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02-16-1982 HUCMC; co O C0 60 N O N I c co (DO 0 E ca 0 O `•- E Oun0 0 0 C 0 00 0 0 0- C N �L 0 i O N � t0n cn 0- E L Of f oco 60 N O N I 7 O ch O Q r- 0 E m o >, O "- c Ocn0 O 0 U) �# U) C 0 0 0 Q N N D 1 -2 L Q 0 � i N of Q Z LL Special Meeting February 16, 1982 Commissioner Filk and Commissioner Daggett were present, also present were Mgr. Alexander, Ruth Hakel and Counsel Peterson. The meeting was called to order at 1:30 p.m. by President Filk. Mgr. Alexander presented three copies of the 1982 Interconnection and Interchange Service Agreement between Hutchinson Utilities Commission of City of Hutchinson a Municipal Corporation and United Power Association. The period of transaction to be January 1, 1982 thru April 30, 1986. Upon recommendation by Associated Consultants, Counsel Peterson and Manager Alexander, a motion was made by Commissioner Daggett, seconded by Commissioner Filk to approve and properly execute the contract as presented. Motion was unanimously carried. (Attached find copy, original copy on file) Motion was made by Commissioner Daggett, seconded by Commissioner Filk to execute a lease between Hutchinson Utilities Commission and United Power Association. Motion was unanimously carried. (Refer to December 23, 1981 minutes - page 24) Resolution No. 2 was presented: WHEREAS, the Hutchinson Utilities Commission has considered the establishment of a deferred compensation plan where -in the funds shall be invested in any or all of the following: Putnam Fund Distributors, Inc.; Lord Abbett and Company; and American Funds Distributors, Inc. NOW, THEREFORE, BE IT RESOLVED that the Hutchinson Utilities Commission of the City of Hutchinson establish said deferred compensation plan, a copy of which is attached hereto, and authorize its officers to execute said plan. Motion was made by Commissioner Daggett, seconded by Commissioner Filk to adopt Resolution No. 2 establishing a Deferred Compensation Plan to enable employees to join Putnam Fund Distributors, Inc. Resolution No. 3 was presented: WHEREAS, the Hutchinson Utilities Commission has in its employ certain personnel; and WHEREAS, said employees are and will be rendering valuable services to the Hutchinson Utilities Commission; and 1 WHEREAS, the Hutchinson Utilities Commission has considered the establishment of a Deferred Compensation Plan for the said employees made available to the Hutchinson Utilities Commission and to said employees by the International City Management Association Retirement Corporation; and WHEREAS, said employees often are unable to acquire retirement security under other existing and available retirement plans due to the contingencies of employment mobility; and WHEREAS, the Hutchinson Utilities Commission receives benefits under said plans by being able to assure reasonable retirement security to said employees, by being more able to attract competent personnel to its service, and by increasing its flexibility in personnel management through elimination of the need for continued employment for the sole purpose of allowing an employee to qualify for retirement benefits. NOW, THEREFORE, BE IT RESOLVED that the Hutchinson Utilities Commission establish said Deferred Compensation Plan for said employees and hereby authorizes a Commissioner to execute the Deferred Compensation Plan with the International City Management Association Retirement Corporation, attached hereto as Appendix 1; and IT IS FURTHER RESOLVED that the General Manager may, on behalf of the Hutchinson Utilities Commission, execute all Joinder Agreements with said employees and other eligible officials and officers, which are necessary for said persons participation in the Plan, an example of which appears at Appendix 3, except that any Joinder Agreement for said designated official shall be executed by a Commissioner. Motion was made by Commissioner Daggett, seconded by Commissioner Filk to adopt Resolution No. 3 establishing a Deferred Compensation Plan to enable employees to join International City Management Association Retirement Corporation. Mgr. Alexander presented correspondence received from Attorney Robert M. Frisbee, representing Hydrodynamics, Inc. This company is in the process of negotiating a contract to construct a hydroelectric generating plant at the St. Cloud dam. The City of St. Cloud would utilize approximately 25% of the 6.5 megawatt capacity. The remaining energy production has been offered to the Hutchinson Utilities Commission. After discussion, a motion was made by Commissioner Filk, seconded by Commissioner Daggett authorizing Mgr. Alexander to write a letter stating that the Hutchinson Utilities Commission is interested in purchasing additional energy and to permit Mgr. Alexander to enter into discussion with people involved in hydroelectric generation. Motion was unanimously carried. Motion was made by Commissioner Daggett, seconded by Commissioner Filk to authorize Mgr. Alexander and Commissioners to attend the American Public Power Association's 1982 Annual National Conference to be held at New Orleans, Louisiana on May 24 -26. Permission was given to Mgr. Alexander to attend The Policy Boards Seminar and The Managers Seminar on May 21 -22. Due to various conflicts, the regular February meeting will be held on February 25, 1982 and the regular March meeting will be held on March 30, 1982. There being no further business, the meeting adjourned at 3 :20 p.m. ATTEST H. W. Filk, President Ruth Hakel, Assistant Secretary 1 1 INTERCONNECTION AND INTERCHANGE SERVICE AGREEMENT Between HUTCHINSON UTILITIES COMMISSION OF CITY OF HUTCHINSON A MUNICIPAL CORPORATION and UNITED POWER ASSOCIATION Dated: •gyp' 1 i article 1 TABIJE OF' CONTENTS - -e-- -I - Subject I Termination of Existing Agreements II Other Existing Agreements III Definitions IV Interconnections & Facilities V Transmission Obligations VI Maintenance of Adequate Capability VII Service Obligations VIII Service Conditions IX Records X Billings and Payment XI XII Taxes 11 Term XIII Membership XIV Uncontrollable Forces XV Liability XVI Arbitration XVII Notices XVIII Approvals XVX 1 TABIJE OF' CONTENTS - -e-- -I - Subject Page Termination of Existing Agreements 2 Other Existing Agreements 2 Definitions 2 Interconnections & Facilities 5 Transmission Obligations 6 Maintenance of Adequate Capability 6 Service Obligations 7 Service Conditions 8 Records 10 Billings and Payment 10 Taxes 11 Term 11 Membership 11 Uncontrollable Forces 11 Liability 12 Arbitration 12 Notices 13 Approvals 13 Services to be Rendered 14 IN`T'ERCHANGE SERVICE AGREEMENT INTERCONNECTION AND INTERCHANGE SERVICE AGREEMENT Between HUTCHINSON UTILITIES COMMISSION OF THE CITY OF HUTCHINSON A MUNICIPAL CORPORATION and UNITED POWER ASSOCIATION THIS AGREEMENT, made and entered into this date of , by and between the Hutchinson Utilities Commission of the city Hutchinson, a municipal corporation, hereinafter referred to as the "HUC ", and United Power Association, a Minnesota cooperative corporation hereinafter referred to as "UPA." Both the HUC and UPA are sometimes referred to herein individually as a "Party" or collectively as "Parties." WITNESSETH: WHEREAS, UPA is an electrical power supplier owning large economical electrical generating units and an extensive electrical transmission system with interconnections to the Mid - Continent Area Power Pool (MAPP) members extra high voltage grid, which provides interconnection benefits of reliability and- access to the economies inherent in membership in a large regional power pool, and WHEREAS, the HUC owns and operates an electrical generation and distribution system and is responsible for providing for the electrical energy requirements within and adjacent to the HUC city limits, and WHEREAS, the HUC is interconnected with UPA and desires to maintain a high degree of reliability to its consumers by the benefits of interconnection to a large interconnected system and also provide the opportunity to reduce costs by participating in the schedules of power transactions available as a result of the interconnection, and WHEREAS, as the benefits accrue from the presence of the interconnected system, it is also self- evident that a responsibility exists to participate in the cost burdens associated with the interconnected system which provides these benefits, and WHEREAS, UPA desires to enable the HUC to share-in the benefits and the responsibilities of interconnected operation, and WHEREAS, both Parties are interested in establishing an agreement for the interchange of specified types of electric power and energy, and WHEREAS, UPA and the HUC are parties to an agreement dated October 11, 1965 and supplements thereto which provide for interconnection with the electrical system of UPA and for other services, and 1 WHEREAS, the Parties desire to cancel said October 11, 1965- agreement as supplemented, NOW THEREFORE, the Parties hereto mutually covenant and agree as follows: ARTICLE I TERMINATION OF EXISTING AGREEMENTS 1.01 The following agreements are terminated as of the effective date of this Interconnection and Interchange Agreement: a. Interchange Service Agreement between the HUC of Hutchinson and Rural Cooperative Power Association, dated October 11, 1965 and supplements one (1) and two (2) thereto which supplements are dated August 6, 1968 and February 20, 1976, respectively. b. Letter agreement for purchase of excess capacity by UPA from the HUC, dated February 23, 1976 and effective March 3, 1976. ARTICLE II OTHER EXISTING AGREEMENTS 2.01 UPA, together with other regional power suppliers, presently is a party to the Mid - Continent Area Power Pool Agreement, dated March 31, 1972, as amended, ( "MAPP Agreement "). The MAPP Agreement was last amended on May 1, 1981. It is anticipated that the MAPP Agreement will be amended from time to time in the future and the HUC and UPA both agree to abide by any such amendment of the MAPP Agreement that may pertain to Article III -- Paragraph 3.07 and 3.20; Article VI -- Paragraph 6.02; Service Schedule B -- Section 3, Demand Charge; and Service Schedule H-- Section 3, Demand Charge of this Agreement. UPA shall provide the HUC with a copy of the MAPP Agreement and any future amendments thereto. ARTICLE III DEFINITIONS 3.01 For the purposes of this Agreement and of the Service Schedules which are a part hereof, the following definitions shall apply: 3.02 System Demand of a Party shall mean that number of kilowatts which is equal to the kilowatthour required in any clock hour, attributable 0 0 to energy required by such Party during such hour for supply of firm energy to the Party's consumers, including system losses, and also including any wheeling losses occurring on other systems and supplied by such Party for transmission of such firm energy, but excluding generating station uses and excluding wheeling losses supplied by another system. 3.03 Annual System Demand of a Party shall mean the highest System Demand of such Party occurring during the 12 -month period ending with the current month. 3.04 Participation Power shall mean power and associated energy which is sold or purchased y Parties as provided for in Service Schedule "All 3.05 Seasonal Participation Power shall mean power and associated energy which is sold or purchased by Parties as provided for in Service Schedule "B ". 3.06 Net Generating Capability of a Party for any month shall mean that amount of kilowatts, less station use, that all the generating facilities of such Party could normally supply simultaneously to its system and the interconnected systems of the Parties at the time of such Party's maximum System Demand. The capability of the generating units of a Party which are temporarily out of service for maintenance or repair shall be included-in the Net Generating Capability of such Party. 3.07 Accredited Capability of a Party for any month shall mean (a) the Net Generating Capability of such Party, plus (b) the value in kilowatts assigned to such Party's purchases under Service Schedules "A ", "B ", and "H" hereof and to commitments for power from electric suppliers under separate contracts now existing or hereafter created, and minus (c) the value in kilowatts assigned to any commitment of such Party to deliver power to the other Party under Service Schedules "A ", "B ", and "H" hereof, or to any electric supplier or suppliers pursuant to any valid order or under separate contract or contracts now existing or hereafter created. The Accredited Capability of such Party will be determined and assigned in accordance with the MAPP Agreement. 3.08 Available Accredited Capability of a Party shall mean its Accredited Capability adjusted for generating capacity out of service for maintenance or repair. 3.09 Reserve Capacity of a Party for any month shall mean the excess in kilowatts for ea- Ti Party's accredited capability over such Party's maximum System Demand for such month. 3.10 Spinning Reserve shall mean the amount of unloaded generating capability of a Party connected to and synchronized with the interconnected system of the Parties and ready to take load. Spinning Reserve allocation to any generator shall not exceed the amount of generation increase that can be realized in ten (10) minutes. 3 3.11 Non - Spinning Reserve shall mean all unloaded generating capability not meeting t e Spinning Reserve criteria (Paragraph 3.10) that can be made fully effective in ten (10) minutes. 3.12 Operating Reserve shall mean the sum of Spinning and Non - Spinning Reserve. 3.13 Operating Reserve Obligation shall mean that amount of Spinning Reserve and Non - Spinning Reserve which a Party is obligated under the terms of this Agreement to provide for the purpose of maintaining continuity of service. 3.14 Total Operating Reserve Obligation shall be that amount of Spinning Reserve and Non - Spinning Reserve of the Parties collectively required to maintain continuity of service. 3.15 An Emergency Outage shall mean any unanticipated, unscheduled outage of generating or transmission facilities, however, such outage classification shall not exceed a period of six (6) hours. 3.16 A Scheduled Outage shall mean any outage of generating or transmission faciliti es which is scheduled in advance and shall include the remainder of Emergency Outages which are rescheduled as a Scheduled Outage. Such rescheduling shall be required within six (6) hours of the initiation of the Emergency Outage. 3.17 Emergency Energy shall mean energy which is supplied under Service Schedu e C o this Agreement by one Party to the other Party during and as required by an Emergency Outage on such other Party's system which is not supplied under another provision of this Agreement. 3.18 Scheduled Outage Energy shall mean energy which is supplied under Service Schedule C" of -this Agreement by a Party as a result of a Scheduled Outage which is not supplied under another provision of this Agreement. 3.19 Economy Energy shall mean energy which one Party may deliver under Service Sc edule E" to the other Party for the purpose of replacing more expensive energy. 3.20 Average Production Cost per kilowatthour of a generating unit for a month shall be: a. The total cost of all fuel consumed by the unit in such month divided by the net kilowatthours produced by the unit in such month, plus b. An amount, established by MAPP after annual review which shall represent the average monthly production cost, other than fuel, of the unit. 3.21 Incremental Cost of a supplying Party for operating generating facilities to supply energy to another Party shall be: 4 a. The incremental cost of the fuel, operating labor, and maintenance required to generate the energy necessary to supply (1) the scheduled delivery to the receiving Party's system, plus (2) the average losses incurred on the supplying Party's system, plus b. The incremental cost of starting and operating any generating units which must be started as a result of supplying such energy. The incremental cost per kilowatthour for any particular transaction shall be the total of such costs divided by the kilowatthours scheduled for delivery to the receiving Party either directly by the supplying Party or through an intervening system or systems. 3.22 Decremental Cost of a receiving Party for avoiding the operation of generating facilities through the purchase of energy from the other Party shall be: a. The cost of the fuel, operating labor, and maintenance which such Party avoided using by means of such purchase. b. The decrementa.l cost of avoiding the starting and operating of a generating unit or units. The decremental cost per kilowatthour shall be the total of such costs divided by the number of kilowatthours scheduled for delivery to the receiving Party either directly by the supplying Party or through an intervening system or systems. 3.23 Peaking Power shall mean power and associated energy which is sold or purchased by the Parties and intended to be available at all times during the period covered by the commitment as provided for in Service Schedule "H ". 3.24 Reserve Capacity Obligation of a Party shall be the capacity which that Party 1s ob igated to reserve and use for the purpose of maintaining continuity of service. ARTICLE IV INTERCONNECTIONS AND FACILITIES 4.01 Points of Interconnection and Ownership The systems of the Parties are interconnected at the points and at the voltages designated in Exhibit A. The division of ownership of interconnection facilities is as designated in Exhibit B. 9 1 ARTICLE V TRANSMISSION OBLIGATIONS 5.01 The delivery of energy to the IIUC results in capacity and energy losses on the UPA transmission system. To compensate UPA for the losses incurred as a result of the power transferred across its transmission system, charges will be assessed on the basis of estimated losses. Initially losses are estimated to be seven (7) percent on the alternating current system and six (6) percent on the direct current system and are subject to adjustment by mutual agreement of the Parties. The capacity and energy charges applicable to losses will be computed at the demand and energy rate in effect for each applicable service schedule and power transaction agreement. 5.02 UPA shall not be obligated to provide transmission capacity hereunder except for that transmission capacity which is related to a specific power transmision agreement attached hereto and made a part hereof. 5.03 The responsibility to participate in the cost burden associated with providing transmission service associated with the service schedules in Article XIX will be assessed at UPA's average cost to own, operate and maintain its Minnesota alternating current transmission system. The charge per kilowatthour shall be established for each calendar year based on the actual total transmission costs including interest, depreciation, taxes, operations and maintenance as reported annually by UPA on Form 12 to the Rural Electrification Administration and dividing such costs by the total kilowatthours delivered over the system for that calendar year. Charges may be based on estimated costs in UPA's operating budget and shall be adjusted to actual costs as reported on the Rural Electrification Administration Form 12 at the end of each year. The Parties shall make appropriate payment based on this adjustment. ARTICLE VI MAINTENANCE OF ADEQUATE CAPABILITY 6.01 Each Party expects and is expected to maintain utility responsibility for its own load and, as a part of -such responsibility, shall maintain during each month of each season Accredited Capability in an amount equal to or greater than its maximum System Demand for such month of each season plus such Party's Reserve Capacity Obligation, as set forth in Paragraph 6.02. C:7 6.02 The Reserve Capacity Obligation of a Party, for any month, shall be equal to that amount as determined by the MAPP Agreement and revised from time to time. Initially the Reserve Capacity Obligation of a Party for any month shall be equal to fifteen (15) percent of the Annual System Demand of such Party. 6.03 The Accredited Capability shall be determined on the following basis: a. In respect to Net Generating Capability, the Accredited Capability shall be determined in accordance with Paragraph 3.07. b. In respect to commitments for power from or to any electric power supplier which are not under the Service Schedules of this Agreement but are under separate contracts now existing or hereafter created, such commitments shall be reflected in a Party's Accredited Capability. Each Party shall submit, if requested, copies of its contracts for such commitments to the other Party. 6.04 Each Party shall review its load and capability forecasts to insure that its capacity obligations are met. If the forecast of a Party indicates that during any month of the ensuing season that its capacity obligations cannot be met, the Party will endeavor to obtain the additional accredited capability required to meet capacity obligations. In the event that during any calendar month capacity obligations are not met, seasonal participation power must be purchased pursuant to Schedule "B ". ARTICLE VII SERVICE OBLIGATIONS 7.01 UPA will endeavor to procure through its interconnections with other electric suppliers power and energy under the Service Schedules in addition to that which can be supplied from owned accredited capability. 7.02 The purchaser purchasing power and energy under the Service Schedules shall be responsible for initiating scheduled deliveries thereunder and the scheduled rate of delivery shall not exceed the amount being purchased under the schedule. In the scheduling of deliveries, due consideration shall be given to the rate of change of delivery and the continuity of deliveries so as not to cause undue hardship on the systems of the Parties. 7.03 The HUC shall maintain a Non- Spinning Reserve in accordance with Paragraph 3.11 in an amount of ten (10) percent of its annual peak load as its share of the Parties Total Operating Reserve Requirement (Paragraph 3.14). UPA shall maintain its Total Operating Reserve Requirement as determined in accordance with the MAPP Agreement as amended from time to time. 7 ARTICLE VIII SERVICE CONDITIONS 8.01 The interconnection shall be operated continuously interconnected under normal conditions. Each Party will be responsible for the reactive requirements of its system. Reactive volt amperes may be interchanged between the systems only when benefit to one system may be gained, thereby without causing hardship to another system. 8.02 All intentional power and energy deliveries between the systems shall be scheduled in advance. It shall be the responsibility of each Party to maintain the net power and energy into and out of its system during each hour so that deliveries are as near as practical equal to the net scheduled amount. The difference between the net scheduled deliveries and actual metered quantities shall be considered as inadvertent. An account shall be established to record this difference. The account shall be used for scheduling in the following month to balance the credit or debit in the account. 8.03 A Purchase Agreement shall be made in writing between the Parties .for Schedules "A ", "B ", and "H ". This Agreement shall be in the form of a Power Transaction Agreement which shall specify the amount of power in megawatt and energy in megawatthour and rates for power megawatt and energy megawatfhour to be purchased. Said Power Transaction Agreement(s) shall be attached to and become a part of this Agreement. 8.04 Operation and Maintenance Each Party will operate and maintain the facilities provided y it unless otherwise provided in Exhibit A. The cost of replacement of such facilities will be borne by the Party owning the facilities unless damaged by the negligent act or omission of the other Party hereto, its agents or employees. 8.05 Associated System Facilities Each Party will provide in its system the facilities necessary for such telemetering, load control, communication, and relay protection necessary for the proper operation of the interconnected systems. 8.06 Points of Metering The transfer of power and energy shall be measure y metering equipment at the locations and at the voltages described in Exhibit C. When meter registrations are not automatically compensated, they shall be increased or decreased by two (2) percent, or as may be otherwise mutually agreed to by the Parties, for each transformation occurring between the point of interconnection and the point of metering in order to compensate to the equivalent of metering at delivery voltage at the point of interconnection. 8.07 Meter Reading Each Party will read its aforesaid meters regularly, at times to be mutually agreed upon, and promptly forward a duplicate copy of such meter readings to the other Party. The demand tapes and /or charts recorded by the meters at the foregoing locations shall be available at all times to authorized employees and agents of each of the Parties hereto for the purposes of this Agreement. 8.08 Meter Tests, Accuracy and Adjustments a. Each meter used hereunder shall, by comparison with accurate standards, be tested and calibrated by the Party owning the meter at approximate intervals of twelve (12) months. If a meter shall be found inaccurate, it shall be restored to an accurate condition or an accurate meter substituted. b. Either Party shall have the right to request that a special test of metering equipment be made at any time. If any test, made at a Party's request, discloses that the metering equipment tested is registering within two (2) percent of normal, the Party requesting the test shall bear the expense thereof. The expense of all other tests shall be borne by the Party owning the metering equipment. C. The results of all tests and calibrations shall be open to examination by both Parties, and a report of every test shall be furnished immediately to the other Party. Any meter tested and found to be not more than two (2) percent above or below normal shall be considered to be accurate. If, as a result of any test, any meter is found to register in excess of two (2) percent. either above or below normal, then the readings of such meter previously taken shall b-e corrected according to the percentage of inaccuracy so found, but no such correction shall extend beyond sixty (60) days previous to the day on which inaccuracy is discovered by such test. d. Should any such metering equipment at any time fail to register, or should the registration thereof be so erratic as to be meaningless, the power and energy delivered shall be determined from the best information available. 8.09 Correction of Trouble If the operation of the systems interconnec e pursuan moo' the provisions of this Agreement result in trouble on either Party's system, including but not limited to interruptions, grounds, radio or telephone interference, unreasonable surges, or objectionable voltage fluctuations, and such trouble is caused by the method of operation or the facilities employed by the other Party, its customers, or third Party suppliers connected to its lines, such trouble shall be corrected by the Party on or through whose system it originates within a reasonable time after receipt of written notice. 8.10 Right of Access Each Party shall give authorized agents and employees of the other Party the right to enter its premises at all reasonable times for the purpose of reading or checking meters, for constructing, testing, repairing, renewing, exchanging or removing any or all of its equipment which may be located on the property of the other Party or performing any work incident to rendering the service hereby contracted. W ARTICLE IX RECORDS 9.01 In addition to meter records, the Parties shall keep log sheets and other records as may be needed to afford a clear history of the various movements of power and energy between the Parties. Each Party shall render to the other Party the appropriate data, including any special tests in such detail and with such segregation as may be needed for operating records and for settlements as required hereunder. ARTICLE X BILLINGS AND PAYMENT 10.01 For billing purposes, the amount of energy delivered pursuant to this Agreement by the supplying Party to the receiving Party shall be the amount scheduled for delivery at the points of delivery and adjusted for losses as specified in Section 10.03. 10.02 Billing for any transaction involving generation capacity pursuant to this Agreement shall be based upon the amount of such capacity committed in advance for delivery. 10.03 Loss adjustments will be determined and agreed to by the Parties and will be based on average annual system losses and as specified in this Agreement. 10.04 All bills for services supplied pursuant to this Agreement shall be rendered monthly by the supplying Party to the purchasing Party, not later than fifteen (15) days after the end of the billing period to which such bills are applicable. Unless otherwise agreed upon by the Parties, such monthly billing periods shall be from 12:01 a.m. of the first (lst) day of the month to 12:01 of the fist (lst) day of the succeeding month. Bills shall be due and payment shall be postmarked not later than the twenth- eighth (28th) of the month in which bills are rendered. Payment shall be made when due and without deduction. In the event bills are not paid when due there shall be added to the amount due an interest charge on the unpaid balance. This interest charge will be calculated and be compounded daily on any unpaid amount, from the date due until the date upon which payment is received, using the lowest daily prime rates published in the money rates section of The Wall Street Journal for the applicable time period. Such daily interest shall be computed on the basis of actual days and a 365 -day calendar year. Billing of interest for late payment will be due upon receipt. If a billing period other than that defined above is agreed upon by the Parties, a different due date must also be defined. 10.05 In the event a Party desires to dispute all or any part of the charges submitted by the other Party it shall nevertheless pay the full amount of the charges when due and give notification in writing within sixty (60) days from the date of the statement stating the grounds on 10 which the charges are disputed and the amount in dispute. The complaining Party will not be entitled to any adjustment on account of any disputed charges which are not brought to the attention of the Party making such changes within the time and manner herein specified. If the settlement of the dispute results in a refund to the payor, interest shall be computed and be compounded daily on the amount to be refunded from the date upon which refund is made, using the lowest daily prime rates published in the money rates section of The Wall Street Journal for the applicable time period. Such daily interest shall be computed on the basis of a 365 -day year. ARTICLE XI TAXES 11.01 Any tax imposed upon the seller and levied upon or measured by power and energy supplied by one Party to the other Party shall be added to the bill rendered by the Party supplying the power or energy. ARTICLE XII wiffU11 12.01 This Agreement shall remain in full force and effect for a period of five (5) years commencing on the effective date of this Agreement and, if not then terminated by at least twenty -four (24) months prior written notice given by either Party to the other, shall continue thereafter in full force and effect until so terminated. ARTICLE XIII MEMBERSHIP 13.01 The HUC shall be a Class B nonvoting member of UPA for the term of this Agreement. ARTICLE XIV UNCONTROLLABLE FORCES 14.01 A Party shall not be considered to be in default in respect of any obligation hereunder if prevented from fulfilling such obligation by reason of uncontrollable forces. The term "uncontrollable forces" 11 shall be deemed for the purposes hereof to mean storm, flood, lightning, earthquake, fire, explosion, failure of facilities not due to lack of proper care or maintenance, civil disturbance, labor disturbance, sabotage, war, national emergency, restraint by court or public authority, or other causes beyond the control of the Party affected which such Party could not reasonably have been expected to avoid by exercise of due diligence and foresight and by provision of reserves in accordance with the requirements of this Agreement. Any Party unable to fulfill any obligation by reason of uncontrollable forces will exercise due diligence to remove such disability within reasonable dispatch. ARTICLE XV LIABILITY 15.01 Each Party shall be responsible for the facilities owned by it as an individual entity without reference to any interests the other Party may have as created by this Agreement. The Party owning, having an interest in, or having a license for the use of any property or equipment shall indemnify, protect, defend, save and hold the other Party harmless from and against any and all claims and demands for property damage, injury or death, including payments made under Workman's Compensation Law or under any plans for employees' disability and death benefits, which may arise out of or be caused by the use or removal of such property or equipment, unless caused by negligence of the other Party. In no event shall either Party be liable to the other for loss of profits, special, consequential or indirect damages due to any cause. ARTICLE XVI ARBITRATION 16.01 Any controversy, claim, counter - claim, dispute, difference, or misunderstanding arising out of or relating to this Agreement, or damages based on tortious conduct, shall be settled by arbitration before an arbitrator selected by the American Arbitration Association. The Party desiring arbitration shall demand such arbitration by giving written notice to the other Party setting forth the point or points in dispute. The arbitration shall be conducted in accordance with the Commercial. Arbitration Rules of the American Arbitration Association then in effect, subject further to the qualification that the arbitrator named under said rules shall be competent by virtue of education and experience in the particular matter subject to arbitration. The decision of the arbitrator on any issue properly before him in accordance with the provisions of this Agreement shall be final and binding upon the Parties hereto subject to the provisions of 12 Ll the Minnesota Uniform Arbitration Act, Minnesota Statutes Sections 572.08 to 572.30 as amended. The arbitrator shall have jurisdiction and authority only to interpret, apply, or determine compliance with the provisions of this Agreement insofar as shall be necessary to the determination of issues properly appealed to the arbitrator. The arbitrator shall not have jurisdiction or authority to add to, detract from, or alter in any way the provisions of the Agreement. ARTICLE XVII NOTICES 17.01 Any notices, demands, or requests required or authorized by this Agreement shall be deemed properly given if mailed, postage prepaid, to the General Manager, UPA, Elk River, Minnesota, on behalf of UPA, and to the General Manager, Hutchinson Utilities Commission, Hutchinson, Minnesota, on behalf of the HUC. The designation of the persons to be notified or the address of such person may be changed at any time by similar notice. 17.02 Any notice, request, or information of a routine character in connection with scheduling, delivery of power, or in connection with operation of facilities, shall be given in such manner as the Parties hereto shall arrange from time-to time. ARTICLE XVI I I APPROVALS 18.01 This Agreement shall not be effective unless and until approved by the Administrator of the Rural Electrification Administration or any other authorized individual acting on behalf of Rural Electrification Administration. This Agreement shall constitute the entire understanding between the Parties hereto superseding any and all previous understandings, oral or written, pertaining to the subject matter contained herein. No Party hereto has relied or will rely upon any oral or written representation or oral or written information made or given to such Party by any representative of the other Party or anyone on its behalf. 13 1 1 1 ARTICLE XIX SERVICES TO BE RENDERED 19.01 The various specific services to be rendered in furtherance of the purposes of this Agreement are covered by Service Schedules of the Agreement which are listed as follows: "A" Participation Power Interchange Service "B" Seasonal Participation Power Interchange Service "C" Emergency and Scheduled Outage Interchange Service "D" Spinning Reserve Interchange Service "E" Economy Energy Interchange Service "H" Peaking Power Interchange Service IN WITNESS WHEREOF, the Parties have executed this Interconnection and Interchange Service Agreement in duplicate on the day, month and year first above written pursuant to resolutions adopted by their respective Board of Directors or utilities commission ATTEST HUTCHINSON UTILITIES COMMISSION t J BY By Secretary Presi eft ATTEST UNITED POWER ASSOCIATION By. By— Secretary I Presi.den 14 Service Schedules Service Schedule A Participation Power Interchange Service Section 1. Service to be Provided 1.01 This Schedule provides for the sale of Participation Power by a Party to another Party from a specific generating unit or units. Participation power shall mean power and energy which is sold from a specific generating unit or units on the basis that it is continuously available except when such unit or units are temporarily out of service for maintenance during which time the delivery of energy from other generating units shall be at the seller's option. Section 2. Conditions of Service 2.01 This Schedule shall be available for the sale of Participation Power for a period of six months or more. 2.02 Participation Power shall be supplied through transmission facilities which have adequate capacity for transmitting such power and energy. Section 3. Schedule of Rates 3.01 The rate and term for Participation Power under this Service Schedule A shall be negotiated by the Parties arranging the transaction. 3.02 In the event that service cannot be supplied on the effective date of an Agreement to sell Participation Power under this Service Schedule A due to a delayed in- service date of the associated generating facilities, the demand charge to be paid by the purchasing Party shall not be effective until the date such facilities are included as Accredited Capability. Service Schedule B Seasonal Participation Power Interchange Service Section 1. Service to be Provided 1.01 This Schedule provides for the sale of Seasonal Participation Power by a Party to any other Party from a specific generating unit. Seasonal Participaton Power shall mean power and energy which is sold from the latest base load unit on the basis that it is continuously available except when such unit is temporarily out of service for 1 1 1 1 Service Schedules maintenance during which time the delivery of energy from other generating units shall be at the seller's option. Section 2. Conditions of Service 2.01 This Schedule shall be available for the sale of Seasonal Participation Power for six consecutive months beginning on May 1 or November 1 unless other dates are agreed to by the Parties. 2.02 Seasonal Participation Power transmission facilities which have such power and energy. Section 3. Schedule of Rates shall be supplied through adequate capacity for transmitting 3.01 The receiving Party shall pay to the supplying Party for Seasonal Participation Power furnished during any month under this Schedule an amount determined from the following schedule of rates: Demand Charge For each megawatt or fraction thereof committed by the supplier, the current rate as established by MAPP per month. Energy Charge For all energy supplied from the assigned generating unit, a charge per kilowatthour of 110 percent of the Average Production Cost for the month of the assigned generating unit for the energy delivered to the purchasing party. 3.02 In the event that service cannot be supplied on the effective date of an Agreement to sell Seasonal Participation Power under this Service Schedule B due to a delayed in- service date of the associated generating facilities, the demand charge to be paid by the purchasing Party shall not be effective until the date such facilities are included as Accredited Capability. Service Schedule C Emergency and Scheduled Outage Energy Interchange Service Section 1. Service to be Provided 1.01 This Schedule provides for the supply of energy by either Party to the other Party during Emergency Outages or Scheduled Outages of generating or transmission facilities or both. E Service Schedules Section 2. Scheduling of Deliveries 2.01 Deliveries of Emergency Energy and Scheduled Outage Energy shall be scheduled as soon as possible after the occurrence of an Emergency Outage. Section 3. Schedule of Rates 3.01 The receiving Party shall pay the supplying Party for Emergency Energy furnished during any month under this schedule from the greater of three cents per kilowatthour or 110 percent of the average production cost of the unit(s) producing such energy. 3.02 The receiving Party shall pay the supplying Party for scheduled outage energy furnished during any month under this schedule as supplied from the supplier's generator facilities or purchased from others. a. The receiving Party shall pay to the supplying Party for such Scheduled Outage Energy an amount of whichever is greatest: i. 110 percent of the average production cost of the unit(s) producing such energy; -or ii. 110 percent of the average cost of the purchasing Party had it produced such energy with the generating unit which is out of service, which average cost shall include but not be limited to fuel costs saved, and operation and maintenance costs saved: provided that, if the purchaser is not using its Total Available Accredited Capability, the supplier may require the purchaser thereof to make an additional_ payment for any financial loss that accrues to the supplier due to this transaction replacing a sale to another Party. b. The supplier of such Scheduled Outage Energy may, at its option, require the purchaser thereof to return such energy at such times and under such conditions that the supplying Party will not experience a loss due to the transaction, or under conditions mutually agreeable to both Parties. Service Schedule D Spinning Reserve Interchange Service Section 1. Service to be Provided 3 ServF,e Schedules 1.01 A Party may arrange for some other Party to supply part or all of its Spinning Reserve Requirement. Section 2. Schedule of Rates 2.01 Except as otherwise agreed to by the Party, a Party supplying a portion or all of the other Party's Spinning Reserve during any month shall be paid by the purchasing Party an amount of whichever is greater of the following: a. 110 percent of the incremental cost of supplying such service, or b. The incremental cost of supplying such service plus one -half of the overall savings of such transaction, where overall savings shall be equal to the difference between the incremental cost of the selling participant and the decremental cost of the purchasing Party, where incremental and decremental costs, for the purpose of this Schedule only, shall be determined as follows: i. Incremental cost of the supplying Party shall be based on the costs incurred in maintaining generating capacity available in 10 minutes and starting and operating any generating unit or units which must be started as a result of supplying such service. ii. Decremental costs of. the purchasing Party shall be based on the costs avoided by not maintaining generating capacity available in 10 minutes and by not starting and operating a generating unit or units. 2.02 In the event there are repetitive transactions between the Parties involving similar incremental and decremental costs, flat rates or an exchange arrangement may be established for such transactions by the representatives of the Parties concerned. Service Schedule E Economy Energy Interchange Service Section 1. Service to be Provided 1.01 This Schedule provides for the supply of Economy Energy by either Party to the other Party when it is economical and practical to do so under the conditions set forth hereinafter. Section 2. Conditions of Service 2.01 It is the intent hereof that, insof -ar as is practicable, Economy Energy from available sources having the lowest Incremental Costs shall 4 Servi,,e Schedules be used to displace generation having the highest Incremental Costs and so on until such transactions are no longer economical, provided that, a. Economy Energy shall not be scheduled in arnounts which will overload any transmission facilities or endanger the operation of the interconnected systems of the Parties. Section 3. Scheduling of Deliveries 3.01 Prior to the scheduling of deliveries, the Parties will agree on hour -by -hour amounts of energy to be delivered. Section 4. Schedule of Rates 4.01 The overall savings of an Economy Energy transaction shall be equal to the difference between the Incremental Cost of the supplying Party and the Decremental Cost of the supplying Party of the receiving Party. If wheeling over the transmission system of a supplier not a Party hereto is involved in an Economy Energy transaction, any transmission fees and losses to be paid for the use of such system shall be taken into account in determining the overall savings of the transactions. 4.02 The receiving Party shall pay the supplying Party for the Economy Energy supplied during each month an amount equal to the Incremental Cost of the energy so supplied, plus one -half of the overall savings of such transactions which remain after deducting the amount paid by the receiving party to any wheeling Party or Parties. Service Schedule I3 Peaking Power Interchange Service Section 1. Service to be Provided 1.01. This Schedule provides for the sale of Peaking Power by either Party to the other Party from a specific generating unit. Peaking Power shall mean power and associated energy intended to be available at all times during the period covered by a commitment and which is sold with anticipated low load factor use. Section 2. Conditions of Service 2.01 This Schedule shall be available for the sale of Peaking Power for a period of six consecutive months beginning on May 1 or November 1 unless other dates are agreed to by the Parties. 5 1 Service Schedules Section 3. Schedule of Rates 3.01 The receiving Party shall pay to the supplying Party for Peaking Power furnished during any month under this Schedule an amount determined from the following Schedule of rates: Demand Charge For each megawatt or fraction thereof committed by the supplier, the current rate per month as established by the MAPP Agreement, or as negotiated by the Parties arranging the transaction. Energy Charge For all energy supplied from the assigned generating unit, a charge per kilowatthour of 110 percent of the Average Production Cost for the month of the assigned generating unit for the energy delivered to the purchasing Party. 3.02 In the event that service cannot be supplied on the effective date of an agreement to sell peaking power under this Service Schedule H due to a delayed in- service date of the associated generating facilities, the demand charge to be paid by the purchasing Party shall not be effective until the date such facilities are included as accredited capability. C 1 1 N, 0, Cog K\/ To POINTS OF , cli LiI < J I Lu CQ I \_ GID K\/ In U� 4 d STA.15+ 21 0.8 FILES 1.05 WU 0 +00 TO 25+-(022#.0 +00 TO 15 +21 SZR. Kr- 3-Mc -18 STCZ. H 113 - H 125 - Ruu To UPa V*&v, izuCR To UPA Ow6"TNNO 91D SN,1 Th\LO -91D SH.Sk P01 "T OP METER INC4 ��/rtiERS 001-\( FUtR0154E.0 gY UPA ) 't �0 -7.57 / t3.8 KY `lei 1= /2a 1 OVA 3�.�MVA SiLP i'FFA = � TRANSF. 47.35MVN STEP z-F FA 13.a1<V 27MVA� S�° F. 13.bKV,0.9 PFD (o0'v t LIE: ALt_ DISTANCES SuOWU ARE APP20XmmF- OWNV-RSNIP LF -GEND: - -- UwllT -D POwa, ASSN. Nl1TCNINSOU UTILITIES COMMISS►0N IMERMAwU- SCRVICE AG4UNT Luwuw UPA.4 NUc. UNITED POWER ASSN E1.X RIVER, MINNESOTA CWK BY CKD. BY INIERC0I HLUON FACT UllES CIRCUIT DINGRANN CKD. BY APPD. BY DATE DMO, NO. REY Q {I {I W.O. NO. y `I DATE REVISION B 9YD ; `� 8 ; 11, - �' I SHEET L nnI SIT A EXHIBIT B The two points of interconnections are located at the city limits of Hutchinson. The Hutchinson Utilities Commission owns all facilities with the exception of metering within the points where the interconnection is made with UPA. The interconnection points are (1) near the west line of Section 31, Township 117, Range 29 and approximately 2700 feet south of the northwest corner of Section 36 (2) at a point on the east line of the west 2050 feet of the northwest quarter of Section 5, Township 116, Range 29. The point being 55 feet south of the north line of Section 5. 1 1 1 L' EXHIBIT C Interconnection metering is located on the HUC's 69 kilovolt bus side of the HUC's 69 kilovolt interconnection breaker. The meters only are furnished and owned by UPA. POWER I'RANSACTTON' A(;1\'1.'1E'1'-1,11,'1\1T Sl"-Ll-,TNG PARTY United Power Association PURCHASING PARTY Hutchinson TTtilities Commission Schedule A Service Schedule, DuscripLi0ii, Generating Capacity Nircliased From Unit 1 & 2 in Selling ParLy's Coal Creek Station I I I L or "), ys Le III Firm PERIOD OF TRANSACTION QUANTITY PRICE/MW/Mo. From To MW $ Jan. 1,1982 April 30, 1982 10 5,950.00 See Attachment M-ay--1,,---19-82 --Apx-i1 --3--0--,- 1983 -6, 85-Cl - H. See-Attachment May-1,19-83 --Ap-ri,L--30, 1984 -7_800-00 See. Attachment --Ap-r-i-1,-,-3-0-.- 1985 8 , 700__00 See Attachment Kay-1,19-3.5 --Apr-il- -39, 1986 10 9,650-00 See Attachment D(,Iiiwd ai)d Rrite,, are to be as i;ii (,�l ol, 1�: 1)(,I- ;I;j-( Schedule, as ildic-.rIt.(,d .1bovo. PURCHASING PARTY SEIM,[N(; PAl)"J"), By President Assistant G ner 1 Manager Title Hutchinson Utilities Commission T i 1:. J c Electrical perations Da L e February 16, 1-982 1) February 9, 1.982 11w provisions of L11L, S(,vvi(-(� 11n1-Lics illdic;lted Al (,V(" I i1m, hI I i I th", scrvicc, hldirlted hevcii), "11-(, ilwol pw1 ll ('(I I," ,-;LiLuLe Hie -u)(l ()I)l i�";It io11--, ()f t[)(, 1)<jj-t jc�, iji,j w. 1 1 [1 ATTACHMENT TO POWER TRANSACTION AGREEMENT SCHEDULE A BETWEEN HUTCHINSON UTILITIES COP'IISSION AND UPA For Schedule A transactions for the period of January 1, 1982 through April 30, 1986. 1) Energy charge of 110% of actual average production cost per kilowatthour (kWh) of the Coal Creek Station Units 1 and 2 for that month. The average production cost is defined as the average fuel cost in mills per kWh plus an amount to cover average monthly production costs other than fuel. The average production cost other than fuel is initially set at 3.05 mills per kWh; however, it will be adjusted annually in accordance with the HAPP Agreement. 2) The City of Hutchinson shall be responsible for capacity losses on the alternating current (ac) transmission system and energy losses on the ac system and the direct current (dc) transmission system. UPA will be responsible for capacity losses on the do system. The losses are estimated to be 6% on the do system and 7% on the ac system. 3) One -half of the power purchases shall be dispatched from each of the Coal Creek generation station units 1 and 2 and each pole of the Coal Creek and Dickinson converter stations. In the event that either one or both of the generating units or converter poles are not able to operate at rated capacity, Hutchinson's entitlement from each unit will be reduced during such time to the amount determined by the ratio of the capacity available from each unit to the rated capacity of that unit. In the event either of the units is out of service or operating at reduced capacity, UPA will use its best efforts to obtain and sell to Hutchinson the needed energy from its other: sources or from other members of MAPP in accordance with the.practices and rates in effect in MAPP. The availability factor for the next several years is expected to be quite high. 4) Wheeling charge equal to UPA's average cost to own, operate, and maintain its Minnesota ac transmission system. There would be no wheeling chnr_ge if Hutchinson participated with UPA in an int-egrated transmission arrangement for 1.0 MW or more of transmission capacity. ATTACHMENT TO POWER TRANSACTION AGREEMENT SCHEDULE A HUT('HINSON UTILITIES COTWISSION AND UPA 4) continued Also, if Hutchinson makes partial investment in transmission, the wheeling charge would be reduced proportionately. I I I I I 1'0t�,ER 1'11"AN�'�AGTIONI SELLING Hutchinson Utij.jtj_c,s Colliplissloll PURCHASING PARTY United Power Association Schedule 11 Service Schedule, Description, Etc. Generating Capacity Purchased From Unit_ 9 (Gas turbine) ill Selling Party Peaking plant 1'1riiit or Sy -tem Firm (1) (1) PERIOD OF TRANSACTION QUANTITY PRICE/MW/MO.. PNCI,"/N ,111 From 0 MW $ 1, 1980 April 30, 1981 14 1,666.67 - - - -- May 1,1981 October 30,1981 8 1,666.67 Nov. 1,1981Ap-ril 3011982 1, 666_._67 May 1, 1982 October 30,1982 6 1,666.67 Nov. 1,1982 April_ 30,1983 10 1 666,_6.7_ May 1, 1983 October 30, 1983 4 1,666.67 Nov.____l, 1983 April 30, 1984 8 1, 6 5. -6 67 6 -- May 1, 1984 October 30,1984- 1 1,666.67 Nov. __l_,__ 1934A April _30, 1985 _--p..- -_ - - 4 1,66.6_.6 -7 11 May 1, 1985 October 30, 1985 0 1,666.67 Nov_ 1 1985 April 30, 1986 ----- -- - ----- _ 2_ .1, 666_.67. 1) (,!iia i i d acid E I I o I- g.v KatI.,s arc to he as II of i ; I t I- r I l-; 1) 1- 1 r 11) 1).1 i c; I 1 1 sche (I L ;Is i [1 (11 ca L e (I Ih ove I l'LJRCH Assist a General Manager-, President Title Electrical Operations Title Hutchinson Utilities Commission Date February 9, 1982 Date February 16, 1982 Ille I)l-ovis-iollFz of Hle III( t i oil ;111(1 1 ;;('rvi( I' tlL l h. p;)rties indicated 'II"()Vo' I I l I I t I rani I r_ its I iII I the service ScIlechile ill(livate(j hei-eill, al-e by rc(('rellco Ind c;11,11 �11 sLiLtite the rJg1iLs and of thc'