion, such recommendation would be incorrect or if on the basis of subsequently discovered evidence or subsequent inspections or tests Engineer considers such refusal or nullification necessary to protect Buyer from loss because the Contract Price has been reduced, Goods are found to be non -conforming, or Seller has failed to furnish acceptable Special Services. 10.03 Amount and Timing of Progress Payments A. Subject to Paragraph 10.02.A., the amounts of the progress payments will be as provided in the Agreement. Buyer shall within fifteen working days after receipt of each Application for Payment with Engineer's recommendation pay Seller the amount recommended; but, in the case of the Application for Payment upon Buyer's acknowledgment of receipt of the Goods, said fifteen working day period may be extended for so long as is necessary (but in no event more than twenty-one working days) for Buyer to examine the bill of sale and other documentation submitted therewith. Buyer shall notify Seller promptly of any deficiency in the documentation and shall not unreasonably withhold payment. 10.04 Suspension of or Reduction in Payment A. Buyer may suspend or reduce the amount of progress payments, even though recommended for payment by Engineer, under the following circumstances: 1. Buyer has reasonable grounds to conclude that Seller will not furnish the Goods or the Special Services in accordance with the Contract Documents, and 2. Buyer has requested in writing assurances from Seller that the Goods and Special Services will be delivered or furnished in accordance with the Contract Documents, and Seller has failed to provide adequate assurances within ten days of Buyer's written request. B. If Buyer refuses to make payment of the full amount recommended by Engineer, Buyer will provide Seller and Engineer immediate written notice stating the reason for such action and promptly pay Seller any amount remaining after deduction of the amount withheld. Buyer shall promptly pay Seller the amount withheld when Seller corrects the reason for such action to Buyer's satisfaction. 10.05 Final Application for Payment A. After Seller has corrected all non -conformities to the reasonable satisfaction of Buyer and Engineer, furnished all Special Services, and delivered all documents required by the Contract Documents, Engineer will issue to Buyer and Seller a notice of acceptance. Seller may then make application for final payment following the procedure for progress payments. The final 10059265 2017.10.15 Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 Standard General Conditions — Procurement Contracts 00 70 00-25 Application for Payment will be accompanied by all documentation called for in the Contract Documents, a list of all unsettled Claims, and such other data and information as Buyer or Engineer may reasonably require. 10.06 Final Payment A. If, on the basis of final inspection and the review of the final Application for Payment and accompanying documentation, Engineer is reasonably satisfied that Seller has furnished the Goods and Special Services in accordance with the Contract Documents, and that Seller's has fulfilled all other obligations under the Contract Documents, then Engineer will, within ten days after receipt of the final Application for Payment, recommend in writing final payment subject to the provisions of Paragraph 10.07 and present the Application to Buyer. Otherwise, Engineer will return the Application to Seller, indicating the reasons for refusing to recommend final payment, in which case Seller shall make the necessary corrections and resubmit the Application for payment. If the Application and accompanying documentation are appropriate as to form and substance, Buyer shall, within 30 days after receipt thereof, pay Seller the amount recommended by Engineer, less any sum Buyer is entitled to set off against Engineer's recommendation, including but not limited to liquidated damages to which Buyer is entitled. 10.07 Waiver of Claims A. The making and acceptance of final payment will constitute: a waiver of all Claims by Buyer against Seller, except Claims arising from unsettled liens from non -conformities in the Goods or Special Services appearing after final payment, from Seller's failure to comply with the Contract Documents or the terms of any special guarantees specified therein, or from Seller's continuing obligations under the Contract Documents; and 2. a waiver of all Claims by Seller against Buyer (other than those previously made in accordance with the requirements herein and listed by Seller as unsettled as required in Paragraph 10.05.A, and not resolved in writing). ARTICLE 11 - CANCELLATION, SUSPENSION, AND TERMINATION 11.01 Cancellation A. Buyer has the right to cancel the Contract, without cause, at any time prior to delivery of the Goods by written notice. Cancellation pursuant to the terms of this paragraph shall not constitute a breach of contract by Buyer. Upon cancellation: 10059265 2017.10.15 Buyer shall pay Seller that portion of the Contract Price corresponding to Goods actually produced. 2. For Goods in process of being produced, which cannot be reasonably rescheduled, Buyer shall pay Seller that portion of the Contract Price corresponding to Goods in production. Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 Standard General Conditions — Procurement Contracts 00 70 00-26 Buyer shall pay Seller any amounts paid or due to be paid by the Seller to any subcontractor or supplier in connection with this Contract, including any cancellation charges due to subcontractor or supplier. 4. Buyer shall pay Seller six percent (6%) of the Contract Price as a cancellation fee. 5. Upon payment by Buyer, the Goods shall be shipped to Buyer and shall become the property of the Buyer and shall be sold "as is" with all faults, and no warranty or other representation of the Seller shall apply. 11.02 Suspension of Performance by Buyer A. Buyer has the right to suspend performance of the Contract for up to a maximum of ninety days, without cause, by written notice. Upon suspension under this paragraph, Seller shall be entitled to an increase in the Contract Times and Contract Price caused by the suspension, provided that performance would not have been suspended or delayed for causes attributable to Seller. 11.03 Suspension of Performance by Seller A. Subject to the provisions of Paragraph 5.07.B, Seller may suspend the furnishing of the Goods and Special Services only under the following circumstance: 1. Seller has reasonable grounds to conclude that Buyer will not perform its future payment obligations under the Contract; and, 2. Seller has requested in writing assurances from Buyer that future payments will be made in accordance with the Contract, and Buyer has failed to provide such assurances within ten days of Seller's written request. 11.04 Breach and Termination A. Buyer's Breach: 10059265 2017.10.15 Buyer shall be deemed in breach of the Contract if it fails to comply with any material provision of the Contract Documents, including but not limited to: a. wrongful rejection or revocation of Buyer's acceptance of the Goods, b. failure to make payments in accordance with the Contract Documents, or c. wrongful repudiation of the Contract. 2. Seller shall have the right to terminate the Contract for cause by declaring a breach should Buyer fail to comply with any material provisions of the Contract. Upon termination, Seller shall be entitled to all remedies provided by Laws and Regulations. Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 Standard General Conditions — Procurement Contracts 00 70 00-27 a. In the event Seller believes Buyer is in breach of its obligations under the Contract, Seller shall provide Buyer with reasonably prompt written notice setting forth in sufficient detail the reasons for declaring that it believes a breach has occurred. Buyer shall have seven days from receipt of the written notice declaring the breach (or such longer period of time as Seller may grant in writing) within which to cure or to proceed diligently to cure such alleged breach. B. Seller's Breach: 1. Seller shall be deemed in breach of the Contract if it fails to comply with any material provision of the Contract Documents, including, but not limited to: a. failure to materially deliver the Goods or materially perform the Special Services in accordance with the Contract Documents, b. wrongful repudiation of the Contract, or c. delivery or furnishing of non -conforming Goods which is understood to mean the Project does not meet the Minimum Generator Set Output, Maximum Heat Rate or Post -Treatment Guaranteed Emissions Data according to the Plant Performance Report as defined in Exhibit 7.02 during the Equipment Performance Test due to reasons solely attributable to equipment supplied by Seller, and after Seller has been given at least one hundred eighty (180) days to remedy the deficiency, Buyer shall be entitled to terminate this Contract. 2. Buyer may terminate Seller's right to perform the Contract for cause by declaring a breach should Seller fail to comply with any material provision of the Contract Documents. Upon termination, Buyer shall be entitled to all remedies provided by Laws and Regulations. a. In the event Buyer believes Seller is in breach of its obligations under the Contract, and except as provided in Paragraph 11.04.13.2.b, Buyer shall provide Seller with reasonably prompt written notice setting forth in sufficient detail the reasons for declaring that it believes a breach has occurred. Seller shall have thirty (30) days from receipt of the written notice declaring the breach (or such longer period of time as Buyer may grant in writing) within which to cure or to proceed diligently to cure such alleged breach. b. If and to the extent that Seller has provided a performance bond under the provisions of Paragraph 4.01, the notice and cure procedures of that bond, if any, shall supersede the notice and cure procedures of Paragraph 11.04.B.2.a. ARTICLE 12 - LICENSES AND FEES 12.01 Intellectual Property and License Fees A. Unless specifically stated elsewhere in the Contract Documents, Seller is not transferring any intellectual property rights, patent rights, or licenses for the Goods delivered. 10059265 2017.10.15 Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 Standard General Conditions — Procurement Contracts 00 70 00-28 B. Seller shall pay all license fees and royalties and assume all costs incident to the use or the furnishing of the Goods, unless specified otherwise by the Contract Documents. 12.02 Seller's Infringement A. Subject to Paragraph 12.01.A, Seller shall indemnify and hold harmless Buyer, Engineer and their officers, directors, members, partners, employees, agents, consultants, contractors, and subcontractors from and against all claims, costs, losses, damages, and judgments (including but not limited to all reasonable fees and charges of engineers, architects, attorneys and other professionals and all court or arbitration or other dispute resolution costs) arising out of or relating to any infringement or alleged infringement of any United States or foreign patent or copyright by any of the Goods as delivered hereunder. B. In the event of suit or threat of suit for intellectual property infringement, Buyer will promptly notify Seller of receiving notice thereof. C. Seller shall promptly defend the claim or suit, including negotiating a settlement. Seller shall have control over such claim or suit, provided that Seller agrees to bear all expenses and to satisfy any adverse judgment thereof. 1. If Seller fails to defend such suit or claim after written notice by Buyer, Seller will be bound in any subsequent suit or claim against Seller by Buyer by any factual determination in the prior suit or claim. 2. If Buyer fails to provide Seller the opportunity to defend such suit or claim after written notice by Seller, Buyer shall be barred from any remedy against Seller for such suit or claim. D. If a determination is made that Seller has infringed upon intellectual property rights of another, Seller may obtain the necessary licenses for Buyer's benefit, or replace the Goods and provide related design and construction as necessary to avoid the infringement at Seller's own expense. 12.03 Buyer's Infringement A. Buyer shall indemnify and hold harmless Seller, and its officers, directors, partners, employees, agents, consultants, contractors, and subcontractors from and against all claims, costs, losses, damages, and judgments (including but not limited to all reasonable fees and charges of engineers, architects, attorneys and other professionals and all court or arbitration or other dispute resolution costs) arising out of or relating to any infringement or alleged infringement of any United States or foreign patent or copyright caused by Seller's compliance with Buyer's design of the Goods or Buyer's use of the Goods in combination with other materials or equipment in any process (unless intent of such use was known to Seller and Seller had reason to know such infringement would result). B. In the event of suit or threat of suit for intellectual property infringement, Seller must after receiving notice thereof promptly notify Buyer. 10059265 2017.10.15 Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 Standard General Conditions — Procurement Contracts 00 70 00-29 C. Upon written notice from Seller, Buyer shall be given the opportunity to defend the claim or suit, including negotiating a settlement. Buyer shall have control over such claim or suit, provided that Buyer agrees to bear all expenses and to satisfy any adverse judgment thereof. 1. If Buyer fails to defend such suit or claim after written notice by Seller, Buyer will be bound in any subsequent suit or claim against Buyer by Seller by any factual determination in the prior suit or claim. 2. If Seller fails to provide Buyer the opportunity to defend such suit or claim after written notice by Buyer, Seller shall be barred from any remedy against Buyer for such suit or claim. 12.04 Reuse of Documents A. Neither Seller nor any other person furnishing any of the Goods and Special Services under a direct or indirect contract with Seller shall: (1) acquire any title to or ownership rights in any of the Drawings, Specifications, or other documents (or copies of any thereof) prepared by or bearing the seal of Engineer or its consultants, including electronic media versions; or (2) reuse any of such Drawings, Specifications, other documents, or copies thereof on any other project without written consent of Buyer and Engineer and specific written verification or adaptation by Engineer. This prohibition will survive termination or completion of the Contract. Nothing herein shall preclude Seller from retaining copies of the Contract Documents for record purposes. 12.05 Electronic Data A. Unless otherwise stated in the Supplementary Conditions, copies of data furnished by Buyer or Engineer to Seller, or by Seller to Buyer or Engineer that may be relied upon are limited to the printed copies (also known as hard copies). Files in electronic media format of text, data, graphics, or other types are furnished only for the convenience of the receiving party. Any conclusion or information obtained or derived from such electronic files will be at the user's sole risk. If there is a discrepancy between the electronic files and the hard copies, the hard copies govern. B. Because data stored in electronic media format can deteriorate or be modified inadvertently or otherwise without authorization of the data's creator, the party receiving electronic files agrees that it will perform acceptance tests or procedures within 60 days, after which the receiving party shall be deemed to have accepted the data thus transferred. The transferring party will correct any errors detected within the 60 -day acceptance period. C. When transferring documents in electronic media format, the transferring party makes no representations as to long term compatibility, usability, or readability of documents resulting from the use of software application packages, operating systems, or computer hardware differing from those used by the data's creator. 10059265 2017.10.15 Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 Standard General Conditions — Procurement Contracts 00 70 00-30 ARTICLE 13 - DISPUTE RESOLUTION 13.01 Dispute Resolution Method A. Either Buyer or Seller may initiate the mediation of any Claim decided in writing by Engineer under Paragraph 9.06.13 or 9.06.0 before such decision becomes final and binding. The mediation will be governed by the Construction Industry Mediation Rules of the American Arbitration Association in effect as of the Effective Date of the Agreement. The request for mediation shall be submitted in writing to the American Arbitration Association and the other party to the Contract. Timely submission of the request shall stay the Engineer's decision from becoming final and binding. B. Buyer and Seller shall participate in the mediation process in good faith. The process shall be concluded within 60 days of filing of the request. The date of termination of the mediation shall be determined by application of the mediation rules referenced above. C. If the mediation process does not result in resolution of the Claim, then Engineer's written decision under Paragraph 9.06.13 or a denial pursuant to Paragraph 9.06.0 shall become final and binding 30 days after termination of the mediation unless, within that time period, Buyer or Seller delivers to the other party written notice of the intent to submit the Claim to a court of competent jurisdiction, and within 60 days of the termination of the mediation institutes such formal proceeding. ARTICLE 14 - MISCELLANEOUS 14.01 Giving Notice A. Whenever any provision of the Contract Documents requires the giving of written notice, it will be deemed to have been validly given if: 1) delivered in person to the individual or to a member of the firm or to an officer of the corporation for whom it is intended, or 2) if delivered at or sent by registered or certified mail, postage prepaid, to the last business address known to the giver of the notice. 14.02 Controlling Law A. This Contract is to be governed by the law of the state in which the Point of Destination is located. B. In the case of any conflict between the express terms of this Contract and the Uniform Commercial Code, as adopted in the state whose law governs, it is the intent of the parties that the express terms of this Contract shall apply. 14.03 Computation of Time A. When any period of time is referred to in the Contract Documents by days, it will be computed to exclude the first and include the last day of such period. If the last day of any such period falls on a Saturday or Sunday or on a day made a legal holiday by the law of the applicable jurisdiction, such day shall be omitted from the computation. 10059265 2017.10.15 Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 Standard General Conditions — Procurement Contracts 00 70 00-31 14.04 Cumulative Remedies A. The duties and obligations imposed by these General Conditions and the rights and remedies available hereunder to the parties hereto are in addition to, and are not to be construed in any way as a limitation of, any rights and remedies available to any or all of them which are otherwise imposed or available by Laws or Regulations, by special warranty or guarantee, or by other provisions of the Contract Documents, and the provisions of this paragraph will be as effective as if repeated specifically in the Contract Documents in connection with each particular duty, obligation, right, and remedy to which they apply. 14.05 Survival of Obligations A. All representations, indemnifications, warranties and guarantees made in, required by, or given in accordance with the Contract Documents, as well as all continuing obligations indicated in the Contract Documents, will survive final payment, completion, and acceptance of the Goods and Special Services and termination or completion of the Agreement. 14.06 Entire Agreement A. Buyer and Seller agree that this Agreement is the complete and final agreement between them, and supersedes all prior negotiations, representations, or agreements, either written or oral. This Agreement may not be altered, modified, or amended except in writing signed by an authorized representative of both parties. 10059265 2017.10.15 Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 Standard General Conditions — Procurement Contracts 00 70 00-32 SECTION 00 73 01 SUPPLEMENTARY CONDITIONS TO GENERAL CONDITIONS 00 70 00 Supplementary Conditions These Supplementary Conditions modify and supplement Section 00 70 00 - General Conditions, and other provisions of the Contract Documents as indicated below. All provisions of the General Conditions that are modified or supplemented remain in full force and effect as so modified or supplemented. All provisions of the General Conditions which are not so modified or supplemented remain in full force and effect. Defined Terms The terms used in these Supplementary Conditions which are defined in the General Conditions have the meaning assigned to them in the General Conditions. Modifications and Supplements The following are instructions that modify or supplement specific paragraphs in the General Conditions and other Contract Documents. SC -3.04. Add the following new Subparagraph immediately after paragraph 3.04C. D. Change orders over $100,000 must be bid out by Owner. SC -4.02. Add the following new subparagraph immediately after Paragraph 4.02E. F. Seller shall purchase and maintain such liability and other insurance that will provide protection from claims set forth below which may arise out of or result from Seller's furnishing of the Goods or Special Services and Seller's other obligations under the Contract Documents, whether the furnishing of Goods and Special Services or other obligations are to be performed by Seller, any subcontractor or supplier, or by anyone directly or indirectly employed by any of them to furnish the Goods and Special Services, or by anyone for whose acts any of them may be liable: 1. Claims of Seller's or Seller's subcontractor's employees under workers' compensation, disability benefits, and other similar employee benefit acts (if applicable on individual employee); 2. claims for damages because of bodily injury, occupational sickness or disease, or death of Seller's employees; 3. claims for damages because of bodily injury, sickness or disease, or death of any person other than Seller's employees for which Seller is liable; 4. claims for damages insured by reasonably available personal injury liability coverage which are sustained: (i) by any person as a result of an offense of Seller directly or indirectly related to the employment of such 10059265 Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 SUPPLEMENTARY CONDITIONS 007301-1 person by Seller, or (ii) by any other person for any other reason for which Seller is liable; 6. claims for damages for which Seller is liable, other than to the Goods, because of injury to or destruction of tangible property wherever located, including loss of use resulting therefrom; and Claims for damages for which Seller is liable for bodily injury or death of any person or property damage arising out of the ownership, maintenance or use of any motor vehicle. G. The policies of insurance so required by this Paragraph 4.02 to be purchased and maintained shall: 1. with respect to insurance required by Paragraphs SC-4.O2.F.3 through SC-4.O2.F.5 inclusive, include Buyer as additional insured (subject to any customary exclusion in respect of professional liability). 2. include at least the specific coverages and be written for not less than the limits of liability provided below or required by Laws or Regulations, whichever is greater; 3. include completed operations insurance; 4. include contractual liability insurance covering Seller's indemnity obligations under Paragraphs 5.09. 5. contain a provision or endorsement that the coverage afforded will not be canceled, materially changed or renewal refused until at least thirty days prior written notice has been given to Seller, and Seller will provide prompt notice to Buyer of any cancellation, material change or refused renewal; 6. remain in effect at least until final payment and at all times thereafter when Seller may be correcting, removing, or replacing non -conforming Goods in accordance with Paragraph 8.03; with respect to completed operations insurance, and any insurance coverage written on a claims -made basis, remain in effect for at least two years after final payment (and Seller shall furnish Buyer identified in these Supplementary Conditions, to whom a certificate of insurance has been issued, evidence satisfactory to Buyer and any such additional insured of continuation of such insurance at final payment and one year thereafter); 8. with respect to any delegation of professional design services to Seller pursuant to Paragraph 5.10 of the General Conditions, include professional liability coverage by endorsement or otherwise. H. The limits of liability for the insurance required by Paragraph SC-4.O2.F shall provide coverage for not less than the following amounts or greater where required by Laws and Regulations: 1. Workers' Compensation, and related coverage's under Paragraphs SC-4.O2.F.1 and F.2: 10059265 Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 SUPPLEMENTARY CONDITIONS 007301-2 a. State: Statutory b. Applicable Federal (e.g., Longshoreman's): Statutory C. Employer's Liability: $1,500,000 2. Seller's General Liability under Paragraphs SC -4.02.F.3 through F.6 which shall include completed operations and product liability coverages and eliminate the exclusion with respect to property under the care, custody and control of Seller: a. General Aggregate $1,500,000 b. Products - Completed $1,500,000 1) Operations Aggregate $1,500,000 C. Personal and Advertising 1) Injury $1,500,000 2) Each Occurrence (Bodily Injury and Property Damage) $1,500,000 d. Property Damage liability insurance will provide Explosion, Collapse, and Underground coverages where applicable. e. Excess or Umbrella Liability 1) General Aggregate $1,500,000 2) Each Occurrence $1,500,000 Automobile Liability under Paragraph SC -4.02.F.6: f. Bodily Injury: 1) Each person $1,500,000 2) Each Accident $1,500,000 g. Property Damage: 1) Each Accident $1,500,000 2) Combined Single Limit of $1,500,000 J. Seller shall deliver to Buyer certificates of insurance which Seller is required to purchase and maintain. K. If Buyer has any objection to the coverage, as evidenced by certificates of insurance in accordance with para. I above, afforded by the insurance required to be purchased and maintained on the basis of non-conformance with the Contract Documents, Buyer shall notify Seller in writing within 10 days after receipt of the certificates. Seller shall provide such additional information in respect to insurance as Buyer shall reasonably request. 10059265 Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 SUPPLEMENTARY CONDITIONS 007301-3 SC -6.02. Revise paragraph. 6.02 A. To Read: Seller shall deliver the Goods DDP Incoterms 2010 (including delivery, Carrier unloading, insurance and block and brace). In accordance with the Contract Terms set forth in the AGREEMENT or other data as agreed to by Buyer and Seller. SC -12.05. Add the following new subparagraph immediately after Paragraph 12.05 D. Seller understands that data created, collected, received, stored, used, maintained, or disseminated by Seller may be subject to the requirements of the Minnesota Government Data Practices Act and Seller agrees to comply with the applicable requirements of the Minnesota Government Data Practices Act notified in writing by Buyer to Seller. All civil remedies and penalties provided for in Minnesota Government Data Practices Act that a municipality would be subject to may apply to the Seller. END OF SECTION 10059265 2017.10.17 Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 SUPPLEMENTARY CONDITIONS 007301-4 10059265 Hutchinson Utilities Commission Procurement Engine/Generator Set — Units 6 & 7 SUPPLEMENTARY CONDITIONS 007301-4 DOCUMENT: 10.01A.6 TECHNICAL CLARIFICATIONS \ DEVIATIONS -REV C Z 0 0 H Q U > W Q N Vi Z M Q U U � LL 2 Q U U 2 U H Q m cf E F..... ._ C CD 0 N O�: N ori Yt Oo ... C U" Q O `O O U O O O Li.. C O O 1 C6 O U U YY C.}i Y -O C3 C1 Q U X 2i s r C5 C} 2i I: 7 0}Ci U N CS N� O !n N r' m 0 I G 0} 0 L O y} O 2r :.. rr c} m L t ... 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Y Y �� L O N � l C55 C}o 0 N O o x U N (A U U U U c+� D O = m (6 U � � N � O L O) N o N O N U E N L_ A N u W 0 CO N N N U J0 d N O m o O O N > U N Y N �_O O O O m 6 O (6 O O U— cn W E m in o N o o XO U U� "L"' o W U` W W Q> Q W H W H .a Z Z O O Q Q W K N 0 Z Z W n W Q Q Z >U co O ai J ai J ~ U Of � o d F- z z z z LU � o m Q r � 0 N � N N �2 N c2 c2 m c2 o 0 EXHIBIT 7.01 SCOPE OF SUPPLY MATRIX - REV 6 K •L a+ cc Q O 0 U) O U) U) N a) � � a) O o Q o o z E 0 � o z N U N o5 N o 0 w 0 R -E L o w 0 3 Q `m w O L Q O w w W Oo w O v H � w O R U N z a ° cncna)NaR wO c w x x x x U R X X X ... x xX x x x X X X x x x x x x x x x x x x x x X a/ R U a N N N N N N N N N N N N N N N N N N N N N N N N N N— N N a) a) a) N N N N N a) N N N N N a) a) a) a) N N N ,N N N N N N N N N N CCCC N N N N N N N N N N .� N N N N � a aacnaaaaacncncn a cncn »» aaaaa aaacncnacncncncn E o `o m o � � a 0 0 m � � '� a ) L a o � cn cn ° o ° o _ U a O O a O r x a C7 a a s 2 Qa Z QQ 00 0 0 oax CL M U O E U) R N 'o , _ a) = a U) -° v Q o m °.� E U iLiL ° x 'a aC\l—° a QQ m a- a° a cn w a° °° w w Q Q° Q in Y w U w >°- o ° in o c o ° Q a 0 o U 0> o_ U o o1 O E-- U°° o L o m o o w R w R w Y R .N w w c a E o R aU w R ��r o °° O> QQ >o o (7cn(7(7�(7aa(7� O- W C C L �' Y C O C a) C (U`4 Y Y U R R R j R °- R R R R .O O C N R C O T IL R N R R C O a) Q ,— R fn R O >> fn O 0 0 0 w O L X L L X X L X L L X X L L X X .— U U W m W U U oo W H C7 fn > >> U U U W W W W W W W W> D K cc Q O 0 U) 0 U) U) % T~ .::, U J O N U m t V aU., M W C) U CD U N N w+ � X V a- N N a >m O U a m a Y f/1 � R a 0 � m m U p L R N > U > O- U E U m U -0, o R M C) o c O Q E 0-j U a o U o c w X X X X X X X X X X X X X X X X XX X X X X X U R Q X X X X X X X X X X X X X d R U a N — — N N S N N N N N N N M NN N N N N N N N N N N N N N N N N N N N N N N N N N N N C m U U .N N U U N N U U N N U U N N U N U U N N U U N N U N U N U U N N U U N N U N U N U N U U N N N N N N N N N U N U U N N U N D cnaaaaaaaa aaaaaa aaaaa as aaa cncncncncncncn aaa a Q 0 aU 0 U) O x 0 0 E m a� O Q o C7Q 2 E O m a O a o o ° a E Y N R O cl Q E 2 a.� O O O N w o o o a T a Z a S � a ° �r o o �a °° U o U o R o Y Y a. w 5 R mo 0 x LU R U EE w LD °a° a° -o C Um am° O C mmm O O p OCo U� A E a o C OZ) w � > U 0> m° ` p C XU O o o° ° LU RE ~ E a p U w E> o o w w w Q R Y J ii R m E R .R R 'E.R 6 o o a 3 Q 0 0 o E E .E w° o QC CO U E �'O N .� O 0 J J L L L N Q O R o° (4 O H (` a O O E E O O E E a'S a'S C C p w a w L O �C U E E E E U U o 0 0 0 0 0 o E 0 0 o 0 R w'cr,E R O a s R R 3 O 3 3 O O r o O a R N U >OcnQQQQcncn UUUUUU (7 (7 w(7 (7 ww aaa iLiLiLiLiLaS .� x�a D IL — — — — — I I I I im— IL I K �L cc Q O 0 U) 0 U) U) —Q ic Q� J-0: N N O m aU M W = C) U O U N i N 2 X a- N N d O Z c N X XXX X X X X X X X X X X X X X X X X X X X X X X X X U R Q X X X X X d R U a N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N U U U N N U U N N U N U U N N U U N N U N N N U .L N U .N U N U N U N U N U N U U N N U U N N U U N N U U N N U N U N U U N N � aaaaa aaaaa acncna U) a- a a as aaaaaaaaaa aaa U O r U U C � N N LL Q � � E o w � R oo w O Y-0 w o° a15 a m o a m a a a` U) a a N ALO a) O� ° R o Ln -j R �— H a �r R Eaaa m°ocnm �=o ° w.2 a O R N N a 0 R R R o fn i..) _ °'� N m 0 m r mw y c ° R o O w° m N ° w Q a o— �'x R cr w o O 0 0 0 .o o w U cn w m U> U ° o C7 w o w cl a o O a Z ° U o ap w '4 w Q ° R R r o r U E .w 2 Q o o w E o f m ;� 3 0 m m w N H .� I. E =0 N N p Up 0 U N 0 U> N N N 0 0 (O`4 0 0 'EO (4 o x U :C5) �0 U)M0 �JJM �6 .�R. z U) >O >HddIL IL<:50E 'o LuD iL 1 11 111111111 IMLL K �L cc Q O 0 U) 0 U) U) m T Q QN N U) U `O Q Q o .° U U U O � � O a o CL O m � v a U w Z w C7 c U R x x d R U a (i 0 0 L L L L �� L L L L L � 52 L L L L 52 L L L L L� 52 L L L L L o 0 cn cn EE ° U N - E E O U C °'.- � w w 0 � U t N O -0 C O C w C �° E 'C Q a Cl R C R N Q N Jw L w w N Qa N N '- N U o a a 0 0 0 m C m a� E aa° =U) U) ) o mmRm o0 0 wa R — b m 'Qm'Qm R ° w m o a W Q Q R R ° ° U R C R R R w .� o a E w o ° m 0 ° R 0 o H cn — o °� E a Q wa ° O w E E oU)—_O�_ o O ° Y C C C Y Y �_ N (` N N N O C (4 O O O O U O� C O R Q _ w_ U) U) U) U) U) CI d R U C C C C > O N n R O `o 0(7 Y mZ a a E° m r r r w w �. a° O O O O > a J R w w Se a s E E S m Cl Cl Y_ w r a� .° ° L' o o N° o R o o°° w N U) ) R U O Q N N L o f/1 V) V) V) O U �inmx��ininwinxcn N O cncncn�m O QiL a Uw�JUssss UlLfn� ain D �L cc Q O 0 U) 0 U) U) N N N N N N N N O O O O O O O O N N N N N N N N O m N N N N N N N N o 0 0 0 0 0 0 0 Q Q—CL a a a a a a a a CL cl >, R R R R R R R R a V% V% V% p cl CL C C C C C C C C Q O O O Q O O O O O - cn cn 0 0 0 = =.2.2.0 U) U) m m m m m m m m `O `O o 0 0 R `o `0 0 0 0 0 0 0 0 0 O U U U O E E E E E E E E Q U) U) U) Q E E E E E E E E O O C C CO O O O O O O O O O 003:3:3: U) U) O O O Zoo V1 UUUU U U U U U U 10,10110, U U U O R R R R R R R R .Q O T r O T r r R R RCL CL cl U) y U U r r r U U a a a a a a a a U U U d Z LL LL w ww SIL IL C N X X X X X X X X X X X X XX X X X X X U R X XXX X X X X X X X X X X X X X d R U a (i 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 y g o g g g o g o g g g g g g g g g o g g o g g g o 0 0 0 0 0 0 U) U) U) U) U) U) U) U) U) U) U) U) U) U) U) U) U) U) U) U) U) U) U) U) U) U) U) U) a a a a a cn `o 0 y O U U) E fn O C N N N L �_ fn0 O N N N Q G� .� y ` Z O C n 0 U) w 0 c cr o _~_0 0 ayR O a0 E mUw a 0 drR mmO U 0 cl n U , 0 E Q°m 0 n U R R R CJ N t N U ) O o waw�� a�y0.wa a E d ooin a UOcl ° 3 O m 0.5 ° Q= 0 0 r ) � U CRi �° a w a s4 O° w ° 7 U C C C C ILU p C E O N co C C w C O° j a sR R c �w °p R y� ammaa `o F - F - F- °.°.° 0 0w min ° w w'° a N ' E ER 0 a 0 J m m L �.� 0 a0 Z 0 0 0 x N m a m 3 o U r 0 0 m O R N W :� O O U O O X R O R R R 0 0 0 0 0 E E u m .� LL � .LD LL Q (n d (n 5 LL J (n W W W W m LL c7 LL LL LL (n (n (n W lL W lL D : cc CL 0 2 J / 3 z CL CL Cl Cl CL CL cl CL CL \ \\\\\\ \ \ /} // U) )))))) ) ) ) \ ) )))))) L ) ) jj \\ / xx xxxx x xxx x 0 fxxxxxx x x x xx xx G $ -- -- - - -- - - - - -- - - - -- - -- -- \\ f )) )))\ )))))) )))))) eee �) mmmmm \� \ [ 2 clcl- �LU-(n\CL \�gJ: ]\$)=E00\\\\ IN \\\0 /§ a 27» [®$) [° E C,CL CL )cL2—= 222 cl \ - =r «E Q[]m7ƒ)CL 2223e /j3/JZ Jd&sG21 666 /) Q EXHIBIT 7.02 PERFORMANCE REPORT -REV 9 CATERPILLAR' Project: HUTCHINSON POWER STATION (2xG20CM34), MN, USA PLANT PERFORMANCE REPORT 85% 75% 50% 25% Tolerance Engine Brake Power @ ISO Conditions bkW 10.000 8.500 7.500 5.000 2.500 Rev.9 Engine Data Generator Efficiency @ 0.8 PF, 60 Hz % 97,3% Site Performance Data: Guaranteed Generator Set Output (@ Gen. Terminals) ekW 9.730 8.262 7.283 4.820 2.350 0% Engine Model: G20CM34 Engine performance at the following site conditions of: hPa (Summer Design (1 %) No of Engines: 2 Altitude: m/ff 315/1050 Configuration: Vee Summer Design Air Temp. (at Engine Inlet): 0C / F 33/91 No of Cylinders: 20 Water Temp. at Aftercooler: 0C / F 39/102 Brake Mean Effective Pressure (BMEP): bar 21,86 Number of engine driven pumps: 44,1 1 Engine Speed: rpm 720 Engine Rating @ ISO Conditions (25 OC / 77 F): bkW 10.000 Bore: mm 340 Engine Rating to 37 OC / 99 F Amb., 30% Rel.Hum @1013 hPa: bkW 10.000 Stroke: mm 420 Engine Rating @ 40OC/104F Max. Amb. 20% Rel. Hum @1013 hPa: bkW 9.490 Stroke/Bore Ratio: 1,24 Site Design Data: BTU/kWh 8.012 8.086 8.180 Min. Ambient Air Temp.: 0C / F 34/-30 Fuel Data kJ/kWh Max. Ambient Air Temp.: 0C / F 40/104 Fuel Type: GAS Site cond. for guaranteed pert.: Summer 91 F Dry Bulb / 72F Wet Bulb = 330C Dry Methane Number Min. 80 Bulb 7.752 8.133 Rating Units 100% 85% 75% 50% 25% Tolerance Engine Brake Power @ ISO Conditions bkW 10.000 8.500 7.500 5.000 2.500 Engine Brake Power @ 33 OC Site Ambient bkW 10.000 8.500 7.500 5.000 2.500 0% Generator Efficiency @ 0.8 PF, 60 Hz % 97,3% 97,2% 97,1% 96,4% 94,0% 0% Guaranteed Generator Set Output (@ Gen. Terminals) ekW 9.730 8.262 7.283 4.820 2.350 0% M9hir nov, m Ci wu r mw -a od Gr r:ofor &M 0v.flput ,okvv 9, ,14,1& 0% Genset Performance @ 33 OC / 91 F Site Ambient, RH40% @1013 hPa (Summer Design (1 %) 91/72 DegF (DB/WB) as per Project Manual) Efficiency(@flywheel, with pump) % 48,5 48,1 47,6 45,7 41,1 -5% Efficiency gen terminals) % 47,2 46,8 46,2 44,1 38,6 -5% Nominal Heat Rate (@ gen terminals): kJ/kWh 7.629 7.700 7.789 8.172 9.318 -5% Heat Rate (LHV basis) BTU/kWh 7.231 7.298 7.383 7.746 8.832 -5% Heat Rate (HHV basis) BTU/kWh 8.012 8.086 8.180 8.582 9.786 -5% Guaranteed Generator Set Heat Rate (@ Gen. Terminals): kJ/kWh 8.010 8.085 8.178 8.581 9.784 0% (see Note 6) Heat Rate (LHV basis) BTU/kWh 7.592 7.663 7.752 8.133 9.273 0% Heat Rate (HHV basis) BTU/kWh 8.428 8.506 8.604 9.027 10.275 0% M odevowve Gwv r oMrP- d G�r+ rafor &M dda= of Cobi',m k,.PIWfV?f Br 9.4r'8" p Genset Performance @ 25 OC / 77 F Site Ambient, RH45% @1013hPa (ISO Conditions) Efficiency (@ flywheel, with pump) % 48,8 48,4 47,9 45,8 41,2 -5% Efficiency gen terminals) % 47,5 47,0 46,5 44,2 38,7 -5% Nominal Heat Rate (@ gen terminals): kJ/kWh 7.582 7.652 7.740 8.154 9.296 -5% Heat Rate (LHV basis) BTU/kWh 7.186 7.253 7.336 7.729 8.811 -5% Heat Rate (HHV basis) BTU/kWh 7.962 8.036 8.128 8.563 9.762 -5% Guaranteed Generator Set Heat Rate (@ Gen. Terminals): kJ/kWh 7.961 8.035 8.127 8.562 9.761 0% (see Note 6) Heat Rate (LHV basis) BTU/kWh 7.546 7.615 7.703 8.115 9.251 0% Heat Rate (HHV basis) BTU/kWh 8.376 8.453 8.550 9.008 10.251 0% d'9 0Vevov,M wo r oMrP-e4 � m+�rafor &M dda= of Cofi',m ks.PIWfV?f Br ;, ";;f9 O Lube Oil Consumption (Per Engine Basis): Lube Oil Consumption @ Site Conditions g/ekWh 0,308 +/-50% (see Note 4) kg/h 3,000 +/-50% Guaranteed Lube Oil Consumption kg/h 4,500 0% Guaranteed Lube Oil Consumption US gal/hr 1,321 Andrei Ungureanu caterpillar Confidential: Green 1/2 10/17/2017 CATERPILLAR' Project: HUTCHINSON POWER STATION (2xG20CM34), MN, USA PLANT PERFORMANCE REPORT Rev.9 Ammonia Consumption (Per Engine Basis) Expected Ammonia Consumption, 19% SolutionI/h Maximum Ammonia Consumption, 19% Solution I/h 26,0 35,0 +/-35% 0% Engine (Pre -Treatment Emissions Data Per Engine Basis): Note 7) " " " " NOx /ekWh 1,24 CO /ekWh 0,92 VOC as NMNEHC /ekWh 0,21 PM10 (Dry) g/ekWh 0,051 Total Particulates(including condesables /ekWh 0,082 Formaldehyde /ekWh 0,21 Total HAP Acetaldeh de+Acrolein+Methanol /ekWh 0,21 Maximum Emissions Reductions with SCR and Oxidation Catalysts - BACT : " " " " " " NOx % 93% CO % 93% VOC as NMNEHC % 50% PM10 D % 0% PM10 % 0% Formaldehyde % 93% Total HAP Acetaldeh de+Acrolein+Methanol % 75% Post-treatment Guaranteed Emissions Data Per Engine Basis - BACT : " " " " " " NOx /ekWh 0,09 CO /ekWh 0,065 VOC as NM NEHC /ekWh 0,10 PM10 D /ekWh 0,051 PM10 / PM2.5 Total including condesables /ekWh 0,082 Formaldehyde /ekWh 0,01 Total HAP Acetaldeh de+Acrolein+Methanol /ekWh 0,05 Ammonia slip m 15%02 1 uennnions ana wnanions 1) Fuel consumption measured at site shall be corrected to reference conditions using calculations provided in ISO 3046. 2) Reference conditions are: 33 °C ambient air temperature, 315 m altitude, 80M Natural Gas, Relative Humidity 40% (acc. to Project Manual) 3) Performance verification at site shall be performed according to Caterpillar site testing procedure. 4) Lube oil consumption will stabilize at the value indicated after a running -in period of 1000 h. 5) Site Design Data is based on customer -provided or publicly available data. Should actual site conditions deviate from these design conditions, Caterpillar may adjust the rating accordingly. 6) Guarantee Heat Rate shall be @ 100% load only. Partial load heat rates are indicative. 7) Emissions are based on ISO 3046 reference conditions. PM 10 values above are on dry basis. *) This parameter is dependent on gas quality. Only when saturated Hydrocarbons C3 and greater (such as propane +buthane + penthane + hexane) remain below < 0.50 vol (same % as in the Natural Gas analisys in the the HUC Project Manual). Derate Curve: Legend: ,qp u3 S,I ,.J V':IY.Aput, Generator Set Site Output Il ha t IIIUA. (nR,Y Sit., gaaln to 1,1,1n., aF0 R 1111 QII uu a aP.1milroa as palugx..nav nnlllyp 10.500 10.000 9.500 9.000 Y d 0 8.500 a 8.000 7.500 7.000 -35 -25 -15 -5 5 15 25 35 45 Temperature [degree q to 000 8 800 8 600 r; 8400 � IIA°: n ala I t': 8 100 8 000 7 800 Andrei Ungureanu caterpillar Confidential: Green 2/2 10/17/2017 EXHIBIT 7.03 BASIC ENGINEERING DELIVERABLES LIST -REV 3 r-. o m N N O � O � C O � Q 40'0,, p £ W is E _ £ - O m 5 � Q5 fn N N N Y N N U IL U W IL O N O N N m Fmz O (ai ZZ,LLI ¢ w LLI O z z z N LL w a Y O� O Z V w U �F- ZW z ILZZ IL 02') O? a a 0 m 0 J Q a W > p LLLL O Xza0C LLL,U U Wa W O ¢ O O Cl)W ',. J J (A Uo U J W y ~ LLI Z i! m W W Z_ U Z; W Z' U O (A Q F ' q m U LL. 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PRESSURE TRANSMITTER - CHARGE AIR COOLER 1 PRESSURE SENSOR - OIL & GAS PRESSURES 344692-430 1 TEMPERATURE SENSOR - OIL, WATER, CHARGE AIR & GAS 344692-431 1 PRESSURE SENSOR - CHARGE AIR 344692-433 1 PRESSURE SENSOR- WATER 1 EXHIBIT 7.05 DESIGN CRITERIA -REV 3 Vve,k..TERPILLAR I " 1.0 SITE REQUIREMENTS Caterpillar Motoren GmbH & CO KG DESIGN CRITERIA (rev.3) Hutchinson Power Plant G20CM34 VALUE (UNITS REMARKS Existing power house, engine foundations Site Environment Normal Elevation 314 meters Minimum Temperature -34 °C Maximum Temperature 40 `C Max. Wind Velocity kph Acord. to IBC 2012 Maximum Humiditv 26 a/ka Acord. Dubliclv available data t *" Generation Voltage Level 13.8 kV power factor 0.8 Load Requirements 19 MW at Alternator terminals Operating hours per year 5000 hrs Plant load factor 100 % During the 5000 operating hours Auxiliary control Voltage 480V 24V DC [( 1 ��1p INMll+3 Project Specifications Available Yes Powerhouse building Concrete Cooling System Cooling Twr Assumed Temperature Rise in Enoine Hall Other °C Existino Dower house ame 5.0 GENERAL NOTES: Notes: Existing power house and engine foundations. Gensets will be placed by Caterpillar on Genset systems (Caterpillar Scope of Supply) will be adapted to fit the existing powerplant. Page 1 of 1 EXHIBIT 7.06 FACTORY ACCEPTANCE TESTS -REV 2 UA M ..I I&H FACTORY PERFORMANCE TEST — ENGINE Standard Acceptance Test Run for CM - Gas Engines The acceptance test run is carried out on the test bed with customary equipment and auxiliaries using natural gas as it is available at the testing facility and under the respective ambient conditions of the test bed. The engine will be run at the following load stages. After reaching steady state conditions, the pressures and temperatures will be recorded and registered according to the form sheet of the "acceptance test certificate" Load (in %) Duration (in min) 50 20 75 20 100 60 In addition, the following functional tests will be carried out: Emergency shut down via minimum oil pressure Start/stop via central engine control room Measurement of crank web deflection (cold/warm condition) The following parameters will be measured and recorded - Load. - Speed. - Fuel consumption. - Operating temperatures for lube -oil, cooling water, exhaust gas, etc. - Checks for protection and warning devices. - Checks for automatic operation of temperature and pressure controls on engine. After the acceptance test run, the main running gear, the camshaft drive and the timing gear can be inspected through opened covers. Inspection of other engine components such as pistons or bearings do not form part of the standard acceptance tests. Caterpillar Confidential: Green Page 1 of 4 10/11/2017 Rev.2 ' M .. I I&H 4 1 FACTORY PERFORMANCE TEST — GENERATOR Testing Program for Standard Generators 1. Measurement of resistance when cold (stator, rotor, exciter armature, exciter inductor) 2. Adjustment of no-load voltage 3. Verification of voltage balance 4. Verification of phase order 5. Verification of the regulation with load, at the maximum power available on platform during the testing. 6. Dielectric rigidity test 7. No-load curve 8. Short-circuit curve 9. Calculation of efficiencies by the method of separate losses 10. Measurement and calculation of reactances. Caterpillar Confidential: Green Page 2 of 4 10/11/2017 Rev.2 CGas ,offT Engine Acceptance Test Record Sheet 1 of Engine Type: G20CM 34 �=Order No.: Engine No.. 00815 Atmospheric conditions during test run: Relative humidity: % Altitude: m We used for the test run: Heat value like actual Gas analysi& 0 MJ/N M3 Density: 0 kg/Nm' Test bed: Luboil type: 0 Hydraulic brake: Engine data: V-Engine i rotation ( viewed from the drive end Rated power- 0 kW Rated speed: 750 1/min Firing order: Bore: 340 mm Stroke: 0 mm Charger type: Number: Specification: Max speed: 11min t Max: 'C Ge neratoricom pressor: Emissions data: Type Application Cycle Manufacturer Test result of parent engineNOx: mg/Nml Inlet valve opens Inlet valve closes Exhaust valve opens Exhaust valve closes before TDC(AIB): (AIB): before BDC(/VB): after TDC(NB): Flywheel diameter: mm I' : mm Exh. measurement Heat Value Gas Series Pe[%] NOx[ppm ] CH 4 ppm CO[ppm] CO2[%] 021% [MJ/Nm'] No, I cylinder on flywheel end of engine Bank A =: left viewed from drive end Bank B = right viewed from drive end Acceptance Mechanic Engineer Approved Acceptance Date Sign. . ............. DICARE f. Windows I Version 2.0 1 OB.66.2017 Caterpillar Confidential: green El cs vs CL E cn " u m b m 0 m W, 0 110 .m O7 lo CL w i m w w c > w CL ccO o :E w < 0 .......... 0 z 1, 097Im rn 0 LcLj: C CL E .0 u 7 v (D 3 m 0 uj L) LL 0 ON r u cr) It �E m o F- 1: 0— E 0) CY) Lu oE CL ca W 40 -A 0 D- -0 CL 04 E m x W 0 ti ct 0 is es .0 E a) -M N EL EL J3 �z > C6 Q. CL -0 m .5 76 cEL CL x -30 C > o E c c 0 E z - E o to 8E :�' 0 m m Lu u as cz 2 'a = r= L) E CL CL z co o Z" wc m m m m EXHIBIT 7.07 PERFORMANCE TESTS PROCEDURES -REV 5 CATERPILLAR A Power Plant Performance and Functional Test Procedures HUC — Hutchinson, MN TABLE OF CONTENTS 1 Purpose...................................................................................................................................... 3 2 Testing Prerequisites................................................................................................................. 3 2.1 General.......................................................................................................................................3 2.2 Caterpillar Functional Tests.................................................................................................... 3 2.2.1 Speed regulation from no-load to full-load........................................................................... 3 2.2.2 Functional tests on local control panel and/or common control panel ............................... 3 2.2.4 Reliability Test: ........................................................................................................................ 3 2.2.5 Capability & Thermal Efficiency Test................................................................................... 4 3 Caterpillar Performance Testing............................................................................................. 5 3.1 General.......................................................................................................................................5 3.2 Power Plant Output Test.......................................................................................................... 5 3.2.1 Instruments.............................................................................................................................. 6 3.2.2 Procedure.................................................................................................................................6 3.2.3 Result Interpretation............................................................................................................... 6 3.3 Power Plant Heat Rate Test..................................................................................................... 7 3.3.1 Instruments.............................................................................................................................. 7 3.3.3 Result Interpretation............................................................................................................... 8 3.4 Emissions Testing...................................................................................................................... 8 3.4.1 NOx as NO2(Nitric Oxide and Nitrogen Dioxide) Emissions ............................................... 8 3.4.2 CO (Carbon Monoxide) Emissions........................................................................................ 8 3.4.3 VOC (Defined as NMNEHC, Non -Methane, Non -Ethane Hydrocarbon) Emissions........ 8 3.4.4 HCHO (Formaldehyde) Emissions......................................................................................... 8 3.4.5 Total HAP (Hazardous Air Pollutants) Emissions................................................................ 8 Caterpillar Confidential: Green 1 Rev. 5 3.4.6 PM 2.5 and PM10 (Particulate Matter including condesables) Emissions ......................... 8 3.4.7 Ammonia Slip.......................................................................................................................... 9 3.4.8 Opacity..................................................................................................................................... 9 3.5 Lube Oil Consumption............................................................................................................. 9 3.5.1 Instruments.............................................................................................................................. 9 3.5.3 Result interpretation............................................................................................................... 9 3.9 Ammonia Consumption Test..................................................................................................... 9 Caterpillar Confidential: Green 2 Rev. 5 1 Purpose This document shall define the procedures and responsibilities for the Performance Tests conducted at the power plant. 2 Testing Prerequisites 2.1 General In order to initiate performance testing, all commissioning activities of the power plant shall be completed, the plant shall be in safe operating condition, and HUC has obtained permission to export power into the electric grid. The following shall be available: - Operating media as per manufacturer's and /or contractual specification - Trained operators - Sufficient load/connection to the grid - Sufficient ventilation and cooling - Measurement instruments as specified in this document - Relevant permits - Operation manuals - Representatives of relevant sub -suppliers and external parties 2.2 Caterpillar Functional Tests The following functional tests shall be performed and completed as part of commissioning activities prior to performance testing. 2.2.1 Speed regulation from no-load to full -load as per Caterpillar's specification: Speed regulation for load rejection. 2.2.2 Functional tests on local control panel and/or common control panel. 2.2.3 Generator: Voltage regulation test from no- load to full -load. Frequency regulation test. Functional test on control & relay panel. Testing of operation of engine -generator interlocks. 2.2.4 Reliability Test: The purpose of the reliability test is to prove functional performance of the power plant during a load sequence which is representative of the anticipated operating characteristics. The test period operational MW output shall range between the prime mover rated capacity at site conditions to a part -load MW output (without exceeding the min. stable output of 2500 kW mechanical). The test period may also include scheduled shut -downs, off-line periods and scheduled restart and operational periods. Caterpillar Confidential: Green 3 Rev The engine generator systems shall achieve stable operations with the generated electric power as required to meet the load conditions demonstrating normal operation with reliable stops and starts as required for "peaking" service over a 150 hour period. Two scheduled start -run -stop sequences shall be performed within each 24 hour period. In the event that the equipment fails at any point in the test, the test clock will return to zero and the test will be repeated until 150 consecutive hours of normal operation as defined above is achieved. Each unit and its auxiliaries must be in a continuous state of availability for the duration of the reliability test. In the event of any mechanical or electrical failure of any portion or component of the generation system furnished by Caterpillar during the reliability testing, Caterpillar shall correct such deficiency without violating any other provisions of the contract. The testing shall be restarted following such repair. In the event of any minor failure that can be readily addressed without replacing failed items, Caterpillar shall correct such deficiency without violating any other provision of the contract, and the testing shall be allowed to continue from the elapsed time when such failure occurred. The generator set shall be in its normal operating mode that is representative of a long term operating mode with normal auxiliaries in service in automatic mode. No normally operating systems shall be taken out of service including the bypassing or suppressing of alarms or trips. Caterpillar shall follow prudent, safe and reliable operating practices. Equipment shall be operated as designed and within specification and alarm limits consistent with good power generation industry practice. The configuration of the plant shall be reviewed and verified by HUC. Should the 150 hour test be interrupted by HUC, HUC shall compensate Caterpillar for any additional time required to complete the test in accordance with the terms of the Contract. HUC shall also have the option to start the functional test at the point of interruption and continue the test counting the previous operation toward the time required for the functional test. The test shall have been satisfactorily completed when the generator sets have operated continuously for not less than 150 hours. The functional test shall be executed with all units running in parallel as much as practically possible. The operating sequence for the test shall be defined by HUC before the start of the test. 2.2.5 Capability & Thermal Efficiency Test The purpose of this functional test is to demonstrate the plant performance at the site consistent with Caterpillar's Performance Criteria stated in Exhibit 7.02 of the Procurement Contract. The test will consist of a 4 hour, full load test using available gas quality and quantity data from the plant's custody transfer station and plant output instrumentation sufficient to confirm plant output. Interpretation of test results shall be consistent with definitions and conditions included in Exhibit 7.02 of the Procurement Contract. Caterpillar Confidential: Green 4 Rev. 5 3 Caterpillar Performance Testing 3.1 General Repetition or abortion of one test shall not constitute other tests to be repeated or aborted. Tests shall be performed at a load as close to 100 % nominal engine load as possible unless defined otherwise in the contract. During the test, equipment shall be operated by Caterpillar's qualified commissioning and testing personnel, under the presence and support of HUC personnel. A test log will be maintained throughout the tests. All deviations from these testing procedures, unusual occurrences and pertinent data will be recorded in this log. Data sheets, together with any notes recorded on data sheets or supplemental sheets, and the test log will be part of the written documentation of this test. Calibration and accuracy certificates of instruments used shall become part of the test documentation. All original data sheets for completed and approved tests shall become the property of HUC. A copy of the available test data shall be provided to HUC promptly after execution of the performance test. Test results are considered temporary until validated and submitted with the performance test report. Caterpillar shall provide a performance test report 30 days after completion of Caterpillar's performance test, but not later than 15 days after receipt of HUC's gas sample analysis report. Caterpillar shall provide to HUC a performance test schedule, outlining the daily activities, no later than 30 days prior to commencement of the performance test. Changes to these site performance test procedures may be made if mutually agreed between the HUC' designated representative and Caterpillar's project manager 180 days prior to commencement of the performance tests. Should testing cost increase by such changes these cost shall be borne by the party requesting the changes. Cost of any additional test that is not specified in this procedure and is performed by any third -party shall be borne by the requesting party. 3.2 Power Plant Output Test The power plant output test shall demonstrate the generator sets' ability to produce power at full load as defined in Exhibit 7.02 of the Procurement Contract. The power plant output test shall be performed simultaneously with the heat rate test. Caterpillar Confidential: Green 5 Rev. 5 3.2.1 Instruments Accuracy: Accuracy of all the measuring equipment shall meet at a minimum the recommendations of ISO 3046 and 8528. 3.2.2 Procedure Load program: 100% for 4 hours, at a minimum power factor of 0.80 Power plant output shall be measured at the outgoing terminals of the alternators. As a result, all parasitic loads will not be included in the measurement. Temperature, humidity and ambient air pressure will be recorded throughout the test. Generator set power factor shall be at a minimum of 0.80 during measurements. KWh readings shall be recorded at the start period, and end period of the test run. The difference between the end period reading and the start period reading equals the produced kWh for each generator. Individual genset output shall be measured at each generator breaker An engine trip or reduction in power shall disqualify the test. If due to interruptions related to Caterpillar's scope of supply, the 4 hour 100% power plant output test cannot be successfully completed, the test may be stopped at Caterpillar's discretion and repeated after problems are corrected. 3.2.3 Result Interpretation The power plant shall meet a minimum capacity factor of 95 % for each individual engine - generators connected to a stable grid. Capacity factor is defined as actual kilowatt-hours produced during the test divided by the product of the duration of the test and the rated power plant output. Caterpillar Confidential: Green 6 Rev. 5 Part of Plant Equipment Mobile Meter by Caterpillar Mobile Meter by HUC KWh meter @ each generator breaker X Ampere meter @ each generator breaker X Volt Meter @ each generator breaker X p.f. meter @ each generator breaker X Thermometer (air temperature) X Hydrometer X Barometer X Accuracy: Ampere meter, 0.5%; Volt meter, 0.5%, power factor meter, 1%. Accuracy: Accuracy of all the measuring equipment shall meet at a minimum the recommendations of ISO 3046 and 8528. 3.2.2 Procedure Load program: 100% for 4 hours, at a minimum power factor of 0.80 Power plant output shall be measured at the outgoing terminals of the alternators. As a result, all parasitic loads will not be included in the measurement. Temperature, humidity and ambient air pressure will be recorded throughout the test. Generator set power factor shall be at a minimum of 0.80 during measurements. KWh readings shall be recorded at the start period, and end period of the test run. The difference between the end period reading and the start period reading equals the produced kWh for each generator. Individual genset output shall be measured at each generator breaker An engine trip or reduction in power shall disqualify the test. If due to interruptions related to Caterpillar's scope of supply, the 4 hour 100% power plant output test cannot be successfully completed, the test may be stopped at Caterpillar's discretion and repeated after problems are corrected. 3.2.3 Result Interpretation The power plant shall meet a minimum capacity factor of 95 % for each individual engine - generators connected to a stable grid. Capacity factor is defined as actual kilowatt-hours produced during the test divided by the product of the duration of the test and the rated power plant output. Caterpillar Confidential: Green 6 Rev. 5 Capacity factor = - (Sum of actual generator kWh produced during test) (Test duration in hours x rated power plant output) Electrical output, actual kilowatt-hours produced, and all test data shall be corrected to base conditions as defined in the plant performance report of the Contract using methods and calculations provided by ISO 3046. 3.3 Power Plant Heat Rate Test The power plant heat rate test shall demonstrate the generator sets' ability to produce power at the heat rate as defined in Exhibit Genset Performance Report of the Procurement Contract. To be performed simultaneously as power plant output test specified above. 3.3.1 Instruments 3.3.2 Procedure Power plant output shall be measured at the outgoing terminals of the alternators. As a result, all parasitic loads will not be included in the measurement. Temperature, humidity and ambient air pressure will be recorded throughout the test. Individual genset output shall be measured at each generator breaker. Fuel consumption shall be measured by the flow meter installed on each engine as provided by CAT and installed by HUC. Caterpillar may, at its discretion and expense, install a temporary fuel meter(s) to verify the accuracy of any of HUC's meters. A calibration certificate of the fuel meter shall be made available prior to the performance test. Caterpillar Confidential: Green 7 Rev. 5 Part of Plant Equipment Mobile Meter by Caterpillar Mobile Meter By HUC Fuel Flow Meter (Main, by gas supplier) X Fuel Flow Meters (per engine, by HUC) X Fuel Thermometer X kWh meter @ each generator breaker X Ampere meter @ each generator breaker X Volt Meter @ each generator breaker X p.f. meter @ each generator breaker X Stop -watch X Thermometer (air temperature) X Hydrometer X Barometer X Accuracy: Ampere meter, 0.5%; Volt meter, 0.5%, power factor meter, 1%. 3.3.2 Procedure Power plant output shall be measured at the outgoing terminals of the alternators. As a result, all parasitic loads will not be included in the measurement. Temperature, humidity and ambient air pressure will be recorded throughout the test. Individual genset output shall be measured at each generator breaker. Fuel consumption shall be measured by the flow meter installed on each engine as provided by CAT and installed by HUC. Caterpillar may, at its discretion and expense, install a temporary fuel meter(s) to verify the accuracy of any of HUC's meters. A calibration certificate of the fuel meter shall be made available prior to the performance test. Caterpillar Confidential: Green 7 Rev. 5 During the 4 hour test -period, sixteen measurement -readings are being recorded for every 15 minute time interval, plus one addition reading at the start of the performance test. For each reading, data from the weather station (ambient temp, pressure, humidity), fuel flow meter, the fuel thermometer and the kWh -meter are being manually recorded. Ambient conditions shall be recorded at the beginning and the end of the performance test. Three fuel samples, i.e. one at the start, one in the middle, and one at the end of the performance test period, shall be taken by HUC under witness of Caterpillar in order to determine the lower heat value, and fuel gas composition. The gas analysis results shall be corrected to ISO3046 standard condition. Plant heat rate shall be calculated as the average of the individual heat rate measured on a per genset basis during the performance test. 3.3.3 Result Interpretation Caterpillar will use readings and fuel test result to calculate power plant heat rate. Data shall be corrected to the reference conditions stated with the specified values (see Exhibit 7.02 of the Procurement Contract) using calculations as provided by ISO 3046. 3.4 Emissions Testing Emissions testing shall be conducted at 100% load. Each engine must be tested. Compliance with each emission guarantee will be based on the average of 3 (three) runs, with results reported in units consistent with the Caterpillar guaranteed values. 3.4.1 NOx as NO2(Nitric Oxide and Nitrogen Dioxide) Emissions (NOTE: Test shall be performed by others within 180 days from fire of first engine at site, according to US EPA Method 7E). 3.4.2 CO (Carbon Monoxide) Emissions (NOTE: Test shall be performed by others within 180 days from fire of first engine at site, according to US EPA Method 10) 3.4.3 VOC (Defined as NMNEHC, Non -Methane, Non -Ethane Hydrocarbon) Emissions (NOTE: Test shall be performed by others within 180 days from fire of first engine at site, according to US EPA Method 18, targeting pentane, hexane, benzene, heptane, octane, methane, propane, butane and ethane). 3.4.4 HCHO (Formaldehyde) Emissions (NOTE: Test shall be performed by others within 180 days from fire of first engine at site, according to US EPA Method 323) 3.4.5 Total HAP (Hazardous Air Pollutants) Emissions (NOTE: Test shall be performed by others within 180 days from fire of first engine at site, according to US EPA Method 18, targeting acetaldehyde, acrolein, methanol) 3.4.6 PM 2.5 and PM10 (Particulate Matter including condensables) Emissions (NOTE: Test shall be performed by others within 180 days from fire of first engine at site, according to US EPA Method 5/202) Caterpillar Confidential: Green 8 Rev. 5 3.4.7 Ammonia Slip (NOTE: Test shall be performed by others within 180 days from fire of first engine at site, according to US EPA Method CTM -027) 3.4.8 Opacity (NOTE: Test shall be performed by others within 180 days from fire of first engine at site, according to US EPA Method 9) 3.5 Lube Oil Consumption Lube oil consumption test shall only be performed after 1000 hours running in period. 3.5.1 Instruments 3.5.2 Procedure 1) Stop engine for one hour, let the oil drain off the engine into the oil pan, 2) measure oil level using dip stick and mark position on dip stick, 3) operate engine for 24 hours continuously, 4) stop engine for one hour, let the oil drain off the engine into the oil pan, 5) top up the oil level to the mark set before (item 2), weigh the top -up quantity. 3.5.3 Result interpretation Divide the weight of the top -up quantity by the operating time (24 hours) to get to a kg/h number which shall be equal or lower than the specified value (see Exhibit 7.02 of the Contract) 3.9 Ammonia Consumption Test The Ammonia dosing rate will be calibrated for each system by SCR (Selective Catalytic Reduction) by the supplier's project engineer at start-up and commissioning. This will take place when the Ammonia dosing rate is set to the associated NOx emissions reduction set point. Once calibrated, the actual consumption will be a calculated value by the SCR Controller. Caterpillar Confidential: Green 9 Rev. 5 Part of Plant equipment By Caterpillar By HUC Oil dip stick X Operating hour meter X 3.5.2 Procedure 1) Stop engine for one hour, let the oil drain off the engine into the oil pan, 2) measure oil level using dip stick and mark position on dip stick, 3) operate engine for 24 hours continuously, 4) stop engine for one hour, let the oil drain off the engine into the oil pan, 5) top up the oil level to the mark set before (item 2), weigh the top -up quantity. 3.5.3 Result interpretation Divide the weight of the top -up quantity by the operating time (24 hours) to get to a kg/h number which shall be equal or lower than the specified value (see Exhibit 7.02 of the Contract) 3.9 Ammonia Consumption Test The Ammonia dosing rate will be calibrated for each system by SCR (Selective Catalytic Reduction) by the supplier's project engineer at start-up and commissioning. This will take place when the Ammonia dosing rate is set to the associated NOx emissions reduction set point. Once calibrated, the actual consumption will be a calculated value by the SCR Controller. Caterpillar Confidential: Green 9 Rev. 5 EXHIBIT 7.08 ENGINE TOOL LIST (Tool Catalogue) E r_ w E as 0 E 4) 0 0 N 0 J4 0 0 Oz E 4) N ili 0 C s- o 'S je z 15 E'm N LL = ch 5, 0) 0,5 J4 0) N J4 Im Im m 4) 0 o M IM Q 4- Im F - cm E 0 IM cm r 0 w r - E ch x W 0 .Cu 4-- 0 C) -a co C) N O O Al C) N O O Al C) N O O Al «« CL }c co co co co c � )ƒ MD _ )§ z E } R § «� 3 \ a: � ) / « 2 E z « CD 2 « 2 co }c co co co c � )ƒ _ )§ ) } «% § 3 \ oCL ) / j / \ (co 00% z m LO C14 � 0 CN � 9 I— C) E @ O M y _ � 0 U M .QL 7 Al C) N O O Al C) N O O Al z z 2 2 � � k § c 00 MD co 3 ]]] z co � 3 CN (D 0 � 0 E @ O @ C: _ 2 § U � � _ 7 Al �-co \\)/ k) 2E 14 ±« I± {2- /{* p0 ]op). 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