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05-30-2018 HUCCPHUTCHINSON UTILITIES COMMISSION AGENDA REGULAR MEETING May 30, 2018 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. HR e. General Manager 6. POLICIES a. Review Policies i. License requirements for utility operation ii. Alcohol or Drugs -Exempt iii. Natural Gas Service Work iv. Locating Customer's Underground Utilities — Gas b. Approve Changes i. Smoking ii. Alcohol or Drugs -Non Exempt iii. Natural Gas Meter Requirements and Placement iv. Meter Testing 7. UNFINISHED BUSINESS 8. NEW BUSINESS a. Approve Charge Offs b. Approve HDR Unit 6 & 7 Change Request C. Approve Advertisement of Bids for Units 6 & 7 Installation d. Approve COS 2 Year Rate Design e. Approve BP Natural Gas Pre -paid Program 9. ADJOURN MINUTES Regular Meeting — Hutchinson Utilities Commission Wednesday, April 25, 2018 Call to order — 3:00 p.m. Vice President Anthony Hanson called the meeting to order. Members present: Vice President Anthony Hanson; Commissioner Mark Girard; Commissioner Robert Wendorff, Commissioner Don Martinez; General Manager Jeremy Carter; Attorney Marc Sebora Absent: President Monty Morrow 1. Conflict of Interest 2. Approve Consent Agenda a. Approve Minutes b. Ratify Payment of Bills Motion by Commissioner Girard, second by Commissioner Wendorff to approve the Consent Agenda. Motion carried unanimously. 3. Approve Financial Statements GM Carter presented the financial statements. HUC is trending well through 1st quarter. Electric Division loss in March increased by $63K. Other Revenue is down due to timing for when HUC is buying materials and then waiting to be reimbursed. Operating Expense is down due to the Software System Implementation payments and additional miscellaneous expenses that were paid in 2017. Debt interest is going to be higher than 2017 due to having bonds out there accruing interest. Overall, consistent in all the areas. Natural Gas Division is trending high due to the colder weather as well as no fuel credits being issued. Customers could expect to see credits on the May billing. On the Balance Sheet, Pack Gas liability is still there, HUC did not make payment until April. Motion by Commissioner Martinez, second by Commissioner Girard to approve the financial statements. Motion carried unanimously. 4. Open Forum 5. Communication a. City Administrator— Matthew Jaunich i. Starting bridge work on 2nd Ave ii. Century Ave work has been pushed back to end of May beginning of June. b. Divisions i. Dan Lange, Engineering Services Manager — 1. Contractors are at HTI Substation making repairs that caused outage. Should be completed this week or next. 2. Work continues down at the plants. Lots of projects; moving gas lines, moving Unit 2, cement sawing, and control room is almost complete. 1 Dave Hunstad, Electric Transmission/Distribution Manager —Absent iii. Randy Blake, Production Manager - Absent iv. John Webster, Natural Gas Division Manager- 1. All operators are down at plant 1; working on units 3, 4, and 8. Looking to finish projects in next couple weeks. 2. Recently provided an Abstract to Emerson, and was notified that I was approved to attend the Global Users Exchange in October at San Antonio. Will now have to deliver two presentations while there. v. Jared Martig, Financial Manager- Absent c. Human Resources - Brenda Ewing — i. In the process of filling a Plant Operator Position. Mike Gabrielson who was a plant operator was hired back in February as a mechanic. ii. Angie currently coordinated with the Police Department to have Eric Killian come in to go over Workplace Violence and Active Shooter Training. Will now be working with Angie to coordinate another training that was done at the City Center recently, which is Respectful Workplace Training. d. Legal — Marc Sebora — Nothing to report e. General Manager — Jeremy Carter i. Received preliminary COS Rate Designs from the consultants. Will be reviewing these and will get information out to the Board. Will try to coordinate a Special Meeting in May to discuss. ii. Staff has been working on the BP Pre -paid agreement. The two concerns Staff had were 1) The termination of the agreement between BP and PEAK would cause the termination of the Gas Supply contract between HUC and PEAK and 2) If the Gas Supply Contract with PEAK would have any bearing on existing bonds or future bond financing. Staff did learn that if terminated, HUC's gas volumes would resort back to HUC. In addition, Gas Supply Contracts do not have any bearing on existing bonds or future bond financing. Staff talked with Ehlers and Dorsey on this topic and these are considered operating costs. Operating costs have to be covered by pledged receivables, which are accounts receivables before any additional dollars can be used towards bonds. HUC will work on bringing this topic forward with a Special meeting along with the COS Study. iii. Jared is working on finalizing the audit, continuing to work on inventory issues with BS&A. Need to get this process done so City Center can complete their audit. HUC also needs to do the Schedule O report for MISO. iv. Acceptance testing on units 6 & 7 will be completed in May. Have four HUC employees going to Germany to watch and check off all the boxes for emission standards and making sure all technical data is satisfied. 6. Policies a. Review Policies i. Membership/Dues/Conventions- Exempt Only 2 ii. Locating Customer's Underground Utilities- Electric iii. Temporary Service- Gas No changes recommended at this time. b. Approve Changes i. Employment of Relatives — as noted, grammatical changes ii. Data Practices Advisory- as noted, clarifying position titles iii. Tree Removal or Trimming — as noted, grammatical changes iv. Natural Gas Service Requirements and Changes — as noted, grammatical changes v. Credit Cards- Under Purchase Policy — as noted, grammatical changes Motion by Commissioner Girard, second by Commissioner Martinez to approve the policy changes as recommended. Motion carried unanimously. 7. Unfinished Business 8. New Business a. Approval of Requisition #7552 — Conductor for Uponor Project GM Carter presented Requisition #7552. Currently Uponor is using HTI's Conductor as a loan. HUC needs to upsize so Uponor can continue to move forward. Commissioner Hanson inquired the financial impact, if this will be reimbursed. GM Carter explained that this will not, however Uponor is looking to purchase up to four transformers in the future to have as their own pieces of equipment and Uponor will reimburse HUC for those. Commissioner Girard inquired what type of customer class Uponor would be. GM Carter stated Uponor would start out as a Large Customer and migrate into an Industrial Customer. Staff will monitor the usage and make the change when needed. After discussion, a motion by Commissioner Wendorff, second by Commissioner Martinez to approve Requisition #7552 — Conductor for Uponor Project. 9. Adjourn There being no further business, a motion by Commissioner Girard, second by Commissioner Wendorff to adjourn the meeting at 3:21 p.m. Motion carried unanimously. ATTEST: Monty Morrow, President 3 Robert Wendorff, Secretary MINUTES Special Meeting — Hutchinson Utilities Commission Thursday, May 24, 2018 Call to order — 9:00 a.m. President Morrow called the meeting to order. Members present: President Monty Morrow; Vice President Anthony Hanson; Secretary Robert Wendorff; Commissioner Mark Girard; Commissioner Don Martinez; General Manger Jeremy Carter Others present: John Webster, and Angie Radke. The purpose of the special meeting is to have further discussions on the Cost of Service (COS) Study. GM Carter reviewed the timeline of the COS study. At the last Commission meeting, a couple of different glide paths were reviewed to move the different classifications more toward equitability relative to the Cost of Service numbers. This would have each class paying their proportionate share while staying revenue neutral. During that discussion, it was decided that both divisions did not need to go down the same path. The Commission agreed to move forward with a 6 year glide path for the Electric Division and a 9 year glide path for the Natural Gas Division because of the larger variations between classifications. Now today the next step is to review the rate design documentation for the next 2 years. The Rate Analysis provided is for the next 2 years; and as part of the discussion a decision will need to be made on when to start implementing the rate structure change. Examples would be the fall of 2018 or spring of 2019. Common practice with rate designs is to review 5-year financial projections but only implement 2-3 year rate changes. This is because of the many changes that can happen within the community out past 2-3 years. By doing a 2 year rate design change is allows the Staff and Board the opportunity to go back and see if the glide paths are doing what they are intended to do in the more near term and make adjustments as necessary if needed. Commissioner Hanson inquired if the intent is to go to City Council with a 2 year rate change but then paint the picture of the 6 year glide path for the Electric Division and the 9 year glide path for Gas Division. GM Carter stated HUC would present to the City Council that HUC is only implementing rate changes for the first 2 years, but still show the City Council the glide paths beyond the first two years to provide the long range look and view of bringing all classes towards more equitability as it relates to the COS data over a longer time period. This would again force HUC and the Board to relook at it in 2 years. However, in 2 years it would not be a full rate study but more of an internal analysis by staff to ensure the intended glide path results are being achieved. HUC will want to review financial data to make sure there is balancing between classes and HUC is staying revenue neutral. GM Carter noted reviewing the rates to see if they are appropriate within the community would be a good process to do internally every year. After some discussion, GM Carter reviewed additional graphs (Attached). These graphs show the bill impact at different usages. For Electric Division roughly 80% of customers are at 1000Kwhr's or below. The largest Residential Customer class is in the range of 501-750 Kwhr's at 25%. All the classes are fairly spread out. Small general customers have many different characteristics while large customers are by load factors. The majority of large customers fall between 30-70% load factor. GM Carter continued on to the Natural Gas Division. With the 5100 accounts, the average residential monthly Usage in MCF's falls between 3-7 MCF. After some discussion, GM Carter asked the Board to think about the time frame on instituting action. The Board would like to see this item on the Commission Agenda for next week to take action to move forward on the rate restructure. Commissioner Hanson stated since rates have not changed for some time, there should be conversations from a public relations standpoint in case questions are asked. There being no further business, a motion by Commissioner Girard, second by Commissioner Martinez to adjourn the meeting at 9.49 a.m. Motion was unanimously carried. ATTEST: Monty Morrow, President Robert Wendorff, Secretary 05/23/2018 03:30 PM CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES Pag 1/28 User: JMartig CHECK DATE FROM 04/20/2018 - 05/22/2018 DE: Hutchinson Utili Check Date Bank Check # Payee Description Account Dept Amount Fund: 1 ELECTRIC 04/20/2018 GEN 160(E) MRES Purchased Power 401-555- 02 932,356.63 04/23/2018 GEN 167(E)'dk BP CANANDA ENERGY SOLUTIONS GENERATOR 41 NATURAL GAS 401-547- 01 10,538.00 GENERATOR 41 NATURAL GAS 401-547- 01 368.20 Generator 41 Aux Boiler 401-547- 01 371.99 GENERATOR 43 NATURAL GAS 401-547- 01 28.32 GENERATOR 44 NATURAL GAS 401-547- 01 28. 32 GENERATOR 45 NATURAL GAS 401-547- 01 4, 491.87 GENERATOR 45 NATURAL GAS 401-547- 01 56.65 GENERATOR 48 NATURAL GAS 401-547- 01 99. 13 Generator 49 Natural Gas 401-547- 01 177.03 Utility Expenses - Water/Waste 401-930- 08 2,768.05 HECK GEN 167(E) TOTAL 18,927.56 04/24/2018 GEN 173(E)* MINNESOTA REVENUE State Sales Tax 242-000- 00 53,890.00 City Sales Tax 242-000- 00 3,890.00 HECK GEN 173(E) TOTAL 57,780.00 04/24/2018 GEN 174(E) MISO Deferred Energy Cost - Miso 174-000- 00 32,313.83 Deferred Energy Cost - Miso 174-000- 00 1,046.36 HECK GEN 174(E) TOTAL 33,360.19 04/24/2018 GEN 175(E)* POINT & PAY collection - Materials 401-903- 06 2,943.13 04/24/2018 GEN 176(E)* TASC Prepaid HBA 174-000- 00 1,494.14 04/26/2018 GEN 171(E)*kk VISA CPU -USE TX 154-000- 00 444.40 Sales Tax Receivable - Replace 186-000- 00 273.76 SALES TAX RECEIVABLE - REPLACE 186-000- 00 1.62 MEETINGS & TRAVEL - EXPENSE WTUI 401-546- 01 3,931.57 PRODUCTION BENEFITS -PASSPORT FEE- 401-546- 01 44.70 SUPPLIES-PLT INK 401-550- 01 114.83 SUPPLIES -GLUE CLEANER 401-550- 01 26.09 GENERATOR 41 MATERIALCABLE 402-554- 01 21.99 -HYDRALIC JACK 402-554- 01 3,711.99 MAINTENANCE OTHER - MATERIALS -LADDERS 402-554- 01 203.87 MAINTENANCE OTHER - MATERIALS -BAT 402-554- 01 40.77 MEETINGS & TRAVEL-SHAKOPEE VISIT 401-580- 02 38.03 MEETINGS & TRAVEL - CHG NXT STMT 401-580- 02 (139.05) 05/23/2018 03:30 PM User: JMartig DE: Hutchinson Utili Check Date Bank Check # Payee Fund: 1 ELECTRIC CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES CHECK DATE FROM 04/20/2018 - 05/22/2018 Description 04/27/2018 GEN 66470* AARON BURKSTRAND 04/27/2018 GEN 66471 AARON JOHNSON 04/27/2018 GEN 66472* ABIEZER LOZADA 04/27/2018 GEN 66473* AIDEE SANDOVAL-GARCIA OR J 04/27/2018 GEN 66474* ALEXA FERN 04/27/2018 GEN 66475dk ALLIED ELECTRONICS INC 04/27/2018 GEN 66476 AMY LEVINE 04/27/2018 GEN 66477* ANDREW DICK 04/27/2018 GEN 66478* ANDREW GREELEY OR AMIE WEINAND 04/27/2018 GEN 66479 ANIXTER INC Pag 2/28 Account Dept Amount OTHER EQUIPMENT - MATERIALS -HEART SMART 402-598- 02 139. 95 OFFICE SUPPLIES -FUNERAL PLT 401-921- 08 47. 92 IT ADMIN AND SUPPORT -USE 401-921- 08 27.37 TRAINING - EXPENSE -REFUND TRAINING 401-930- 08 (295.00) TRAINING - EXPENSE-APPA MEETING 401-930- 08 1,045.71 DUES/MEMBERSHIP EXPENSE -MN CHP NIGP 401-930- 08 41.25 HECK GEN 171(E) TOTAL 9,721.77 DEP REFUND/APPLIED 235-000- 00 81.25 Cip - Residential 401-916- 07 50.00 DEP REFUND/APPLIED 235-000- 00 243.75 DEP REFUND/APPLIED 235-000- 00 48.75 DEP REFUND/APPLIED 235-000- 00 65.00 FUSE -3.5 AMP CYLINDER -PART# 70151029 107-344- 00 106.05 FUSE -3.5 AMP CYLINDER -PART# 70151029 107-344- 00 6.28 FUSE HOLDER - PART # 70193048 107-344- 00 44.38 FUSE HOLDER - PART # 70193048 107-344- 00 2.63 TRANSFORMER 240/480 - PART # 70209191 107-344- 00 148.76 TRANSFORMER 240/480 - PART # 70209191 107-344- 00 8.81 FUSE, CYLINDER, 2 AMP - PART # 70149883 107-344- 00 199.32 FUSE, CYLINDER, 2 AMP - PART # 70149883 107-344- 00 11.81 SKF BEARING 626-2Z 402-554- 01 it.88 SKF BEARING 626-2Z 402-554- 01 12.29 SKF BEARING 627-2Z 402-554- 01 11.88 SKF BEARING 627-2Z 402-554- 01 12.29 HECK GEN 66475 TOTAL 576.38 OVERPAYMENTS 142-000- 00 557.00 DEP REFUND/APPLIED 235-000- 00 61.75 DEP REFUND/APPLIED 235-000- 00 65.00 1 AWG COPPER WIRE THHN - BLACK 107-344- 00 132.00 1 AWG COPPER WIRE THHN - BLACK 107-344- 00 41.36 05/23/2018 03:30 PM CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES User: JMartig CHECK DATE FROM 04/20/2018 - 05/22/2018 DE: Hutchinson Utili Check Date Bank Check # Payee Description Account Dept Fund: 1 ELECTRIC 3 AWG COPPER WIRE THHN - BLACK 107-344- 00 3 AWG COPPER WIRE THHN - BLACK 107-344- 00 Sales Tax Receivable - Replace 186-000- 00 Sales Tax Receivable - Replace 186-000- 00 HECK GEN 66479 TOTAL 04/27/2018 GEN 66480* AUSTIN MATHERN DEP REFUND/APPLIED 235-000- 00 04/27/2018 GEN 66481* BENJAMIN OR STEPHANIE EICHTEN DEP REFUND/APPLIED 235-000- 00 04/27/2018 GEN 66482*#k BORDER STATES ELECTRIC SUPPLY Underground Conductor 107-367- 00 TAPE, GREEN, 3/4" x 663M SCOTCH 35 154-000- 00 TAPE, BLACK, 88-SUPER, 3/4" x 66 3M 154-000- 00 BLADE, RECIP SAW, LENX 614G, 6" 14T 154-000- 00 BLADE, RECIP SAW, LENX 9114R, 9" 14T 154-000- 00 BLADE, RECIP SAW, LENX 956R, 9" 6T 154-000- 00 BULB, 150W, HIS LU150/55 HIS LAMP 44043 154-000- 00 SWITCHGEAR, 3PH PADMOUNT, 15KV, 600 A, 154-000- 00 Sales Tax Receivable - New 186-000- 00 Sales Tax Receivable - New 186-000- 00 Sales Tax Receivable - New 186-000- 00 5488a-250-500 Splice Kit 69KV 402-592- 02 Structures & Equipment - Mater 402-592- 02 HECK GEN 66482 TOTAL 04/27/2018 GEN 66483* BRITTANI OR CORTNEY CHRISTIE DEP REFUND/APPLIED 235-000- 00 04/27/2018 GEN 66484* CALISTA CARLSON OR MICHAEL WOLF DEP REFUND/APPLIED 235-000- 00 04/27/2018 GEN 66485* CANDY AYRES DEP REFUND/APPLIED 235-000- 00 04/27/2018 GEN 66487* CHAD BULAU DEP REFUND/APPLIED 235-000- 00 04/27/2018 GEN 66488* CHARLES RENNER DEP REFUND/APPLIED 235-000- 00 04/27/2018 GEN 66489* CHERYL OR TONY HANSON DEP REFUND/APPLIED 235-000- 00 04/27/2018 GEN 66491* CHRIS KOZAN DEP REFUND/APPLIED 235-000- 00 Pag 3/28 Amount 129.00 40.42 24.08 7.54 374.40 52.00 32.50 3,287.00 8.00 14.49 39.75 19.00 17.30 1,110.00 13,657.89 225.98 1.55 938.98 7,964.33 424.49 27,708.76 221.00 97.50 214.50 65.00 130.00 169.00 227.50 05/23/2018 03:30 PM CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES Pag 4/28 User: JMartig CHECK DATE FROM 04/20/2018 - 05/22/2018 DE: Hutchinson Utili Check Date Bank Check # Payee Description Account Dept Amount Fund: 1 ELECTRIC 04/27/2018 GEN 66492* CHRIS VENABLE DEP REFUND/APPLIED 235-000- 00 29.25 04/27/2018 GEN 66493 CHRISTINA DEBNER OVERPAYMENTS 142-000- 00 71.69 04/27/2018 GEN 66494* CHRISTOPHER LOFGREN DEP REFUND/APPLIED 235-000- 00 175.50 04/27/2018 GEN 66495*#k CINTAS CORPORATION 4470 Uniforms & Laundry 401-550- 01 253.75 Uniforms & Laundry 401-550- 01 247.90 Uniforms & Laundry 401-550- 01 299.07 UNIFORMS & LAUNDRY 401-588- 02 213. 02 UNIFORMS & LAUNDRY 401-588- 02 213. 02 UNIFORMS & LAUNDRY 401-588- 02 213. 02 HECK GEN 66495 TOTAL 1,439.78 04/27/2018 GEN 66496*#k CITY OF HUTCHINSON Generator 41 Water & Sewer 401-547- 01 140.47 Generator 41 Water & Sewer 401-547- 01 236.24 Waste Disposal 401-550- 01 130.96 Waste Disposal 401-550- 01 247.08 Waste Disposal 401-550- 01 464.08 Accessory Plant - Materials 402-554- 01 510.80 It Admin And Support 401-921- 08 8,780.83 Utility Expenses - Water/Waste 401-930- 08 14.54 Utility Expenses - Water/Waste 401-930- 08 382.87 Utility Expenses - Water/Waste 401-930- 08 59.66 HECK GEN 66496 TOTAL 10,967.53 04/27/2018 GEN 66497* CLIFFTON OR ANNA CLEVERINGA DEP REFUND/APPLIED 235-000- 00 243.75 04/27/2018 GEN 66498* CODY SCHUMACHER DEP REFUND/APPLIED 235-000- 00 286.00 04/27/2018 GEN 66499 CREEKSIDE SOILS Generators 107-344- 00 15.70 04/27/2018 GEN 66500* DENNIS OR TERRI JANNUSCH DEP REFUND/APPLIED 235-000- 00 48.75 04/27/2018 GEN 66501* DOROTHY ADAMS Cip - Residential 401-916- 07 150.00 04/27/2018 GEN 66502* DUSTIN ORTLOFF DEP REFUND/APPLIED 235-000- 00 104.00 05/23/2018 03:30 PM User: JMartig DE: Hutchinson Utili Check Date Bank Check # CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES CHECK DATE FROM 04/20/2018 - 05/22/2018 Payee Description Account Dept Pag 5/28 Amount Fund: 1 ELECTRIC 04/27/2018 GEN 66503* ERIC FLOM DEP REFUND/APPLIED 235-000- 00 195.00 04/27/2018 GEN 66504 FLANDERS SAF OPAL MS6B-125 SOFT 107-344- 00 6,450.00 SAF OPAL MS6B-125 SOFT 107-344- 00 240.00 CHECK GEN 66504 TOTAL 6,690.00 04/27/2018 GEN 66505* FLAVIUS BECK DEP REFUND/APPLIED 235-000- 00 45.50 04/27/2018 GEN 66506* GRACE LUND DEP REFUND/APPLIED 235-000- 00 48.75 04/27/2018 GEN 66508* HALEY JACOBSEN DEP REFUND/APPLIED 235-000- 00 208.00 04/27/2018 GEN 66509 HARMONY RIVER LIVING CENTER Cip- Commercial 401-916- 07 96.00 04/27/2018 GEN 66510* HAYDEN OR CRYSTAL BRANSON DEP REFUND/APPLIED 235-000- 00 32.50 04/27/2018 GEN 66511* HEATHER GOLDSCHMIDT DEP REFUND/APPLIED 235-000- 00 243.75 04/27/2018 GEN 66512 HINTZMAN ENVIRONMENTAL SERVICES Generator 41 Outside Services 402-554- 01 1,200.00 04/27/2018 GEN 66513*#k HUTCHINSON HEALTH Training - Expense 401-556- 03 174.00 04/27/2018 GEN 66514 INTERPOLL LABORATORIES INC FEE FOR RATA TEST - UNIT 1 402-554- 01 6,450.00 04/27/2018 GEN 66515 JACOB BADKE OVERPAYMENTS 142-000- 00 146.79 04/27/2018 GEN 66516* JAMES NAVRTIL DEP REFUND/APPLIED 235-000- 00 162.50 04/27/2018 GEN 66517* JAMIE ZIEMER DEP REFUND/APPLIED 235-000- 00 139.75 04/27/2018 GEN 66519* JEAN KRAMER DEP REFUND/APPLIED 235-000- 00 26.00 04/27/2018 GEN 66520* JEFF HAVELKA Cip - Residential 401-916- 07 150.00 04/27/2018 GEN 66521* JERRY L OR LISA OLSEN DEP REFUND/APPLIED 235-000- 00 260.00 04/27/2018 GEN 66522* JESSICA PLAUNT DEP REFUND/APPLIED 235-000- 00 188.50 04/27/2018 GEN 66523* JLR GARAGE DOOR SERVICE INC MISC OTHER - MATERIALS ** VOIDED ** 05/23/2018 03:30 PM User: JMartig DE: Hutchinson Utili Check Date Bank Check # Payee CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES CHECK DATE FROM 04/20/2018 - 05/22/2018 Description Fund: 1 ELECTRIC 04/27/2018 GEN 66524 JONAH SKELLEY OR LAURA SKELLEY 04/27/2018 GEN 66525* JOSH TELECKY 04/27/2018 GEN 66526* KELLSIE FARENBAUGH OR BRADLEY 04/27/2018 GEN 66527* KEVIN KELLER 04/27/2018 GEN 66531* LINDA HOUSE 04/27/2018 GEN 66532* LINDA HOUSE 04/27/2018 GEN 66533* LINDA OR TRACY LITCHY 04/27/2018 GEN 66534* LISA OHARA 04/27/2018 GEN 66535 LUANN SCHULTE OR BETTY NASS 04/27/2018 GEN 66536 M & P SEALING CO 04/27/2018 GEN 66537* MARIE ANDERSON 04/27/2018 GEN 66538* MARVIN SELLER 04/27/2018 GEN 66539dk MECHANICAL SYSTEMS INC Pag 6/28 Account Dept Amount OVERPAYMENTS 142-000- 00 83. 42 DEP REFUND/APPLIED 235-000- 00 325.00 DEP REFUND/APPLIED 235-000- 00 65.00 Cip - Residential 401-916- 07 425.00 DEP REFUND/APPLIED 235-000- 00 81.25 DEP REFUND/APPLIED 235-000- 00 35.75 DEP REFUND/APPLIED 235-000- 00 178.75 DEP REFUND/APPLIED 235-000- 00 279.50 OVERPAYMENTS 142-000- 00 47.20 DIESEL, MANIFOLD GASKET 154-000- 00 143.00 DIESEL, MANIFOLD GASKET 154-000- 00 20.49 Sales Tax Receivable - Replace 186-000- 00 9.83 Sales Tax Receivable - Replace 186-000- 00 1.41 HECK GEN 66536 TOTAL 174.73 DEP REFUND/APPLIED 235-000- 00 130.00 Cip - Residential 401-916- 07 425.00 DESICCANT FILTER HF, 77-P200-403-20R 154-000- 00 DESICCANT FILTER HF, 77-P200-403-20R 154-000- 00 DESICCANT CO2 ADSORBER CDA 77-P0323- 154-000- 00 DESICCANT CO2 ADSORBER CDA 77-P0323- 154-000- 00 Sales Tax Receivable - New 186-000- 00 Sales Tax Receivable - Replace 186-000- 00 Sales Tax Receivable - Replace 186-000- 00 RATA TEST SUPPORT 402-554- 01 HECK GEN 66539 TOTAL 439.32 7.37 523.90 8.79 322.92 67.41 1.13 4,697.00 6,067.84 05/23/2018 03:30 PM User: JMartig DE: Hutchinson Utili Check Date Bank Check # CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES CHECK DATE FROM 04/20/2018 - 05/22/2018 Payee Description Account Dept Pag 7/28 Amount Fund: 1 ELECTRIC 04/27/2018 GEN 66540* MERCEDES OR DARIN WALTERS DEP REFUND/APPLIED 235-000- 00 227.50 04/27/2018 GEN 66541* MICHAEL JAMES MILLER DEP REFUND/APPLIED 235-000- 00 120.25 04/27/2018 GEN 66542* MICHAEL JAMES MILLER DEP REFUND/APPLIED 235-000- 00 139.75 04/27/2018 GEN 66543* MORGAN SCHMIDT DEP REFUND/APPLIED 235-000- 00 182.00 04/27/2018 GEN 66546*dk NORTHERN STATES SUPPLY INC MATERIALS 401-588- 02 13.20 04/27/2018 GEN 66547* OLD REPUBLIC SURETY GROUP PROPERTY INSURANCE 401-924- 08 55.00 04/27/2018 GEN 66548#k OXYGEN SERVICE COMPANY INC BLADE, BAND SAW, EBE 11 X 1 - 5 154-000- 00 90.60 Supplies 401-550- 01 108.63 Supplies 401-550- 01 50.89 Supplies 401-550- 01 219.53 HECK GEN 66548 TOTAL 479.65 04/27/2018 GEN 66549 PSI ENGINEERING LLC FILTER BAG, 50 MICRO, TOWER BY-PASS, 6" 154-000- 00 118.00 FILTER BAG, 50 MICRO, TOWER BY-PASS, 6" 154-000- 00 17.29 Sales Tax Receivable - Replace 186-000- 00 10.09 Sales Tax Receivable - Replace 186-000- 00 1.48 HECK GEN 66549 TOTAL 146.86 04/27/2018 GEN 66550 REINER CONTRACTING, INC Generators 107-344- 00 123,979.69 04/27/2018 GEN 66551 ROILGARD FILTER ELEMENT, BPE-8018, 1 MIRCON 154-000- 00 4,309.20 FILTER ELEMENT, BPE-8018, 1 MIRCON 154-000- 00 177.20 HECK GEN 66551 TOTAL 4,486.40 04/27/2018 GEN 66553* SAMANTHA SOLIS DEP REFUND/APPLIED 235-000- 00 123.50 04/27/2018 GEN 66554* SCOTT A STUBER DEP REFUND/APPLIED 235-000- 00 65.00 04/27/2018 GEN 66555* SHARON OR DANNY SHONERD DEP REFUND/APPLIED 235-000- 00 156.00 04/27/2018 GEN 66556 SHAWN AMAN Cip - Residential 401-916- 07 24.00 05/23/2018 03:30 PM User: JMartig DE: Hutchinson Utili Check Date Bank Check # CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES CHECK DATE FROM 04/20/2018 - 05/22/2018 Payee Description Account Pag Dept 8/28 Amount Fund: 1 ELECTRIC 04/27/2018 GEN 66557 SHELBY NORCUTT OVERPAYMENTS 142-000- 00 79.87 04/27/2018 GEN 66558* SHERI DIRCKS DEP REFUND/APPLIED 235-000- 00 175.50 04/27/2018 GEN 66559* SORENSENS SALES Cip- Commercial 401-916- 07 150.00 04/27/2018 GEN 66560* STEVE OR ASHLEY LAMMERS DEP REFUND/APPLIED 235-000- 00 156.00 04/27/2018 GEN 66561 STURGES, DALE Supplies 401-550- 01 13.83 04/27/2018 GEN 66562* T93 PROPERTIES DEP REFUND/APPLIED 235-000- 00 455.00 04/27/2018 GEN 66563* T93 PROPERTIES DEP REFUND/APPLIED 235-000- 00 1,202.50 04/27/2018 GEN 66565* TOTAL COMPLIANCE SOLUTIONS INC DRUG TESTING SERVICES 401-923- 08 5,625.00 04/27/2018 GEN 66566* TRAVIS SHUFELT OR ELIZABETH KOCH DEP REFUND/APPLIED 235-000- 00 91.00 04/27/2018 GEN 66567 TWO-WAY COMMUNICATIONS INC Supplies 401-550- 01 210.46 04/27/2018 GEN 66568* UIS/SOURCECORP COLLECTION - MATERIALS 401-903- 06 383.11 COLLECTION - MATERIALS 401-903- 06 1,512.50 HECK GEN 66568 TOTAL 1,895.61 04/27/2018 GEN 66570 VERNON KRENTZ Cip - Residential 401-916- 07 16.00 04/27/2018 GEN 66571* VIK'S LANDSCAPING & LAWN CARE, INC GROUNDS - OUTSIDE SERVICES 401-935- 08 632.50 04/27/2018 GEN 66572* WHITNEY MALESKI OR JASON BENAGE DEP REFUND/APPLIED 235-000- 00 91.00 04/27/2018 GEN 66573* ZACH GASSMAN DEP REFUND/APPLIED 235-000- 00 32.50 05/01/2018 GEN 177(E) MISO Deferred Energy Cost - Miso 174-000- 00 1,072.98 05/02/2018 GEN 184(E)* CITIZENS BANK Office Supplies 401-921- 08 70.95 05/02/2018 GEN 66576 ALLIED ELECTRONICS INC RELAY -3PDT-15AMP -120V- PART# 70184904 107-344- 00 45.45 RELAY -3PDT-15AMP -120V- PART# 70184904 107-344- 00 11.00 RELAY SOCKET- 11 PIN - PART 4 70185332 107-344- 00 12.50 05/23/2018 03:30 PM User: JMartig DE: Hutchinson Utili Check Date Bank Check # CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES CHECK DATE FROM 04/20/2018 - 05/22/2018 Payee Description Account Pag Dept 9/28 Amount Fund: 1 ELECTRIC RELAY SOCKET- 11 PIN - PART 4 70185332 107-344- 00 3.02 HECK GEN 66576 TOTAL 71.97 05/02/2018 GEN 66577* AMERICAN PAYMENT CENTERS INC BOX RENTAL 401-903- 06 51.14 05/02/2018 GEN 66578 BARRY SCHAFFER OR JULIE SCHAFFER OVERPAYMENTS 142-000- 00 155.28 05/02/2018 GEN 66579 BECKY OSTLIE Cip - Residential 401-916- 07 25.00 05/02/2018 GEN 66580 BEN MADSEN OVERPAYMENTS 142-000- 00 253.63 05/02/2018 GEN 66581* BIRCHDALE FIRE & SAFETY LLP GROUNDS - OUTSIDE SERVICES 401-935- 08 35.27 05/02/2018 GEN 66583 BRETT BOLIN OR ANGELA BOLIN OVERPAYMENTS 142-000- 00 157.62 05/02/2018 GEN 66584 CHARLES D ROBERTS OVERPAYMENTS 142-000- 00 217.52 05/02/2018 GEN 66585 COLONIAL SUPPLEMENTAL INS CO COLONIAL INSURANCE 242-000- 00 113.76 05/02/2018 GEN 66587* DON KIECKER Cip - Residential 401-916- 07 400.00 05/02/2018 GEN 66588 DONALD CARL Cip - Residential 401-916- 07 250.00 05/02/2018 GEN 66589* FIRST CHOICE FOOD & BEVERAGE BREAKROOM/RECOGNITION BANQUET 401-926- 08 114.00 05/02/2018 GEN 66590* GUARDIAN DENTAL INSURANCE-80o ELEC 242-000- 00 3,742.95 DENTAL INSURANCE -COBRA 242-000- 00 303.12 HECK GEN 66590 TOTAL 4,046.07 05/02/2018 GEN 66591 HAGER JEWELRY INC Cip- Commercial 401-916- 07 438.00 05/02/2018 GEN 66592 HILLYARD/HUTCHINSON Supplies 401-550- 01 232.17 05/02/2018 GEN 66593* HUTCHINSON JAYCEES WATER CARNIVAL CIP - MARKETING 401-916- 07 750.00 05/02/2018 GEN 66594 JACQUELINE ROSENAU OVERPAYMENTS 142-000- 00 70.30 05/02/2018 GEN 66595 JEREMY THIEL OVERPAYMENTS 142-000- 00 82.05 05/02/2018 GEN 66596 JOSHUA MORGAN Cip - Residential 401-916- 07 25.00 05/02/2018 GEN 66597 JUUL CONTRACTING COMPANY Generators 107-344- 00 335.10 05/02/2018 GEN 66598 KATHY ROSENAU OVERPAYMENTS 142-000- 00 373.92 05/02/2018 GEN 66599 LIBERTY TAX SERVICES OVERPAYMENTS 142-000- 00 151.04 05/23/2018 03:30 PM CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES User: JMartig CHECK DATE FROM 04/20/2018 - 05/22/2018 DE: Hutchinson Utili Check Date Bank Check # Payee Description Account Dept Fund: 1 ELECTRIC 05/02/2018 GEN 66600 LOCATORS & SUPPLIES INC PAINT, LOCATING, INVERTED SURVEY 154-000- 00 PAINT, LOCATING, INVERTED SURVEY 154-000- 00 Sales Tax Receivable - New 186-000- 00 Sales Tax Receivable - New 186-000- 00 HECK GEN 66600 TOTAL 05/02/2018 GEN 66601 MATTHEW AHO OR CECELIA AHO OVERPAYMENTS 142-000- 00 05/02/2018 GEN 66602 MCLEOD COUNTY CHIROPRACTIC CTR HEALTH INSURANCE 4/19 401-926- 08 HEALTH INSURANCE 4/20 401-926- 08 HEALTH INSURANCE 4/24 401-926- 08 HECK GEN 66602 TOTAL 05/02/2018 GEN 66603* MEDICA HEALTH INSURANCE 85% ELEC 242-000- 00 05/02/2018 GEN 66604* MN NCPERS LIFE INSURANCE-PERA LIFE 242-000- 00 05/02/2018 GEN 66606 NATHAN COLE OVERPAYMENTS 142-000- 00 05/02/2018 GEN 66607* NELSON, NICK Training - Expense 05/02/2018 GEN 66609* NU TELECOM TELEPHONE 401-921- 08 05/02/2018 GEN 66610*dk OXYGEN SERVICE COMPANY INC BLADE, BAND SAW, 79" X 3/4" 6/10, 154-000- 00 Sales Tax Receivable - Replace 186-000- 00 Supplies 401-550- 01 3/8" X 36" ULTRATHERMIC CUTTING RODS 402-554- 01 HECK GEN 66610 TOTAL 05/02/2018 GEN 66612* RELIANCE STANDARD LIFE -LIFE LTD INSURANCE-80o ELEC 242-000- 00 LIFE INSURANCE-80o ELEC 242-000- 00 HECK GEN 66612 TOTAL 05/02/2018 GEN 66613*#k RUNNING'S SUPPLY INC Maintenance Other - Materials 402-554- 01 05/02/2018 GEN 66614* SARA BROWN Cip - Residential 401-916- 07 05/02/2018 GEN 66616 SELENA GEISER OVERPAYMENTS 142-000- 00 Pag 10/28 Amount 443.52 63.02 35.17 5.00 546.71 65.44 56.00 56.00 56.00 168.00 51,446.90 48.00 51.49 ** VOIDED ** 1,868.24 43.89 43.83 137.67 1,224.70 741.94 1,966.64 51.53 425.00 8.69 05/23/2018 03:30 PM User: JMartig DE: Hutchinson Utili Check Date Bank Check # Payee CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES CHECK DATE FROM 04/20/2018 - 05/22/2018 Description Fund: 1 ELECTRIC 05/02/2018 GEN 66617* TASC 05/02/2018 GEN 66618* VERIZON WIRELESS 05/02/2018 GEN 66619 WILLIAM JENSEN 05/07/2018 GEN 188(E)* TASC 05/08/2018 GEN 178(E) MISO 05/08/2018 GEN 179(E) MISO 05/14/2018 GEN 185(E) MISO 05/14/2018 GEN 186(E) MISO 05/14/2018 GEN 187(E) MISO 05/15/2018 GEN 180(E) MISO 05/15/2018 GEN 181(E) MISO 05/16/2018 GEN 172(E)*#k VISA Account Dept Pag 11/28 Amount HEALTH INSURANCE-HRA FEES 401-926- 08 4, 521. 62 TELEPHONE 401-921- 08 1,134.36 OVERPAYMENTS 142-000- 00 169.66 Prepaid HRA 174-000- 00 1,707.00 Deferred Energy Cost - Miso 174-000- 00 51,913.04 Deferred Energy Cost - Miso 174-000- 00 1,127.28 SCHEDULE 1 401-565- 03 3,901.96 SCHEDULE 2 401-565- 03 10,491.38 SCHEDULE 11 401-565- 03 647.94 HECK GEN 185(E) TOTAL 15,041.28 SCHEDULE 26 401-565- 03 13,633.45 SCHEDULE 26A 401-565- 03 22,119.92 HECK GEN 186(E) TOTAL 35,753.37 Transmission Expense 401-565- 03 5,620.19 Deferred Energy Cost - Miso 174-000- 00 14,115.99 Deferred Energy Cost - Miso 174-000- 00 1,055.70 GENERATORS -CONTROL ROOM 107-344- 00 199.16 SALES TAX RECEIVABLE - REPLACE 186-000- 00 14.69 MEETINGS & TRAVEL - EXP-PALM SPRINGS 401-546- 01 2,937.10 SUPPLIES -HUTCH LEADER PLANTS 401-550- 01 120.00 SUPPLIES -RUSH CARD REPLACEMNT FEE 401-550- 01 25.00 SUPPLIES -FACE SHIELD 401-550- 01 9.38 SUPPLIES-PLT 1 SUPPLIES 401-550- 01 229.02 Generator 41 Material 402-554- 01 17.34 Generator 45 Material 402-554- 01 51.51 GENERATOR 48 MATERIAL -TRANSMITTER 402-554- 01 1,064.33 Accessory Plant - Materials 402-554- 01 16.57 Meetings & Travel - Expense (S 401-580- 02 938.61 LINE - MLS-DEWALT BATTERIES USE TX 401-581- 02 239. 90 Materials 401-588- 02 12.99 OFFICE SUPPLIES-VERIDESK- A RADKE 401-921- 08 633.53 05/23/2018 03:30 PM User: JMartig DE: Hutchinson Utili Check Date Bank Check # CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES CHECK DATE FROM 04/20/2018 - 05/22/2018 Payee Description Account Dept Pag 12/28 Amount Fund: 1 ELECTRIC TRAINING - EXPENSE -NICK N MEETING ESP 401-930- 08 81.35 CHECK GEN 172(E) TOTAL 6,590.48 05/17/2018 GEN 183(E) MRES Purchased Power 401-555- 02 911,000.45 05/18/2018 GEN 66624 ADVANCED PROCESS SOLUTIONS GAUGE, 0-60, 2 1/2", 1/4" BOTTOM 154-000- 00 151.20 GAUGE, 0-60, 2 1/2", 1/4" BOTTOM 154-000- 00 14.14 Sales Tax Receivable - Replace 186-000- 00 11.44 Sales Tax Receivable - Replace 186-000- 00 1.07 CHECK GEN 66624 TOTAL 177.85 05/18/2018 GEN 66625#k AG SYSTEMS INC Sales Tax Receivable - Replace 186-000- 00 0.41 Generator 41 Material 402-554- 01 6.03 CHECK GEN 66625 TOTAL 6.44 05/18/2018 GEN 66626* AL BARNES Cip - Residential 401-916- 07 400.00 05/18/2018 GEN 66627 ALEX SANDOE OR JENNA SANDOE OVERPAYMENTS 142-000- 00 79.13 05/18/2018 GEN 66628 ALEXANDRA LARSON OR AARON LARSON OVERPAYMENTS 142-000- 00 166. 93 05/18/2018 GEN 66629 ANGELO DENG OVERPAYMENTS 142-000- 00 57.15 05/18/2018 GEN 66630* BIRCHDALE FIRE & SAFETY LLP GROUNDS - OUTSIDE SERVICES 401-935- 08 88.17 05/18/2018 GEN 66631 BONNIE MCLAIN Cip - Residential 401-916- 07 37.00 05/18/2018 GEN 66632*#k BORDER STATES ELECTRIC SUPPLY TAPE, HIGH VOLTAGE BUS, 2" WIDE x 25 154-000- 00 849.44 7673-5-8(S) QT-III 69KV 402-592- 02 8,310.60 4H NEMA pad 350-750 402-592- 02 891.34 CHECK GEN 66632 TOTAL 10,051.38 05/18/2018 GEN 66633 BORDER STATES ELECTRIC SUPPLY UNDERGROUND CONDUCTOR -RETURNABLE -REEL 107-367- 00 10,580.63 UNDERGROUND CONDUCTOR -RETURNABLE -REEL 107-367- 00 168.87 CONDUCTOR, 750 MCM 15KV AL 154-000- 00 76,195.11 CONDUCTOR, 750 MCM 15KV AL 154-000- 00 1,216.13 Sales Tax Receivable - New 186-000- 00 1,461.40 CHECK GEN 66633 TOTAL 89,622.14 05/18/2018 GEN 66634 BRIANNA KARTAK Cip - Residential 401-916- 07 16.00 05/23/2018 03:30 PM User: JMartig DE: Hutchinson Utili Check Date Bank Check # Payee CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES CHECK DATE FROM 04/20/2018 - 05/22/2018 Description Fund: 1 ELECTRIC 05/18/2018 GEN 66636*#k BS&A SOFTWARE 05/18/2018 GEN 66637* CARD SERVICES 05/18/2018 GEN 66639*dk CINTAS CORPORATION 4470 05/18/2018 GEN 66641 CRAIG HARDEL OR HEIDI HARDEL 05/18/2018 GEN 66642 DAVID THORSON 05/18/2018 GEN 66644 ERIN BILLER OR RYAN BILLER 05/18/2018 GEN 66645 FREMONT INDUSTRIES INC 05/18/2018 GEN 66646 FS3 INC 05/18/2018 GEN 66648 HDR ENGINEERING INC 05/18/2018 GEN 66650* HUTCHFIELD SERVICES INC 05/18/2018 GEN 66652* INNOVATIVE OFFICE SOLUTIONS 05/18/2018 GEN 66654 JENNA JACOBSEN Account Dept Pag 13/28 Amount Collection - Materials 401-903- 06 4,224.00 IT ADMIN AND SUPPORT 401-921- 08 7, 845.00 HECK GEN 66636 TOTAL 12,069.00 BREAKROOM/RECOGNITION BANQUET 401-926- 08 282.73 Uniforms & Laundry 401-550- 01 416.84 Uniforms & Laundry 401-550- 01 275.17 UNIFORMS & LAUNDRY 401-588- 02 213. 02 UNIFORMS & LAUNDRY 401-588- 02 213. 02 HECK GEN 66639 TOTAL 1,118.05 OVERPAYMENTS 142-000- 00 306.44 OVERPAYMENTS 142-000- 00 39.28 OVERPAYMENTS 142-000- 00 29. 53 TOWER INHIBITOR, F-9173 154-000- 00 1,922.80 TOWER INHIBITOR, F-9173 154-000- 00 64.72 HECK GEN 66645 TOTAL 1,987.52 BATTERY PACK, DRILL HEAD, SIZE C, 2 154-000- 00 42.83 Sales Tax Receivable - New 186-000- 00 2.94 HECK GEN 66646 TOTAL 45.77 Generators 107-344- 00 50,979.40 Generators 107-344- 00 54,933.29 Generators 107-344- 00 8,091.51 HECK GEN 66648 TOTAL 114,004.20 MISC OTHER - MATERIALS 401-935- 08 1,112.73 OFFICE SUPPLIES 401-921- 08 70. 95 OFFICE SUPPLIES 401-921- 08 68.94 HECK GEN 66652 TOTAL 139.89 OVERPAYMENTS 142-000- 00 77.27 05/23/2018 03:30 PM CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES Pag 14/28 User: JMartig CHECK DATE FROM 04/20/2018 - 05/22/2018 DE: Hutchinson Utili Check Date Bank Check # Payee Description Account Dept Amount Fund: 1 ELECTRIC 05/18/2018 GEN 66655* JLR GARAGE DOOR SERVICE INC MISC OTHER - MATERIALS 401-935- 08 245.64 05/18/2018 GEN 66656 JOHN HENRY FOSTER FILTER, OIL FILTER ELEMENT, SPIN ON, 154-000- 00 795.04 FILTER, OIL FILTER ELEMENT, SPIN ON, 154-000- 00 25.70 FILTER, AIR/OIL SEPERATOR, SPIN ON, 154-000- 00 379.28 FILTER, AIR/OIL SEPERATOR, SPIN ON, 154-000- 00 12.26 OIL, COMPRESSOR, QYN-SYN PLUS, QUINCY 154-000- 00 1,566.09 OIL, COMPRESSOR, QYN-SYN PLUS, QUINCY 154-000- 00 50.61 Sales Tax Receivable - Replace 186-000- 00 209.14 Sales Tax Receivable - Replace 186-000- 00 6.76 HECK GEN 66656 TOTAL 3,044.88 05/18/2018 GEN 66657 JON SCHWICHTENBERG Cip - Residential 401-916- 07 250.00 05/18/2018 GEN 66658 KAREN SCHRADER Cip - Residential 401-916- 07 30.00 05/18/2018 GEN 66659 KATIE PETERSON OVERPAYMENTS 142-000- 00 104.32 05/18/2018 GEN 66660* KDUZ/KARP ADVERTISING/PRINTING 401-921- 08 147.00 05/18/2018 GEN 66662 LAMBERT INSURANCE OF HUTCHINSON OVERPAYMENTS 142-000- 00 157.37 05/18/2018 GEN 66663*#k LOCATORS & SUPPLIES INC SAFETY GLASSES, GRAY, SILVER MIRROR, 401-550- 01 39.90 SAFETY GLASSES, GRAY, SILVER MIRROR, 401-550- 01 6.54 1503JFY, X-LARGE 401-588- 02 110.00 1503JFY, X-LARGE 401-588- 02 14.41 1501TFY, X-LARGE 401-588- 02 73.00 1501TFY, X-LARGE 401-588- 02 9.57 SAFETY GLASSES, GRAY, SILVER MIRROR, 401-588- 02 39. 90 SAFETY GLASSES, GRAY, SILVER MIRROR, 401-588- 02 6.54 HECK GEN 66663 TOTAL 299.86 05/18/2018 GEN 66664* MARCO TECHNOLOGIES, LLC OFFICE SUPPLIES 401-921- 08 317.01 05/18/2018 GEN 66665 MARIAH TORRES OVERPAYMENTS 142-000- 00 47.24 05/18/2018 GEN 66667#k MCC ENERGY SOLUTIONS, LLC I AM MANAGEMENT FEES 401-555- 02 3,900.00 IAM USAGE FEES 401-556- 03 3,050.00 CHECK GEN 66667 TOTAL 6,950.00 05/18/2018 GEN 66669 MIKE ANDERSON OR MELINDA ANDERSON OVERPAYMENTS 142-000- 00 500.00 05/18/2018 GEN 66671 MIKE EISENHART OR DILLON KRIPPNER OVERPAYMENTS 142-000- 00 49. 60 05/23/2018 03:30 PM CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES User: JMartig CHECK DATE FROM 04/20/2018 - 05/22/2018 DE: Hutchinson Utili Check Date Bank Check # Payee Description Account Dept Fund: 1 ELECTRIC 05/18/2018 GEN 66672 MINNESOTA POLLUTION CONTROL AGENCY Regulatory Expenses 401-928- 08 Regulatory Expenses 401-928- 08 HECK GEN 66672 TOTAL 05/18/2018 GEN 66673 MINNESOTA POLLUTION CONTROL AGENCY Generators 107-344- 00 05/18/2018 GEN 66674* MISSOURI RIVER ENERGY SERVICES Training - Expense 401-930- 08 05/18/2018 GEN 66678 PETER KURVERS OVERPAYMENTS 142-000- 00 05/18/2018 GEN 66679* PLUNKETTS GROUNDS - OUTSIDE SERVICES 401-935- 08 GROUNDS - OUTSIDE SERVICES 401-935- 08 GROUNDS - OUTSIDE SERVICES 401-935- 08 HECK GEN 66679 TOTAL 05/18/2018 GEN 66680* PREMIUM WATERS INC 05/18/2018 GEN 66681 ROBERT SHIMANSKI 05/18/2018 GEN 66682 ROBERT TEPLEY 05/18/2018 GEN 66683 RUTH LADE 05/18/2018 GEN 66684* SHRED RIGHT 05/18/2018 GEN 66686 STEILE CONSTRUCTION 05/18/2018 GEN 66687 SUTTON GILBERTSON 05/18/2018 GEN 66688* TERRY HAUTH 05/18/2018 GEN 66689 TOTAL FILTRATION SERVICES 05/18/2018 GEN 66690* TOTAL FIRE PROTECTION OFFICE SUPPLIES -BOTTLED WATER 401-921- 08 Cip - Residential 401-916- 07 Cip - Residential 401-916- 07 Cip - Residential 401-916- 07 OFFICE SUPPLIES -SHREDDING SERVICES 401-921- 08 Underground Conduit & Manholes 107-366- 00 OVERPAYMENTS 142-000- 00 Cip - Residential 401-916- 07 FILTER CARTRIDGE 20" GXO1-20-25RO 154-000- 00 FILTER CARTRIDGE 20" GXO1-20-25RO 154-000- 00 FILTER CARTRIDGE 30" PT4GXO1-30 40RO 154-000- 00 FILTER CARTRIDGE 30" PT4GXO1-30 40RO 154-000- 00 Sales Tax Receivable - Replace 186-000- 00 Sales Tax Receivable - Replace 186-000- 00 HECK GEN 66689 TOTAL GROUNDS - OUTSIDE SERVICES 401-935- 08 GROUNDS - OUTSIDE SERVICES 401-935- 08 Pag 15/28 Amount 8,795.01 4,143.85 25.00 113.56 122.30 221.34 465.94 20.90 25.00 25.00 25.00 12.48 4,095.00 80.63 150.00 232.00 21.19 373.60 34.12 49.07 714.46 480.51 876.30 05/23/2018 03:30 PM User: JMartig DE: Hutchinson Utili Check Date Bank Check # Payee Fund: 1 ELECTRIC 05/18/2018 GEN 66691 TRIMARK CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES CHECK DATE FROM 04/20/2018 - 05/22/2018 Description 05/18/2018 GEN 66692* UNITED PARCEL SERVICE 05/18/2018 GEN 66693 WAYTEK 05/18/2018 GEN 66694*dk WEST CENTRAL SANITATION INC 05/22/2018 GEN 189(E) MISO 05/22/2018 GEN 190(E) MISO Account Dept Pag 16/28 Amount GROUNDS - OUTSIDE SERVICES 401-935- 08 134.08 GROUNDS - OUTSIDE SERVICES 401-935- 08 253.40 HECK GEN 66690 TOTAL 1,744.29 DEGREASER ULTRA 2000 BETCO CORP 13605 154-000- 00 206.20 Sales Tax Receivable - Replace 186-000- 00 15.21 HECK GEN 66691 TOTAL 221.41 MAIL SERVICES - UPS, FEDEX 401-921- 08 101.25 Heat shrink - 1" 402-554- 01 12.46 Heat shrink - 1" 402-554- 01 4.44 Heat shrink - 3/4" 402-554- 01 9.28 Heat shrink - 3/4" 402-554- 01 3.31 Heat shrink - 1/2" 402-554- 01 5.80 Heat shrink - 1/2" 402-554- 01 2.07 Heat shrink - 3/8" 402-554- 01 7.85 Heat shrink - 3/8" 402-554- 01 2.80 Heat shrink - 1/4" 402-554- 01 6.33 Heat shrink - 1/4" 402-554- 01 2.26 Heat shrink - 3/16" 402-554- 01 6.80 Heat shrink - 3/16" 402-554- 01 2.42 CHECK GEN 66693 TOTAL 65.82 GENERATOR 41 WATER & SEWER 401-547- 01 86.57 Waste Disposal 401-550- 01 139.53 UTILITY EXPENSES - WATER/WASTE 55/45 401-930- 08 210.66 HECK GEN 66694 TOTAL 436.76 Deferred Energy Cost - Miso 174-000- 00 18,922.39 Deferred Energy Cost - Miso 174-000- 00 902.49 Total for fund 1 ELECTRIC 2,670,297.04 05/23/2018 03:30 PM User: JMartig DE: Hutchinson Utili Check Date Bank Check # Payee CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES CHECK DATE FROM 04/20/2018 - 05/22/2018 Description Fund: 2 GAS 04/23/2018 GEN 167(E)'dk BP CANANDA ENERGY SOLUTIONS 04/24/2018 GEN 173(E)* MINNESOTA REVENUE 04/24/2018 GEN 175(E)* POINT & PAY 04/24/2018 GEN 176(E)* TASC 04/26/2018 GEN 171(E)*kk VISA 04/27/2018 GEN 66470* AARON BURKSTRAND 04/27/2018 GEN 66472* ABIEZER LOZADA Account Dept Pag 17/28 Amount Gas For Retail 401-807- 04 369,656.11 3M 401-807- 04 226,241.25 HTI 401-807- 04 14,003.57 UNG 401-807- 04 4,806.90 GAS FOR RETAIL 401-807- 04 1,386.60 BROWNTON 401-807- 04 10,889.09 Utility Expenses - Water/Waste 401-930- 08 2,534.74 CHECK GEN 167(E) TOTAL 629,518.26 State Sales Tax 242-000- 00 13,781.00 City Sales Tax 242-000- 00 970.00 HECK GEN 173(E) TOTAL 14,751.00 METER READING - MATERIALS 401-903- 06 2, 408.01 Prepaid HRA 174-000- 00 498.04 TRAINING - EXPENSE -BREEZY IT 401-870- 04 1,124.52 Meetings & Travel - Expense (S 401-870- 04 32.92 Meetings & Travel - Expense (S 401-870- 04 18.00 Meetings & Travel - Expense (S 401-870- 04 64.78 MATERIALS -WELDING SUPPLIES -USE TX 15.22 401-874- 04 221.35 MATERIALS-MSA SAFETY -USE TX 5.42 401-874- 04 78.80 LINE - OUTSIDE SERVICES -REMOTE 401-856- 05 80.75 MATERIALS -ELECTRODE -USE TX 46.05 401-856- 05 669.80 MATERIALS -TIP ASSY-USE TX 5.02 401-856- 05 72.96 MATERIALS -HEAT SHRINK -USE TX 1.76 401-856- 05 25.48 MATERIALS -ELECTRIC MUD -USE TX 7.24 401-856- 05 105.29 PUB AWARE - MATERIAL-FLD 401-856- 05 111.99 OFFICE SUPPLIES -FUNERAL PLT 401-921- 08 15.97 IT ADMIN AND SUPPORT -USE 401-921- 08 9.12 DUES/MEMBERSHIP EXPENSE -MN CHP NIGP 401-930- 08 33.75 HECK GEN 171(E) TOTAL 2,665.48 DEP REFUND/APPLIED 235-000- 00 43.75 DEP REFUND/APPLIED 235-000- 00 131.25 05/23/2018 03:30 PM User: JMartig DE: Hutchinson Utili Check Date Bank Check # Payee CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES CHECK DATE FROM 04/20/2018 - 05/22/2018 Description Fund: 2 GAS 04/27/2018 GEN 66473* AIDEE SANDOVAL-GARCIA OR J 04/27/2018 GEN 66474* ALEXA FERN 04/27/2018 GEN 66477* ANDREW DICK 04/27/2018 GEN 66478* ANDREW GREELEY OR AMIE WEINAND 04/27/2018 GEN 66480* AUSTIN MATHERN 04/27/2018 GEN 66481* BENJAMIN OR STEPHANIE EICHTEN 04/27/2018 GEN 66482*dk BORDER STATES ELECTRIC SUPPLY Account Dept Pag 18/28 Amount DEP REFUND/APPLIED 235-000- 00 26.25 DEP REFUND/APPLIED 235-000- 00 35.00 DEP REFUND/APPLIED 235-000- 00 33.25 DEP REFUND/APPLIED 235-000- 00 35.00 DEP REFUND/APPLIED 235-000- 00 28.00 DEP REFUND/APPLIED 235-000- 00 17.50 SERVICES 107-380- 00 22.95 Baton 4F-US13-WF, Ball Valve, 150 ANSI, 107-385- 00 1,677.48 Baton 4F-US13-BW, Ball Valve, 150 ANSI, 107-385- 00 803.31 Baton 6R-US33-BW, Ball Valve, 150 ANSI, 107-385- 00 1,038.72 Elbow, 6", 90 Degree 107-385- 00 323.00 Reducer, Concentric, 6" x 4", Weld, 107-385- 00 100.70 Tee, 6", Weld, Seamless, Std Weight 107-385- 00 216.92 Cap, 8", Weld, Seamless, Std Weight 107-385- 00 69.92 FLUID, LEAK DETECTION, TYPE III, 154-000- 00 31.40 SLEEVE, 2" DRESSER REINFORCING, 220 154-000- 00 1,916. 90 VALVE, BALL, 4" IDS, POLY GAS FULL 154-000- 00 466.88 TEE, BUTT FUSION, 4" IPS, DR 11.0, 2406 154-000- 00 21.80 ELL, BUTT FUSION, MOLDED, 90 DEG, 4" 154-000- 00 19. 02 FITTING, TRANSITION, 4" WE X 4" IDS, 154-000- 00 154.60 ELL, STREET, 90 DEG, 1", BM, CLASS 150 154-000- 00 36.50 COUPLING, FEMALE THRD, 1", BM, CLASS 154-000- 00 30.40 NIPPLE, 1" X 2", BM, STD, SMLS, TEE 154-000- 00 13.60 NIPPLE, 3/4" X 4", BM, STD, SMLS, TEE 154-000- 00 19.84 CAP, BUTT FUSION, 6" IPS, DR 11.0, 2406 154-000- 00 33.49 THREAD-O-LET, 1/2" X 8" X 3", CLASS 154-000- 00 15.00 KIT, FLANGE INS 4", TYPE"E", NEOPRENE 154-000- 00 75.66 GASKET, 2" RING, 150 ANSI FLANGE, 154-000- 00 13.21 CARHARTT, 102691 FR DUCK BIB OVERALL, 401-880- 04 204. 52 CARHARTT, 102179 FR FULL SWING, JACKET 401-880- 04 153.06 HECK GEN 66482 TOTAL 7,458.88 04/27/2018 GEN 66483* BRITTANI OR CORTNEY CHRISTIE DEP REFUND/APPLIED 235-000- 00 119.00 05/23/2018 03:30 PM CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES Pag 19/28 User: JMartig CHECK DATE FROM 04/20/2018 - 05/22/2018 DE: Hutchinson Utili Check Date Bank Check # Payee Description Account Dept Amount Fund: 2 GAS 04/27/2018 GEN 66484* CALISTA CARLSON OR MICHAEL WOLF DEP REFUND/APPLIED 235-000- 00 52.50 04/27/2018 GEN 66485* CANDY AYRES DEP REFUND/APPLIED 235-000- 00 115.50 04/27/2018 GEN 66486 CENTRAL HYDRAULICS Materials 401-874- 04 90.84 04/27/2018 GEN 66487* CHAD BULAU DEP REFUND/APPLIED 235-000- 00 35.00 04/27/2018 GEN 66488* CHARLES RENNER DEP REFUND/APPLIED 235-000- 00 70.00 04/27/2018 GEN 66489* CHERYL OR TONY HANSON DEP REFUND/APPLIED 235-000- 00 91.00 04/27/2018 GEN 66490 CHICAGO TUBE AND IRON PIPE, 6", ELK STEEL, API-5L, GR B 107-385- 00 564.52 PIPE, 6", ELK STEEL, API-5L, GR B 107-385- 00 0.01 PIPE, 6", ELK STEEL, FUSION BONDED 154-000- 00 4, 160.00 PIPE, 6", ELK STEEL, FUSION BONDED 154-000- 00 0.07 HECK GEN 66490 TOTAL 4,724.60 04/27/2018 GEN 66491* CHRIS KOZAN DEP REFUND/APPLIED 235-000- 00 122.50 04/27/2018 GEN 66492* CHRIS VENABLE DEP REFUND/APPLIED 235-000- 00 15.75 04/27/2018 GEN 66494* CHRISTOPHER LOFGREN DEP REFUND/APPLIED 235-000- 00 94.50 04/27/2018 GEN 66495*kk CINTAS CORPORATION 4470 UNIFORMS & LAUNDRY 401-880- 04 129.29 UNIFORMS & LAUNDRY 401-880- 04 220.21 Uniforms & Laundry 401-880- 04 131.87 HECK GEN 66495 TOTAL 481.37 04/27/2018 GEN 66496*#k CITY OF HUTCHINSON It Admin And Support 401-921- 08 2,926.94 Utility Expenses - Water/Waste 401-930- 08 11.88 Utility Expenses - Water/Waste 401-930- 08 313.25 Utility Expenses - Water/Waste 401-930- 08 48.81 HECK GEN 66496 TOTAL 3,300.88 04/27/2018 GEN 66497* CLIFFTON OR ANNA CLEVERINGA DEP REFUND/APPLIED 235-000- 00 131.25 05/23/2018 03:30 PM User: JMartig DE: Hutchinson Utili Check Date Bank Check # CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES CHECK DATE FROM 04/20/2018 - 05/22/2018 Payee Description Account Pag Dept 20/28 Amount Fund: 2 GAS 04/27/2018 GEN 66498* CODY SCHUMACHER DEP REFUND/APPLIED 235-000- 00 154.00 04/27/2018 GEN 66500* DENNIS OR TERRI JANNUSCH DEP REFUND/APPLIED 235-000- 00 26.25 04/27/2018 GEN 66501* DOROTHY ADAMS Cip - Residential 401-916- 07 400.00 04/27/2018 GEN 66502* DUSTIN ORTLOFF DEP REFUND/APPLIED 235-000- 00 56.00 04/27/2018 GEN 66503* ERIC FLOM DEP REFUND/APPLIED 235-000- 00 105.00 04/27/2018 GEN 66505* FLAVIUS BECK DEP REFUND/APPLIED 235-000- 00 24.50 04/27/2018 GEN 66506* GRACE LUND DEP REFUND/APPLIED 235-000- 00 26.25 04/27/2018 GEN 66507 GROEBNER & ASSOCIATES INC TRANSITION-6"IxWLD, 11, ELK w/ 107-385- 00 432.13 04/27/2018 GEN 66508* HALEY JACOBSEN DEP REFUND/APPLIED 235-000- 00 112.00 04/27/2018 GEN 66510* HAYDEN OR CRYSTAL BRANSON DEP REFUND/APPLIED 235-000- 00 17.50 04/27/2018 GEN 66511* HEATHER GOLDSCHMIDT DEP REFUND/APPLIED 235-000- 00 131.25 04/27/2018 GEN 66513*#k HUTCHINSON HEALTH Materials 401-874- 04 180.00 04/27/2018 GEN 66516* JAMES NAVRTIL DEP REFUND/APPLIED 235-000- 00 87.50 04/27/2018 GEN 66517* JAMIE ZIEMER DEP REFUND/APPLIED 235-000- 00 75.25 04/27/2018 GEN 66518 JAN BETKER Cip - Residential 401-916- 07 725.00 Cip - Residential 401-916- 07 725.00 HECK GEN 66518 TOTAL 1,450.00 04/27/2018 GEN 66519* JEAN KRAMER DEP REFUND/APPLIED 235-000- 00 14.00 04/27/2018 GEN 66520* JEFF HAVELKA Cip - Residential 401-916- 07 400.00 04/27/2018 GEN 66521* JERRY L OR LISA OLSEN DEP REFUND/APPLIED 235-000- 00 140.00 05/23/2018 03:30 PM User: JMartig DE: Hutchinson Utili Check Date Bank Check # Payee CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES CHECK DATE FROM 04/20/2018 - 05/22/2018 Description Fund: 2 GAS 04/27/2018 GEN 66522* JESSICA PLAUNT 04/27/2018 GEN 66523* JLR GARAGE DOOR SERVICE INC 04/27/2018 GEN 66525* JOSH TELECKY 04/27/2018 GEN 66526* KELLSIE FARENBAUGH OR BRADLEY 04/27/2018 GEN 66527* KEVIN KELLER 04/27/2018 GEN 66528 KIM HUTTON 04/27/2018 GEN 66529 KRANZ LAWN & POWER 04/27/2018 GEN 66530 KRISTA BERKNER 04/27/2018 GEN 66531* LINDA HOUSE 04/27/2018 GEN 66532* LINDA HOUSE 04/27/2018 GEN 66533* LINDA OR TRACY LITCHY 04/27/2018 GEN 66534* LISA OHARA 04/27/2018 GEN 66537* MARIE ANDERSON 04/27/2018 GEN 66538* MARVIN SELLER 04/27/2018 GEN 66540* MERCEDES OR DARIN WALTERS 04/27/2018 GEN 66541* MICHAEL JAMES MILLER 04/27/2018 GEN 66542* MICHAEL JAMES MILLER 04/27/2018 GEN 66543* MORGAN SCHMIDT 04/27/2018 GEN 66544 MUELLER CO. Account Dept Pag 21/28 Amount DEP REFUND/APPLIED 235-000- 00 101.50 Misc Other - Materials ** VOIDED ** DEP REFUND/APPLIED 235-000- 00 175.00 DEP REFUND/APPLIED 235-000- 00 35.00 Cip - Residential 401-916- 07 400.00 Cip - Residential 401-916- 07 50.00 Power Equipment - Materials 402-895- 04 25.65 Cip - Residential 401-916- 07 25.00 DEP REFUND/APPLIED 235-000- 00 43.75 DEP REFUND/APPLIED 235-000- 00 19.25 DEP REFUND/APPLIED 235-000- 00 96.25 DEP REFUND/APPLIED 235-000- 00 150.50 DEP REFUND/APPLIED 235-000- 00 70.00 Cip - Residential 401-916- 07 400.00 DEP REFUND/APPLIED 235-000- 00 122.50 DEP REFUND/APPLIED 235-000- 00 64.75 DEP REFUND/APPLIED 235-000- 00 75.25 DEP REFUND/APPLIED 235-000- 00 98.00 Mueller 091664, Wrench for E-5 Machine 401-874- 04 102.22 05/23/2018 03:30 PM CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES Pag 22/28 User: JMartig CHECK DATE FROM 04/20/2018 - 05/22/2018 DE: Hutchinson Utili Check Date Bank Check # Payee Description Account Dept Amount Fund: 2 GAS Mueller 091664, Wrench for E-5 Machine 401-874- 04 7.96 Mueller 047756, Fiber 401-874- 04 6.16 Mueller 047756, Fiber 401-874- 04 0.48 Mueller 096536, 3/4 x 13/16" Wrench 401-874- 04 86.56 Mueller 096536, 3/4 x 13/16" Wrench 401-874- 04 8.45 HECK GEN 66544 TOTAL 211.83 04/27/2018 GEN 66545 MYRON POLZIN Training - Expense 401-870- 04 142.80 04/27/2018 GEN 665461dk NORTHERN STATES SUPPLY INC MATERIALS 401-874- 04 13.20 04/27/2018 GEN 66547* OLD REPUBLIC SURETY GROUP PROPERTY INSURANCE 401-924- 08 45.00 04/27/2018 GEN 66552#k RYAN ELLENSON Training - Expense 401-870- 04 144.97 Public Awareness - Material 401-856- 05 84.15 HECK GEN 66552 TOTAL 229.12 04/27/2018 GEN 66553* SAMANTHA SOLIS DEP REFUND/APPLIED 235-000- 00 66.50 04/27/2018 GEN 66554* SCOTT A STUBER DEP REFUND/APPLIED 235-000- 00 35.00 04/27/2018 GEN 66555* SHARON OR DANNY SHONERD DEP REFUND/APPLIED 235-000- 00 84.00 04/27/2018 GEN 66558* SHERI DIRCKS DEP REFUND/APPLIED 235-000- 00 94.50 04/27/2018 GEN 66559* SORENSENS SALES Cip- Commercial 401-916- 07 400.00 04/27/2018 GEN 66560* STEVE OR ASHLEY LAMMERS DEP REFUND/APPLIED 235-000- 00 84.00 04/27/2018 GEN 66562* T93 PROPERTIES DEP REFUND/APPLIED 235-000- 00 245.00 04/27/2018 GEN 66563* T93 PROPERTIES DEP REFUND/APPLIED 235-000- 00 647.50 04/27/2018 GEN 66564 TIM WEBER Training - Expense 401-870- 04 144.98 04/27/2018 GEN 66565* TOTAL COMPLIANCE SOLUTIONS INC DRUG TESTING SERVICES 401-923- 08 1,875.00 04/27/2018 GEN 66566* TRAVIS SHUFELT OR ELIZABETH KOCH DEP REFUND/APPLIED 235-000- 00 49.00 05/23/2018 03:30 PM User: JMartig DE: Hutchinson Utili Check Date Bank Check # CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES CHECK DATE FROM 04/20/2018 - 05/22/2018 Payee Description Account Pag Dept 23/28 Amount Fund: 2 GAS 04/27/2018 GEN 66568* UIS/SOURCECORP COLLECTION - MATERIALS 401-903- 06 313.46 COLLECTION - MATERIALS 401-903- 06 1,237.50 HECK GEN 66568 TOTAL 1,550.96 04/27/2018 GEN 66569 VERIZON WIRELESS UTILITIES (ELECTRIC, SATELLITE-SCADA 401-856- 05 80.04 04/27/2018 GEN 66571* VIK'S LANDSCAPING & LAWN CARE, INC GROUNDS - OUTSIDE SERVICES 401-935- 08 517.50 04/27/2018 GEN 66572* WHITNEY MALESKI OR JASON BENAGE DEP REFUND/APPLIED 235-000- 00 49. 00 04/27/2018 GEN 66573* ZACH GASSMAN DEP REFUND/APPLIED 235-000- 00 17.50 05/02/2018 GEN 184(E)* CITIZENS BANK Office Supplies 401-921- 08 70.96 05/02/2018 GEN 66577* AMERICAN PAYMENT CENTERS INC BOX RENTAL 401-903- 06 41.84 05/02/2018 GEN 66581* BIRCHDALE FIRE & SAFETY LLP GROUNDS - OUTSIDE SERVICES 401-935- 08 28.86 05/02/2018 GEN 66582 BORDER STATES ELECTRIC SUPPLY Elbow, 6", 90 Degree, Long Radius, 107-385- 00 387.66 Elbow, 6", 90 Degree, Long Radius, 107-385- 00 146.31 Performance Pipe, Yellowstripe 8300 HD 107-385- 00 4,704.00 Performance Pipe, Yellowstripe 8300 HD 107-385- 00 1,723.62 FLANGE, WELD NECK, RAISED FACE, 150 154-000- 00 109. 90 FLANGE, WELD NECK, RAISED FACE, 150 154-000- 00 56.45 UNION, BM, CLASS 150, 1", FEMALE THRD 154-000- 00 17.48 HECK GEN 66582 TOTAL 7,145.42 05/02/2018 GEN 66586 DON KIECKER Cip - Residential 401-916- 07 102.00 05/02/2018 GEN 66587* DON KIECKER Cip - Residential 401-916- 07 400.00 05/02/2018 GEN 66589* FIRST CHOICE FOOD & BEVERAGE BREAKROOM/RECOGNITION BANQUET 401-926- 08 38.00 05/02/2018 GEN 66590* GUARDIAN DENTAL INSURANCE-20o GAS 242-000- 00 935.73 05/02/2018 GEN 66593* HUTCHINSON JAYCEES WATER CARNIVAL CIP - MARKETING 401-916- 07 250.00 05/23/2018 03:30 PM User: JMartig DE: Hutchinson Utili Check Date Bank Check # Payee Fund: 2 GAS 05/02/2018 GEN 66603* MEDICA 05/02/2018 GEN 66604* MN NCPERS 05/02/2018 GEN 66605 MUELLER CO. CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES CHECK DATE FROM 04/20/2018 - 05/22/2018 Description Account Dept 05/02/2018 GEN 66607* NELSON, NICK 05/02/2018 GEN 66608 NORTHERN BORDER PIPELINE CO 05/02/2018 GEN 66609* NU TELECOM 05/02/2018 GEN 66610*dk OXYGEN SERVICE COMPANY INC 05/02/2018 GEN 66611 PEGGY WEISPFENNING 05/02/2018 GEN 66612* RELIANCE STANDARD LIFE -LIFE 05/02/2018 GEN 66613*dk RUNNING'S SUPPLY INC 05/02/2018 GEN 66614* SARA BROWN 05/02/2018 GEN 66615 SCOTT HILGEMANN 05/02/2018 GEN 66617* TASC 05/02/2018 GEN 66618* VERIZON WIRELESS 05/07/2018 GEN 188(E)* TASC 05/16/2018 GEN 172(E)*#k VISA Pag 24/28 Amount HEALTH INSURANCE 15% GAS 242-000- 00 9, 078.86 LIFE INSURANCE-PERA LIFE 242-000- 00 16.00 Mueller 046726, ORING 4214 401-874- 04 9.88 Mueller 046726, ORING 4214 401-874- 04 8.45 HECK GEN 66605 TOTAL 18.33 Training - Expense ** VOIDED ** LINE - OUTSIDE SERVICES -INTERCONNECT 401-856- 05 2,000.00 TELEPHONE 401-921- 08 622.74 PIPE ALIGNMENT CLAMP, 2"- 6" 401-874- 04 191.67 Cip - Residential 401-916- 07 25.00 LTD INSURANCE-20o GAS 242-000- 00 306.17 LIFE INSURANCE-20o GAS 242-000- 00 185.48 HECK GEN 66612 TOTAL 491.65 Materials 401-874- 04 41.34 Cip - Residential 401-916- 07 400.00 Cip - Residential 401-916- 07 25.00 HEALTH INSURANCE-HRA FEES 401-926- 08 1,507.21 TELEPHONE 401-921- 08 378.12 Prepaid HRA 174-000- 00 568.00 MEETINGS & TRAVEL - EXPENSE (S 401-870- 04 1,465.10 MTGS & TRVL - EXP-REIMBURSED FROM J 401-870- 04 44.00 MATERIALS-DEWALT BATTERIES -USE TAX 401-874- 04 239. 90 MATERIALS-ISDA/WIN DOT 401-874- 04 1,569.00 05/23/2018 03:30 PM CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES Pag 25/28 User: JMartig CHECK DATE FROM 04/20/2018 - 05/22/2018 DE: Hutchinson Utili Check Date Bank Check # Payee Description Account Dept Amount Fund: 2 GAS LINE - OUTSIDE SERVICES -REMOTE 401-856- 05 75.75 MATERIALS -OFFICE SUPPLIES 401-856- 05 95.52 MATERIALS -WEATHER CAPS -USE TX 12.58 401-856- 05 182.95 TRAINING - EXPENSE -NICK N MEETING ESP 401-930- 08 81.35 HECK GEN 172(E) TOTAL 3,753.57 05/18/2018 GEN 66623 ADVANCE ENGINEERING CORP 2" SCH 40 SMLS 12 x 12 180 DEGREE LOOP 107-381- 00 1,112.33 METER BAR ASSEMBLY, 425, AS PER 154-000- 00 2, 913.68 HECK GEN 66623 TOTAL 4,026.01 05/18/2018 GEN 66626* AL BARNES Cip - Residential 401-916- 07 400.00 05/18/2018 GEN 66630* BIRCHDALE FIRE & SAFETY LLP GROUNDS - OUTSIDE SERVICES 401-935- 08 72.14 05/18/2018 GEN 66632*#k BORDER STATES ELECTRIC SUPPLY Gasket, 6", Fiber, Ring, 150 ANSI 107-385- 00 44.67 Flange, Weld Neck, 107-385- 00 169.93 Industrial M & R Station Equip 107-385- 00 (1,035.73) UNION, INSULATING, GRND JOINT, CLASS 154-000- 00 36.40 THREAD-O-LET, 1/2" X 8" X 3", CLASS 154-000- 00 22.38 PLUG, SQ HEAD, MALE THRD, 1 1/2", 154-000- 00 20.65 VALVE BOX, 6" WIDTH WITH 12" BELL, 154-000- 00 724.35 FLANGE, WELD NECK, RAISED FACE, 150 154-000- 00 94.20 NIPPLE, 1/2" X 6", BM, STD, SMLS, TEE, 154-000- 00 9.91 HECK GEN 66632 TOTAL 86.76 05/18/2018 GEN 66635 BROWN COUNTY RURAL ELECTRIC Utilities (Electric, Satellite 401-856- 05 136.18 05/18/2018 GEN 66636*#k BS&A SOFTWARE collection - Materials 401-903- 06 3,456.00 IT ADMIN AND SUPPORT 401-921- 08 2,615.00 CHECK GEN 66636 TOTAL 6,071.00 05/18/2018 GEN 66637* CARD SERVICES BREAKROOM/RECOGNITION BANQUET 401-926- 08 94.24 05/18/2018 GEN 66638 CENTURYLINK Utilities (Electric, Satellite 401-856- 05 54.84 05/18/2018 GEN 66639*#k CINTAS CORPORATION 4470 UNIFORMS & LAUNDRY 401-880- 04 135.83 UNIFORMS & LAUNDRY 401-880- 04 123.38 HECK GEN 66639 TOTAL 259.21 05/23/2018 03:30 PM User: JMartig BE: Hutchinson Utili Check Date Bank Check # Payee CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES CHECK DATE FROM 04/20/2018 - 05/22/2018 Description Fund: 2 GAS 05/18/2018 GEN 66640 CONTROL EQUIPMENT SALES 05/18/2018 GEN 66643#k ENERTECH 05/18/2018 GEN 66647 dk GROEBNER & ASSOCIATES INC 05/18/2018 GEN 66649 HUGHES NETWORK SYSTEMS 05/18/2018 GEN 66650* HUTCHFIELD SERVICES INC 05/18/2018 GEN 66651 IMAC SYSTEMS, INC 05/18/2018 GEN 66652* INNOVATIVE OFFICE SOLUTIONS 05/18/2018 GEN 66653 JANINE GEHLEN Account Dept Pag 26/28 Amount 090M-VID000-000000010-AD, CH, DE-0000- 107-385- 00 4,595.64 090M-VID000-000000010-AD, CH, DE-0000- 107-385- 00 41.22 Misc ProductsEC350-EOB-00000000-C- 107-385- 00 3,740.64 Misc ProductsEC350-EOB-00000000-C- 107-385- 00 33.55 P.N. 40-4914-KIT, IRDA Communications 107-385- 00 160.28 P.N. 40-4914-KIT, IRDA Communications 107-385- 00 1.44 HECK GEN 66640 TOTAL 8,572.77 Public Awareness - Material 401-874- 04 1,872.95 OPERATING & MAINT-BROWNTON-LINE 3 416-108- 04 249.49 Public Awareness - Material 401-856- 05 458.35 HECK GEN 66643 TOTAL 2,580.79 RSR 3/4"NPTx3/4" I,11 3408 107-385- 00 19.43 RSR 3/4"NPTx3/4" I,11 3408 107-385- 00 12.77 TAP TEE-6"I EFx3/4"I BF 107-385- 00 38.44 TAP TEE-6"I EFx3/4"I BF 107-385- 00 25.26 EFV-3/4" IPS, ELK 700, 50098 107-385- 00 28.81 EFV-3/4" IPS, ELK 700, 50098 107-385- 00 18.94 Pipe, 3/4" IPS high 107-385- 00 160.00 Pipe, 3/4" IPS high 107-385- 00 32.80 COUPLING-3/4"I, EF, PE100, 4.7 107-385- 00 34.67 COUPLING-3/4"I, EF, PE100, 4.7 107-385- 00 7.11 Cat No. XP-1.00 IPS, 1" IPS Plug 401-874- 04 37.56 Cat No. XP-1.00 IPS, 1" IPS Plug 401-874- 04 5.05 Item No. A848706, Butt 401-874- 04 756.66 Item No. A848706, Butt 401-874- 04 101.64 HECK GEN 66647 TOTAL 1,279.14 UTILITIES -NEW ULM COMMUNICATIONS 401-856- 05 106. 94 MISC OTHER - MATERIALS 401-935- 08 910.41 STRAINER, GASKET RING, 3", 20 MESH, 154-000- 00 99. 15 OFFICE SUPPLIES 401-921- 08 23.65 OFFICE SUPPLIES 401-921- 08 22.98 HECK GEN 66652 TOTAL 46.63 Cip - Residential 401-916- 07 325.00 05/23/2018 03:30 PM CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES Pag 27/28 User: JMartig CHECK DATE FROM 04/20/2018 - 05/22/2018 DE: Hutchinson Utili Check Date Bank Check # Payee Description Account Dept Amount Fund: 2 GAS 05/18/2018 GEN 66655* JLR GARAGE DOOR SERVICE INC Misc Other - Materials 401-935- 08 200.98 05/18/2018 GEN 66660* KDUZ/KARP ADVERTISING/PRINTING 401-921- 08 49.00 05/18/2018 GEN 66661 KGM SICK Lithium Battery Pack p/n 2064018 401-874- 04 163.33 SICK Lithium Battery Pack p/n 2064018 401-874- 04 19.70 HECK GEN 66661 TOTAL 183.03 05/18/2018 GEN 66663*#k LOCATORS & SUPPLIES INC PAINT, LOCATING, RUST-OLEUM INVERTED 154-000- 00 419.04 PAINT, LOCATING, RUST-OLEUM INVERTED 154-000- 00 101.12 FLAG, LOCATE, 5" x 8", ON 36" WIRE 154-000- 00 510.00 FLAG, LOCATE, 5" x 8", ON 36" WIRE 154-000- 00 96.25 SAFETY GLASSES, GRAY, SILVER MIRROR, 401-880- 04 39. 90 SAFETY GLASSES, GRAY, SILVER MIRROR, 401-880- 04 6.55 HECK GEN 66663 TOTAL 1,172.86 05/18/2018 GEN 66664* MARCO TECHNOLOGIES, LLC OFFICE SUPPLIES 401-921- 08 105.67 05/18/2018 GEN 66666 MARISA PROVENCHER Cip - Residential 401-916- 07 25.00 05/18/2018 GEN 66668#k MCLEOD COOPERATVIE POWER ASSN MISC EXPENSE -GAS LINE PUMP 401-880- 04 67.31 UTILITIES (ELECTRIC, SATELLITE-MCLEOD 401-856- 05 38.48 UTILITIES (ELECTRIC, SATELLITE -PIPELINE 401-856- 05 39.35 HECK GEN 66668 TOTAL 145.14 05/18/2018 GEN 66670 MIKE CHRISTENSON Cip - Residential 401-916- 07 400.00 05/18/2018 GEN 66674* MISSOURI RIVER ENERGY SERVICES Training - Expense 401-930- 08 25.00 05/18/2018 GEN 66675 MRC GLOBAL Stud Bolt, Assy - 5/8" 107-381- 00 213.00 Stud Bolt, Assy - 5/8" 107-381- 00 0.04 Stud Bolt, Assy - 5/8" 107-381- 00 228.30 Stud Bolt, Assy - 5/8" 107-381- 00 0.05 HECK GEN 66675 TOTAL 441.39 05/18/2018 GEN 66676 NORTHERN STATES SUPPLY INC BLADE, COMBINATION, PIDTSCI4P, 401-874- 04 173.99 05/18/2018 GEN 66677 PAUL SCHERMANN Cip - Residential 401-916- 07 100.00 05/18/2018 GEN 66679* PLUNKETTS GROUNDS - OUTSIDE SERVICES 401-935- 08 100.07 05/23/2018 03:30 PM User: JMartig DE: Hutchinson Utili Check Date Bank Check # CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES CHECK DATE FROM 04/20/2018 - 05/22/2018 Payee Description Account Dept Pag 28/28 Amount Fund: 2 GAS GROUNDS - OUTSIDE SERVICES 401-935- 08 100.07 HECK GEN 66679 TOTAL 200.14 05/18/2018 GEN 66680* PREMIUM WATERS INC OFFICE SUPPLIES -BOTTLED WATER 401-921- 08 6.97 05/18/2018 GEN 66684* SHRED RIGHT OFFICE SUPPLIES -SHREDDING SERVICES 401-921- 08 4.16 05/18/2018 GEN 66685 SPRINT Utilities (Electric, Satellite 401-856- 05 141.52 05/18/2018 GEN 66688* TERRY HAUTH Cip - Residential 401-916- 07 400.00 05/18/2018 GEN 66690* TOTAL FIRE PROTECTION GROUNDS - OUTSIDE SERVICES 401-935- 08 393.15 GROUNDS - OUTSIDE SERVICES 401-935- 08 716. 98 GROUNDS - OUTSIDE SERVICES 401-935- 08 109.70 GROUNDS - OUTSIDE SERVICES 401-935- 08 207.33 HECK GEN 66690 TOTAL 1,427.16 05/18/2018 GEN 66692* UNITED PARCEL SERVICE MAIL SERVICES - UPS, FEDEX 401-921- 08 33.75 05/18/2018 GEN 66694*#k WEST CENTRAL SANITATION INC UTILITY EXPENSES - WATER/WASTE 45/55 401-930- 08 172.35 Total for fund 2 GAS 738,120.44 TOTAL - ALL FUNDS 3,408,417.48 '*'-INDICATES CHECK DISTRIBUTED TO MORE THAN ONE FUND '#'-INDICATES CHECK DISTRIBUTED TO MORE THAN ONE DEPARTMENT HUTCHINSON UTILITIES COMMISSION COMBINED DIVISIONS FINANCIAL REPORT FOR APRIL, 2018 33.3% ofYearComp. 2018 2017 Di %Chnq 2018 2017 Di %Chnq Full YrBud %of Bud Combined Division Customer Revenue $ 2,739,024 $ 2,320,530 $ 418,494 18.0% $ 13,531,346 $ 12,375,053 $ 1,156,294 9.3% $ 35,763,605 37.8% Sales for Resale $ 265,443 $ 103,019 $ 162,424 157.7% $ 926,721 $ 513,351 $ 413,369 80.5% $ 2,519,200 36.8% NU Transportation $ 72,079 $ 70,482 $ 1,596 2.3% $ 286,495 $ 289,227 $ (2,732) (0.9%) $ 739,440 38.7% Electric Division Transfer $ 54,697 $ 54,308 $ 389 0.7% $ 218,789 $ 217,233 $ 1,556 0.7% $ 656,366 33.3% Other Revenues $ 41,234 $ 61,555 $ (20,321) (33.0%) $ 187,639 $ 281,755 $ (94,116) (33.4%) $ 492,808 38.1% Interest Income $ 29,280 $ 10,171 $ 19,109 187.9% $ 105,474 $ 51,037 $ 54,437 106.7% $ 100,000 105.5% TOTAL REVENUES $ 3,201,756 $ 2,620,065 $ 581,691 22.2% $ 15,256,464 $ 13,727,656 $ 1,528,807 11.1% $ 40,271,419 37.9% Salaries & Benefits Purchased Commodities Transmission Generator Fuel/Chem. Depreciation Transfers (Elect./City) Operating Expense Debt Interest TOTAL EXPENSES NET PROFIT/(LOSS) $ 492,167 $ 432,207 $ 59,960 13.87% $ 1,994,440 $ 1,904,292 $ 90,148 4.7% $ 6,363,429 31.3% $ 1,545,848 $ 1,449,905 $ 95,943 6.6% $ 7,568,856 $ 7,296,666 $ 272,191 3.7% $ 19,600,000 38.6% $ 170,958 $ 178,446 $ (7,488) (4.2%) $ 721,845 $ 725,213 $ (3,368) (0.5%) $ 2,630,000 27.4% $ 79,305 $ 8,701 $ 70,604 811.5% $ 243,552 $ 97,298 $ 146,254 150.3% $ 992,082 24.5% $ 325,667 $ 317,333 $ 8,333 2.6% $ 1,302,667 $ 1,269,333 $ 33,333 2.6% $ 3,908,000 33.3% $ 158,986 $ 154,003 $ 4,984 3.2% $ 635,945 $ 616,010 $ 19,935 3.2% $ 1,907,835 33.3% $ 188,865 $ 139,709 $ 49,155 35.2% $ 644,857 $ 732,233 $ (87,376) (11.9%) $ 2,490,809 25.9% $ 103,551 $ 63,382 $ 40,169 63.4% $ 414,206 $ 253,529 $ 160,676 63.4% $ 1,280,863 32.3% $ 3,065,346 $ 2,743,686 $ 321,660 11.7% $ 13,526,366 $ 12,894,573 $ 631,793 4.9% $ 39,173,018 34.5% $ 136,410 $ (123,621) $ 260,031 (210.3%) $ 1,730,097 $ 833,083 $ 897,015 107.7% $ 1,098,401 157.5% April April YTD YTD 2018 2017 Change 2018 2017 Change Gross Margin % 35.4% 27.1% 8.3% 37.0% 32.4% 4.6% Operating Income Per Revenue $ (%) 6.1% -4.1% 10.2% 12.9% 6.3% 6.6% Net Income Per Revenue $ (%): 4.3% -4.7% 9.0% 11.3% 6.1% 5.3% 2018 HUC Budget Target 32.2% IIIIIIIIIIIIIIIIIII 10NNNNNNNN�1 5.2% fN��IINIINIdI 2.7% HUTCHINSON UTILITIES COMMISSION ELECTRIC DIVISION FINANCIAL REPORT FOR APRIL, 2018 2018 2017 Di . Electric Division Customer Revenue $ 1,804,375 $ 1,675,124 $ 129,251 Sales for Resale $ 265,443 $ 103,019 $ 162,424 Other Revenues $ 14,526 $ 27,326 $ (12,799) Interest Income $ 16,034 $ (15,348) $ 31,382 TOTAL REVENUES $ 2,100,377 $ 1,790,121 $ 310,257 33.3% of Year Comp. %Chna 2018 2017 Di . %Chna Full YrBud %of Bud 7.7% $ 7,791,380 $ 7,633,859 $ 157,521 2.1% $ 25,325,189 30.8% 157.7% $ 926,721 $ 513,351 $ 413,369 80.5% $ 2,519,200 36.8% (46.8%) $ 65,245 $ 192,140 $ (126,895) (66.0%) $ 208,800 31.2% (204.5%) $ 58,313 $ 25,519 $ 32,794 128.5% $ 50,000 116.6% 17.3% $ 8,841,659 $ 8,364,868 $ 476,791 5.7% $ 28,103,189 31.5% Salaries & Benefits $ 387,431 $ 163,353 $ 224,078 137.2% $ 1,554,722 $ 1,487,789 $ 66,932 4.5% $ 4,942,964 31.5% Purchased Power $ 1,041,751 $ 1,065,050 $ (23,299) (2.2%) $ 4,605,533 $ 4,494,533 $ 111,001 2.5% $ 14,000,000 32.9% Transmission $ 170,958 $ 178,446 $ (7,488) (4.2%) $ 721,845 $ 725,213 $ (3,368) (0.5%) $ 2,630,000 27.4% Generator Fuel/Chem. $ 79,305 $ 8,701 $ 70,604 811.5% $ 243,552 $ 97,298 $ 146,254 150.3% $ 992,082 24.5% Depreciation $ 241,667 $ 233,333 $ 8,333 3.6% $ 966,667 $ 933,333 $ 33,333 3.6% $ 2,900,000 33.3% Transfers (Elect./City) $ 128,224 $ 31,626 $ 96,599 305.4% $ 512,898 $ 493,633 $ 19,265 3.9% $ 1,538,693 33.3% Operating Expense $ 145,875 $ (3,401) $ 149,277 (4,388.7%) $ 446,009 $ 536,173 $ (90,164) (16.8%) $ 1,613,834 27.6% Debt Interest $ 47,376 $ 2,124 $ 45,252 2,130.6% $ 189,506 $ 8,496 $ 181,010 2,130.6% $ 606,763 31.2% TOTAL EXPENSES $ 2,242,588 $ 1,679,231 $ 563,357 33.5% $ 9,240,730 $ 8,776,468 $ 464,262 5.3% $ 29,224,336 31.6% NET PROFIT/(LOSS) $ (142,210) $ 110,890 $ (253,100) (228.2%) r $ (399,071) $ (411,600) $ 12,529 (3.0%) $ (1,121,147) 35.6% II ��d�NYi rah'��iiiiii��I�IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII�Ii�Iitl�I�iiiirfffttttttt��I�lllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll'�i�i��r'��i�ii��I��llllllllllllllllllllllllllllllllllllllllllllllllllllllllll 33.3% o . f Year Comp. P 2018 2017 Di . %Chna 2018 2017 Di . %Chna Full YrBud %of Bud Electric Division Residential 3,431,602 2,647,297 784,305 29.63% 15,445,479 14,256,421 1,189,058 8.34% 50,432,797 30.6% All Electric 201,258 124,418 76,840 61.76% 1,148,966 985,944 163,022 16.53% 2,611,705 44.0% Small General 1,390,709 1,045,910 344,799 32.97% 6,080,797 5,504,915 575,882 10.46% 17,085,853 35.6% Large General 5,482,460 4,567,640 914,820 20.03% 23,380,420 21,879,894 1,500,526 6.86% 79,262,499 29.5% Industrial 10,376,000 9,492,000 884,000 9.31% 40,609,000 41,441,000 (832,000) (2.01%) 134,707,856 30.1% Total KWH Sold 20,882,029 17,877,265 3,004,764 16.81% 86,664,662 84,068,174 2,596,488 3.09% 284,100,710 30.5% April April YTD YTD 2018 HUC 2018 2017 Change 2018 2017 Change Budget Target Gross Margin % 26.9% 17.8% 9.1% 26.3% 23.9% 2.3% 24.0% Operating Income Per Revenue $ (%) -5.2% 6.8% -12.0% -3.1% -6.4% 3.3% -2.0% 0%-5% Net Income Per Revenue $ (%): -6.8% 6.2% -13.0% -4.5% -4.9% 0.4% -4.0% 0%-5% Customer Revenue per KWH: $0.0864 $0.0937 -$0.0073 $0.0895 $0.0904 -$0.0009 $0.0886 11llllllllllllllll� Total Power Supply Exp. per KWH: $0.0731 $0.0828 -$0.0097 $0.0747 $0.0746 $0.0001 $0.0750 Due tothe software conversion in April 2017 the monthly numbers are not very comparable within each division since a largejournal entrywas needed to split the electric and natural gas division numbers. The YTD numbers are accurate. Sales for Resale of $265,443 consisted of $30,816 in market sales, $35,600 in the monthly tolling fee from Transalta, $103,027 in Transalta energy sales, and $96,000 in capacity sales to SMMPA. March 2017 Sales for Resale of $103,019 consisted of $2,119 in market sales, $34,400 in monthly tolling fees from Transalta, $0 in Transalta energy sales, and $66,500 in capacity sales to SMMPA. March 2016 Sales for Resale of $101,395 consisted of $4,464 market sales, $34,400 in Transalta tolling fees, $20,531 in Transalta energy sales, and capacity sales to SMMPA for $42,000. Overall Purchased Power decreased by $23,299. MRES purchases decreased by $8,277 and market purchases/MISO costs decreased by $15,022. The power cost adjustment for April 2018 was $.00227/kwhr bringing in an additional $47,064 of revenue for the month and $465,964 YTD. Last year's power cost adjustment for April 2017 generated $136,856 in additional revenue for the month and $513,065 for the year. HUTCHINSON UTILITIES COMMISSION GAS DIVISION FINANCIAL REPORT FOR APRIL, 2018 2018 2017 Di . % Chna 2018 2017 Di . Gas Division Customer Revenue $ 934,649 $ 645,406 $ 289,243 44.8% $ 5,739,966 $ 4,741,194 $ 998,772 Transportation $ 72,079 $ 70,482 $ 1,596 2.3% $ 286,495 $ 289,227 $ (2,732) Electric Div. Transfer $ 54,697 $ 54,308 $ 389 0.7% $ 218,789 $ 217,233 $ 1,556 Other Revenues $ 26,708 $ 34,229 $ (7,522) (22.0%) $ 122,394 $ 89,616 $ 32,779 Interest Income $ 13,246 $ 25,519 $ (12,273) (48.1%) $ 47,161 $ 25,519 $ 21,642 TOTAL REVENUES $ 1,101,379 $ 829,945 $ 271,434 32.7% $ 6,414,805 $ 5,362,788 $ 1,052,017 Salaries & Benefits $ 104,736 $ 268,854 $ (164,118) (61.0%) $ 439,718 $ 416,502 $ 23,216 Purchased Gas $ 504,096 $ 384,855 $ 119,241 31.0% $ 2,963,323 $ 2,802,133 $ 161,190 Operating Expense $ 42,989 $ 143,111 $ (100,122) (70.0%) $ 198,848 $ 196,060 $ 2,788 Depreciation $ 84,000 $ 84,000 $ 0.0% $ 336,000 $ 336,000 $ Transfers (City) $ 30,762 $ 122,377 $ (91,615) (74.9%) $ 123,047 $ 122,377 $ 670 Debt Interest $ 56,175 $ 61,258 $ (5,083) 0.0% $ 224,700 $ 245,033 $ (20,333) TOTAL EXPENSES $ 822,758 $ 1,064,455 $ (241,697) (22.7%) $ 4,285,637 $ 4,118,105 $ 167,531 NET PROFIT/(LOSS) $ 278,620 $ (234,511) $ 513,131 (218.8%) $ 2,129,168 $ 1,244,683 $ 884,486 33.3% of Year Comp. Chna Full Yr Bud % of Bud 21.1% $ 10,438,416 55.0% (0.9%) $ 739,440 38.7% 0.7% $ 656,366 33.3% 36.6% $ 284,008 43.1% 84.8% $ 50,000 94.39/8 19.6%1 $ 12,168,230 52.7% 5.6% $ 1,420,465 5.8% $ 5,600,000 1.4% $ 876,975 0.0% $ 1,008,000 0.5% $ 369,142 '8.32L $ 674,100 4.1% $ 9,948,682 71.1%1 $ 2,219,548 31.0% 52.9% 22.7% 33.3% 33.3% 33.3% 43.1% 95.9% 33.3% of Year Comp. 2018 2017 Di %Chnq 2018 2017 Di %Chnq Full YrBud %of Bud Gas Division Residential 44,070,013 19,658,834 24,411,179 124.17% 254,462,071 202,546,233 51,915,838 25.63% 449,582,000 56.6% Commercial 33,023,123 15,492,051 17,531,072 113.16% 189,663,105 149,616,782 40,046,323 26.77% 420,183,000 45.1% Industrial 79,795,351 65,123,381 14,671,970 2253% 377,402,749 339,378,381 38,024,368 11.20% 786,836,000 48.0% Total CF Sold 156,888,487 100,274,266 56,614,221 56t% 821,527,925 691,541,396 129,986,529 18.80% 1,656,601,000 49.6% April April YTD YTD 2018 HUC 2018 2017 Change 2018 2017 Change Budget Target Gross Margin % 52.0% 48.7% 3.3% 52.1% 45.8% 6.3% 51.4% IIIIIIIIIIIIIIIIIIIIIIII �� Operating Income Per Revenue $ (%) 28.2% -29.6% 57.8% 35.2% 26.2% 9.0% 22.1% Net Income Per Revenue $ (%): 26.2% -30.4% 56.7% 34.1% 23.7% 10.4% 18.8% �pyN�NNpNp�p�p�p�N� ��MflIII�IIIIIIIIIIIIIIIIIyy Contracted Customer Rev. per CF: $0.0038 $0.0037 $0.0000 $0.0039 $0.0040 -$0.0001 $0.0035pp�pp�pp��pp��pp��ryry�I Customer Revenue per CF: $0.0082 $0.0115 -$0.0033 $0.0096 $0.0096 $0.0000 $0.0088IIIIIIIIII��II�'' Total Power Supply Exp. per CF: $0.0033 $0.0040 ($0.0007) $0.0037 $0.0041 ($0.0005) $0.0035 $0.0035 Due to the software conversion in April 2017 the monthly numbers are not very comparable within each division since a largejournal entry was needed to split the electric and natural gas division numbers. The YTD numbers are accurate. Credits were issued once again after replenishing the rate stabilization fund to $600K after depleting it in December due to the gas price spike. April's Fuel Cost credit adjustment was $1.69798/MCF totalling $133,523 for the month and YTD. April 2017 credits totalled $5,991 for the month and $196,692 YTD. Current Assets Unnestricted/Undesignated Cash Cash Petty Cash Designated Cash Capital Expenditures - Five Yr. CIP Payment in Lieu of Taxes Rate Stabilization - Electric Rate Stabilization - Gas Catastrophic Funds Restricted Cash Bond Interest Payment 2017 Bond Interest Payment 2012 Debt Service Reserve Funds Total Current Assets Receivables Accounts (net of uncollectible allowances) Interest Total Receivables Other Assets Inventory Prepaid Expenses Sales Tax Receivable Deferred Outflows - Electric Deferred Outflows - Gas Total Other Assets Total Current Assets Capital Assets Land & Land Rights Depreciable Capital Assets Accumulated Depreciation Construction - Work in Progress Total Net Capital Assets HUTCHINSON UTILITIES COMMISSION BALANCE SHEET - CONSOLIDATED APRIL 30, 2018 Electric Gas Total Total Net Change Division Division 2018 2017 Total (YTD) 17,006,060.00 7,739,311.50 24,745,371.50 12,140,694.10 12,604,677.40 680.00 170.00 850.00 850.00 - 2,750,000.00 700,000.00 3,450,000.00 2,415,525.98 1,034,474.02 882,327.00 369,142.00 1,251,469.00 1,196,331.00 55,138.00 314,539.41 - 314,539.41 314,539.41 - - 651,306.61 651,306.61 646,058.37 5,248.24 400,000.00 100,000.00 500,000.00 500,000.00 - 901,197.03 - 901,197.03 75,243.73 825,953.30 - 820,458.31 820,458.31 977,549.98 (157,091.67) 522,335.64 2,188,694.02 2,711,029.66 2,188,694.02 522,335.64 22,777,139.08 12,569,082.44 35,346,221.52 20,455,486.59 14,890,734.93 1,852,552.05 1,222,093.94 3,074,645.99 2,338,087.50 736,558.49 19,039.49 19,039.49 38,078.98 31,415.67 6,663.31 1,871,591.54 1,241,133.43 3,112,724.97 2,369,503.17 743,221.80 1,192,004.02 404,138.66 1,596,142.68 1,537,253.62 58,889.06 76,998.44 44,717.98 121,716.42 110,208.57 11,507.85 40,109.89 - 40,109.89 153,153.34 (113,043.45) 1,746,060.00 - 1,746,060.00 1,746,060.00 - - 582,020.00 582,020.00 582,020.00 - 3,055,172.35 1,030,876.64 4,086,048.99 4,128,695.53 (42,646.54) 27, 703, 902.97 14, 841, 092.51 690,368.40 89,598,670.26 (53,411,660.21) 3,836,590.92 40,713,969.37 3,899,918.60 41,294,704.69 (15, 342, 585.00) 90,677.34 29,942,715.63 42,544,995.48 26,953,685.29 15,591,310.19 4,590,287.00 4,591,691.75 (1,404.75) 130,893,374.95 127,874,648.36 3,018,726.59 (68,754,245.21) (65,601,159.85) (3,153,085.36) 3,927,268.26 354,700.22 3,572,568.04 70,656,685.00 67,219,880.48 3,436,804.52 Total Assets 68,417,872.34 44,783,808.14 113,201,680.48 94,173,565.77 19,028,114.71 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 2017 Bonds 2012 Bonds 2003 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 APRIL 30, 2018 Electric Gas Total Division Division 2018 1,884,126.37 280,058.26 90,850.52 2,255,035.15 1,295,000.00 185,608.32 819,806.63 364,875.16 28,892.66 2,694,182.77 Total Net Change 2017 Total (YTD) 1,295,000.00 1,345,000.00 (50,000.00) 185,608.32 185,608.32 - 2,703,933.00 1,866,188.84 837,744.16 644,933.42 316,911.50 328,021.92 119,743.18 239,494.42 (119,751.24) 4,949,217.92 3,953,203.08 996,014.84 16,675,000.00 - 16,675,000.00 - 16,675,000.00 - 13,900,000.00 13,900,000.00 15,195,000.00 (1,295,000.00) - - - 465,000.00 (465,000.00) 655,198.80 1,407,529.39 2,062,728.19 1,593,137.71 469,590.48 4,226,202.00 - 4,226,202.00 4,226,202.00 - - 1,408,734.00 1,408,734.00 1,408,734.00 - 323,735.99 102,774.05 426,510.04 378,943.50 47,566.54 73,739.62 28,580.99 102,320.61 92,050.32 10,270.29 569,910.00 - 569,910.00 569,910.00 - - 189,970.00 189,970.00 189,970.00 - 22,523,786.41 17,037,588.43 39,561,374.84 24,118,947.53 15,442,427.31 43,639,050.78 25,052,036.94 68,691,087.72 66,101,415.16 2,589,672.56 43,639,050.78 25,052,036.94 68,691,087.72 66,101,415.16 2,589,672.56 Total Liabilities and Net Position 68,417,872.34 44,783,808.14 113,201,680.48 94,173,565.77 19,028,114.71 Hutchinson Utilities Commission Cash -Designations Report, Combined 4/30/2018 Change in Financial Balance, Balance, Cash/Reserve Institution Current Interest Rate Annual Interest April 2018 March 2018 Position 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 35,346,221.52 35,121,795.26 224,426.26 35,346,221.52 35,121,795.26 224,426.26 1,721,655.34 1,503,941.04 217,714.30 2,188,694.02 2,188,694.02 - 3,910,349.36 3,692,635.06 217,714.30 Operating Reserve Min 60 days of 2018 Operating Bud. 5,868,920.00 5,868,920.00 Rate Stabalization Funds 965,846.02 965,846.02 PILOT Funds Charter (Formula Only) 1,251,469.00 1,251,469.00 Catastrophic Funds Risk Mitigation Amount 500,000.00 500,000.00 Capital Reserves 5 Year CIP ( 2018-2022 Fleet & Infrastructure Maintenance) 3,450,000.00 3,450,000.00 Total Earmarked Funds 12,036,235.02 12,036,235.02 YE YE YE YE YTD HUC 2014 2015 2016 2017 2018 Target Debt to Asset 28.8% 32.0% 32.2% 40.8% 39.3% Current Ratio 2.26 2.52 3.06 5.73 7.23 �INigM� RONA 0.05% 1.31% 2.17% 1.80% 1.70% Change in Cash Balance (From 12131114 to 413012018) Month End Electric Elec. Change Natural Gas Gas Change Total Total Change 4/30/2018 22,777,139 12,569,082 35,346,222 12/31/2017 23,213,245 (436,106) 10,702,689 1,866,393 33,915,934 1,430,288 12/31/2016 8,612,801 14,600,444 9,500,074 1,202,615 18,112,875 15,803,059 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 * 2017's Signifcant increase in cash balance is due to issuing bonds for the generator project. Hutchinson Utilities Commission Cash -Designations Report, Electric 4/30/2018 Change in Financial Balance, Balance, Cash/Reserve Institution Current Interest Rate Annual Interest April 2018 March 2018 Position Savings, Checking, Investments varies varies varies 35,346,221.52 35,121,795.26 224,426.26 Total HUC Operating Funds 35,346,221.52 35,121,795.26 224,426.26 Debt Restricted Requirements Bond Covenants - sinking fund Operating Reserve Min 60 days of 2018 Operating Bud. Rate Stabalization Funds $400K-$1.2K PILOT Funds Charter (Formula Only) Catastrophic Funds Risk Mitigation Amount Capital Reserves 5 Year CIP ( 2018-2022 Fleet & Infrastructure Maintenance) Total Designated Funds 901,197.03 847,574.40 53,622.63 4,387,223.00 4,387,223.00 314,539.41 314,539.41 882,327.00 882,327.00 400,000.00 400,000.00 2,750,000.00 2,750,000.00 8,734,089.41 8,734,089.41 RestrictionsExcess Reserves Less Designations,0: YE YE YE YE YTD APPA Ratio HUC 2014 2015 2016 2017 2018 5K-10K Cust. Target Debt to Asset Ratio (* w/Gen.) 7.4% 13.2% 16.1% 36.1% 36.2% 50.1% Current Ratio 2.48 2.95 3.57 10.70 10.88 2.43 �I RONA -3.1% -1.2% -0.4% -0.1% -0.6% NA >0% Hutchinson Utilities Commission Cash -Designations Report, Gas 4/30/2018 Change in Financial Balance, Balance, Cash/Reserve Institution Current Interest Rate Annual Interest April 2018 March 2018 Position 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 35,346,221.52 35,121,795.26 224,426.26 35,346,221.52 35,121,795.26 224,426.26 820,458.31 656, 366.64 164,091.67 2,188,694.02 2,188,694.02 - 3,009,152.33 2,845,060.66 164,091.67 Operating Reserve Min 60 days of 2018 Operating Bud. 1,481,697.00 1,481,697.00 Rate Stabalization Funds $200K-$600K 651,306.61 651,306.61 PILOT Funds Charter (Formula Only) 369,142.00 369,142.00 Catastrophic Funds Risk Mitigation Amount 100,000.00 100,000.00 Capital Reserves 5 Year CIP ( 2018-2022 Fleet & Infrastructure Maintenance) 700,000.00 700,000.00 Total Earmarked Funds 3,302,145.61 3,302,145.61 YE YE YE YE YTD HUC 2014 2015 2016 2017 2018 APGA Ratio Target Debt to Asset 55.6% 54.8% 51.5% 48.1% 44.1% TBD Current Ratio 2.07 2.17 2.59 2.72 4.18 TBD RONA 4.3% 4.7% 5.6% 5.0% 5.5% TBD HUTCHINSON UTILITIES COMMISSION Investment Report For the Month Ended April 30, 2018 Interest Current Date of Date of Par Current Purchase Unrealized Premium Next Institution Description Rate YTM Purchase Maturity Value Value Amount Gain/(Loss) (Discount) Call Date Wells Fargo Money Market 0.600% 0.600% NA NA 46,349.40 46,349.40 - - - N/A Wells Fargo CD's 1.650% 1.650% 02/22/2018 08/22/2018 245,000.00 244,899.55 245,000.00 (100.45) - N/A Wells Fargo CD's 2.000% 2.000% 02/28/2018 03/28/2019 245,000.00 244,772.15 245,000.00 (227.85) - N/A Wells Fargo CD's 2.100% 2.100% 02/21/2018 08/21/2019 245,000.00 244,389.95 245,000.00 (610.05) - N/A Wells Fargo CD's 1.200% 1.200% 09/07/2016 09/21/2018 245,000.00 244,127.80 245,000.00 (872.20) - N/A Wells Fargo CD's 2.000% 2.000% 04/07/2016 10/07/2021 245,000.00 238,208.60 245,000.00 (6,791.40) - 10/07/2018 Wells Fargo CD's 2.150% 2.150% 06/27/2017 06/27/2022 245,000.00 238,184.10 245,000.00 (6,815.90) - 07/27/2018 Wells Fargo FHLMC - Step 1.500% 1.945% 09/07/2016 09/27/2019 260,000.00 258,668.80 260,000.00 (1,331.20) - 06/27/2018 Wells Fargo FHLMC - Step 2.000% 2.192% 06/29/2017 06/29/2022 275,000.00 267,855.50 275,000.00 (7,144.50) - 06/29/2018 Wells Fargo FHLMC - Step 2.000% 2.256% 10/27/2016 10/27/2023 1,025,000.00 1,003,003.50 1,025,000.00 (21,996.50) 07/27/2018 Broker Total 16.1 % 3,030,000.00 3,030,459.35 3,030,000.00 (45,890.05) - Cetera Investm ent Services Money Market 0.150% 0.150% N/A N/A 32,117.80 32,117.80 - - - N/A Cetera Investment Services U.S. Treasury Bill 1.111% 1.111% 11/07/2017 05/24/2018 7,042,000.00 7,034,817.16 6,999,783.21 35,033.95 (42,216.79) N/A Cetera Investment Services U.S. Treasury Bill 1.140% 1.140% 11/07/2017 06/21/2018 3,021,400.00 3,014,178.85 3,000,194.12 13,984.73 (21,205.88) N/A Cetera Investm ent Services U.S. Treasury Bill 1.101% 1.101% 11/07/2017 05/03/2018 3,016,000.00 3,015,728.56 2,999,985.04 15,743.52 (16,014.96) N/A Cetera Investm ent Services Municipal Bonds 2.995% 2.073% 03/07/2016 07/01/2020 250,000.00 250,850.00 260,835.21 (9,985.21) 10,835.21 N/A Cetera Investm ent Services Municipal Bonds 2.750% 1.881% 03/07/2016 08/01/2020 250,000.00 251,135.00 259,820.00 (8,685.00) 9,820.00 N/A Cetera Investment Services Municipal Bonds 2.163% 1.779% 03/08/2016 07/01/2019 500,000.00 496,730.00 506,145.00 (9,415.00) 6,145.00 N/A Cetera Investment Services Municipal Bonds 1.886% 1.886% 04/29/2016 04/15/2019 250,000.00 242,387.50 236,327.50 6,060.00 (13,672.50) N/A Cetera Investm ent Services Municipal Bonds 2.875% 2.121% 04/29/2016 09/01/2021 250,000.00 249,870.00 259,467.50 (9,597.50) 9,467.50 N/A Cetera Investm ent Services Municipal Bonds 3.751% 2.399% 04/29/2016 11/01/2021 250,000.00 251,012.50 267,330.00 (16,317.50) 17,330.00 N/A Cetera Investment Services Municipal Bonds 3.139% 2.190% 12/11/2017 09/01/2021 300,000.00 298,098.00 310,116.00 (12,018.00) 10,116.00 N/A Cetera Investment Services Municipal Bonds 2.655% 2.208% 12/11/2017 03/01/2022 300,000.00 293,442.00 305,314.92 (11,872.92) 5,314.92 N/A Cetera Investment Services Municipal Bonds 2.300% 1.715% 12/11/2017 10/01/2020 100,000.00 99,005.00 101,595.00 (2,590.00) 1,595.00 N/A Cetera Investment Services Municipal Bonds 3.240% 3.240% 11/17/2017 02/15/2023 65,000.00 53,923.35 54,917.20 (993.85) (10,082.80) N/A Cetera Investment Services Municipal Bonds 5.000% 1.610% 10/11/2016 01/01/2020 250,000.00 262,207.50 276,500.00 (14,292.50) 26,500.00 N/A Broker Total 83.9% 15,844,400.00 15,845,503.22 15,838,330.70 15,838,330.70 15,838,330.70 TOTAL INVESTMENTS 100.0% $ 18,874R00.00 $ 18,875,962.57 $ 18,868,330.70 $ 15,792,440.65 $15,838,330.70 PORTFOLIO BY PRODUCT TYPE MATURITY, SCHEDULE 4/302018 % of 3/312018 % of Monthly Maturity Current Value % ProductType Total Value Total Total Value Total Change Less than 1 year $14,119,378.77 74.8% EM Money Market $78,467.20 0.4% $63,892.69 0.3% $14,574.51 1 - 2 years 1,261,996.25 6.7% CD's 1,454,582.15 7.7% 1,456,429.45 7.7% (1,847.30) 2 - 3 years 600,990.00 3.2% Government Bonds 14,594,252.37 77.3% 14,583,625.38 77.3% 10,626.99 3 - 4 years 1,330,631.10 7.0% Municipal Bonds 2,748,660.85 14.6% 2,760,892.55 14.6% 12,231.70 4 - 5 years 559,962.95 3.0% TOTAL $18,875,962.57 100.0% $18,864,840.07 100.0% $11,122.50 5+years 1,003,003.50 5.3% TOTAL $18,875,962.57 100.0% $16,000,000.00 Municipal Bonds 14.6% 0001 Money Market f 04% $14,000,000.00 $12,000,000.00 $10,000,000.00 $14,119,379 r r $8,000,000.00 Government Bonds CD's $6,000,000.00 77.3% 7.7% $4,000,000.00 / II $2,000,000.00 $1,,26II1,, IIII996 $1,330,631 609V190 MI %193 $ $55 m96 $S tltl4 Less than 1year 1 2years 2 3years 3-4years 4 - S years S+years ELECTRIC DIVISION Operating Revenue April 2018 CLASS AMOUNT KWH /KWH Street Lights $0.32 6 $0.05333 Electric Residential Service $346,100.51 3,431,602 $0.10086 All Electric Residential Service $19,649.65 201,258 $0.09763 Electric Small General Service $135,581.45 1,390,709 $0.09749 Electric Large General Service $515,303.31 5,482,460 $0.09399 Electric Large Industrial Service $787,739.52 10,376,000 $0.07592 Total $1,804,374.76 20,882,035 $0.08641 Power Adjustment $0.00227 Rate Without Power Adjustment $0.08414 Electric Division Year -to -Date 02018$A--t 02017$A-nt ®2018 KWH110 02017KWH110 10,000,000 9,000,000 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 ,I 1 IIIIIIIIIIIIIIIII l i IIIIIIIIIIIIIIIII I i IIIIIIIIIIIIIIIII l i IIIIIIIIIIIIIIIII l i IIIIIIIIIIIIIIIII Street Lights Residential All Elec. Small Gen. Large Gen. Large For Resale Resid. Srv. Srv. Industrial NOTE: Sales for resale includes capacity sales, market sales and Transalta sales. Total NATURAL GAS DIVISION Operating Revenue APRIL 2018 CLASS AMOUNT MCF /$ MCF Residential $358,815.11 44,070 $8.14194 Commercial $258,566.77 33,023 $7.82990 Large Industrial $317,267.23 79,795 $3.97603 Total $934,649.11 156,888 $5.95743 Fuel Adjustment-$0.00170 Rate Without Fuel Adjustment $7.65743 Natural Gas Division Year -to -Date ® 2018 $ Amount 0 2017 $ Amount ® 2018 MCF 0 2017 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 Gas Residential Gas Commercial Large Industrial Total Work Order Description 11708 Units G&7 zzuoz Unit BBuilding spancrete Joint Replacement zzuoa Unit zControl Building Air Conditioning 11803 Plant zCooling Tower Piping Replacement 11804 Soft Start Motor Controllers for Air Supply Fan zzaos Replace Stage 3-sHpcBlades zznoa Unit z[ewsData Logger 11807 Plant zPipe Replacement Engineering Total Total Percentage Materials Labor Budgeted Actual Difference Completed $ 14,369.702o0 $ - $ 14,369,702.00 $ 880\8*7.62 $ (13,488,804.38) 10,000o0 $ 10,000.00 - $ (10,000o0) zs'oO000 $ zs'000.00 - $ (zs'00000) 350,000o0 $ 350,000o0 - $ (350,000o0) 8,000o0 2,000o0 $ 10,000o0 9'875.76 $ (124z*) z00% 150,000o0 $ 150,000o0 - $ (150,000.00) 30,000.00 - $ 30,000.00 - $ (30,000o0) 700000 ---_�� $7,00K0.00 -_ $ 570'000o0 $ z'00000 $ 572'000o0 $ 9'875.76 $ (562'124.24) Work Order Description 21801 Pole Repair or Replacement 21802 Hutch Substation Roof Replacement 21803 Station Equipment 21804 Duct forReconductor 21805 Uponer New Feed 21806 Feeder 16 and 17 Reconductor 21807 MITGI New Feed 21808 New Developments 21809 Century Court Apartments 21810 Century Avenue Trail Work Feeder 22 21811 New Developments Transformers 21812 Plant 14160 Generator Transformer Repl 21813 Transformer Replacements 21814 Century Court Apartments 21815 Meters Electric Distribution Total Total Materials Labor Budgeted Actual Difference 15,000.00 - 15,000.00 - $ (15,000.00) 10,000.00 10,000.00 - $ (10,000.00) 10,000.00 10,000.00 2,785.58 $ (7,214.42) 15,000.00 65,000.00 80,000.00 299.46 $ (79,700.54) 85,000.00 50,000.00 135,000.00 3,577.56 $ (131,422.44) 30,000.00 70,000.00 100,000.00 $ (100,000.00) 80,000.00 35,000.00 115,000.00 309.73 $ (114,690.27) 50,000.00 50,000.00 317.92 $ (49,682.08) 20,000.00 15,000.00 35,000.00 $ (35,000.00) 10,000.00 10,000.00 20,000.00 $ (20,000.00) 50,000.00 50,000.00 8.22 $ (49,991.78) 70,000.00 5,000.00 75,000.00 $ (75,000.00) 40,000.00 14,000.00 54,000.00 $ (54,000.00) 10,000.00 3,000.00 13,000.00 $ (13,000.00) 30,000.00 - 30,000.00 - $ (30,000.00) $ 525,000.00 $ 267,000.00 $ 792,000.00 $ 7,298.47 $ (784,701.53) Percentage Completed Administrative Total Total Work Order Description Budgeted Actual 51801 Replace 2008 Super Duty Bucket Truck 140,000.00 51802 Replace 2007 Metering Van 25,750.00 51803 Replace 2006 Production Dodge Dakota 25,000.00 51804 Replace 2006 Ford F150 25,750.00 51805 Replace Vehicle #433 37,080.00 $ 253,580.00 $ Difference 140,000.00 25,750.00 25,000.00 25,750.00 37,080.00 $ (253,580.00) Percentage Completed ,, Order Description Transmission61801 4HCP ROW 61802 Transmission Lateral to HCP - Materials and Perm 61803 Lafayette interconnect Metering Upgrade Locator61804 61805 Misc Developments and Improvements :0. Regulator Station Improvements 61807 Service Lines :0: Meters, AMI, and all Fittings :0' Industrial Metering and Regulation Natural Gas Total Total Percentage Materials Labor Budgeted Actual Difference Completed $ 500,000.00 $ 4,200.00 $ 504,200.00 $ $ (504,200.00) 1,000,000.00 4,200.00 1,004,200.00 $ (1,004,200.00) 90,000.00 18,000.00 108,000.00 $ (108,000.00) 6,000.00 - $ 6,000.00 7,674.16 $ 1,674.16 100% 125,000.00 28,000.00 $ 153,000.00 3,951.79 $ (149,048.21) 15,000.00 4,900.00 $ 19,900.00 $ (19,900.00) 55,000.00 31,500.00 $ 86,500.00 12,062.42 $ (74,437.58) 90,000.00 4,900.00 $ 94,900.00 4,324.45 $ (90,575,55) 80,000.00 7,000.00 $ 87,000.00 37,873.69 $ (49,126.31) 20% C1,961,000.00 102,700.00 2,063,700.00 OS HUTCHINSON UTILITIES COMMISSION 9T, Board Action Form iiiiiiiiiiiiiiiiiiiiiillillillillillillilliillillillillillillilliilliillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliilllI 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. License requirements for utility operation ii. Alcohol or Drugs- Exempt iii. Natural Gas Service Work iv. Locating Customer's underground Utilities - Gas BOARD ACTION REQUESTED: None Fiscal Impact: Included in current budget: Budget Change: PROJECT SECTION: Total Project Cost: RemainingCost: EXEMPT LICENSE REQUIREMENTS FOR UTILITY VEHICLE OPERATION Prior to hire date as an WC employee, the candidate's driving record is evaluated and must be approved. This is a condition of employment if operation of a vehicle is an essential part of an employee's job. An employee whose job requires operating a motor vehicle must possess a valid Minnesota Driver's License with necessary endorsements in order to conduct WC business. If an employee's driver's license is suspended, revoked, or cancelled during employment with WC, the employee must immediately inform the employee's Director, Manager or Supervisor who must inform the General Manager. The General Manager shall take appropriate action up to and including discharge. NON-EXEMPT LICENSE REQUIREMENTS FOR UTILITY VEHICLE OPERATION Prior to hire date as an WC employee, the candidate's driving record is evaluated and must be approved. This is a condition of employment if operation of a vehicle is an essential part of an employee's job. An employee whose job requires operating a motor vehicle must possess a valid Minnesota Driver's License with necessary endorsements in order to conduct WC business. If an employee's driver's license is suspended, revoked, or cancelled during employment with WC, the employee must immediately inform the employee's Director, Manager or Supervisor who must inform the General Manager. The General Manager shall take appropriate action up to and including discharge. EXEMPT ALCOHOL OR DRUGS Possession or consumption of alcohol or controlled substances is prohibited while on -duty or on/in any HUC equipment or property. An employee who reports to work incapacitated or whose performance is impaired through the use of alcohol or controlled substances is subject to disciplinary action up to and including discharge. All HUC employees required to maintain a Commercial Driver's License (CDL), and/or perform a maintenance or emergency function on a natural gas pipeline regulated by 49 CFR Parts 192, 193 or 195 must comply with the Total Compliance Solutions Drug and Alcohol Plan as administered by HUC. Natural Gas Service Work HUC personnel shall perform leak investigation and carbon monoxide testing at no charge to the customer. HUC does not perform service work on customer owned facilities. Locating Customer's Underground Utilities HUC shall locate all natural gas underground distribution and transmission facilities up to the meter at no charge to the customer or landowner. OS HUTCHINSON UTILITIES COMMISSION 9T, Board Action Form iiiiiiiiiiiiiiiiiiiiiillillillillillillilliillillillillillillilliilliillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliilllI 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. Smoking ii. Alcohol or Drugs- Non Exempt iii. Natural Gas Meter Requirements and Placement iv. Meter Testing BOARD ACTION REQUESTED: Approve Policy Changes Fiscal Impact: Included in current budget: Budget Change: PROJECT SECTION: Total Project Cost: RemainingCost: EXEMPT SMOKING The HUC observes and supports the Minnesota Clean Indoor Air Act. All HUC buildings and vehicles, in their entirety, shall be designated as tobacco free, meaning that smoking in any form (through the use of tobacco products (pipes, cigars and cigarettes) or "vaping" with e-cigarettes is prohibited while in a HUC facility or vehicle. Smoking of any kind, including pipes, cigars, cigarettes, vaping with e-cigarettes and the use of chewing tobacco is prohibited for employees while on duty. Employees 18 and over are allowed to smoke only during their breaks and lunch, and only in areas designated for that purpose. �Ix a j �,�... Eby �:�„� � ��u��..:��:��..�� ."�� ...�� . �� p��„�;;� �� p:�.��,u ��, i��'i.�� ,�,� i�� p� ��„�,�,� ��fl�....�� ...a�u�... NON-EXEMPT SMOKING The HUC observes and supports the Minnesota Clean Indoor Air Act. All HUC buildings and vehicles, in their entirety, shall be designated as tobacco free, meaning that smoking in any form (through the use of tobacco products (pipes, cigars and cigarettes) or "vaping" with e-cigarettes is prohibited while in a HUC facility or vehicle. Smoking of any kind, including pipes, cigars, cigarettes, vaping with e-cigarettes and the use of chewing tobacco is prohibited for employees while on duty. Employees 18 and over are allowed to smoke only during their breaks and lunch, and only in areas designated for that purpose. '<,ntraau„<, , �!, 02en was (Iowg....an(] ventflati.on 4ntaal<es o1'j !jbH .° 12�a es an(j tflaces ol'worl<:. NON-EXEMPT ALCOHOL OR DRUGS Possession or consumption of alcohol or controlled substances is prohibited while on -duty or on/in any HUC equipment or property. An employee who reports to work incapacitated or whose performance is impaired through the use of alcohol or controlled substances is subject to disciplinary action up to and including discharge. All HUC employees required to maintain a Commercial s Il:)ia ',�� License (CDL), and/or perform a maintenance or emergency function on a natural gas pipeline regulated by 49 CFR Parts 192, 193 or 195 must comply with the Total Compliance Solutions Drug and Alcohol Plan as administered by HUC Natural Gas Meter Requirements and Placement HUC shall furnish and install the natural gas meter at no charge to the customer. HUC reserves the right to specify the natural gas meter location on all installations. All meters must be located on an external wall of the building, at a horizontal distance of no less than 3 feet from fresh air intakes, windows or door openings. New construction natural aas meters must be located within 10 feet of the electric meter OR the eyeptl lif HUC is providing both services. Access to all natural gas meters shall not be obstructed. Natural gas meters shall be located in ventilated spaces readily accessible for examination, reading, replacement or necessary maintenance. Decks, porches, etc. shall not be constructed over a natural gas meter. Natural gas meters shall not be located where they will be subject to damage, such as adjacent to a driveway or other locations subject to vehicular traffic, in public passages, where they will be subject to excessive corrosion or vibration or in areas subject to ice and snow damage. Natural gas meters shall not be installed directly beneath external stairways. Natural gas meters shall not be located where they will be subjected to extreme temperatures or sudden extreme temperature changes (e.g., air ducts, dryer vents). Manufacturer's installation specifications shall be adhered to when installing fresh air intake and exhaust terminations near natural gas metering facilities. Natural gas regulators shall be located - no less than 3 feet from any source of ignition or any source of heat that may damage the facilities. HUC requires a minimum of a 3-foot clear zone in front of the natural gas meter. Reasonable care must be taken to protect all metering facilities when remodeling, roofing, painting, etc. In the event of damage to the natural gas facilities, the customer shall be responsible for the cost of repairing or replacing the natural gas facilities. Conditions may exist which may require additional restrictions or distances (e.g. multiple meters, etc.). Please contact HUC if you should have any questions regarding your natural gas metering facilities. Modifications made to the customer's metering facilities, necessitated by customer changes, shall be performed by HUC, at the customer's expense. All natural gas service lines retired due to building demolition, overbuilding, etc. shall be retired at the customer's expense. h....W Ilyal r11 Gas Il::: lip §on jeiforims aIIII urcLireime t work our unat r11 gas facHliLe : Limatc lis jrovl c Il,sy II....W Ilyat r11 Gas Il::: lip §on When requested Q etes te be PFGVided WheR requested by ni 11c4nmor All exceptions require the approval of HUC prior to the start of construction. if violations or deviations are determined, the customer shall be responsible for the cost of the correction. Single Family Dwellings HUC shall provide natural gas to residential customers at the standard delivery pressure of 7 inches of water column, measured at the inlet to the natural gas meter. All residential natural gas metering facilities shall be located on the side of the home within 6 feet of the front building wall. Front building wall is defined as the wall nearest the street of the resident's living space. Multi -Family Dwellings/Multiple Business Establishments Delivery pressures greater than 7 inches of water column, for multi -family and multiple business establishments, shall only be allowed by the prior approval of HUC. The customer must provide adequate over -pressure protection for all fuel lines subject to increased delivery pressure. The single metering of multiple -family dwellings, apartment buildings or multiple business establishments within a single building is permitted to the extent that each building is centrally heated. Individual metering is required for all individually heated, single-family private residences and each separately heated, owned and/or operated business. Please contact HUC for specifications regarding meter facilities. Commercial/Industrial Facilities Delivery pressures greater than 7 inches of water column, for commercial and industrial applications, shall only be allowed by the prior approval of HUC. The customer must provide adequate over -pressure protection for all fuel lines subject to increased delivery pressure. Please contact HUC for specifications regarding meter facilities. Meter Testing HUC shall periodically test all natural gas meters for accuracy and sound mechanical condition. Meters that have an average incest accuracy of 100, *-- :u: 2%, shall be considered accurate. Average accuracy is defined as the average of the open and check flow accuracies. Accounts +4 for which the natural gas meter tests in excess of 102% are subject to a refund. This refund shall be based on the "as found average meter accuracy" and the customer's consumption for the previous six month period. Upon request of the customer, HUC shall test the average accuracy of the natural gas meter. A $40 trip charge may be assessed to all accounts in which the "as found average meter accuracy" is determined to be 102% or less. HUTCHINSON UTILITIES COMMISSION�� Board Action Form 'Ylkll'M1'k Agenda Item: Approve Charge Offs Presenter: Jared Martig Agenda Item Type: Time Requested (Minutes): 2 New Business Attachments: Yes BACKGROUND/EXPLANATION OF AGENDA ITEM: We are requesting that you approve the charge -offs in the amount of $5,852.23 as shown on the attached spreadsheet. Past amounts written off are listed below. 2017: $31,967.78 2016: $11,350.31 2015. $ 7,537.92 2014: $41,279.16 2013: $ 4,316.12 2012: $ 4,067.15 2011: $ 9,792.12 BOARD ACTION REQUESTED: Approve Charge Offs Fiscal Impact: Included in current budget: Budget Change: PROJECT SECTION: Total Project Cost: Remaining Cost: ACCOUNT# AMT. OWING 80200 235.69 310246 582.64 DECEASED TOTAL 818.33 ACCOUNT# AMT. OWING CHARGE OFF FOR MAY 2018 Deceased ELECTRIC NAT. GAS REASON FOR 37.75 197.94 Deceased 264.89 317.75 Deceased 302.64 515.69 Uncollectable ELECTRIC NAT. GAS 191005 9.24 9.24 50515 260.85 130.43 210721 151.19 151.19 260254 108.68 108.68 260284 178.91 178.91 320091 210.81 14.11 420337 329.24 329.24 436963 698.86 0.00 420170 362.77 362.77 420463 107.86 107.86 190320 36.88 36.88 371045 174.32 174.32 30975 87.20 87.20 340006 248.75 89.89 470388 375.98 184.35 210717 97.45 97.45 90940 586.84 61.91 340007 221.18 64.57 162014 40.99 40.99 470027 111.62 111.62 260425 262.29 262.29 161093 44.27 44.27 10305 48.13 13.74 320245 279.59 95.74 Uncollectable Total 5,033.90 2,757.65 REASON FOR CHARGE OFF 0.00 closed account 130.42 closed account 0.00 closed account 0.00 closed account 0.00 closed account 196.70 closed account 0.00 closed account 698.86 closed account 0.00 closed account 0.00 closed account 0.00 closed account 0.00 closed account 0.00 closed account 158.86 closed account 191.63 closed account 0.00 closed account 524.93 closed account 156.61 closed account 0.00 closed account 0.00 closed account 0.00 closed account 0.00 closed account 34.39 closed account 183.85 closed account 2,276.25 Grand Totals 5,852.23 3,060.29 2,791.94 LAST 12/19/17 01/12/18 LAST ACTIVITY DATE 03/10/17 03/16/17 07/18/17 11/20/17 04/18/17 11/15/17 01/18/18 02/09/17 01/17/17 11/07/11 11/15/11 10/04/11 09/20/11 11/14/11 01/04/12 11/01/11 04/10/12 12/15/11 01/25/12 03/05/12 02/23/12 03/19/12 01/27/12 03/20/12 HUTCHINSON UTILITIES COMMISSION�� Board Action Form �'Ylkll'M1'k� Agenda Item: Approve HDR Change Request Presenter: Jeremy Carter Agenda Item Type: Time Requested (Minutes): 5 New Business Attachments: Yes BACKGROUND/EXPLANATION OF AGENDA ITEM: As part of the project to add new units 6 & 7 this year HDR was hired as the engineering firm to oversee the air permitting and the technical aspects of the project. The original contract amount approved was for $382,110. HDR is requesting a change order request of an additional $263,500 to complete the project along with the final commissioning of the new units later this fall. Listed in the attached submittal request are the general circumstances surrounding the project and the additional time needed to complete this project. If the commission approves this change request it will bring the total contract price for HDR engineering services to $645,610 or about 4% of the overall project costs. Within this project there is a 5% contingency built in of $751,948 so this change request will be covered by contingency dollars and still keep the project well within budget. BOARD ACTION REQUESTED: Approve HDR Change Request Fiscal Impact: $263,500 Included in current budget: Yes Budget Change: PROJECT SECTION: Total Project Cost: Remaining Cost: May 4, 2018 Mr. Jeremy Carter General Manager Hutchinson Utilities Commission 225 Michigan St. SE Hutchinson, MN 55350 Subject: Engineering Services Engine Generator sets 6 & 7 Procurement and Installation Cost of Services change request Dear Mr. Carter As you are aware, we are expending considerable effort working with the Engine Generator contractor to finalize the procurement of the Unit 6 & 7 engine -generators and auxiliary equipment and securing the necessary information for development of construction documents for the Balance of Plant construction. We originally anticipated the design effort to be similar to the 2012 engine installation. Reviewing our man-hours and related cost to date, we are currently estimating additional costs through startup and commissioning of $263,500.00. These additional costs are represented by the following: • Extended contract discussions and effort to finalize the Engine Generator contract • Extended review and response to required submittals • Unanticipated design complexity in new plant equipment arrangements Each of these efforts involved senior personnel to a greater level than anticipated. With that said, we are currently projecting an Engineering Services cost through Engine installation, startup and commissioning of $645,610.00 based on our original anticipated level of effort, completed work to date and anticipated work to commissioning. At this time, we respectfully request a $263,500.00 increase to our Original budgeted fee of $382,110.00. During your review of our request, please don't hesitate to contact me for further information or clarifications. Sincerely, HDR En ineering, Inc. �W . James W. Booty, PE Project Manager cc: Randy Blake Craig Lenning, HDR Matt Zuehls, HDR Ihdirnumco mn 701 Xenia Avenue South, Suite 600, Minneapolis, MN 55416-3636 (763)591-5400 HUTCHINSON UTILITIES COMMISSION�� Board Action Form 'Ylkll'M1'k Agenda Item: Approve Advertisement of Bids for Units 6 & 7 Installation Presenter: Jeremy Carter Agenda Item Type: Time Requested (Minutes): 5 New Business Attachments: Yes BACKGROUND/EXPLANATION OF AGENDA ITEM: HUC is requesting that the Board approve Advertising of Bids for Units 6 & 7. HUC will receive sealed bids at the Hutchinson Utilities office until 2pm on July 2, 2018 and then publicly open and read aloud such Bids on the following construction: "The completion of the installation of engine generator units 6 & 7 in the HUC Plant 1 facility. Contractor shall complete the necessary structural, civil, and mechanical systems installation, including certain equipment and systems furnished by owner and Caterpillar Motoren GmbH & Co. KG." The project bidder must attend the mandatory pre -bid meeting on June 20, 2018 at 10: am at the Plant 1 facility 44 4th Ave NW Hutchinson, MN 55350 Specifications may be obtained by contacting Mr. James Booty, HDR Engineering Inc. 701 Xenia Ave South Minneapolis, MN. 763-591-5471 BOARD ACTION REQUESTED: Approve Advertisement of Bids for Units 6 & 7 Installation Fiscal Impact: none Included in current budget: Yes Budget Change: PROJECT SECTION: Total Project Cost: Remaining Cost: Advertisement for Bids for Plant 1 units 6 and 7 installation Hutchinson Utilities Commission Hutchinson, Minnesota Notice is hereby given that the Hutchinson Utilities Commission of the City of Hutchinson, Hutchinson, Minnesota, hereinafter referred to as the Owner, will receive sealed Bids at the Hutchinson Utilities office until 2pm (CDT) on the 2nd day of July 2018, and will publicly open and read aloud such Bids on the following construction: "The completion of the installation of engine generator units 6 and 7 in the HUC Plant 1 facility. Contractor shall complete the necessary structural, civil, and mechanical systems installation, including certain equipment and systems furnished by owner and Caterpillar Motoren GmbH & Co. KG" To be considered for this project the bidder must attend the mandatory pre -bid meeting on June 20t", 2018 at 10:00 am CDT at the Plant 1 facility 44 - 4t" Ave NW Hutchinson Minnesota 55350 Proposals shall be properly endorsed and delivered in an envelope marked, "Plant 1 units 6 and 7 installation" and shall be addressed to: Randy Blake, Production Manager, Hutchinson Utilities Commission, 225 Michigan Street SE, Hutchinson, Minnesota 55350. Bids shall be supplied in both hardcopy and electronic format. The name and address of the Bidder shall be clearly indicated on the outside of the package containing the bid. Bidder shall provide one (1) original (clearly marked as such) and 2 copies of the bid along with 2 flash drives containing electronic PDF files of their bid. All proposals shall be submitted on the Bidder's own letterhead. In facsimile of the Bid Form enclosed within the Specifications, or by utilizing the Bid Form enclosed with the Specifications by typing the official name of the Bidder at the top of the form. Each bid should be accompanied by a Bid Bond, made payable to the Hutchinson Utilities Commission of the City of Hutchinson, Hutchinson, Minnesota, in the amount of five per cent (5%) of the Bid, as a guarantee that the Bidder will enter into the proposed Contract and provide a Performance and Payment Bond after the Bid has been accepted. The successful Bidder shall furnish a Performance Bond and Payment Bond in an amount equal to one hundred per cent (100%) of the Contract price to the Owner prior to the approval of the Contract. No Bidder may withdraw his Bid or Proposal for a Period of thirty (30) days after date of opening of Bids. At the aforementioned time and place, or at such later time and Place as the Owner then may fix, the Owner will act upon Proposals received and with its sole discretion may award Contract(s) for the furnishing of said construction. Specifications may be obtained by contacting Mr. James Booty, HDR Engineering Inc. 701 Xenia Avenue South Minneapolis, MN. Telephone number 763-591-5471. The Hutchinson Utilities Commission of the City of Hutchinson, Hutchinson, Minnesota reserves the right to reject any and all bids, or bid irregularities. In , President Date ATTESTED In Secretary Date HUTCHINSON UTILITIES COMMISSION�� Board Action Form �'Ylkll'M1'k� Agenda Item: Electric & Natural Gas Rate Structure Change Presenter: Jeremy Carter Agenda Item Type: Time Requested (Minutes): 5 New Business Attachments: Yes BACKGROUND/EXPLANATION OF AGENDA ITEM: Utility Financial Services has been involved in extensive analysis of Hutchinson Utilities Commission business model and cost drivers. As part of this analysis, a Cost of Service study identified various financial benchmarks, In addition, considerations were discussed relating to ensuring the various components of how HUC collects revenue through its monthly billing aligns well against the fixed and variable costs of operation. Utility Financial Services proposed a 2 year rate track for both the Electric and Natural Gas division. As part of the rate designs for each division, a glide path was also determined for each division. A 6-year glide path for the Electric division was the boards direction to bring the various classifications towards more equitable compared to the Cost of Service numbers while it was the boards determination a 9-year glide path for the Natural Gas division was appropriate. Please see attached a resolution for approval that would start the process of adjusting the rate structures. Once this resolution is approved, the rate design structures, communication and a meeting with the council may need to take place as well. BOARD ACTION REQUESTED: Approve 2 Year Rate Structure Change Resolution Fiscal Impact: Included in current budget: Yes Budget Change: PROJECT SECTION: Total Project Cost: Remaining Cost: Hutchinson 111 Commission Utility Financial Solutions, LLC 185 Sun Meadow Court Holland, MI USA 49424 (616) 402-7045 Email: dkasbohm@ufsweb.com Submitted Respectfully by: Daniel Kasbohm Rates Manger, Utility Financial Solutions �4Jfl�quN�: ��ip^�tsdh�?am0'�;�ty�mul�u�vnn�k V.W." Hutchinson ili ie i i n Electric Rate Design for 2018 & 2019 Table of Contents Page 3 Residential 5 Electric Small General Service 7 Street Lighting 8 Security Lighting 9 Electric Large General Service 10 Large Industrial Service DesignHutchinson Utilities Commission Electric Rate 2018 Rate Design Summary Projected Projected Revenues Under Revenues Under Projected Projected Current Rates Proposed Rates Revenue Change from Customer Class (RD) (RD) Change Current Residential $ 5,484,084 $ 5,560,861 $ 76,777 1.40% Small General Service 1,807,442 1,823,709 16,267 0.90% Street Lights 151,656 153,020 1,365 0.90% Security Lights 12,655 12,773 118 0.93% Large General Service 7,182,612 7,117,968 (64,644) -0.90% Large Industrial 11,242,760 11,220,624 (22,137) -0.20% Totals $ 25,881,208 $ 25,888,954 $ 7,747 0.03% Hutchinson Utilities Commission Electric Rate Design for 2019 Rate Design Summary Projected Projected Revenues Under Revenues Under Projected Projected Current Rates Proposed Rates Revenue Change from Customer Class (RD) (RD) Change Current Residential $ 5,560,861 $ 5,638,713 $ 77,852 1.40% Small General Service 1,823,709 1,840,122 16,413 0.90% Street Lights 153,020 154,398 1,377 0.90% Security Lights 12,773 12,892 119 0.93% Large General Service 7,117,968 7,053,906 (64,062) -0.90% Large Industrial 11,220,624 11,198,487 (22,137) -0.20% Totals $ 25,888,954 $ 25,898,518 $ 9,563 0.04% 2 Hutchinson Utilities Commission Electric Rate Design Residential Average monthly kWh units--> 722 $ 2.60 $ 2.60 6 year option--> 1.4% 1.4% Rates Current 2018 2019 Cos Monthly Facilities Charge: All Customers $ 6.50 $ 9.10 $ 11.70 $ 14.35 Energy Charge: All Energy $ 0.0872 $ 0.08504 $ 0.08290 $ 0.10280 Power Cost Adjustment: All Energy $ 0.00669 $ 0.00669 $ 0.00669 Revenue from Rate $ 5,484,084 $ 5,560,861 $ 5,638,713 Change from Previous 1.4% 1.4% Change by Monthly kWh Usage (%) 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 250 350 450 550 650 750 850 950 1050 1150 2018 2019 Change by Monthly kWh Usage ($) $2.50 $2.00 $1.50 �IIIIIIIIIIII�10001111100�""100000000000000'mmm000000000000000000000000000000000000000000uw�iuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuum $1.00 mmuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuum �uuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuum�00000000000000000000000000000000000000000 $0.50 �uuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuum 250 350 450 550 650 750 850 950 1050 1150 2018 2019 Electric Rate Design 3 of 10 Hutchinson Utilities Commission Electric Rate Design Residential Average monthly kWh units--> 722 $ 2.60 $ 2.60 6 year option--> 1.4% 1.4% Monthly Bill By Energy Usage All Energy Current $ 2018 $ 2019 $ 250 $ 29.97 $ 32.03 $ 34.10 350 $ 39.36 $ 41.20 $ 43.05 450 $ 48.75 $ 50.38 $ 52.01 550 $ 58.14 $ 59.55 $ 60.97 650 $ 67.53 $ 68.72 $ 69.93 750 $ 76.92 $ 77.89 $ 78.89 850 $ 86.30 $ 87.07 $ 87.85 950 $ 95.69 $ 96.24 $ 96.80 1050 $ 105.08 $ 105.41 $ 105.76 1150 $ 114.47 $ 114.58 $ 114.72 Monthly % Change by Energy Usage All Energy 2018 2019 250 6.9% 6.4% 350 4.7% 4.5% 450 3.3% 3.2% 550 2.4% 2.4% 650 1.8% 1.8% 750 1.3 % 1.3 850 0.9% 0.9% 950 0.6% 0.6% 1050 0.3% 0.3% 1150 0.1% 0.1% Monthly $ Change by Energy Usage All Energy 2018 2019 250 $ 2.06 $ 2.06 350 $ 1.84 $ 1.85 450 $ 1.63 $ 1.64 550 $ 1.41 $ 1.42 650 $ 1.19 $ 1.21 750 $ 0.98 $ 0.99 850 $ 0.76 $ 0.78 950 $ 0.55 $ 0.56 1050 $ 0.33 $ 0.35 1150 $ 0.11 $ 0.14 Electric Rate Design 4 of 10 Hutchinson Utilities Commission Electric Rate Design Small General Service Average monthly kWh units--> 1,807 $ 2.90 $ 2.90 6 year option--> 0.9% 0.9% Rates Current 2018 2019 COS Monthly Facilities Charge: All Customers $ 10.00 $ 12.90 $ 15.80 $ 24.43 Energy Charge: Block 1 (0 - 500 kWh) $ 0.0911 $ 0.09081 $ 0.09052 $ 0.10280 Block 2 (Excess) $ 0.0855 $ 0.08432 $ 0.08314 Power Cost Adjustment: All Energy $ 0.00669 $ 0.00669 $ 0.00669 Revenue from Rate rH-,--- f.,,.., n. _;_.., $ 1,807,442 $ 1,823,709 n not $ 1,840,122 n not Electric Rate Design 5 of 10 Hutchinson Utilities Commission Electric Rate Design Small General Service Average monthly kWh units--> 1,807 $ 2.90 $ 2.90 6 year option--> 0.9% 0.9% Monthly Bill By Energy Usage Energy Block 1 Block 3 Current $ 2018 $ 2019 $ 400 400 0 $ 49.12 $ 51.90 $ 54.68 700 500 200 $ 77.33 $ 79.85 $ 82.37 1000 500 500 $ 104.99 $ 107.15 $ 109.32 1300 500 800 $ 132.64 $ 134.45 $ 136.27 1600 500 1100 $ 160.30 $ 161.75 $ 163.21 1900 500 1400 $ 187.96 $ 189.05 $ 190.16 2200 500 1700 $ 215.61 $ 216.35 $ 217.11 2500 500 2000 $ 243.27 $ 243.65 $ 244.06 2800 500 2300 $ 270.93 $ 270.95 $ 271.01 3100 500 2600 $ 298.58 $ 298.25 $ 297.96 Monthly % Change by Energy Usage All Energy 2018 2019 400 5.7% 5.4% 700 3.3% 3.2% 1000 2.1% 2.0% 1300 1.4% 1.4% 1600 0.9% 0.9% 1900 0.6% 0.6% 2200 0.3% 0.4% 2500 0.2% 0.2% 2800 0.0% 0.0% 3100 -0.1% -0.1% Monthly $ Change by Energy Usage All Energy 2018 2019 400 $ 2.78 $ 2.78 700 $ 2.52 $ 2.52 1000 $ 2.16 $ 2.17 1300 $ 1.80 $ 1.82 1600 $ 1.45 $ 1.46 1900 $ 1.09 $ 1.11 2200 $ 0.74 $ 0.76 2500 $ 0.38 $ 0.41 2800 $ 0.03 $ 0.06 3100 $ (0.33) $ (0.30) Electric Rate Design 6 of 10 Hutchinson Utilities Commission Electric Rate Design Street Lighting 6 year option--> 0.9% 0.9% Rates Current 2018 2019 Monthly Facilities Charge: StrL 100 Unmetered $ 6.33 6.39 6.4 StrL 150 Unmetered $ 6.33 6.39 6.45 StrL 175 Unmetered $ 7.04 7.11 7.17 StrL 200 Unmetered $ 8.67 8.75 $ 8.83 StrL 250 Unmetered $ 8.69 8.77 8.8 StrL400 Unmetered $ 12.15 12.25 $ 12.36 All Customers $ - $ - $ - Energy Charge: All Energy $ - $ - $ - Power Cost Adjustment: $ - AII Energy $ - $ - $ - Revenue from Rate $ 151,656 $ 153,020 $ 154,398 Change from Previous 0.9% 0.9% Electric Rate Design 7 of 10 Hutchinson Utilities Commission Electric Rate Design Security Lighting 6 year option--> 0.9% 0.9% Rates Current 2018 2019 Monthly Facilities Charge: SecL 150 $ 3.00 3.03 3.06 SecL 250 $ 3.50 3.54 3.57 SecL 400 $ 4.00 4.04 4.08 SecL 150 Unmetered $ 7.00 7.07 7.14 SecL 250 Unmetered $ 10.00 10.10 10.20 SecL 400 Unmetered $ 13.00 13.13 13.26 All Customers $ - $ - $ - Energy Charge: All Energy $ - $ - $ - Power Cost Adjustment: All Energy $ 0.00669 $ 0.00669 $ 0.00669 Revenue from Rate $ 12,655 $ 12,773 $ 12,892 Change from Previous 0.9% 0.9% Electric Rate Design 8 of 10 Hutchinson Utilities Commission Electric Rate Design Large General Service Average Load Factor--> 49.0% $ 26.90 $ 26.90 6 year option--> -0.9% -0.9% Rates Current 2018 2019 COS Monthly Facilities Charge: 75% of Max kW Monthly Charge $ - 26.90 53.80 $ 134.67 Energy Charge: All Energy $ 0.07370 0.07003 0.06637 $ 0.05680 Demand Charge All Demand $ 6.00 7.00 8.00 $ 14.72 Power Cost Adjustment: All Energy $ 0.00669 $ 0.00669 $ 0.00669 Revenue from Rate $ 7,182,612 $ 7,117,968 $ 7,053,906 Change from Previous -0.9% -0.9% 1.0% 0.5% 0.0% -0.5% -1.0% -1.5% -2.0% -2.5% $100,000 $50,000 S- $(50,000; $ (100,000) $(150,000) $(200,000) $(250,000) Change by Load Factor (%) 35% 45% 50% 55% 60% 65% 70% 75% w,,,,,,,,,,-2018 —2019 Change by Load Factor ($) 35% 40°0 45% 50% 55% 60% 65% 70% 75% w,,,,,,,,,,-2018 —2019 Electric Rate Design 9 of 10 Hutchinson Utilities Commission Electric Rate Design Larger Industrial Service Average Load Factor--> 71.1% $ 75.20 $ 75.20 6 year option--> -0.2% -0.2% Rates Current 2018 2019 COS Monthly Facilities Charge: Monthly Charge $ - 75.20 150.40 $ 375.96 Energy Charge: All Energy $ 0.06100 0.05890 0.05680 $ 0.05680 Demand Charge All Demand $ 7.00 8.00 9.00 $ 15.86 Power Cost Adjustment: All Energy $ 0.00669 $ 0.00669 $ 0.00669 Revenue from Rate $ 11,242,760 $ 11,220,624 $ 11,198,487 Change from Previous -0.2% -0.2% Change by Load Factor (%) 1.0% 0.8% 0.6% 0.4% 0.2% 0.0% 02%5 % 55% 60% 65% 75% 80% 85% 90% 95% -0.4% -0.6% -0.8% -1.0% w,,,,,,,,,,-2018 -2019 Change by Load Factor (Monthly $) $4,000.00 $3,000.00 $2,000.00 $1,000.00 $ 5 % 55% 60% 5% 6 „„„ 75% 80% 85% 90% 95% 0 $(3,000.00) $(6,000.00) w,,,,,,,,,,-2018 -2019 Electric Rate Design 10 of 10 Hutchinson 111 Commission Utility Financial Solutions, LLC 185 Sun Meadow Court Holland, MI USA 49424 (616) 402-7045 Email: dkasbohm@ufsweb.com Submitted Respectfully by: Daniel Kasbohm Rates Manger, Utility Financial Solutions URr AY INw.mow emq :walouk'puuurvap U'_C Hutchinson Utilities Commission Minimum -4.00% Rate Design for 2018 Total Adjustment 0.00% Summary Maximum 4.00% Residential $ 3,703,084 $ 3,673,034 $ (30,050) -0.8% Commercial 2,865,103 2,826,711 (38,392) -1.3% Large Industrial 1 426,227 411,599 (14,628) -3.4% Large Industrial 2 273,670 273,670 0.0% Large Industrial 3 2,595,730 2,595,730 0.0% Total $ 9,863,814 $ 9,780,744 $ (83,071) -0.84% Hutchinson Utilities Commission Minimum -4.00% Rate Design for 2019 Total Adjustment 0.00% Summary Maximum 4.00% Residential $ 3,673,034 $ 3,643,283 $ (29,752) -0.8% Commercial 2,826,711 2,788,833 (37,878) -1.3% Large Industrial 1 411,599 397,481 (14,118) -3.4% Large Industrial 2 273,670 273,670 0.0% Large Industrial 3 2,595,730 2,595,730 0.0% Total $ 9,780,744 $ 9,698,996 $ (81,747) -0.84% 2 ul,hpi hwn m.1 �,4wxsrc n L.It('. Hutchinson Utilities Commission Rate Design for 2018 Residential Current Rate Monthly Customer Gas Commodity Purchased Gas Charge Charge $/MCF Adjustment Summer $ 6.50 $ 9.0800 $ (1.1993) Winter $ 6.50 $ 9.0800 $ (1.1993) Customer Gas Commodity Purchased Gas Proposed Rate I Charge Charge $/MCF Adjustment Monthly Summer $ 8.90 $ 8.6620 $ (1.1993) Winter $ 8.90 $ 8.6620 $ (1.1993) Cost of Service Charges $ 13.81 $ 6.2400 Estimated Chanqe in Revenues Current Revenues $ 3,703,084 Proposed Revenues 3,673,034 5 45.90 46.21 0.31 0.7% 6 53.78 53.68 (0.11) -0.2% 7 61.66 61.14 (0.53) -0.9% 8 69.55 68.60 (0.94) -1.4% 9 77.43 76.06 (1.36) -1.8% 10 85.31 83.53 (1.78) -2.1 % 11 93.19 90.99 (2.20) -2.4% 3 Hutchinson Utilities Commission Rate Design for 2018 Commercial Current Rate Monthly Customer Gas Commodity Purchased Gas Charge Charge $/MCF Adjustment Summer $ 31.50 $ 9.0800 $ (1.1993) Winter $ 31.50 $ 9.0800 $ (1.1993) I Customer Gas Commodity Purchased Gas Proposed Rate Charge Charge $/MCF Adjustment Monthly Summer $ 39.80 $ 8.8033 $ (1.1993) Winter $ 3.80 $ 8.8033 $ (1.13) Cost of Service Charges $ 72.87 $ 6.4000 Estimated Change in Revenues Current Revenues $ 2,865,103 Proposed Revenues 2,826,711 Percentage Change -1.34% Commercial Gas Code 65 0 5.0 /o 4.0% 3.0% Stu 0.m q� �� 2.0% u n�s 1.0% 0.0% -1.0% �IIIII�IV ��IIIIll7U� 41�ti1Y� -2.0% °°°�Ilulull °°gll�l�� -3.0% -4.0% -5.0% MCF (Usage) MCF ........ Aueage Mr%tr y Brll 4Jsa current Bill , ,,,,,,Pr© ased BrCI ;'chars id 10 $ 110.31 $ 115.84 $ 5.53 20 189.11 191.88 2.77 30 267.92 267.92 0.00 40 346.73 343.96 (2.77) 50 425.53 420.00 (5.53) 60 504.34 496.04 (8.30) 70 583.15 572.08 (11.07) 80 661.95 648.12 (13.83) 90 740.76 724.16 (16.60) 4 Hutchinson Utilities Commission Rate Design for 2018 Large Industrial 1 Current Rate Monthly Customer Gas Commodity Max Daily Purchased Gas Charge Charge $/MCF Mcf Adjustment Summer $ - $ Winter $ - $ 8.5400 $ 10.00 $ (1.1993) 8.5400 $ 10.00 $ (1.1993) Customer Gas Commodity Max Daily Purchased Gas Proposed Rate I Charge Charge $/MCF Mcf Adjustment Monthly Summer $ '75.00 $ 8.2840 $ 9.50 $ (1.1993) Winter $ 75.00 $ 8.2840 $ 9.50 $ (1.1993) Cost of Service Charges $ 372.33 $ 4.5200 $ 5.71 Estimated Change in Revenues Current Revenues $ 426,227 Proposed Revenues 411,599 Percentage Change -3.43% Large Industrial Gas Code 89/91 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% -4.0% -5.0% MCF (Usage) MCF ........ Aueage Mr%tr y Brll 4Jsa current Bill , ,,,,,,Pr© ased BrCI ;'chars id 2300 $ 20,541.91 $ 19,845.19 $ (696.72) 2800 24,212.25 23,387.54 (824.72) 3300 27,882.60 26,929.88 (952.72) 3800 31,552.94 30,472.22 (1,080.72) 4300 35,223.28 34,014.56 (1,208.72) 4800 38,893.62 37,556.90 (1,336.72) 5300 42,563.96 41,099.25 (1,464.72) 5800 46,234.31 44,641.59 (1,592.72) 6300 49,904.65 48,183.93 (1,720.72) 5 Hutchinson Utilities Commission Rate Design for 2018 Large Industrial 2 Current Rate Monthly Summer Winter Customer Gas Commodity Max Daily HUC Purchased Gas Charge Charge $/MCF Mcf Transport Adjustment $ - $ 3.0303 $ 10.33 $ 0.87 $ - $ - $ 3.3764 $ 10.33 $ 0.87 $ - I Customer Gas Commodity Max Daily HUC Purchased Gas I Proposed Rate Charge Charge $/MCF Mcf Transport Adjustment Monthly Summer $ $ 10303 $ 1033 $ 0„8'7 $ - Winter $ - $ 3.3764 $ 10.33 $ 0.87 $ - Cost of Service Charges $ 539.69 $ 2.6000 $ 25.89 Estimated Change in Revenues Current Revenues $ 273,670 Proposed Revenues 273,670 Percentage Change 0.00% Large Industrial 2 Gas 0 5.0 /o 4.0% 3.0% 2.0% 1.0% 0.0% 0�........i .......°wwwI011�........,i.wwwww➢10111� ��i.....;°°�IIIIII�°i�IIIIIIV -1.0% -2.0% -3.0% -4.0% -5.0% MCF (Usage) .. MC�.. ........� 1rrc artty r......... „ Ilea �,' ure+��# �►(�,, $ ,,,,Fro ©sect E�►(� ,,,Chan � "" ';, 3100 $ 14,836.53 $ 14,836.53 $ - 3600 16,844.36 16,844.36 - 4100 18,852.20 18,852.20 - 4600 20,860.04 20,860.04 - 5100 22,867.87 22,867.87 - 5600 24,875.71 24,875.71 - 6100 26,883.55 26,883.55 - 6600 28,891.38 28,891.38 - 7100 30,899.22 30,899.22 - 6 Hutchinson Utilities Commission Rate Design for 2018 Large Industrial 3 Current Rate Monthly Summer Winter Customer Gas Commodity Max Daily HUC Purchased Gas Charge Charge $/MCF Mcf Transport Adjustment $ - $ 3.2435 $ 9.00 $ 0.36 $ - - $ 3.0985 $ 9.00 $ 0.36 $ - I Customer Gas Commodity Max Daily HUC Purchased Gas I Proposed Rate Charge Charge $/MCF Mcf Transport Adjustment Monthly Summer $ $ 12435 $ 9.00 $ 036 $ - Winter $ - $ 3.0985 $ 9.00 $ 0.36 $ - Cost of Service Charges $ 1,896.04 $ 3.3500 $ 15.06 Estimated Change in Revenues Current Revenues $ 2,595,730 Proposed Revenues 2,595,730 Percentage Change 0.00% Large Industrial 3 Gas 0 5.0 /o 4.0% 3.0% 2.0% 1.0% 0.0% ............ i...--11w...,. .�r 10.wwww....... .... .'p �IIVV -1.0% -2.0% -3.0% -4.0% -5.0% MCF (Usage) Ilea ,' urrt,jill„ , , irc : awspd Ei(� ", .` 35200 $ 146,841.27 $ 146,841.27 $ - 40200 164,616.98 164,616.98 - 45200 182,392.70 182,392.70 - 50200 200,168.41 200,168.41 - 55200 217,944.13 217,944.13 - 60200 235,719.84 235,719.84 - 65200 253,495.55 253,495.55 - 70200 271,271.27 271,271.27 - 75200 289,046.98 289,046.98 - 7 Hutchinson Utilities Commission Gas Rate Design for 2019 `Utility Financial Solutions, LLC Hutchinson Utilities Commission Rate Design for 2019 Residential Current Rate Monthly Customer Gas Commodity Purchased Gas Charge Charge $/MCF Adjustment Summer $ 8.90 $ 8.6620 $ (1.1993) Winter $ 8.90 $ 8.6620 $ (1.1993) Customer Gas Commodity Purchased Gas Proposed Rate I Charge Charge $/MCF Adjustment Monthly Summer $ 11.30 $ 8.2447 $ (1.1993) Winter $ 11.30 $ 8.2447 $ (1.1993) Cost of Service Charges $ 13.81 $ 6.2400 Estimated Chanqe in Revenues Current Revenues $ 3,673,034 Proposed Revenues 3,643,283 5 46.21 46.53 0.31 0.7% 6 53.68 53.57 (0.10) -0.2% 7 61.14 60.62 (0.52) -0.9% 8 68.60 67.66 (0.94) -1.4% 9 76.06 74.71 (1.36) -1.8% 10 83.53 81.75 (1.77) -2.1 % 11 90.99 88.80 (2.19) -2.4% 9 Hutchinson Utilities Commission Rate Design for 2019 Commercial Current Rate Monthly Customer Gas Commodity Purchased Gas Charge Charge $/MCF Adjustment Summer $ 39.80 $ 8.8033 $ (1.1993) Winter $ 39.80 $ 8.8033 $ (1.1993) Customer Gas Commodity Purchased Gas Proposed Rate I Charge Charge $/MCF Adjustment Monthly Summer $ 48.10 $ 8.5282 $ (1.1993) Winter $ 48.10 $ 8.5282 $ (1.13) Cost of Service Charges $ 72.87 $ 6.4000 Estimated Change in Revenues Current Revenues $ 2,826,711 Proposed Revenues 2,788,833 Percentage Change -1.34% Commercial Gas Code 65 0 5.0 /o IlVlllp�X`4 4.0% 3.0% 2.0% 1.0%illlll�ll� 0.0% -1.0% �IIIII�IV -2.0% fi��11111I gl�l�llllu-�1111111 -3.0% -4.0% -5.0% MCF (Usage) MCF ........ Aueage Mr%tr y Brll 4Jsa current Bill , ,,,,,,Pr© ased BrCI ;'chars id 10 $ 115.84 $ 121.39 $ 5.55 20 191.88 194.68 2.80 30 267.92 267.97 0.05 40 343.96 341.26 (2.71) 50 420.00 414.54 (5.46) 60 496.04 487.83 (8.21) 70 572.08 561.12 (10.96) 80 648.12 634.41 (13.71) 90 724.16 707.70 (16.46) 10 Hutchinson Utilities Commission Rate Design for 2019 Large Industrial 1 Current Rate Monthly Customer Gas Commodity Max Daily Purchased Gas Charge Charge $/MCF Mcf Adjustment Summer $ 75.00 $ 8.2840 $ 9.50 $ (1.1993) Winter $ 75.00 $ 8.2840 $ 9.50 $ (1.1993) I Customer Gas Commodity Max Daily Purchased Gas Proposed Rate Charge Charge $/MCF Mcf Adjustment Monthly Summer $ 145.00 $ 8.0390 $ 9.00 $ (1.1993) Winter $ 145.00 $ 8.0390 $ 9.00 $ (1.1993) Cost of Service Charges $ 372.33 $ 4.5200 $ 5.71 Estimated Change in Revenues Current Revenues $ 411,599 Proposed Revenues 397,481 Percentage Change -3.43% MCF ........ Average Mori% y Brll 4Jsa current Bill , .,,,,,,Pro ased WO ;'chars id 2300 $ 19,845.19 $ 19,168.67 $ (676.52) 2800 23,387.54 22,588.49 (799.05) 3300 26,929.88 26,008.31 (921.57) 3800 30,472.22 29,428.13 (1,044.09) 4300 34,014.56 32,847.95 (1,166.62) 4800 37,556.90 36,267.76 (1,289.14) 5300 41,099.25 39,687.58 (1,411.66) 5800 44,641.59 43,107.40 (1,534.19) 6300 48,183.93 46,527.22 (1,656.71) 11 Hutchinson Utilities Commission Rate Design for 2019 Large Industrial 2 Current Rate Monthly Summer Winter Customer Gas Commodity Max Daily HUC Purchased Gas Charge Charge $/MCF Mcf Transport Adjustment $ - $ 3.0303 $ 10.33 $ 0.87 $ - $ - $ 3.3764 $ 10.33 $ 0.87 $ - I Customer Gas Commodity Max Daily HUC Purchased Gas I Proposed Rate Charge Charge $/MCF Mcf Transport Adjustment Monthly Summer $ $ 10303 $ 1033 $ 0„8'7 $ - Winter $ - $ 3.3764 $ 10.33 $ 0.87 $ - Cost of Service Charges $ 539.69 $ 2.6000 $ 25.89 Estimated Change in Revenues Current Revenues $ 273,670 Proposed Revenues 273,670 Percentage Change 0.00% Large Industrial 2 Gas 0 5.0 /o 4.0% 3.0% 2.0% 1.0% 0.0% 0�........i .......°wwwI011�........,i.wwwww➢10111� ��i.....;°°�IIIIII�°i�IIIIIIV -1.0% -2.0% -3.0% -4.0% -5.0% MCF (Usage) .. MC�.. ........� 1rrc artty r......... „ Ilea �,' ure+��# �►(�,, $ ,,,,Fro ©sect E�►(� ,,,Chan � "" ';, 3100 $ 14,836.53 $ 14,836.53 $ - 3600 16,844.36 16,844.36 - 4100 18,852.20 18,852.20 - 4600 20,860.04 20,860.04 - 5100 22,867.87 22,867.87 - 5600 24,875.71 24,875.71 - 6100 26,883.55 26,883.55 - 6600 28,891.38 28,891.38 - 7100 30,899.22 30,899.22 - 12 Hutchinson Utilities Commission Rate Design for 2019 Large Industrial 3 Current Rate Monthly Summer Winter Customer Gas Commodity Max Daily HUC Purchased Gas Charge Charge $/MCF Mcf Transport Adjustment $ - $ 3.2435 $ 9.00 $ 0.36 $ - - $ 3.0985 $ 9.00 $ 0.36 $ - I Customer Gas Commodity Max Daily HUC Purchased Gas I Proposed Rate Charge Charge $/MCF Mcf Transport Adjustment Monthly Summer $ $ 12435 $ 9.00 $ 036 $ - Winter $ - $ 3.0985 $ 9.00 $ 0.36 $ - Cost of Service Charges $ 1,896.04 $ 3.3500 $ 15.06 Estimated Change in Revenues Current Revenues $ 2,595,730 Proposed Revenues 2,595,730 Percentage Change 0.00% Large Industrial 3 Gas 0 5.0 /o 4.0% 3.0% 2.0% 1.0% 0.0% ............ i...--11w...,. .�r 10.wwww....... .... .'p �IIVV -1.0% -2.0% -3.0% -4.0% -5.0% MCF (Usage) Ilea ,' urrt,jill„ , , irc : awspd Ei(� ", .` 35200 $ 146,841.27 $ 146,841.27 $ - 40200 164,616.98 164,616.98 - 45200 182,392.70 182,392.70 - 50200 200,168.41 200,168.41 - 55200 217,944.13 217,944.13 - 60200 235,719.84 235,719.84 - 65200 253,495.55 253,495.55 - 70200 271,271.27 271,271.27 - 75200 289,046.98 289,046.98 - 13 Resolution No. 18-02 A RESOLUTION CHANGING THE HUTCHINSON UTILITIES COMMISSION RATE STRUCTURE FOR 2018 & 2019 FOR ELECTRIC AND NATURAL GAS DIVISIONS Be It Resolved by the Hutchinson Utilities Commission: That the current Electric and Natural Gas Rates paid by customers of the Hutchinson Utilities Commission be changed as follows: Electric Division Table - Current 2018 2019 Residential Facility Charge $ 6.50 $ 9.10 $ 11.70 Energy Charge $ 0.0872 $ .08504 $ 0.08290 Small General Facility Charge $ 10.00 $ 12.90 $ 15.80 Energy Charge Block 1 (0-500 kWh) $ 0.0911 $ 0.09081 $ 0.09052 Block 2 (Excess) $ 0.0855 $ 0.08432 $ 0.08314 Large General Facility Charge $ - $ 26.90 $ 53.80 Energy Charge $ .07370 $ 0.07003 $ 0.06637 Demand Charge $ 6.00 $ 7.00 $ 8.00 Large Industrial Facility Charge $ - $ 75.20 $ 150.40 Energy Charge $ 0.06100 $ 0.05890 $ 0.05680 Demand Charge $ 7.00 $ 8.00 $ 9.00 Natural Gas Table - Current 2018 2019 Residential Customer Charge $ 6.50 $ 8.90 $ 11.30 Gas Commodity Charge $/MCF $ 9.0800 $ 8.6620 $ 8.2447 Commercial Customer Charge $ 31.50 $ 39.80 $ 48.10 Gas Commodity Charge $/MCF $ 9.0800 $ 8.8033 $ 8.5282 Large Industrial 1 Customer Charge $ - $ 75.00 $ 145.00 Gas Commodity Charge $/MCF $ 8.5400 $ 8.2840 $ 8.0390 AND BE IT FURTHER RESOLVED, that the General Manager of the Hutchinson Utilities Commission, Jeremy J Carter, shall provide notice of these rate changes to the City Council of the City of Hutchinson. Adopted by the Hutchinson Utilities Commission this 12018 Hutchinson Utilities Commission Monty Morrow, President Attest: Robert Wendorff, Secretary day of HUTCHINSON UTILITIES COMMISSION�� Board Action Form �'Ylkll'M1'k� Agenda Item: Approval of "Buyer's Authorizing Resolution" Presenter: Jeremy Carter Agenda Item Type: Time Requested (Minutes): 5 New Business Attachments: Yes BACKGROUND/EXPLANATION OF AGENDA ITEM: Board Resolution This is an action that 1. authorizes Hutchinson Utilities Commission to approve the execution and delivery of the Gas Supply Contract pursuant to which Hutchinson Utilities Commission will agree to purchase specified quantities of natural gas from PEAK, and, 2. authorizes the Hutchinson Utilities Commission General Manager to execute any any such other closing documents or certificates which may be required or contemplated in connection with the execution and delivery of the Contract or carrying out the intent and purpose of this resolution. BOARD ACTION REQUESTED: Approval of "Incumbency Certificate" and "Board Resolution" Fiscal Impact: Reduction in base load costs Included in current budget: Budget Change: PROJECT SECTION: Total Project Cost: Remaining Cost: EXHIBIT G BUYER'S AUTHORIZING RESOLUTION RESOLUTION NO. 18-01 A RESOLUTION OF THE HUTCHINSON UTILITIES COMMISION OF HUTCHINSON, MINNESOTA (i) AUTHORIZING THE EXECUTION OF A GAS SUPPLY CONTRACT ("CONTRACT") WITH THE PUBLIC ENERGY AUTHORITY OF KENTUCKY ("PEAK") FOR THE PURCHASE OF NATURAL GAS FROM PEAK; (ii) ACKNOWLEDGING THAT PEAK WILL ISSUE ITS GAS SUPPLY REVENUE BONDS TO FUND THE PURCHASE OF A SUPPLY OF NATURAL GAS FROM BP ENERGY COMPANY ("BPEC"), WHICH GAS WILL BE USED TO MAKE DELIVERIES UNDER THE CONTRACT; AND (iii) FOR OTHER PURPOSES WHEREAS, the Hutchinson Utilities Commission of Hutchinson, Minnesota owns and operates a municipal gas distribution and electric utility and is authorized by the provisions of the City Charter of the City of Hutchinson, Minnesota to acquire, purchase, transport, store and manage supplies of gas necessary to meet the requirements of the residential, commercial and industrial customers served by such utility; and WHEREAS, the acquisition of secure, reliable and economic supplies of natural gas is necessary for the prudent and businesslike operation of the utility owned by the Hutchinson Utilities Commsion, the continued economic development of its community and the promotion of the public health, safety and welfare; and WHEREAS, the Public Energy Authority of Kentucky which was formed pursuant to the Natural Gas Acquisition Authority Act, KRS 353.400 to 353.410., has offered to sell to the Hutchinson Utilities Commision, pursuant to the Contract, a supply of natural gas in the quantities on the dates set forth in the Contract, on the condition that PEAK issues its Gas Supply Revenue Bonds, 2018 Series A (the "Bonds") the proceeds of which will be used to acquire a supply of natural gas (the "Gas Supply") pursuant to a Prepaid Agreement with BPEC (the "Prepaid Agreement"); and WHEREAS, the Hutchinson Utilities Commission is a Government Agency, as such term is defined in the Gas Supply Contract, and desires to enter into the Contract with PEAK. NOW, THEREFORE, BE IT RESOLVED by the Hutchinson Utilities Commission of Hutchinson, Minnesota as follows: 1. The Hutchinson Utilities Commission hereby approves the execution and delivery of the Gas Supply Contract, in substantially the form previously submitted to the Hutchinson Utilities Commission and attached hereto as Exhibit A, pursuant to which the Hutchinson Utilities Commission will agree to purchase specified quantities of natural gas from PEAK, such deliveries to b 3 71 o.4,--o-n ftwk T 14A9-21 Supply • 2. The General Manager of the Hutchinson Utilities Commission is hereby authorized to execute any such other closing documents or certificates which may be required or contemplated in connection with the execution and deliver�,j of the Contract or canT intent and purpose of this resolution. BY: Its: President BY: Its: Secretary [SEAL] GAS SUPPLY CONTRACT DATED AS OF f 2018 BETWEEN PUBLIC ENERGY AUTHORITY OF KENTUCKY, as Seller I_lZIWE HUTCHINSON UTILITIES COMMISSION, as Buyer ME 1 27165045v.1 TABLE OF CONTENTS ARTICLE I DEFINITIONS...........................................................................................................1 Section1.01 Defined Terms...................................................................................................1 Section1.02 Interpretation.....................................................................................................7 Section 1.03 Technical Meanings...........................................................................................8 ARTICLE 11 TERM AND DELIVERY PERIOD............................................................................. 8 Section2.01 Term..................................................................................................................8 Section 2.02 Termination Prior to Commencement of Delivery Period...................................8 Section 2.03 Reset Period Remarketing.................................................................................8 Section 2.04 Reset Period Remarketing Notice Procedure....................................................8 ARTICLE III SALE AND PURCHASE; DELIVERY POINT PREMIUM.........................................8 Section 3.01 Sale and Purchase............................................................................................8 Section3.02 Contract Price....................................................................................................8 Section3.03 Annual Refund...................................................................................................8 Section 3.04 Rate Stabilization Fund.....................................................................................9 ARTICLE IV FAILURE TO DELIVER OR TAKE GAS.................................................................9 Section 4.01 Seller's Unexcused Failure to Deliver................................................................9 Section 4.02 Buyer's Unexcused Failure to Take.................................................................10 Section 4.03 Failure to Deliver or Take Due to Force Majeure.............................................10 Section4.04 Load Loss........................................................................................................10 Section 4.05 Make-up Delivery in Lieu of Payment ..............................................................11 Section4.06 Sole Remedies................................................................................................11 ARTICLE V DELIVERY POINTS; TRANSPORTATION; NOMINATIONS AND IMBALANCES. 11 Section 5.01 Delivery Points................................................................................................11 Section 5.02 Responsibility for Transportation, Nominations and Imbalances ......................11 Section 5.03 Agreements Regarding Operations and Delivery.............................................12 Section 5.04 Title and Risk of Loss......................................................................................13 ARTICLE VI QUALITY AND MEASUREMENT.........................................................................13 Section 6.01 Quality and Measurement................................................................................13 ARTICLE VII BILLING, PAYMENT AND AUDIT........................................................................14 Section 7.01 Monthly Statements.........................................................................................14 Section7.02 Payment..........................................................................................................14 Section7.03 Netting.............................................................................................................15 ME1 27165045v.1 TABLE OF CONTENTS (CONTINUED) Section 7.04 Payment Default and Suspension....................................................................15 Section 7.05 Termination for Payment Default.....................................................................15 ARTICLE VIII TERMINATION...................................................................................................15 Section 8.01 Automatic Termination Event...........................................................................15 Section 8.02 Buyer Termination Events...............................................................................15 Section 8.03 Right to Termination; Remedies......................................................................16 Section 8.04 Other Remedies..............................................................................................16 Section 8.05 Limitation on Damages....................................................................................17 ARTICLE IX REMARKETING...................................................................................................17 Section 9.01 Remarketing Notices.......................................................................................17 Section 9.02 Remarketing Terms.........................................................................................18 ARTICLE X EXCHANGES........................................................................................................18 Section 10.01 General Principle...........................................................................................18 ARTICLE XI REPRESENTATIONS, WARRANTIES AND COVENANTS..................................18 Section 11.01 Tax -Exempt Status of the Bonds...................................................................18 Section11.02 Qualifying Use...............................................................................................19 Section 11.03 Representations and Warranties...................................................................19 Section 11.04 Additional Representations, Warranties and Covenants of Buyer..................20 Section 11.05 Negative Covenant........................................................................................21 ARTICLE XI TAXES.................................................................................................................21 Section12.01 Taxes............................................................................................................21 ARTICLE XIII FORCE MAJEURE.............................................................................................21 Section 13.01 Force Majeure...............................................................................................21 ARTICLE XIV GOVERNING RULES AND REGULATIONS......................................................23 Section 14.01 Compliance with Laws...................................................................................23 Section14.02 Contests........................................................................................................23 Section 14.03 Defense of Contract.......................................................................................23 Section 14.04 Continuing Disclosure....................................................................................23 ARTICLE XV MISCELLANEOUS..............................................................................................23 Section 15.01 Assignment....................................................................................................23 Section15.02 Notices..........................................................................................................24 MMSr «'0, TABLE OF CONTENTS (CONTINUED) Section 15.03 Indemnification Procedure.............................................................................24 Section15.04 Entirety..........................................................................................................24 Section15.05 Governing Law..............................................................................................24 Section15.06 Non-Waiver................................................................................................... 25 Section15.07 Severability....................................................................................................25 Section15.08 Exhibits..........................................................................................................25 Section 15.09 Winding Up Arrangements.............................................................................25 Section 15.10 Relationship of the Parties.............................................................................25 Section15.11 Immunity........................................................................................................25 Section15.12 Counterparts..................................................................................................25 Section 15.13 Third -Party Beneficiaries...............................................................................25 Section 15.14 Rights of Trustee...........................................................................................26 Section 15.15 Non -Publication of Index Price......................................................................26 ARTICLE XVI PROJECT MANAGEMENT AND ADMINISTRATION........................................26 Section 16.01 Administration of the Gas Project..................................................................26 Section 16.02 Project Management Committee...................................................................26 ARTICLE XVII CLOSING DOCUMENTATION..........................................................................27 Section 17.01 Closing Documentation.................................................................................27 EXHIBIT A DAILY CONTRACT QUANTITY EXHIBIT B DELIVERY POINTS AND INDICES EXHIBIT C NOTICE CONTACTS AND PAYMENT INSTRUCTION EXHIBIT D BUYER CERTIFICATE EXHIBIT E FORM OF RESET REMARKETING NOTICE EXHIBIT F OPINION OF COUNSEL TO BUYER EXHIBIT G BUYER'S AUTHORIZING RESOLUTION EXHIBIT H FORM OF REMARKETING NOTICE 11 0 GAS SUPPLY CONTRACT This Gas Supply Contract (this "Contract') is made and entered into as of [ ], 2018 (the "Effective Date'), by and between Public Energy Authority of Kentucky, a Natural Gas Acquisition Authority formed under the Natural Gas Acquisition Authority Act of the Commonwealth of Kentucky ("Seller'), and Hutchinson Utilities Commission, a municipal electrical and natural gas utility company located in Hutchinson, Minnesota (`Buyer'). Seller and Buyer are sometimes hereinafter referred collectively as the "Parties" and individually as a 'Party'. WITNESSETH WHEREAS Seller was created between and among public agencies to acquire Gas at reasonable prices that would enhance reliability, efficiency, and supply security through the joint purchases and the arrangement of joint services on behalf of its members and other public agencies; and WHEREAS, Seller has planned and developed a project to obtain a long-term supply of natural gas from BP Energy Company, a Delaware corporation ('SPEC" }, pursuant to a Prepaid Natural Gas Purchase and Sale Agreement dated as of [ ], 2018 (the "Prepaid Agreement'); and WHEREAS, the Seller will finance this project by issuing certain bonds pursuant to the Indenture; and WHEREAS, Seller desires to sell this long-term supply of Gas to one or more public agencies, including Buyer (Buyer, together with all such other public agencies, collectively, the "Gas Purchasers'); and WHEREAS, Buyer desires to purchase from Seller a portion of the Gas available to Seller under the Prepaid Agreement, and Seller desires to sell such Gas to Buyer, upon the terms and conditions set forth herein; NOW, THEREFORE, in consideration of the premises above and the mutual covenants and agreements herein set forth, Buyer and Seller agree as follows: ARTICLE I DEFINITIONS Section 1.01 Defined Terms. The following terms and abbreviations, when used in this Contract, have the respective meanings set forth below, unless otherwise provided in this Contract. "Administrative Charge" means $0.05 per MMBtu. "Available Discount" means, the amount expressed in cents per MMBtu (rounded down to the nearest one -tenth cent) determined pursuant to the Repricing Agreement for each Month of a Reset Period. Any estimated Available Discount provided by Seller under Section ME 1 27165045v.1 2.04 may differ from the Available Discount because the final Available Discount for any Reset Period will be finally determined under the Repricing Agreement's provisions. "Billing Statement" has the meaning specified in Section 7.01. "Bond Counsel' means any attorney(s) or firm(s) of attorneys of recognized national standing in the field of law relating to municipal bonds and the exclusion of interest on municipal bonds from gross income for federal income tax purposes, reasonably acceptable to both Seller and BPEC. "Bond(s)" means bonds of one or more Series (including any refunding bonds) issued under the Indenture. "BPEC" has the meaning specified in the recitals. "Btu" means International Btu, which is also called the Btu (IT). "Business Day' means (i) with respect to payments and general notices required to be given under this Contract, any day other than (a) a Saturday or Sunday, (b) a Federal Reserve Bank holiday, (c) any day on which commercial banks located in either New York, New York or the Commonwealth of Kentucky are required or authorized by Law or other governmental action to close, or (d) any other day excluded as a business day pursuant to the Indenture, and (ii) solely with respect to Gas deliveries and notices with respect thereto, any day. "Buyer" has the meaning specified in the preamble. "Buyer Statement" has the meaning specified in Section 7.01. "Buyer Termination Event" has the meaning specified in Section 8.02 . "Central Prevailing Time" or "CPT' means Central Daylight Savings Time when such time is applicable and otherwise means Central Standard Time. "Claims" means all claims or actions, threatened or filed, that directly or indirectly relate to the indemnities provided for in this Contract, and the resulting losses, damages, expenses and disbursements (including reasonable attorneys' and experts' fees and disbursements and court costs (and which, for the avoidance of doubt, shall exclude the allocated costs of in-house counsel)), whether incurred by settlement or otherwise, without regard to whether such claims or actions are threatened or filed prior to or after the termination of this Contract. "Code" means the Internal Revenue Code of 1986, as amended, and the U.S. Treasury Regulations thereunder, or any successor or successors thereto. "Contract" has the meaning specified in the preamble and shall include exhibits, recitals and attachments referenced herein and attached hereto and all amendments, supplements and modifications hereto and thereto. "Contract Price" has the meaning specified in Section 3.02 . "Cover Standard' shall mean, if there is an unexcused failure to take or deliver any quantity of Gas pursuant to this Contract by a Party, then the performing Party shall use 2 ME1 27165045v.1 commercially reasonable efforts to (i) if the Buyer is the performing Party, purchase Gas quantities or (ii) if the Seller is the performing Party, sell Gas quantities, in either case, at a price reasonable for the delivery or production area, as applicable, consistent with (a) the amount of notice provided by the nonperforming Party; (b) the immediacy of Buyer's Gas delivery needs or Seller's Gas sales requirements, as applicable; (c) the quantities involved; and (d) the anticipated length of failure by the nonperforming Party. "Daily Contract Quantity' means, with respect to each Gas Day during the Delivery Period, the daily quantity of Gas (in MMBtu) shown on Exhibit A, as may be revised from time to time pursuant to the terms of this Contract, to be delivered pursuant to this Contract for each Gas Day of each Month. "Default Rate" means, as of any date of determination, the lesser of (a) the rate of interest per annum quoted in The Wall Street Journal (Eastern Edition) under the "Money Rates" section as the "Prime Rate" for such date of determination or (b) if a maximum rate is imposed by applicable Law, such maximum lawful rate. "Delivery Period" shall mean [MM] 1, 2018, through the earlier of [MM] [DD], 20[YY], or an Early Termination Date. "Delivery Point"or "Delivery Points" means the point or points set forth in Exhibit B. "Delivery Suspension" shall have the meaning in Section 7.04 . "Discount" shall be [$0.20] per MMBtu, provided that the Available Discount (as determined under the Repricing Agreement for any Reset Period) shall become the Discount after the Initial Reset Period. "Early Termination Date" means a date occurring automatically pursuant to Section 8.01 or a date designated pursuant to Section 8.03 , upon which in each case the Delivery Period will end and Buyer's and Seller's respective obligations to receive and deliver Gas under this Contract will terminate. "Effective Date" has the meaning specified in the preamble. "Favorable Opinion of Bond Counsel" means an opinion of Bond Counsel acceptable to Seller and BPEC to the effect that an action proposed to be taken (i) is permitted by the Indenture, and (ii) will not adversely affect the exclusion from gross income for federal income tax purposes on any of the Bonds. "FERC' means the Federal Energy Regulatory Commission and any successor thereto. "Firm" shall mean that either Party may interrupt its performance without liability only to the extent that such performance is prevented for reasons of Force Majeure; provided, however, that during Force Majeure interruptions, the Party invoking Force Majeure may be responsible for any Imbalance Charges as set forth in Section 5.02 (c) related to its interruption after the nomination is made to the Transporter and until the change in deliveries and/or receipts is confirmed by the Transporter. "Force Majeure" has the meaning specified in Article XIII. 3 ME1 27165045v.1 "Gas" shall mean any mixture of hydrocarbons and noncombustible gases in a gaseous state consisting primarily of methane. "Gas Day' means a period of twenty-four (24) consecutive hours beginning at 9:00 a.m. CPT on a calendar day and ending at 9:00 a.m. CPT on the next succeeding calendar day. If, through standardization of business practices in the industry or for any other reason, a Transporter or FERC changes the definition of Gas Day, such change shall apply to the definition of Gas Day in this Contract with respect to such Transporter or generally, as the case may be. "Gas Project" means, collectively, the acquisition by Seller of Gas supplies from BPEC, the financing by Seller of the cost of acquisition of such Gas supplies, and the execution and performance by Seller of related contracts that provide Gas to the Gas Purchasers. "Gas Purchasers" or "Gas Purchaser" has the meaning specified in the recitals. "Government Agency' means the United States of America, any state thereof, or any local jurisdiction, or any political subdivision of any of the foregoing including, but not limited to courts, administrative bodies, departments, commissions, boards, bureaus, agencies, municipalities or other instrumentalities. "Governmental Person" means a state or local governmental unit or any instrumentality thereof. It does not include the United States or any agency or instrumentality thereof. "Imbalance Charges" shall mean any fees, penalties, costs or charges (in cash or in kind) assessed by a Transporter for failure to satisfy the Transporter's balance and/or nomination requirements. "Indenture" means the Trust Indenture, dated as of [ ] 1, 2018, between the Seller and the Trustee, as the same may be amended or supplemented in accordance with its terms. "Index Price" means, with respect to any Gas Day, the price published and in effect for the Month in which such Gas Day occurs as specified in Exhibit B. "Initial Reset Period" means the period from and including [ ], 2018 to and including [ ], 202[ ]. "LaW means any statute, law, rule, regulation, order, or any judicial or administrative interpretation thereof having the effect of the foregoing imposed by a Government Agency whether in effect as of the Effective Date or at any time in the future. "Minimum Discount" means $0.20 per MMBtu. "MMBtd' means one million Btus. "Month" means the period beginning at the beginning of the first Gas Day of a calendar month and ending at the beginning of the first Gas Day of the next calendar month. "Municipal Utility' means any Person that (i) is a gas district, gas board, utility board, municipality or other entity to which Buyer is authorized to sell Gas under applicable law, (ii) is a "governmental person" as defined in U.S. Treas. Reg. §1.141-1(b) (or any successor regulation 4 ME1 27165045v.1 or provision of the Code), (iii) owns either or both a Gas distribution utility or an electric distribution utility (or provides Gas or electricity generated using the Gas at wholesale to "governmental persons" that own such utilities), and (iv) agrees in writing to use the Gas it acquires from the Gas Project (or to cause such Gas to be used) in a Qualifying Use. Except in the case of manifest error, any Qualifying Use Certificate that is (x) provided by a Person as to the identity, form or status of such Person, its intended use for the Gas or other matters contained in any such certificate, and (y) relied upon by Seller, BPEC or both, shall be deemed to have met the requirements under clause (iv). In addition, for purposes of this Contract the term "Municipal Utility" shall also include a Governmental Person that sells Gas (or electricity generated from such Gas) to any Person meeting criteria (i) through (iv) above, and which possesses all power, authority, and applicable approvals necessary for it to enter into a Gas Supply Contract. To the extent required or permitted by any change in the Code after the Effective Date, the Parties from time to time may revise the definition of "Municipal Utility" to conform to the applicable provisions of the Code, provided that a Favorable Opinion of Bond Counsel is obtained. "New Tak' means (a) any Tax enacted and effective after the Effective Date of this Contract, including, without limitation, that portion of any Tax in effect on the Effective Date that constitutes an increase in such Tax over the rate thereof in effect as of the Effective Date, or (b) any law, rule, order or regulation, or interpretation thereof, enacted and effective after the Effective Date of this Contract resulting in the application of any Taxes enacted or effective on or before the Effective Date of this Contract to a new or different class of Persons. "Nongovernmental Agency' means any Person other than a Governmental Person. "Operational Flow Order" has the meaning set forth in Section 5.02 (d). "Output Contract" means a contract for the purchase by a Nongovernmental Agency of available output of an output facility financed with proceeds of an issue (as defined in U.S. Treas. Reg. §1.141-7). "Partial Termination Condition" has the meaning specified in Section 9.02 (b). "Part}' and "Parties" have the meaning specified in the preamble. "Payment Default" has the meaning specified in Section 7.04 . "Person" means any individual, public or private corporation, partnership, limited liability company, state, county, district, authority, municipality, political subdivision, instrumentality, association, firm, trust, estate or any other entity or organization whatsoever. "Prepaid Agreement" has the meaning specified in the recitals. "Private Business Use" means use (directly or indirectly) in a trade or business carried on by any Person other than a Governmental Person. For purposes of the foregoing: (i) Except as provided below Private Business Use includes: (a) any contracts by a Governmental Person for the sale of the Gas financed with Bond proceeds (or the electricity generated by the Gas) to a Nongovernmental Agency pursuant to: (1) a take contract, (2) a take or pay contract, or (3) a requirements contract, in each case, as defined in U.S. Treas. Reg. §1.141-7; or (b) any use of the Gas financed with the Bond proceeds (or electricity generated 5 ME1 27165045v.1 using the Gas) by a Nongovernmental Agency that may occur pursuant to: (1) a lease of, or management contract with respect to, all or a portion of a Municipal Utility's facilities, or (2) a brokerage contract or other arrangement creating a special legal entitlement with respect to such Gas (or electricity generated using the Gas); or (c) an Output Contract having a term longer than 3 years (including any renewal options). (ii) Private Business Use does not include any of the following, provided that the Seller or Gas Purchaser, as the case may be, obtains a Favorable Opinion of Bond Counsel: (a) any lease, management contract, requirements contract, or other arrangement that: meets the applicable requirements set forth in the U.S. Treas. Reg. §1.141-3 or IRS Revenue Procedure 2017-13, as such requirements are modified from time to time; or (b) any Output Contract with a term, including renewal options, that is not longer than 3 years, and that meets the requirements of U.S. Treas. Reg. §1.141-7(f)(3); or (c) any other arrangement with respect to the use of Gas (or electricity generated using Gas), including, but not limited to, small purchases of output as described in U.S. Treas. Reg. §1.141-7(f)(1); or (d) any swapping and pooling arrangement described in U.S. Treas. Reg. §1.141-7(f)(2). "Project Management Committee" has the meaning set forth in Section 16.02 . "Qualifying Use" shall have the meaning ascribed in U.S. Treas. Reg. § 1.148- 1(e)(2)(iii)(A)(2) (or any successor regulation or provision of the Code); provided that the use does not give rise to a Private Business Use. "Qualifying Use Certificate" means (i) a Buyer Certificate executed by (a) a Municipal Utility, in substantially the form set forth in Exhibit D, or (b) a Governmental Person other than a Municipal Utility that sells Gas (or electricity generated from such Gas) to a Municipal Utility, as modified from the form set forth in Exhibit D with language approved by Bond Counsel, or (ii) in the case of a remarketing of the Gas, a certificate signed by the purchaser of the remarketed Gas certifying in language approved by Bond Counsel that such Gas (or the electricity generated by the Gas) shall be applied for a Qualifying Use. "Rate Stabilization Fund' has the meaning set forth in Section 3.04 . "Receivables Purchase Agreement" means the Receivables Purchase Agreement, dated as of [ ], between Seller, BPEC, and the Trustee, as amended or supplemented from time to time in accordance with its terms. "Receivables Purchase Agreement Provider" means, initially, BPEC, and, subsequently, any entity agreed upon by BPEC and Seller. "Remarketing Notice" means the form set forth in Exhibit H attached hereto. "Repricing Agreement" means the Repricing Agreement, dated as of the Effective Date, between Seller and BPEC, as amended or supplemented from time to time in accordance with its terms. "Reset Period" means a period commencing on the first day following the Initial Reset Period or prior Reset Period, as the case may be, and ending on the day prior to the first day of the subsequent Reset Period; provided that the final Reset Period shall be the period from the first day after the prior Reset Period to the end of the Delivery Period. 6 ME1 27165045v.1 "Reset Period Remarketing" has the meaning set forth in Section 2.03 . "Seller" has the meaning specified in the preamble. "Tax" or "Taxes" means (a) any or all ad valorem, property, occupation, severance, production, generation, extraction, first use, conservation, Btu or energy, gathering, transport, transmission, pipeline, utility, gross receipts, gas or oil revenue, gas or oil import, privilege, sales, use, consumption, excise, lease, transaction, greenhouse gas, carbon, and other taxes or any interest, penalties, or assessments thereon, (b) state or local Taxes or any interest, penalties, or assessments thereon, (c) New Taxes or any interest, penalties, or assessments thereon, and (d) governmental charges, licenses, fees, permits and assessments, or any interest, penalties, or increases thereon, and specifically excludes taxes based on net income or net worth. "Taansportee' or "Transporters" shall mean all Gas gathering or pipeline companies, or local distribution companies, acting in the capacity of a transporter, transporting Gas for Seller or Buyer upstream or downstream, respectively, of the Delivery Point(s). "Trustee' means [The Bank of New York Mellon Trust Company, N.A.], a national banking association organized and existing under the laws of the United States, or any successor thereto under the Indenture. Section 1.02 Interpretation. All references to any agreement or document shall be construed as of the particular time that such agreement or document may then have been executed, amended, varied, supplemented or modified. Terms defined in this Contract shall have the meanings given therein when used elsewhere in this Contract. Titles appearing at the beginning of any articles, sections, subsections and other subdivisions of this Contract are for convenience only and shall not constitute part of such subdivisions and shall be disregarded in construing the language contained in such subdivisions. References in the singular shall include the plural, and references to the masculine shall include the feminine, and vice versa. Any reference in this Contract to any Person includes its successors and permitted assigns and, in the case of any governmental authority, any Person succeeding to its functions and capacities. Reference to a particular article, section, subsection, paragraph, subparagraph, attachment, schedule or exhibit, if any, shall be a reference to such article, section, subsection, paragraph, subparagraph, attachment, schedule or exhibit in and to this Contract. Any appendices, schedules or exhibits are fully incorporated and made part of this Contract. The appendices, schedules or exhibits shall be read in conjunction with the provisions of the body of this Contract, and the appendices, schedules or exhibits and the body of this Contract shall be interpreted to give effect to the intent of the Parties as evidenced by their terms when taken as a whole, provided, however, that in the event of an express and irreconcilable conflict between the terms of an attachment, schedule or exhibit and the provisions of the body of this Contract, the provisions of the body of this Contract shall control. Capitalized terms appearing in an attachment, schedule or exhibit shall have the meanings set forth in Section 1.01 , unless the context requires otherwise. The recitals at the beginning of this Contract are incorporated herein for all purposes. All uses of "include" or "including" shall be deemed to be followed by "without limitation", whether expressly so stated or not. All references to a law, rule, regulation, contract, agreement, or other document mean that law, rule, regulation, contract, agreement, or document as amended, modified, supplemented or restated, from time to time. 7 ME1 27165045v.1 Section 1.03 Technical Meanings. Words not otherwise defined in this Contract that have well-known and generally accepted technical or trade meanings are used herein in accordance with such recognized meanings. ARTICLE II TERM AND DELIVERY PERIOD Section 2.01 Term. This Contract shall be in effect from and including the Effective Date to and including the last day of the Month following the last Month of the Delivery Period, subject to the provisions of Section 2.02 , Section 7.05 , and Article VIII. Section Z02 Termination Prior to Commencement of Delivery Period. In the event that the Prepaid Agreement is terminated prior to the commencement of the Delivery Period because BPEC does not receive the prepayment, Seller shall terminate this Contract without any further obligation or liability of either Party. Section Z03 Reset Period Remarketing. A Reset Period Remarketing occurs when the Available Discount for a new Reset Period is not equal to or greater than the Minimum Discount. Upon a Reset Period Remarketing, Buyer (and each other Gas Purchaser) shall either (i) continue to purchase and receive its Daily Contract Quantity for each Gas Day during such Reset Period at a Contract Price that reflects the Available Discount, or (ii) deliver to Seller a written notice designating a Reset Period Remarketing. Section 2.04 Reset Period Remarketing Notice Procedure. No later than thirty (30) days prior to the first day of a new Reset Period, Seller shall provide Buyer a written notice setting forth the duration of the new Reset Period and the estimated Available Discount for such Reset Period. Buyer may elect conditionally to remarket its Daily Contract Quantity by delivering to Seller a notice designating a Reset Period Remarketing, in the form set forth in Exhibit E attached hereto, no later than 4:00 p.m. Central Prevailing Time on the eighth (8th) Business Day following the date of the Seller's notice. Buyer's notice designating a Reset Period Remarketing shall only be effective if the Available Discount as finally determined fails to equal or exceed the Minimum Discount and then shall suspend the Buyer's and Seller's obligations under Section 3.01 for the Reset Period only. ARTICLE III SALE AND PURCHASE; DELIVERY POINT PREMIUM Section 3.01 Sale and Purchase. Seller agrees to sell and deliver or cause to be delivered to Buyer, and Buyer agrees to purchase and take, on a Firm basis, the Daily Contract Quantity for each Gas Day during the Delivery Period pursuant to the terms and conditions set forth in this Contract. Section 3.02 Contract Price. The price payable for Gas delivered and purchased pursuant to this Contract (the "Contract Price') shall be equal to the Index Price applicable to the relevant quantity of Gas for the applicable Delivery Point minus the Discount. Section 3.03 Annual Refund. At the end of each fiscal year following completion of the annual audit of Seller's financial statements, Seller shall compare its revenues (as determined in accordance with the Indenture) and expenses under the Gas Project for that fiscal year. For purposes of such annual comparison, Seller's expenses shall include: (a) its expenses incurred in obtaining Gas supply under the Gas Project; (b) its administrative, legal, 8 ME1 27165045v.1 and accounting expenses directly incurred in connection with or properly allocable to the Gas Project, including the administration of this Contract and all other contracts for the sale of Gas obtained under the Gas Project; (c) debt service on the Bonds, including payments under any hedge agreement; (d) any replenishment of draws made upon any working capital fund associated with the Gas Project; (e) any deposits required to be made by Seller into any debt service reserve or other reserve or contingency fund or funds established with respect to the Bonds; (f) any fees or other amounts due to any provider of credit support for the Bonds; (g) payments under any commodity price swap or hedge agreement entered into in connection with the Gas Project; (h) any amounts required by the Repricing Agreement to be deposited to the Rate Stabilization Fund, and (i) any other similar costs and expenses. If this annual comparison demonstrates that such revenues exceeded such expenses during the applicable fiscal year and there are amounts on deposit in the fund established by the Indenture available for such purpose, then Seller shall make refunds to Buyer and the other Gas Purchasers in the amount available after making allowances for any necessary and appropriate reserves and contingencies to fund any working capital reserve and to reserve or account for unfunded liabilities, including future sinking fund or other principal amortization of the Bonds. The amount available for refund shall be allocated among and paid to Buyer and the other Gas Purchaser in proportion to their respective purchases for such fiscal year. Buyer acknowledges and agrees that (a) there is no assurance an annual refund will be achieved and that, under the structure of the Gas Project, none is anticipated, and (b) any such refund and the amount thereof is subject to the availability to Seller of sufficient funds for Seller to satisfy its obligations and covenants under the Indenture and the Prepaid Agreement, and other reasonably related factors, some of which may not be known to the Parties at the time of execution of this Contract. Section 3.04 Rate Stabilization Fund. A fund (the "Rate Stabilization Fund") will be created in the Indenture so that monies deposited in such fund may, at the direction of Seller, be applied from time to time, primarily to supplement (increase) the Available Discount pursuant the terms of the Repricing Agreement. Pursuant to the Indenture, any amounts remaining in the Rate Stabilization Fund on the first day of the final Reset Period shall be applied to increase the Available Discount to all Gas Purchasers over the term of such final Reset Period. ARTICLE IV FAILURE TO DELIVER OR TAKE GAS Section 4.01 Seller's Unexcused Failure to Deliver. (a) If on any Gas Day Seller fails to deliver all or any portion of the Daily Contract Quantity pursuant to the terms of this Contract, and such failure is not due to either (i) the actions or inactions of Buyer, or (ii) Force Majeure, then the portion of the Daily Contract Quantity that Seller failed to deliver shall be the "Deficiency Quantity". (b) To the extent Buyer purchases replacement Gas that is delivered prior to the end of the Month in which such Deficiency Quantity arose, then Seller shall pay to Buyer the amount determined as follows: P = DQ x (RP + AC) Where: P = the amount payable by Seller under this Section 4.01 (b) g ME1 27165045v.1 DQ = the Deficiency Quantity RP = Utilizing the Cover Standard, the positive amount, if any, by which the price actually paid by Buyer for the replacement Gas in an arm's length Gas purchase from an unaffiliated third party, as may be adjusted for commercially reasonable differences in transportation costs to or from the Delivery Point(s), exceeds the Contract Price for the applicable Gas Day and Delivery Point. AC = the Administrative Charge (c) Imbalance Charges shall not be recovered pursuant to Section 4.01 , but Seller and/or Buyer shall be responsible for Imbalance Charges, if any, as provided in Section 5.02 (c). The replacement prices referred to under the definition of "RP" as used in Section 4.01 (b) shall not include any administrative or other internal costs incurred by Buyer, it being understood that such costs are being compensated by way of the Administrative Charge included above. (d) Seller agrees to notify Buyer promptly upon becoming aware that Seller may not be able to deliver all or a portion of the Daily Contract Quantity at any Delivery Point(s) on any Gas Day. Section 4.02 Buyer's Unexcused Failure to Take. (a) If on any Gas Day Buyer fails to take all or any portion of the Daily Contract Quantity at any Delivery Point(s) for any reason other than Force Majeure, Seller will attempt to remarket such Gas. If Seller is able to remarket such Gas, Seller will invoice Buyer in the amount equal to the positive difference, if any, between the Index Price and the price received by Seller utilizing the Cover Standard for the resale of such Gas, adjusted for commercially reasonable differences in transportation costs to or from the Delivery Point(s), plus the Administrative Charge, multiplied by the difference between the Daily Contract Quantity and the quantity actually taken by Buyer for such Gas Day(s). If Seller remarkets the Gas for Qualified Use, the Cover Standard may be adjusted to reflect any discounts required to complete that sale. (b) Buyer agrees to notify Seller promptly upon becoming aware that Buyer or any Gas Purchaser may not be able to take all or a portion of the Daily Contract Quantity at any Delivery Point(s) on any Gas Day. Section 4.03 Failure to Deliver or Take Due to Force Majeure. If on any Gas Day Buyer fails to take or Seller fails to deliver, all or any portion of the Daily Contract Quantity at any Delivery Point(s) and such failure is due to either Party claiming Force Majeure, then each Party shall be relieved of its respective obligation to deliver and receive, as applicable, such portion of the Daily Contract Quantity. Section 4.04 Load Loss. If Buyer experiences a sustained load loss such that it is unable to take all or any part of the Daily Contract Quantities, it may request remarketing of the affected quantities of Gas and Seller shall use commercially reasonable efforts to resell such quantities on behalf of Buyer consistent with Article IX. 10 E1 27165045M Section 4.05 Make-up Delivery in Lieu of Payment. The Parties may mutually agree to make up all or a portion of the Daily Contract Quantity not delivered or taken by increasing deliveries and takes over the remainder of the Month in which such failure occurred. Section 4.06 Sole Remedies. Except with respect to the payment of Imbalance Charges pursuant to Section 5.02 (c) the remedies set forth in this Article IV shall be each Party's sole and exclusive remedies for any failure by the other Party to deliver or take Gas pursuant to this Contract. ARTICLE V DELIVERY POINTS; TRANSPORTATION; NOMINATIONS AND IMBALANCES Section 5.01 Delivery Points. (a) Gas delivered hereunder shall be delivered and received at the points specified as Delivery Point(s) in Exhibit B, or any other Delivery Point established pursuant to Section 5.01 (b) or otherwise by mutual agreement of the Parties. Each Delivery Point must have a published Index Price, mutually agreed by the Parties, corresponding to such Delivery Point. (b) Not more frequently than once during the each ensuing summer season (the period from April through October) or once during the each ensuing winter season (the period from November through March), Buyer may change delivery for all or a portion of the Daily Contract Quantity at any of the Delivery Point(s) to any other delivery point(s), as may be allowed under the operating terms and conditions of the applicable Transporter or Transporters; provided (A) Seller is able to obtain a corresponding change under the Prepaid Agreement; (B) such new Delivery Point is in the reasonable opinion of each Party a liquidly traded Gas delivery point, (C) the Parties designate a replacement Index Price that is reasonably acceptable to each Party, (D) the Parties are able to agree on any reasonable actual incremental costs, including but not limited to actual costs incurred to meet such request and including transportation costs, fuel costs and hedge unwind costs, if any, or the reduction in actual costs, if any, and (E) Seller shall not be obligated to enter into any new upstream supply agreement, transportation agreement or other arrangement to meet Buyer's request. Following any agreed upon modification to the Delivery Points, Buyer and Seller shall enter into a revised Exhibit B reflecting said change. (c) Seller will deliver and Buyer will receive Gas at the Delivery Point(s) in accordance with Buyer's pooling arrangements, if any, and other requirements in each case as specified in Exhibit B. Buyer may issue a standing nomination with respect to pooling arrangements at any Delivery Point. Any changes to such standing nomination must be received by Seller not later than six (6) Business Days prior to the applicable delivery Month for any change to the monthly standing nomination, and prior to 7:30 AM CPT on the Business Day prior to any change for a Gas Day. Section 5.02 Responsibility for Transportation, Nominations and Imbalances. (a) Seller shall have the sole responsibility for all transportation necessary for delivery of the Daily Contract Quantity to the Delivery Point(s). Buyer shall have the sole responsibility for all transportation necessary to receive the Daily Contract Quantity at the Delivery Point(s) and to transport the Daily Contract Quantity from the Delivery Point(s). Seller has responsibility for all compliance with applicable Transporter tariffs and regulations of the FERC for Gas transported on pipelines prior to the Delivery Points. Buyer has responsibility for 11 ME1 27165045v.1 all compliance with applicable Transporter tariffs and regulations of the FERC for Gas transported on pipelines from the Delivery Point(s). (b) Unless otherwise agreed by the Parties or required by a Transporter, Seller shall nominate, schedule and deliver, and Buyer shall nominate, schedule and take, the Daily Contract Quantity, ratably, at the Delivery Point(s) in accordance with the requirements of the receiving Transporter and the delivering Transporter at such Delivery Point. The Parties shall coordinate their nomination activities, giving sufficient time to meet the nomination deadlines of the Transporters. Should either Party become aware that the actual deliveries of Gas at the Delivery Point(s) are greater or less than the Daily Contract Quantity, such Party shall promptly notify the other Party. (c) The Parties shall use commercially reasonable efforts to avoid the imposition of any Imbalance Charges. If either Party receives an invoice from a Transporter that includes Imbalance Charges related to the obligations of either Party under this Contract, the Parties shall determine the validity as well as the cause of such Imbalance Charges. If the Imbalance Charges were incurred as a result of Buyer's takes of quantities of Gas greater than or less than the Daily Contract Quantity at any Delivery Point, then Buyer shall pay for such Imbalance Charges or reimburse Seller for such Imbalance Charges paid by Seller. If the Imbalance Charges were incurred as a result of Seller's delivery of quantities of Gas greater than or less than the Daily Contract Quantity at any Delivery Point, then Seller shall pay for such Imbalance Charges or reimburse Buyer for such Imbalance Charges paid by Buyer. (d) Should either Party receive an operational flow order or other order or notice from a Transporter, or a Transporter posts such notice on its bulletin board or provides the notice by another industry standard, requiring action to be taken in connection with the Gas being delivered under this Contract (a "Operational Flow Order'), it shall notify the other Party as soon as possible during normal business hours and provide the other Party with a copy of the Operational Flow Order, or direct the other Party to an electronic version of the Operational Flow Order. The Parties shall cooperate to take all actions required by the Operational Flow Order within the time prescribed. Seller shall indemnify, defend and hold harmless Buyer from any Claims, including, without limitation, all non-compliance penalties and reasonable attorneys' fees, if any, associated with an Operational Flow Order (i) with respect to which Seller failed to give the notice required hereunder to Buyer, or (ii) under which Seller failed to take the action required by the Operational Flow Order within the time prescribed; provided, that any notice required to be given to Buyer by Seller was timely delivered as required by this Section 5.02 M. To the extent not otherwise prohibited by law, Buyer agrees to indemnify, defend and hold harmless Seller from any Claims, including, without limitation, all non-compliance penalties and reasonable attorneys' fees, if any, associated with an Operational Flow Order (i) with respect to which Buyer failed to give the notice required hereunder to Seller, or (ii) under which Buyer failed to take the action required by the Operational Flow Order within the time prescribed; provided, that any notice required to be given to Seller by Buyer was timely delivered as required by this Section 5.02 (d). Section 5.03 Agreements Regarding Operations and Delivery. Agreements regarding operations and delivery may be made in one or more telephone conversations or by instant messenger between Seller (or BPEC on behalf of Seller) and Buyer whereby an offer and acceptance shall constitute a valid and enforceable agreement subject to the terms of this Agreement that also shall be considered a part of this Agreement. Such an agreement shall be considered a "writing" or "in writing" and to have been "signed." To the 12 ME1 27165045v.1 extent permitted by applicable law, Seller (or BPEC on behalf of Seller) and Buyer: (i) consent to the recording of telephone conversations between the trading, marketing and other relevant personnel of the Parties in connection with this Agreement; (ii) agree to obtain any necessary consent of, and give any necessary notice of such recording to, its relevant personnel; (iii) agree that recordings may be submitted in evidence in any proceedings; and (iv) acknowledge to the other Party and consent that such other Party may from time to time and without further notice (A) retain electronic transmissions (including telephone conversations, e-mail and instant messaging between the Parties' respective representatives in connection with this Contract) on central and local databases for their respective legitimate purposes, and (B) monitor electronic transmissions through their internal and external networks for purposes of security and compliance with applicable laws, regulations and internal policies for their legitimate business purposes. Each Party further agrees that, to extent permitted by applicable law, it will indemnify, defend and hold the other Party harmless from any and all damages, losses, claims, liabilities, judgments, costs and expenses, including but not limited to reasonable attorney's fees and costs of court arising directly or indirectly from or out of such Party's failure to obtain any consent necessary from a Party's trading, marketing and other relevant personnel, agents or representatives or such Party's failure to give any notice required to such individuals. The Parties shall be entitled to rely without further inquiry on oral representations as to the identity of person(s) purporting to transact on behalf of the other Party. Section 5.04 Title and Risk of Loss. (a) Title to Gas delivered hereunder shall pass from Seller to Buyer at the Delivery Points. Seller warrants that it will have the right to convey and will transfer good and merchantable title to all Gas sold hereunder and delivered by it to Buyer, free and clear of all liens, encumbrances, and claims. EXCEPT FOR THE WARRANTIES EXPRESSLY MADE BY SELLER IN THIS SECTION AND Article XI, SELLER HEREBY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR ANY PARTICULAR PURPOSE. (b) As between the Parties, Seller shall be deemed to be in exclusive control and possession of Gas delivered hereunder and responsible for and will assume any liability with respect to the Gas prior to its delivery to Buyer at the Delivery Points. As between the Parties, Buyer shall be deemed to be in exclusive control and possession thereof and responsible for and will assume any liability with respect to the Gas after its delivery to Buyer at the Delivery Points. Seller agrees to indemnify Buyer and save it harmless from all Claims, from any and all persons, arising from or out of claims of title, personal injury (including death) or property damage from said Gas or other charges thereon which attach before title passes to Buyer. Buyer agrees to indemnify Seller and save it harmless from all Claims, from any and all persons, arising from or out of claims regarding payment, personal injury (including death) or property damage from said Gas or other charges thereon which attach after title passes to Buyer. ARTICLE VI QUALITY AND MEASUREMENT Section 6.01 Quality and Measurement. The Parties acknowledge that the Gas delivered by Seller under this Contract shall meet the quality specifications of the receiving Transporter at the applicable Delivery Point(s). The unit of quantity measurement for purposes of this Contract shall be one MMBtu dry. Measurement of Gas quantities hereunder shall be in accordance with the established procedures of the Transporters that own or operate the 13 ME1 27165045v.1 measurement facilities at the Delivery Point(s). The Parties acknowledge that the Gas delivered by Seller under this Contract will be delivered in common stream with other sources of Gas. In the event and to the extent that a Transporter refuses to receive or transport Gas nominated for delivery to Buyer at the Delivery Point(s) for reasons of gas quality, the event shall be considered an event of Force Majeure, and Seller shall be relieved of its obligation to deliver and Buyer shall be relieved of its obligation to receive the affected volumes of Gas until the situation is remedied in accordance with Article XIII. ARTICLE VII BILLING, PAYMENT AND AUDIT Section 7.01 Monthly Statements. (a) No later than the fifth (5th) day of each Month (or the immediately succeeding Business Day, if such day is not a Business Day) following any Month during which replacement Gas was purchased by Buyer pursuant to Section 4.01 (b), Buyer shall deliver to Seller a statement (the "Buyer Statement') setting forth the quantity and replacement price. (b) No later than the tenth (10th) day of each Month (or the immediately succeeding Business Day, if such day is not a Business Day) (the "Billing Date'), of each Month following the Month in which Gas was delivered, Seller shall deliver to Buyer a statement (the "Billing Statement') setting forth (i) the quantities of Gas delivered, (ii) the total amount due to Buyer, if any, under Article III and Article IV with respect to the prior Month(s), (III) any other amounts due in connection with this Contract, including, but not limited to, amounts due under Section 4.02 with respect to the prior Month(s), and (iv) the net amount due to Buyer or Seller. If the actual quantity of Gas delivered is not known by the Billing Date, the Billing Statement will be prepared based upon the quantity of Gas confirmed by the Transporter(s) for transportation. Adjustments will be made in the following Month's Billing Statement for any differences between the quantity of Gas delivered and the quantity of Gas confirmed by the Transporter(s) for transportation. (c) Upon reasonable request by either Party, the other Party will deliver such supporting documentation acceptable in industry practice to support an amount due. Section 7.02 Payment. (a) Any amounts due shall be remitted by wire transfer in immediately available funds to the accounts specified in Exhibit C, on or before the twentieth (20th) day of the Month in which the Billing Statement or the Buyer Statement, as applicable, was received unless such day is not a Business Day, in which case payment is due on the Business Day immediately preceding such day. (b) If the invoiced Party, in good faith, disputes any amounts included in a statement, such Party will (except in the case of manifest error) pay the full amount due. In the event the Parties are unable to resolve such dispute, either Party may pursue any remedy available at law or in equity to enforce its rights pursuant to this Section. (c) If a Party owing any amounts due under this Contract fails to remit the full amount then payable when and as due, interest on the unpaid portion shall accrue at the Default Rate from and including the date on which the payment was due to, and including, the date on which the full amount is paid. 14 ME1 27165045v.1 Section 7.03 Netting. The Parties shall net all amounts due and owing, and/or past due, arising under this Contract such that the Party owing the greater amount shall make a single payment of the net amount to the other Party in accordance with this Article VII. Section 7.04 Payment Default and Suspension. If Buyer fails to pay Seller an amount due by the twenty-third (23rd) day of the Month in which the applicable Billing Statement was received ("Payment Default"), the Trustee shall draw on the Receivables Purchase Agreement in accordance with its terms to make payments in satisfaction of all or a portion of the amount owed to Seller. The Receivables Purchase Agreement Provider then shall be subrogated to the rights of Seller against Buyer in respect of such Payment Default. Upon a Payment Default, delivery of Buyer's Daily Contract Quantity shall be suspended ("Delivery Suspension') until either (a) Buyer's payment is received in full, including any interest at the Default Rate, on or before the twentieth (20'h) day of the Month following the Month that payment was originally due, or (b) this Contract is terminated pursuant to Section 7.05 or Article VIII. Seller shall provide notice of the Delivery Suspension to Buyer, BPEC and its designee(s), and the Trustee. Section 7.05 Termination for Payment Default. If by the twentieth (20th) day of the Month following the Month that a payment was originally due, Buyer fails to make such payment in full, including any interest at the Default Rate, then Seller shall terminate this Contract by providing notice pursuant to Section 15.02 , with copies to Buyer, BPEC, and the Trustee. Upon such notice (a) the Delivery Period will end, (b) Seller shall no longer have any obligation to sell or deliver Gas to Buyer under this Contract, (c) the obligation of Buyer to purchase and receive Gas from Seller under this Contract will terminate, and (d) Buyer shall have no right to any Discount or proceeds that may arise due to remarketing of the Gas. In lieu of or in addition to notice of termination given by Seller, the Trustee, acting on Seller's behalf pursuant to the terms of the Indenture, may provide notice of termination to Buyer, Seller, and BPEC. ARTICLE VIII TERMINATION Section &01 Automatic Termination Event. If the Prepaid Agreement terminates prior to the end of the Delivery Period, this Contract shall terminate on the date of early termination of the Prepaid Agreement (subject to all winding up arrangements) such that all Gas deliveries hereunder shall cease. In the event of the early termination of the Prepaid Agreement, Seller agrees to transfer to Buyer, solely from amounts thereof actually available to Seller under the Indenture, if any, Buyer's share of any excess monies available from the Gas Project. Notwithstanding the foregoing, Seller's reasonable determination of Buyer's share of any such amounts may include retention by Seller from Buyer's share recoupment of costs incurred because of the early termination, costs incurred due to any audit of the Gas Project or any transactions thereunder, and amounts reasonably determined by Seller to represent the present value of administrative fees that Seller would otherwise have retained or received in respect of the Daily Contract Quantity over the remainder of the Delivery Period had such early termination of the Prepaid Agreement not occurred. Seller in its sole discretion may delay such a payment until the time that the Gas Project and any transactions thereunder are no longer subject to audit. Section &02 Buyer Termination Events. Each of the following events shall constitute a "Buyer Termination Event" under this Contract: 15 ME 1 27165045v.1 (a) Any representation, warranty, or covenant made by Buyer in this Contract shall prove to have been incorrect in any material respect when made or deemed made; (b) Buyer otherwise fails to perform any covenant under this Contract; or (c) Buyer (i) is dissolved (other than pursuant to a consolidation, amalgamation or merger); (ii) becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due; (iii) makes a general assignment, arrangement or composition with or for the benefit of its creditors; (iv) otherwise becomes bankrupt or insolvent (however evidenced); (v) has a resolution passed for its winding -up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger); (vi) seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets; (vii) causes or is subject to any event with respect to it, which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in clauses (i) to (vi) above (inclusive); or (viii) takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts. Section &03 Right to Termination; Remedies. (a) At any time a Buyer Termination Event has occurred and is continuing, Seller may by notice to the Buyer specifying the relevant Buyer Termination Event designate an Early Termination Date not later than the last day of the Month in which such notice is provided. Each of (i) Seller's obligation to sell and deliver Gas, (ii) Buyer's obligation to purchase and take Gas, and (iii) Seller's obligation to remarket Gas pursuant to the terms of this Contract shall terminate on the Early Termination Date. (b) In lieu of or in addition to any notice provided by Seller, the Trustee, acting on Seller's behalf pursuant to the Indenture, may provide notice to Buyer of any Early Termination Date or Partial Termination Condition. (c) If a Partial Termination Condition under Section 9.02 (b) has occurred, Seller, unless the Parties agree otherwise, may designate an Early Termination Date with respect to that portion of this Contract represented by the quantities of Gas not remaining to be delivered hereunder described in clause (i) of Section 9.02 (b). If this Contract is so partially terminated with respect to such quantities of Gas, the provisions of this Article VIII shall apply to the portion terminated. Nothing in this paragraph (c) is meant to imply that a complete termination of this Contract would or would not be required or permitted pursuant to the exercise of any other right or remedy under this Contract. (d) In the event of a default by Seller under any covenant, agreement, or obligation in this Contract, for which no exclusive remedy is expressly provided herein, Buyer may bring any suit, action, or proceeding at law or in equity to enforce Seller's obligation(s), including mandamus, injunction, and action for specific performance, as Buyer determines may be necessary or appropriate to enforce any covenant, agreement, or obligation in this Contract against Seller. Section &04 Other Remedies. If any amounts payable on the Early Termination Date are not paid timely, then the Party owed such amounts may proceed to protect and enforce its rights, either by suit in equity or by action at law or both, whether for the specific performance of any covenant or agreement contained in this Contract or in aid of the exercise of any power, 16 ME1 27165045v.1 right or remedy granted in this Contract or may proceed to enforce the payment of all amounts owing under this Contract (including, without limitation, any sums specified as liquidated damages or any other unpaid amounts due to a non -defaulting Party hereunder, together with interest thereon to the extent provided herein); it being intended that, except with respect to events or circumstances for which an exclusive remedy is expressly provided herein, no remedy conferred herein is to be exclusive of any other remedy, and each and every remedy contained herein shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity. Section 8.05 Limitation on Damages. Neither Party shall be liable for consequential, incidental, punitive, exemplary, or indirect damages, lost profits or other business interruption damages, by statute, in tort or contract, under any indemnity provision or otherwise, unless such breach is the result of gross negligence or willful misconduct. It is the intent of the Parties that (i) the limitations herein imposed on remedies and the measure of damages be without regard to the cause or causes related thereto, including, without limitation, the negligence of either Party, other than gross negligence or willful misconduct, whether such negligence be sole, joint or concurrent, or active or passive, and (ii) if and to the extent any damages required to be paid hereunder are liquidated, the parties acknowledge that the damages are difficult or impossible to determine, otherwise obtaining an adequate remedy is inconvenient and the liquidated damages constitute a reasonable approximation of the harm or loss. In determining the appropriate measure of damages that would make the Parties whole, the Parties have thoroughly considered, inter alia, the uncertainty of fluctuations in gas prices, the ability and intention of the Parties to hedge such fluctuations, the bargained -for allocation of risk, the knowledge, sophistication and equal bargaining power of the Parties, the arms -length nature of the negotiations, the special circumstances of this transaction, the accounting and tax treatment of the transaction by the Parties and the entering into of other transactions in reliance on the enforceability of the liquidated damages provisions contained herein. The Parties acknowledge that this Contract is subject to Article 2 of the Uniform Commercial Code, as enacted by the state or commonwealth the law of which shall govern this Contract, including without limitation, §§ 2-706(6), 2-711, 2-718, and 2-719, except to the extent any provisions of such Article 2 (inclusive of such sections) may be inconsistent with the provisions of this Contract, which shall control. EXCEPT AS EXPRESSLY SET FORTH HEREIN, SELLER EXPRESSLY DISCLAIMS ANY, AND MAKES NO OTHER, REPRESENTATION OR WARRANTY, WRITTEN OR ORAL, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY REPRESENTATION OR WARRANTY WITH RESPECT TO CONFORMITY TO MODELS OR SAMPLES, MERCHANTABILITY, OR FITNESS FOR ANY PARTICULAR PURPOSES. THERE ARE NO WARRANTIES WHICH EXTEND BEYOND THE DESCRIPTION ON THE FACE HEREOF. ARTICLE IX REMARKETING Section 9.01 Remarketing Notices. (a) Upon Buyer's inability to take Gas under Section 4.04 and delivery by Buyer to Seller of a Remarketing Notice satisfying the criteria in clause (b) below, provided that no Buyer Termination Event exists, Seller shall use commercially reasonable efforts to remarket on behalf of Buyer (or arrange for BPEC to remarket) all or a specified portion of the Daily Contract Quantity as set forth in the Remarketing Notice. (b) Each Remarketing Notice shall specify: (i) the portion (in MMBtu) of the Daily Contract Quantity to be remarketed with respect to the applicable Delivery Point for each Gas 17 ME1 271650450 Day; (ii) the applicable period during which such Gas is to be remarketed; and (iii) an explanation, in reasonable detail, as to the reason(s) for the remarketing. Each such notice shall be in the form of Exhibit H, shall be sent by electronic mail, with a mailed copy following, and shall be deemed to have been properly delivered, with such notice complete upon transmission by electronic mail, notwithstanding any different requirements for notice under Section 15.02 . A Remarketing Notice where the type of remarketing is "Daily" must be delivered by 7:15 a.m. CPT on the Business Day prior. A Remarketing Notice where the type of remarketing is "Monthly" must be delivered by 4:00 p.m. CPT on the fifteenth (151h) day of the Month preceding the Month in which Gas is to be remarketed. If the remarketing is for a season, the Remarketing Notice must be delivered by 4:00 p.m. CPT on February 101h for remarketing of Gas during the ensuing summer season (the period from April through October) and by 4:00 p.m. CPT on September 10`h for remarketing of Gas during the ensuing winter season (the period from November through March). (c) The provision of a Remarketing Notice in itself does not relieve Buyer of its obligation to pay the Contract Price to Seller for the Daily Contract Quantity. For the avoidance of doubt, a Reset Period Remarketing Notice does relieve Buyer of this obligation. Section 9.02 Remarketing Terms. (a) For all Gas remarketed pursuant to Section 9.01, if the remarketed Gas does not sell for a price equal to or exceeding the Contract Price plus the Administrative Charge, then Buyer shall pay Seller for the difference between the Contract Price plus the Administrative Charge and the price at which the remarketed Gas actually sold. (b) If during any period of twelve (12) consecutive Months during the Delivery Period (i) the sum of (A) the quantity of Gas requested to be remarketed under Section 9.01 , and (B) the quantity of Gas which Buyer fails to take under Section 4.02 (without duplication), exceeds (ii) fifty percent (50%) of the sum of the Daily Contract Quantity during such twelve (12) Month period, and (iii) Seller shall have given written notice thereof to Buyer, then a "Partial Termination Condition" shall be deemed to exist and Section 8.03 (c) shall apply. ARTICLE X EXCHANGES Section 10.01 General Principle. With the consent of Seller, Buyer may effectuate an exchange of Delivery Points for Gas purchased under this Contract on a daily or monthly basis, provided, however, that any failure by a third party to perform its obligations under any such exchange arrangement shall not relieve Buyer of its obligations under this Contract. ARTICLE XI REPRESENTATIONS, WARRANTIES AND COVENANTS Section 11.01 Tax -Exempt Status of the Bonds. Buyer and Seller acknowledge and agree that Seller will finance the prepayment under the Prepaid Agreement with the proceeds of the Bonds, which will be issued as obligations under which the interest is excluded from the gross income of the owners thereof for federal income tax purposes. Buyer and Seller covenant and agree that each will not take any action, or fail to take any action, or permit any action to be taken on its behalf or cause or permit any circumstance within its control to arise or continue, if any such action or inaction would adversely affect the exclusion from gross income for federal income tax purposes of the interest on any of the Bonds under the Code. Buyer further agrees 18 ME 1 27165045v.1 that it will provide all documents and records reasonably requested by Seller for response to any inquiry or audit relating to the tax-exempt status of the bonds. Section 11.02 Qualifying Use. (a) Buyer represents, warrants, covenants and agrees that: (i) it is (A) either (1) a Municipal Utility or (2) a Governmental Person that sells Gas (or electricity generated from such Gas) to a Municipal Utility, and (B) which, in either case, possesses all power, authority, and applicable approvals necessary for it to enter into this Contract; (ii) it has delivered to Seller, as a condition precedent to Seller's execution of this Contract, the Buyer Certificate, in substantially the form set forth in Exhibit D hereto; (iii) the Gas purchased under this Contract is and shall be used, at all times during the Delivery Period, by Buyer in its normal and customary governmental utility operations to provide utility service to consumers located within its governmental service territory pursuant to Buyer's generally applicable and uniformly applied rate schedules and tariffs as they exist from time to time; and (iv) it will execute such additional documents and certificates as Bond Counsel may reasonably request evidencing Gas Purchaser's compliance with this Section, with the Code, and with Treasury Regulations thereunder. (b) Without limiting the foregoing, Buyer further agrees that it will use the Gas (i) for Qualifying Use, (ii) in a manner that will not result in any Private Business Use, and (iii) that it will not use Gas purchased under this Contract in any other manner without the prior written consent of Seller. Buyer agrees that it will execute such additional documents and certificates as Bond Counsel may reasonably request evidencing Gas Purchaser's compliance with this Section, with the Code, and with Treasury Regulations thereunder. Section 11.03 Representations and Warranties. As a material inducement to entering into this Contract, each Party, with respect to itself, hereby represents and warrants to the other Party as of the Effective Date as follows: (a) it is duly organized and validly existing in good standing under the Laws of the state or commonwealth in which it is organized, and has all requisite power and authority, corporate or otherwise, to enter into and to perform its obligations hereunder and to carry out the terms and conditions hereof and the transactions contemplated hereby; (b) it has all requisite power and authority to conduct its business, to own its properties and to execute, deliver and perform its obligations under this Contract; (c) there is no litigation, action, suit, proceeding or investigation pending or, to the best of such Party's knowledge, threatened, before or by any Government Agency that could reasonably be expected to materially and adversely affect the performance by such Party of its obligations hereunder or that questions the validity, binding effect or enforceability hereof or of any action taken or to be taken by such Party pursuant hereto or any of the transactions contemplated hereby; 19 ME1 27165045v.1 (d) the execution, delivery and performance of this Contract by such Party have been duly authorized by all necessary actions on the part of such Party and do not require any approval or consent of any security holder of such Party or any holder (or any trustee for any holder) of any indebtedness or other obligation of such Party; (e) this Contract has been duly executed and delivered on behalf of such Party by an appropriate officer or authorized Person of such Party and constitutes the legal, valid and binding obligation of such Party, enforceable against it in accordance with its terms, as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and similar Laws affecting creditors' rights generally and by general principles of equity; (f) the execution, delivery and performance of this Contract by such Party shall not violate any provision of any Law, rule, regulation, order, writ, judgment, decree or other legal or regulatory determination applicable to it; (g) the execution, delivery and performance by such Party of this Contract, and the consummation of the transactions contemplated hereby, including the incurrence by such Party of its financial obligations hereunder, shall not result in any violation of any term of any material contract or agreement applicable to it, or any of its charter or bylaws or of any license, permit, franchise, judgment, writ, injunction or regulation, decree, order, charter, Law, ordinance, rule or regulation applicable to it or any of its properties or to any obligations incurred by it or by which it or any of its properties or obligations are bound or affected, or of any determination or award of any arbitrator applicable to it, and shall not conflict with, or cause a breach of, or default under, any such term or result in the creation of any Lien upon any of its properties or assets; and (h) to the best of the knowledge and belief of such Party, no consent, approval, order or authorization of, or registration, declaration or filing with, or giving of notice to, obtaining of any license or permit from, or taking of any other action with respect to, any Government Agency is required in connection with the valid authorization, execution, delivery and performance by such Party of this Contract or the consummation of any of the transactions contemplated hereby. Section 11.04 Additional Representations, Warranties and Covenants of Buyer. As a material inducement to entering into this Contract, Buyer hereby represents, warrants and covenants to Seller as follows: (a) the amounts payable by Buyer under this Contract (i) shall be payable as a cost of purchased Gas (or fuel) and as an item of operating expenses of Buyer or Buyer's municipal gas (or electric) utility that is payable prior to debt service on Buyer's revenue bonds, if applicable, and (ii) do not constitute an indebtedness or liability of Buyer within the meaning of any constitutional or statutory limitation or restriction applicable to Buyer; and (b) Buyer shall establish, maintain and collect rates and charges for the sale or use of Gas or electric energy generated, transmitted, distributed or furnished by it so as to provide revenues sufficient, together with other legally available moneys, to enable Buyer to pay timely all amounts payable to Seller under this Contract, to pay any other amounts legally payable from such revenues, to maintain any required reserves pursuant to any financing obligations, 20 ME1 27165045v.1 and to promptly enforce the payment of any and all accounts owing to Buyer for the sale of Gas or electricity or the provision of distribution or other services to its customers. (c) Buyer further agrees to use Gas purchased under this Contract prior to other Gas purchased by Buyer that is not subject to any Qualifying Use restrictions. Section 11.05 Negative Covenant. Buyer agrees that unless the Receivable Purchase Agreement Provider shall otherwise expressly consent in writing, Buyer shall not create, incur or suffer to exist, or agree to create, incur or suffer to exist, or consent to cause or permit in the future (upon the happening of a contingency or otherwise) the creation, incurrence or existence of any Lien on the source of payment for Buyer's payment obligations hereunder to or for the benefit of any Person that would provide such Person with a right to payment that is prior to the rights of Seller to payment under this Contract or the rights of the Receivable Purchase Agreement Provider to payment under this Contract. ARTICLE XII TAXES Section 12.01 Taxes. Seller shall (i) be responsible for and shall pay, cause to be paid, or promptly reimburse Buyer if Buyer has paid all Taxes assessed upstream of the Delivery Point, and (ii) indemnify Buyer and its Affiliates for any such taxes paid by Buyer or its Affiliates. Buyer shall (i) be responsible for and shall pay, cause to be paid, or promptly reimburse Seller if Seller has paid, all Taxes assessed at or downstream of the Delivery Point, and (ii) indemnify Seller and its Affiliates for any such taxes paid by Seller or its Affiliates. The Index Price does not include any applicable state or local, gross receipts, compensating, utility, transaction privilege, sales or use tax, and any other transactional -type tax which may be levied as a result of sales of or use of Gas hereunder and that is allowed by applicable law to be invoiced to the Buyer as a separate charge from the Index Price, whether measured by quantity or revenues; and if there are any such taxes Seller will invoice Buyer and Buyer will pay Seller the amount of such taxes which Seller will remit as required by applicable law. The parties agree to cooperate, in the event either party in good faith protests, contests, disputes, or files a refund request, with the applicable taxing authority or court with jurisdiction, by providing any relevant information, upon request, within a party's possession, which will support the filing party's filing. At Seller's request, Buyer shall provide Seller with a valid sales tax exemption certificate and any other required exemption or resale certificate to the extent applicable necessary for exemption from any relevant state taxes that may be levied against the Parties in relation to the transactions under, or pursuant, to this Contract. ARTICLE XIII FORCE MAJEURE Section 13.01 Force Majeure. (a) Except with regard to a Party's obligation to make payment(s) due hereunder, neither Party shall be liable to the other for failure to perform a Firm obligation, to the extent such failure was caused by Force Majeure. The term "Force Majeure" as employed herein means any cause not reasonably within the control of the party claiming suspension, as further defined in this section. (b) Notwithstanding and without limiting the generality of the foregoing, Buyer acknowledges and agrees that the Delivery Points under this Contact are at, near, or supplied 21 ME1 27165045M by Gas production areas at point(s) or pool(s) at which Gas is aggregated, and that these Gas production areas may be affected by weather -related events, including hurricanes and wellhead freeze offs, which could disrupt or curtail Seller's ability to access Gas supplies, and that such circumstances, if and to the extent that they actually affect Seller's performance, constitute a Force Majeure event that relieves Seller of all or part, as applicable, of its obligations under this Contact to either (a) make deliveries of Gas, or (b) financially to keep Buyer whole, in either case by using any other source of Gas that may be available, including without limitation (x) storage deliveries and (y) deliveries under any third -party supply contracts not used to supply Gas under this Contract prior to such event, including deliveries from a different supply region than the regions used to supply Gas at the Delivery Points. (c) Force Majeure shall include, but not be limited to, the following: (i) physical events such as acts of God, landslides, lightning, earthquakes, fires, storms or storm warnings, such as hurricanes, which result in evacuations of the affected area, floods, washouts, explosions or breakage, accident or the necessity of repairs to machinery or equipment or lines of pipe; (ii) weather -related events affecting a broad geographic region, such as low temperatures which cause freezing or failure of wells or lines of pipe; (iii) interruption and/or curtailment of Firm transportation and/or storage by Transporters; (iv) acts of others such as strikes, lockouts, or other industrial disturbances, riots, sabotage, insurrections, acts of terrorism or wars; (v) governmental actions such as necessity for compliance with any court order, law, statute, ordinance, regulation or policy having the effect of law promulgated by a governmental authority having jurisdiction (excluding any actions taken by Buyer or a Gas Purchaser unless such actions are taken in response to an event that would otherwise constitute an event of Force Majeure); and (vii) an event of the type specified as an event of Force Majeure in Section 6.01. Seller and Buyer shall make reasonable efforts to avoid the adverse impacts of a Force Majeure and to resolve the event or occurrence once it has occurred in order to resume performance. In no event shall Seller be under any obligation to source Gas from storage or other markets if an event of Force Majeure occurs. To the extent an event of Force Majeure occurs, Seller or Buyer will allocate the supply or purchase of Firm Gas for affected transactions, as applicable, on a pro rata basis with other similarly situated Firm Gas customers. (d) If an event of Force Majeure occurs, the Party affected may, in its sole discretion and without notice to the other Party, determine not to make a claim of Force Majeure and waive its rights under this Contract as such rights would apply to such event. Such determination or waiver shall not preclude the affected Party from claiming Force Majeure with respect to any subsequent event, including any event that is substantially similar to the event with respect to which such determination or waiver is made. (e) Neither Party shall be entitled to the benefit of the provisions of Force Majeure to the extent performance is prevented by any or all of the following circumstances: (i) the curtailment of interruptible or secondary Firm transportation unless primary, in -path Firm transportation is also curtailed; (ii) the Party claiming excuse failed to remedy the condition and to resume the performance of such covenants or obligations with reasonable dispatch; (iii) Seller's ability to sell Gas at a higher or more advantageous price, Buyer's ability to purchase Gas at a lower or more advantageous price, or a regulatory agency disallowing, in whole or in part, the pass through of costs resulting from this Contract; (iv) the loss of Buyer's markets or Buyer's inability to use or resell Gas purchased under this Contract, except, in either case, as a result of Force Majeure; or (v) the loss or failure of Seller's Gas supply or depletion of reserves, except, in either case, for reasons of Force Majeure. The Party claiming Force Majeure shall not be excused from its responsibility for costs associated with Imbalances. 22 ME1 27165045v.1 (f) Notwithstanding anything to the contrary in this Contract, the Parties agree that the settlement of strikes, lockouts, or other industrial disturbances shall be within the sole discretion of the Party experiencing such disturbance. (g) The Party whose performance is prevented by Force Majeure must provide notice to the other Party. Initial notice may be given orally; however, written notice with reasonably full particulars of the event or occurrence is required as soon as reasonably possible. Upon providing written notice of Force Majeure to the other Party, the affected Party will be relieved of its obligation to make or accept delivery of Gas, as applicable, to the extent and for the duration of the Force Majeure event, and neither Party shall be deemed to have failed in such obligation to the other during such occurrence or event. ARTICLE XIV GOVERNING RULES AND REGULATIONS Section 14.01 Compliance with Laws. This Contract shall be subject to all present and future Laws of any Government Agency having jurisdiction, and neither Party has or will knowingly undertake or knowingly cause to be undertaken any activity that would conflict with such Laws; provided, however, that nothing herein shall be construed to restrict or limit either Party's right to object to or contest any such Law, and neither acquiescence therein or compliance therewith for any period of time shall be construed as a waiver of such right. Section 14.02 Contests. Excluding all matters involving a contractual dispute between the Parties, no Party shall contest, cause to be contested or in any way actively support the contest of the equity, fairness, reasonableness or lawfulness of any terms or conditions set forth or established pursuant to this Contract, as those terms or conditions may be at issue before any Government Agency in any proceeding, if the successful result of such contest would be to preclude or excuse the performance of this Contract by either Party. Section 14.03 Defense of Contract. Excluding all matters involving a contractual dispute between the Parties, each Party shall hereafter defend and support, and shall take no action in derogation of, this Contract before any Government Agency in any proceeding involving such Party, if the substance, validity or enforceability of all or any part of this Contract is hereafter challenged or if any proposed changes in Law or regulatory practices or procedures would have the effect of making this Contract invalid or unenforceable or would subject either Party to any greater or different regulation or jurisdiction that materially affects the rights or obligations of the Parties under this Contract. Section 14.04 Continuing Disclosure. Buyer agrees to provide Seller with its publicly available financial statements and operating information and authorizes Seller to use all or part of such information in its official statement with respect to the Bonds. Buyer shall also: (a) provide Seller with such annual updates to such information as Seller reasonably may request for use in any continuing disclosure filings that Seller may be required to make; and (b) on an annual basis, provide Seller with the audited financial statements and annual operating report of the Buyer as soon as they are available upon request. ARTICLE XV MISCELLANEOUS Section 15.01 Assignment. Neither Party shall assign this Contract or any of its rights or obligations under this Contract without the prior written consent of the other Party, such 23 ME1 27165045v.1 consent not to be unreasonably withheld or delayed, provided, however (i) Seller may pledge and assign its right, title, and interest in this Contract and the amounts payable by Buyer under this Contract to the Trustee under the Indenture, such that the Trustee or any receiver appointed under the Indenture shall have the right to enforce all obligations of Buyer and to perform all obligations of Seller under this Contract; (ii) in the event of Payment Default and receipt by the Trustee of payment by the Receivables Purchase Agreement Provider of amounts owing by Buyer, Seller shall be deemed to have assigned its rights under this Contract to the Receivables Purchase Agreement Provider; and (iii) Buyer shall not assign this Contract or any of its rights or obligations under this Contract to any Person other than a Municipal Utility that executes and delivers to Buyer and Seller a Qualifying Use Certificate, unless Buyer obtains and delivers to Seller a Favorable Opinion of Bond Counsel, and without the prior written consent of BPEC and the Receivables Purchase Agreement Provider. Section 15.02 Notices. All notices, requests, statements or payments shall be made as specified on Exhibit C hereto. All notices, requests, or statements to Buyer shall be recognized as valid, whether from Seller, or its designee(s), and Buyer shall not be held liable by reason of Buyer having relied on them. Notices required to be in writing shall be delivered by letter, electronic mail, facsimile or other documentary form or such other means of communication as the Parties may agree from time to time in writing and shall be deemed given upon actual receipt by the Party to which such notice is given except that any notices received after 2:00 p.m. CPT shall be deemed received at the close of the next Business Day. A Party may change its address by providing notice of same in accordance herewith. Notwithstanding the foregoing, any notices regarding day-to-day operations may be given orally, to be followed up in writing. Section 15.03 Indemnification Procedure. With respect to each indemnification included in this Contract, the indemnity is given to the fullest extent permitted by applicable Law and the following provisions shall be applicable. The indemnified Party shall promptly notify the indemnifying Party in writing of any Claim and the indemnifying Party shall have the right to assume its investigation and defense, including employment of counsel, and shall be obligated to pay related court costs and the indemnifying Party's attorneys' and experts' fees, and to post any appeals bonds; provided, however, that the indemnified Party shall have the right to employ at its expense separate counsel and participate in the defense of any Claim. The indemnifying Party shall not be liable for any settlement of a Claim without its express written consent thereto. In order to prevent double recovery, the indemnified Party shall reimburse the indemnifying Party for reasonable payments or costs incurred in respect of an indemnity with the proceeds of any judgment, insurance, bond, surety or other recovery made by the indemnified Party with respect to a covered event. Section 15.04 Entirety. This Contract, including the exhibits hereto, constitutes the entire agreement between the Parties and supersedes all prior discussions and agreements between the Parties with respect to the subject matter hereof. There are no prior or contemporaneous agreements or representations affecting the same subject matter other than those herein expressed. Except for any matters that, in accordance with the express provisions of this Contract, may be resolved by oral agreement between the Parties, no amendment, modification or change herein shall be enforceable unless reduced to writing and executed by both Parties. Section 15.05 Governing Law. This Contract shall be interpreted and construed in accordance with the applicable Laws of the State of New York, excluding conflicts of law principles which would refer to the laws of another jurisdiction; provided that the authority of 24 ME1 27165045v.1 each of Buyer and Seller to enter into and perform its obligations under this Contract shall be determined in accordance with the Laws of the state or commonwealth, as applicable, of formation of each Party. Section 15.06 Non -Waiver. No waiver of any breach of any of the terms of this Contract shall be effective unless such waiver is in writing and signed by the Party against whom such waiver is claimed. No waiver of any breach shall be deemed a waiver of any other subsequent breach. Section 15.07 Severability. If any provision of this Contract, or the application thereof, shall for any reason and to any extent be invalid or unenforceable, the remainder of this Contract and the application of such provision to other Persons or circumstances shall not be affected thereby, but rather shall be enforced to the maximum extent permissible under applicable Law, so long as the economic and legal substance of the transactions contemplated hereby is not affected in any materially adverse manner as to either Party. Section 15.08 Exhibits. Any and all exhibits referenced in this Contract shall be incorporated herein by reference and shall be deemed to be an integral part hereof. Section 15.09 Winding Up Arrangements. All indemnity obligations, audit rights and other provisions specifically providing for survival shall survive the expiration or termination of this Contract. The expiration or termination of this Contract shall not relieve either Party of (a) any unfulfilled obligation or undischarged liability of such Party on the date of such termination, or (b) the consequences of any breach or default of any warranty or covenant contained in this Contract. All obligations and liabilities described in the preceding sentence of this Section 15.09 , and applicable provisions of this Contract creating or relating to such obligations and liabilities, shall survive such expiration or termination. Section 15.10 Relationship of the Parties. The Parties shall not be deemed in a relationship of partners or joint ventures by virtue of this Contract, nor shall either Party be an agent, representative, trustee or fiduciary of the other. Neither Party shall have any authority to bind the other to any agreement. This Contract is intended to secure and provide for the services of each Party as an independent contractor. Section 15.11 Immunity. Buyer and Seller represent and covenant to and agree that each is not entitled to, and hereby waives any rights it may have to and shall not assert the defense of, sovereign immunity with respect to its obligations or any claims under this Contract. Section 15.12 Counterparts. This Contract may be executed and acknowledged in multiple counterparts and by different Parties in separate counterparts, each of which shall be an original and all of which shall be and constitute one and the same instrument. Section 15.13 Third -Party Beneficiaries. With the exception of the Receivables Purchase Agreement Provider and as provided in Section 15.14 with respect to the Trustee, the Parties acknowledge and agree that there are no third party beneficiaries of this Contract, and that this Contract shall not impart any rights enforceable by any person, firm, organization, or corporation not a party to this Contract. Regarding the Receivables Purchase Agreement Provider, it shall be an express third party beneficiary of this Contract entitled, but not obligated, to enforce each of the covenants and provisions of this Contract. Each Party expressly acknowledges and agrees that, irrespective of any action taken or omitted to be taken by the Receivables Purchase Agreement Provider under or in connection with this Contract or 25 ME1 27165045v.1 otherwise in connection with the transactions contemplated by this Contract, the sole liability and obligation of the Receivables Purchase Agreement Provider in connection therewith shall be those obligations which are expressly undertaken pursuant to the Receivables Purchase Agreement. Section 15.14 Rights of Trustee. Pursuant to the terms of the Indenture, Seller has irrevocably appointed the Trustee as its agent to issue notices (including Remarketing Notices) and to take any other actions that Seller is required or permitted to take under this Contract, and as assignee of Seller under the Indenture and subject to the terms thereof, the Trustee shall have all rights of Seller to enforce Buyer's payment and other obligations under this Contract on behalf of the holders of the Bonds and the other parties secured under the Indenture. Buyer may rely on notices or other actions taken by Seller or the Trustee, and Buyer has the right to exclusively rely on any notices delivered by the Trustee, regardless of any conflicting notices that it may receive from Seller. Section 15.15 Non -Publication of Index Price. Pursuant to the Prepaid Agreement, Seller and BPEC shall undertake a process to agree on a replacement Index Price (or on a method for determining a replacement Index Price) for the affected Gas Day(s) should any of the following events occur: (a) the failure of the price source to announce or publish information necessary for determining the Index Price; (b) the failure of trading to commence or the permanent discontinuation or material suspension of trading on the exchange or market acting as the price source; (c) the temporary or permanent discontinuance or unavailability of the price source; (d) the temporary or permanent closing of any exchange acting as the price source; or (e) both Seller and BPEC agree that a material change in the formula for or the method of determining the Index Price has occurred. Seller shall involve Buyer in this process. If Seller incurs any costs associated with this process, such as payment to an independent third party, such costs shall be paid by Buyer. ARTICLE XVI PROJECT MANAGEMENT AND ADMINISTRATION Section 16.01 Administration of the Gas Project. Seller covenants and agrees that it will use its best efforts to acquire, manage and administer the Gas Project for the benefit of all of the Gas Purchasers. Buyer acknowledges and agrees that Seller may from time to time enter into amendments of and supplements to the Indenture and any or all of the related project agreements and that Seller will not be required to obtain the consent or approval of Buyer in connection with any such supplement or amendment. Section 16.02 Project Management Committee. Pursuant to the Seller's bylaws, Buyer may appoint a representative to serve on the Seller's "Project Management Committee" (the "Project Management Committee') created for this transaction. Seller shall share with the Project Management Committee all pertinent financial data including market conditions, repricing economics, and the status of the Rate Stabilization Fund. The Project Management Committee is required to act in accordance with and is governed by the Seller's bylaws. In the event that a weighted vote is called for on any matter before the Project Management Committee, the Gas Purchaser shall be entitled to cast the number of votes that is equal to the total daily quantities of Gas to be purchased by it under its Gas Supply Contract with Seller. 26 ME1 27165045v.1 ARTICLE XVII CLOSING DOCUMENTATION Section 17.01 Closing Documentation. (a) The following documents shall be delivered by Buyer on or before the Effective Date of this Contract: (i) a completed and executed certificate of Buyer, in substantially the form attached as Exhibit D; (ii) a certificate of the Secretary or Assistant Secretary or other duly authorized representative of Buyer setting forth (i) the resolutions of its governing body authorizing Buyer to execute and deliver this Contract and to enter into the transactions contemplated hereby and any agreements relating thereto, in substantially the form attached as Exhibit G, (ii) the appropriate individuals who are authorized to execute the Agreement and any such agreements, (iii) specimen signatures of such authorized individuals, and (iv) the organizational documents of Buyer, certified as being true and complete; (iii) such other documents, certificates and opinions as may be reasonably requested by Seller; and (iv) a legal opinion of counsel to the Buyer, in substantially the form of Exhibit F hereto, addressed to PEAK, the Trustee and the Receivables Purchase Agreement Provider to the effect that this Contract has been duly authorized, executed and delivered by Buyer and constitutes its legal, valid and binding obligation, enforceable in accordance with its terms. (b) The following documents shall be delivered by Seller on the Effective Date of this Contract: (i) An executed copy of the resolution(s) of its governing body authorizing Seller to execute and deliver this Contract and to enter into the transactions contemplated hereby and any agreements relating thereto; (ii) a legal opinion addressed to the Buyer, Trustee, SPEC, the Swap Counterparty and the Receivables Purchase Agreement Provider to the effect that this Contract has been duly authorized, executed and delivered by Seller and constitutes its legal, valid and binding obligation, enforceable in accordance with its terms; and (iii) executed copy of the Prepaid Agreement and Repricing Agreement. (c) Buyer shall provide to Seller such updates to the documents provided by Buyer pursuant to Section 17.01 (a) as Seller may reasonably request prior to be beginning of the Delivery Period. 27 ME1 27165045v.1 IN WITNESS WHEREOF, Seller and Buyer have caused this Contract to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first above written. [GAS PURCHASER] 0 2 Title: PUBLIC ENERGY AUTHORITY OF KENTUCKY By: Name: Gerald L. Ballinger Title: President and General Manager 28 ME1 27165045v.1 EXHIBIT A DAILY CONTRACT QUANTITY Month Nov-18 MMBtu/D MMBtu/Mo 2,548 76,440 Dec-18 3,073 95,263 Jan-19 3,745 116,095 Feb-19 4,062 113,736 Mar-19 3,492 108,252 Apr-19 2,422 72,660 May-19 1,666 51,646 Jun-19 1,360 40,800 Jul-19 1,299 40,269 Aug-19 1,124 34,844 Sep-19 1,169 35,070 Oct-19 1,838 56,978 Nov-19 2,548 76,440 Dec-19 3,073 95,263 Jan-20 3,745 116,095 Feb-20 4,062 117,798 Mar-20 3,492 108,252 Apr-20 2,422 72,660 May-20 1,666 51,646 Jun-20 1,360 40,800 Jul-20 1,299 40,269 Aug-20 1,124 34,844 Sep-20 1,169 35,070 Oct-20 1,838 56,978 Nov-20 2,548 76,440 Dec-20 3,073 95,263 Jan-21 3,745 116,095 Feb-21 4,062 113,736 Mar-21 3,492 108,252 Apr-21 2,422 72,660 May-21 1,666 51,646 Jun-21 1,360 40,800 Jul-21 1,299 40,269 Aug-21 1,124 34,844 Sep-21 1,169 35,070 A-1 ME1 27165045v.1 Oct-21 1,838 56,978 Nov-21 2,548 76,440 Dec-21 3,073 95,263 Jan-22 3,745 116,095 Feb-22 4,062 113,736 Mar-22 3,492 108,252 Apr-22 2,422 72,660 May-22 1,666 51,646 Jun-22 1,360 40,800 Jul-22 1,299 40,269 Aug-22 1,124 34,844 Sep-22 1,169 35,070 Oct-22 1,838 56,978 Nov-22 2548 76,440 Dec-22 3,073 95,263 Jan-23 3,745 116,095 Feb-23 4,062 113,736 Mar-23 3,492 108,252 Apr-23 2,422 72,660 May-23 1,666 51,646 Jun-23 1,360 40,800 Jul-23 1,299 40,269 Aug-23 1,124 34,844 Sep-23 1,169 35,070 Oct-23 1,838 56,978 Nov-23 2,548 76,440 Dec-23 3,073 95,263 Jan-24 3,745 116,095 Feb-24 4,062 117,798 Mar-24 3,492 108,252 Apr-24 2,422 72,660 May-24 1,666 51,646 Jun-24 1,360 40,800 Jul-24 1,299 40,269 Aug-24 1,124 34,844 Sep-24 1,169 35,070 Oct-24 1,838 56,978 Nov-24 2,548 76,440 May-28 1,666 51,646 Dec-24 3,073 95,263 Jun-28 1,360 40,800 Jan-25 3,745 116,095 Jul-28 1,299 40,269 Feb-25 4,062 113,736 Aug-28 1,124 34,844 Mar-25 3,492 108,252 Sep-28 1,169 35,070 Apr-25 2,422 72,660 Oct-28 1,838 56,978 May-25 1,666 51,646 Nov-28 2,548 76,440 Jun-25 1,360 40,800 Dec-28 3,073 95,263 Jul-25 1,299 40,269 Jan-29 3,745 116,095 Aug-25 1,124 34,844 Feb-29 4,062 113,736 Sep-25 1,169 35,070 Mar-29 3,492 108,252 Oct-25 1,838 56,978 Apr-29 2,422 72,660 Nov-25 2,548 76,440 May-29 1,666 51,646 Dec-25 3,073 95,263 Jun-29 1,360 40,800 Jan-26 3,745 116,095 Jul-29 1,299 40,269 Feb-26 4,062 113,736 Aug-29 1,124 34,844 Mar-26 3,492 108,252 Sep-29 1,169 35,070 Apr-26 2,422 72,660 Oct-29 1,838 56,978 May-26 1,666 51,646 Nov-29 2,548 76,440 Jun-26 1,360 40,800 Dec-29 3,073 95,263 Jul-26 1,299 40,269 Jan-30 3,745 116,095 Aug-26 1,124 34,844 Feb-30 4,062 113,736 Sep-26 1,169 35,070 Mar-30 3,492 108,252 Oct-26 1,838 56,978 Apr-30 2,422 72,660 Nov-26 2,548 76,440 May-30 1,666 51,646 Dec-26 3,073 95,263 Jun-30 1,360 40,800 Jan-27 3,745 116,095 Jul-30 1,299 40,269 Feb-27 4,062 113,736 Aug-30 1,124 34,844 Mar-27 3,492 108,252 Sep-30 1,169 35,070 Apr-27 2,422 72,660 Oct-30 1,838 56,978 May-27 1,666 51,646 Nov-30 2,548 76,440 Jun-27 1,360 40,800 Dee-30 3,073 95,263 Jul-27 1,299 40,269 Jan-31 3,745 116,095 Aug-27 1,124 34,844 Feb-31 4,062 113,736 Sep-27 1,169 35,070 Mar-31 3,492 108,252 Oct-27 1,838 56,978 Apr-31 2,422 72,660 Nov-27 2,548 76,440 May-31 1,666 51,646 Dec-27 3,073 95,263 Jun-31 1,360 40,800 Jan-28 3,745 116,095 Jul-31 1,299 40,269 Feb-28 4,062 117,798 Aug-31 1,124 34,844 Mar-28 3,492 108,252 Sep-31 1,169 35,070 Apr-28 2,422 72,660 Oct-31 1,838 56,978 A-2 ME1 27165045v.1 Nov-31 2,548 76,440 May-35 1,666 51,646 Dec-31 3,073 95,263 Jun-35 1,360 40,800 Jan-32 3,745 116,095 Jul-35 1,299 40,269 Feb-32 4,062 117,798 Aug-35 1,124 34,844 Mar-32 3,492 108,252 Sep-35 1,169 35,070 Apr-32 2,422 72,660 Oct-35 1,838 56,978 May-32 1,666 51,646 Nov-35 2,548 76,440 Jun-32 1,360 40,800 Dec-35 3,073 95,263 Jul-32 1,299 40,269 Jan-36 3,745 116,095 Aug-32 1,124 34,844 Feb-36 4,062 117,798 Sep-32 1,169 35,070 Mar-36 3,492 108,252 Oct-32 1,838 56,978 Apr-36 2,422 72,660 Nov-32 2,548 76,440 May-36 1,666 51,646 Dec-32 3,073 95,263 Jun-36 1,360 40,800 Jan-33 3,745 116,095 Jul-36 1,299 40,269 Feb-33 4,062 113,736 Aug-36 1,124 34,844 Mar-33 3,492 108,252 Sep-36 1,169 35,070 Apr-33 2,422 72,660 Oct-36 1,838 56,978 May-33 1,666 51,646 Nov-36 2,548 76,440 Jun-33 1,360 40,800 Dec-36 3,073 95,263 Jul-33 1,299 40,269 Jan-37 3,745 116,095 Aug-33 1,124 34,844 Feb-37 4,062 113,736 Sep-33 1,169 35,070 Mar-37 3,492 108,252 Oct-33 1,838 56,978 Apr-37 2,422 72,660 Nov-33 2,548 76,440 May-37 1,666 51,646 Dec-33 3,073 95,263 Jun-37 1,360 40,800 Jan-34 3,745 116,095 Jul-37 1,299 40,269 Feb-34 4,062 113,736 Aug-37 1,124 34,844 Mar-34 3,492 108,252 Sep-37 1,169 35,070 Apr-34 2,422 72,660 Oct-37 1,838 56,978 May-34 1,666 51,646 Nov-37 2,548 76,440 Jun-34 1,360 40,800 Dec-37 3,073 95,263 Jul-34 1,299 40,269 Jan-38 3,745 116,095 Aug-34 1,124 34,844 Feb-38 4,062 113,736 Sep-34 1,169 35,070 Mar-38 3,492 108,252 Oct-34 1,838 56,978 Apr-38 2,422 72,660 Nov-34 2,548 76,440 May-38 1,666 51,646 Dec-34 3,073 95,263 Jun-38 1,360 40,800 Jan-35 3,745 116,095 Jul-38 1,299 40,269 Feb-35 4,062 113,736 Aug-38 1,124 34,844 Mar-35 3,492 108,252 Sep-38 1,169 35,070 Apr-35 2,422 72,660 Oct-38 1,838 56,978 A-3 ME1 27165045v.1 Nov-38 2,548 76,440 May-42 1,666 51,646 Dec-38 3,073 95,263 Jun-42 1,360 40,800 Jan-39 3,745 116,095 Jul-42 1,299 40,269 Feb-39 4,062 113,736 Aug-42 1,124 34,844 Mar-39 3,492 108,252 Sep-42 1,169 35,070 Apr-39 2,422 72,660 Oct-42 1,838 56,978 May-39 1,666 51,646 Nov-42 2,548 76,440 Jun-39 1,360 40,800 Dec-42 3,073 95,263 Jul-39 1,299 40,269 Jan-43 3,745 116,095 Aug-39 1,124 34,844 Feb-43 4,062 113,736 Sep-39 1,169 35,070 Mar-43 3,492 108,252 Oct-39 1,838 56,978 Apr-43 2,422 72,660 Nov-39 2,548 76,440 May-43 1,666 51,646 Dec-39 3,073 95,263 Jun-43 1,360 40,800 Jan-40 3,745 116,095 Jul-43 1,299 40,269 Feb-40 4,062 117,798 Aug-43 1,124 34,844 Mar-40 3,492 108,252 Sep-43 1,169 35,070 Apr-40 2,422 72,660 Oct-43 1,838 56,978 May-40 1,666 51,646 Nov-43 2,548 76,440 Jun-40 1,360 40,800 Dec-43 3,073 95,263 Jul-40 1,299 40,269 Jan-44 3,745 116,095 Aug-40 1,124 34,844 Feb-44 4,062 117,798 Sep-40 1,169 35,070 Mar-44 3,492 108,252 Oct-40 1,838 56,978 Apr-44 2,422 72,660 Nov-40 2,548 76,440 May-44 1,666 51,646 Dec-40 3,073 95,263 Jun-44 1,360 40,800 Jan-41 3,745 116,095 Jul-44 1,299 40,269 Feb-41 4,062 113,736 Aug-44 1,124 34,844 Mar-41 3,492 108,252 Sep-44 1,169 35,070 Apr-41 2,422 72,660 Oct-44 1,838 56,978 May-41 1,666 51,646 Nov-44 2,548 76,440 Jun-41 1,360 40,800 Dec-44 3,073 95,263 Jul-41 1,299 40,269 Jan-45 3,745 116,095 Aug-41 1,124 34,844 Feb-45 4,062 113,736 Sep-41 1,169 35,070 Mar-45 3,492 108,252 Oct-41 1,838 56,978 Apr-45 2,422 72,660 Nov-41 2,548 76,440 May-45 1,666 51,646 Dec-41 3,073 95,263 Jun-45 1,360 40,800 Jan-42 3,745 116,095 Jul-45 1,299 40,269 Feb-42 4,062 113,736 Aug-45 1,124 34,844 Mar-42 3,492 108,252 Sep-45 1,169 35,070 Apr-42 2,422 72,660 Oct-45 1,838 56,978 A-4 ME1 27165045v.1 Nov-45 2,548 76,440 Dec-45 3,073 95,263 Jan-46 3,745 116,095 Feb-46 4,062 113,736 Mar-46 3,492 108,252 Apr-46 2,422 72,660 May-46 1,666 51,646 Jun-46 1,360 40,800 Jul-46 1,299 40,269 Aug-46 1,124 34,844 Sep-46 1,169 35,070 Oct-46 1,838 56,978 Nov-46 2,548 76,440 Dec-46 3,073 95,263 Jan-47 3,745 116,095 Feb-47 4,062 113,736 A-5 ME1 27165045v.1 Mar-47 3,492 108,252 Apr-47 2,422 72,660 May-47 1,666 51,646 Jun-47 1,360 40,800 Jul-47 1,299 40,269 Aug-47 1,124 34,844 Sep-47 1,169 35,070 Oct-47 1,838 56,978 Nov-47 2,548 76,440 Dec-47 3,073 95,263 Jan-48 3,745 116,095 Feb-48 4,062 117,79 Mar-48 3,492 108,252 EXHIBIT B DELIVERY POINTS AND INDICES NNG VENTURA/DEMARC B-1 81AW11f[-111111- EXHIBIT C NOTICE CONTACT AND PAYMENT INSTRUCTIONS NOTICES If to Seller: Public Energy Authority of Kentucky 516 Highland Ave. Carrollton, KY 41008 Attention: President and General Manager Telephone: (502) 732-0991 Fax: (502) 732-8777 E-mail: gballinger@peakgas.net with a copy to: BP Energy Company P.O. Box 3092 Houston, TX 77253-3092 If to Buyer: By Wire Transfer. Attention: Confirmations Dept Telephone: 713-323-1866 Fax: 281-227-8470 Hutchinson Utilities Commission 225 Michigan St. Hutchinson, MN 55350 Attention: John Webster Telephone: (320) 234-0507 Fax: (320) 587-4721 E-mail: LVebsterjgd1jutchinson.mmus PAYMENT INSTRUCTIONS Account No. ABA No. C-1 ME1 27165045v.1 EXHIBIT D BUYER CERTIFICATE' DATED: [ ] 1, 2018 The undersigned hereby certifies that [he/she] is the [Title] of the [Entity] ("Buyer"), and that as such [he or she] is authorized to execute this certificate on behalf of Buyer. This certificate is executed in connection with the Gas Supply Contract, dated as of , 2018 (the "Gas Supply Contract'), between Buyer and the Public Energy Authority of Kentucky ("PEAK" or "Seller"). Capitalized terms used and not otherwise defined in this Certificate have the meanings assigned to them in the Gas Supply Contract. Pursuant to the Indenture, Seller will issue the Bonds to finance the cost of acquisition of the Gas Supply Project, Gas from which will be sold to Buyer under the Gas Supply Contract. In connection with the foregoing, Buyer hereby certifies and represents as follows: 1. Buyer is a Municipal Utility duly created and validly existing and in good standing under the laws of the [State Name] ("State") and has the corporate power and authority to enter into and perform its obligations under the Gas Supply Contract. 2. The Gas Supply Contract has been duly authorized, executed and delivered by Buyer, is in full force and effect and constitutes the legal, valid and binding obligation of Buyer enforceable in accordance with its terms. Attached hereto as Annex A is a true, correct and complete copy of the resolution or ordinance of Buyer authorizing the execution and delivery of the Gas Supply Contract. 3. 1 have reviewed the statements and information relating to Buyer and its utility system attached as Annex B that are contained in the final Official Statement prepared by the Seller in connection with the sale of the Bonds with respect to the Bonds and, as of the date hereof and to the best of my knowledge, such statements and information are true and correct in all material respects and did not and do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make such statements, in light of the circumstances under which they were made, not misleading. 4. The authorization, execution and delivery of the Gas Supply Contract and compliance with the provisions thereof (a) will not conflict with or constitute a breach of, or default under, any instrument relating to the organization, existence or operation of Buyer, any commitment, agreement, bond resolution, bond, note, indenture or other instrument to which Buyer is a party or by which it or its property is bound or affected, or any ruling, regulation, ordinance, judgment, order or decree to which Buyer (or any of its officers in their respective capacities as such) is subject or any provision of the laws of the State relating to Buyer and its affairs, and (b) will not result in, or require the creation or imposition of, any The Buyer Certificate set forth in this Exhibit D is a form certificate for buyers that are Municipal Utilities. This form will be modified with language approved by Bond Counsel in the case of a Governmental Person (other than a Municipal Utility) that sells Gas (or electricity generated from such Gas) to a Municipal Utility, and possesses all power, authority, and applicable approvals necessary for it to enter into this Contract. D-1 ME1 27165045v.1 Lien on any of the properties or revenues of Buyer pursuant to any of the foregoing. 5. There is no action, suit, proceeding, inquiry or investigation by or before any court, governmental agency, public board or administrative body pending or, to the best of Buyer's knowledge, threatened, against Buyer which in any way affects or questions the validity or enforceability of any provision of the Gas Supply Contract. 6. Buyer has entered into the Gas Supply Contract for the purpose of acquiring a long-term supply of Gas (x) for sale to its Retail Customers, or (y) to produce electricity for sale to its Retail Customers. 7. Tax Certifications a. Buyer understands that PEAK will issue the Bonds to finance prepayment of the purchase price payable by PEAK for the Gas to be sold and delivered to Buyer under the Gas Supply Contract. Buyer further understands and acknowledges that PEAK will issue the Bonds as tax-exempt obligations under Sections 141- 150 of the Internal Revenue Code of 1986, as amended (the "Code"), and the Treasury regulations promulgated thereunder (the "Regulations"). Sections 141- 150 of the Code and the Regulations impose certain conditions and requirements on Buyer's use of the Gas purchased by it under the Gas Supply Contract (the "Gas Supply") in order to establish and maintain the tax exemption for interest on the Bonds. Buyer understands that the statements made herein will be relied upon by PEAK in its effort to comply with the conditions imposed by the Code and the Regulations, and by Bond Counsel in rendering its opinion with respect to the exclusion from gross income for federal income tax purposes of interest on the Bonds. b. Definitions: For purposes of this Certificate: i. "Testing Period" means calendar years 2013 through 2017. "Service Area" means (A) any area throughout which Buyer provided, at all times during (x) the Testing Period, and (y) the period immediately following the Testing Period and ending on the Issue Date, natural gas transmission or distribution services or electric energy distribution services, or (B) any area recognized as the natural gas or electric distribution service area of Buyer under state or federal law. iii. "Issue Date" shall mean [Issue Date], 2018, the issue date of the Bonds. iv. "Governmental Person" means a state or local governmental unit or any instrumentality thereof. It does not include the United States or any agency or instrumentality thereof. v. "Retail Customer" shall mean a customer of Buyer located in the Service Area of the Buyer that purchases Gas or electricity, as applicable, for consumption and not for resale. D-2 ME1 27165045M vi. "Nongovernmental Agency" means any Person other than a Governmental Person. vii. "Private Use" means use of property, directly or indirectly, in any trade or business carried on by any Person, or any activity of any Person other than a natural person, in each case excluding Governmental Persons, unless (1) such use is merely as a member of the general public, (2) such property is intended to be and is in fact reasonably available for use on the same basis as natural persons not engaged in a trade or business, and (3) no priority rights therein or special benefits therefrom are extended to such Person (other than customary and reasonable differences in rates and terms and conditions of service for different classes of users). For this purpose, property is considered to be "used" by a Person if it is owned by such Person or otherwise actually or beneficially used by such Person under a lease, management contract, output -type contract, or similar arrangement. For the avoidance of doubt, Private Use does not arise as a result of the receipt by a Nongovernmental Agency (including an industrial or commercial customer) of retail Gas service from Buyer under a generally applicable and uniformly applied tariff (including, for example, customary and reasonable differences in rates and terms and conditions of service for different classes of users). On the other hand, Private Use does arise, for example, if a Nongovernmental Agency receives retail Gas service for its trade or business from Buyer under a contract entered into between such Nongovernmental Agency and Buyer, other than bona fide requirements contracts satisfying the requirements of the Regulations. c. In accordance with the requirements of Sections 141-150 of the Code and the Regulations, Buyer certifies as follows: Buyer is a Municipal Utility that owns and operates either or both a gas distribution utility or an electricity distribution utility (the "System"). Attachment I hereto shows (A) the average annual amount of Gas either (x) sold by Buyer to Retail Customers within its Service Area during the Testing Period, or (y) used by Buyer to generate electricity for sale to Retail Customers within its Service Area during the Testing Period, (B) the maximum amount of Gas storage available to Buyer on the date hereof, and (C) the amount of Gas that Buyer has a right to acquire for the System from any Person in any year during the term of the Gas Supply Contract. Buyer owns and operates the System and reasonably expects to use all of the Gas Supply solely to (x) furnish Gas to its Retail Customers located in its Service Area in the normal and customary operations of the System, or (y) generate electricity for sale to its Retail Customers located in its Service Area in the normal and customary operation of the System. iv. The amount of Gas to be acquired under the Gas Supply Contract during any year, plus the amount of Gas otherwise available to Buyer for the System as of the Issue Date, does not exceed the sum of (A) the annual D-3 ME 1 27165045v.1 average amount during the Testing Period of Gas purchased by Retail Customers of Buyer, (B) the amount of Gas to be used by Buyer to generate electricity for sale to Retail Customers of Buyer, and (C) the amount of Gas to be used to transport the Gas acquired under the Gas Supply Contract to the System during the year. For purposes of the preceding sentence, the "amount of Gas otherwise available to Buyer for the System as of the Issue Date" means the sum of (1) the amount of Gas held by Buyer for the System on the Issue Date, and (II) the amount of Gas that Buyer has an obligation to purchase for the System in any year during the term of the Gas Supply Contract, divided by [ ] (the number of years in the Gas Supply Contract). v. Buyer will not engage in any intentional act to render the volume of Gas acquired under the Gas Supply Contract to be in excess of (A) the amount of Gas needed to serve Retail Customers of Buyer, and (B) the amount of Gas used to transport the acquired Gas to the System. Buyer reasonably expects that all amounts paid for Gas acquired pursuant to the Gas Supply Contract will be derived from current revenues from operations of the System. vi. The Gas Supply is to be used in the Service Area. Therefore, the Gas Supply may not be used in any expansion of the Service Area occurring after the date of this Certificate unless Buyer receives the prior written approval of PEAK and agrees to comply with such conditions and limitations as PEAK may require, provided however that Buyer may expand its Service Area for this purpose, without seeking approval of PEAK, to any area contiguous to its existing Service Area if permitted by State law. vii. Except to the extent set forth in the Gas Supply Contract, or a prior written consent of PEAK delivered to Buyer, Buyer will not permit any portion of the Gas Supply to be used for a Private Use. In determining compliance with this requirement, Buyer will inform PEAK of the current existence of, and during the term of the Gas Supply Contract will notify PEAK prior to entering into, any of the following types of contracts or arrangements: (A) Any sale or other disposition to a Nongovernmental Agency of all or any part of the System; (B) Any lease of or management contract for the operation of all or any part of the System if such lease or management contract is with a Nongovernmental Agency; (C) Any contract providing for the sale of Gas delivered under the Gas Supply Contract to a Nongovernmental Agency; and (D) Any arrangement that conveys to a Nongovernmental Agency priority rights or any other preferential benefits to use of the output of the System (other than customary and reasonable differences in rates and terms and conditions of service for different classes of users). D-4 ME1 27165045v.1 Buyer will not use any of the types of contracts or arrangements described in A through D above without the prior written approval of PEAK and under PEAK's the written instruction, provided, however, that arrangements providing for the retail sale of Gas from the System to the general public (including private businesses as members of the general public) solely on the basis of rates or charges that are generally applicable and uniformly applied do not have to be reported to PEAK. 8. The undersigned has been duly authorized to execute and deliver this certificate on behalf of Buyer. Dated as of the day and year first above written. [BUYER] By Name: Its [SEAL] D-5 ME1 27165045M ANNEX A [insert Buyer's resolution in the form of Exhibit G] ANNEX B [TBD] D-6 ME1 27165045v.1 EXHIBIT E FORM OF RESET REMARKETING NOTICE [Date] Public Energy Authority of Kentucky Post Office Box 299 516 Highland Avenue Carrollton, Kentucky 41008 Attn: President and General Manager BP Energy Company 201 Helios Way Houston, TX 77079 To the Addressees: The undersigned, duly authorized representative of [ ] (the "Buyer"), is providing this notice (the "Reset Remarketing Election Notice") pursuant to the Gas Supply Contract, dated as of [ ] 1, 2018 (the "Supply Agreement"), between Public Energy Authority of Kentucky and the Buyer. Pursuant to Section 2.04 of the Gas Supply Contract, if the Available Discount for the Reset Period beginning on j 1, 20[I as finally determined does not equal or exceed the Minimum Discount, the Buyer has elected to have its Daily Contract Quantity for each Gas Day of such Reset Period remarketed. Given this [_] day of f 1, 20[ 1. [BUYER] By: Name: Title: E-1 ME1 27165045v.1 OPINION OF COUNSEL TO BUYER [dated as of Closing], 2018 Public Energy Authority of Kentucky Post Office Box 299 516 Highland Avenue Carrollton, Kentucky 41008 Attn: President and General Manager Morgan Stanley & Co. LLC 1585 Broadway New York, NY 10036 The Bank of New York Mellon Trust Company, N.A One Wall Street New York, NY 10286 BP Energy Company 201 Helios Way Houston, TX 77079 Re: Gas Supply Contract between Public Energy Authority of Kentucky and Buyer [Namel Ladies and Gentlemen: I am the duly appointed and acting _ for and have acted as counsel to the Board of [ lfor the ("Buyer") in connection with the Gas Supply Contract between Public Energy Authority of Kentucky ("PEAK") and the Buyer dated as of [ 11, 2018 (the "Gas Supply Contract'). PEAK acquired a supply of natural gas (the "Gas Supply") from BP Energy Company ("Supplier") pursuant to the Prepaid Natural Gas Purchase and Sale Agreement, dated as of [ 1, 2018, between Supplier and PEAK with the net proceeds of its Gas Supply Revenue Bonds 2018 Series B. PEAK will sell a portion of the Gas Supply to the Buyer under the Gas Supply Contract. Unless otherwise specified herein, all terms used but not defined in this opinion shall have the same meaning ascribed to them in the Gas Supply Contract. In connection with this opinion, I have assumed the genuineness of all signatures (other than the signatures of officers and directors of the Buyer) and the authenticity of all items submitted to me as originals and the conformity with originals of all items submitted to me as copies, and I am aware of no facts or circumstances that might indicate that these assumptions are not correct. I have further assumed the due authorization, execution and delivery of the Gas Supply Contract by PEAK. In connection with this opinion, I have examined originals or copies, certified or otherwise identified to my satisfaction, of the following: F-1 ME1 27165045v.1 (a) Resolution No. _, duly adopted by the governing body of Buyer on , 2018 (the "Resolution") authorizing Buyer to execute and deliver the Gas Supply Contract; (b) Executed counterparts of the Gas Supply Contract, together with each of the Exhibits thereto; and (c) Such other documents, information, and facts as are necessary for me to render the opinions contained herein. Based upon the foregoing, I am of the opinion that: i. The Buyer is a duly organized and validly existing under the laws of the state of (the "State"), and has the power and authority to deliver gas to retail gas customers desiring such service from the Buyer within its service area, to own its properties, to carry on its business as now being conducted, to execute, deliver, and perform the Gas Supply Contract. ii. The rates charged by the Buyer to its retail gas customers are currently not regulated by any state or federal regulatory authority. iii. The Buyer has lawful authority to own, operate, and manage its gas distribution utility and to fix and collect rates, fees and other charges in connection with such distribution system. iv. The governing body of the Buyer has duly authorized executed, and delivered the Gas Supply Contract and do not and will not require, subsequent to the execution of the Gas Supply Contract by the Buyer, any consent or approval of the governing body or any officers of the Buyer. V. The Gas Supply Contract constitutes the legal, valid, and binding obligation of the Buyer, enforceable in accordance with its terms. The Buyer complied with any applicable procurement requirements of State or local law prior to entering into the Gas Supply Contract. vi. The authorization, execution and delivery of the Gas Supply Contract and compliance with the provisions thereof (a) will not conflict with or constitute a breach of, or default under, any instrument relating to the organization, existence or operation of the Buyer, any commitment, agreement, bond resolution, bond, note, indenture or other instrument to which the Buyer is a party or by which it or its property is bound or affected, or any ruling, regulation, ordinance, judgment, order or decree to which the Buyer (or any of its officers in their respective capacities as such) is subject or any provision of the laws of the State relating to the F-2 ME 1 27165045v.1 Buyer and its affairs, and (b) will not result in, or require the creation or imposition of, any Lien on any of the properties or revenues of the Buyer pursuant to any of the foregoing. The foregoing assumes that all payments under the Gas Supply Contract are operating expenses of the Buyer's municipal utility system, as described in the Gas Supply Contract. vii. As of the date of the Gas Supply Contract, to the best of my knowledge after due inquiry, there is no pending or threatened action or proceeding against or affecting the Buyer which in any way would adversely affect the legality, validity, or enforceability of the Gas Supply Contract. viii. The foregoing opinion with respect to the enforceability of the Gas Supply Contract is subject to the effect of bankruptcy, insolvency, reorganization, moratorium, and other similar laws relating to or affecting creditors' rights generally, to the exercise of judicial discretion in the appropriate case, and to the limitations imposed by general principles of equity upon the specific enforceability of any of the remedies, covenants or other provisions of the Gas Supply Contract and any related documents and upon the availability of injunctive relief or other equitable remedies. My opinion as to enforceability is limited by standards of good faith, fair dealing, materiality, and reasonableness that may be applied by a court to the exercise of certain rights and remedies; limitations based on statutes or on public policy limiting a person's right to waive the benefits of statutory provisions or of a common law right; and limitations releasing a party from or indemnifying a party against liability for its own wrongful or negligent act when such release or indemnification is contrary to public policy. This opinion is rendered solely for use and benefit of the addressees in connection with the Gas Supply Contract and may not be relied upon other than in connection with the Gas Supply Contract, or by any other person or entity for any purpose whatsoever, nor may it be quoted in whole or in part or otherwise referred to in any document or delivered to any other person or entity without the prior written consent of the undersigned. This opinion is given as of the date hereof and no opinion is expressed as to the effect of future applicable laws or court decisions. I assume no obligation, and expressly disclaim any obligation, to update or supplement this opinion to reflect any facts or circumstances which may hereafter come to my attention or as to any change in laws which may hereafter occur. Very truly yours, F-3 ME1 27165045v.1 EXHIBIT G BUYER'S AUTHORIZING RESOLUTION RESOLUTION NO. [ORDINANCE][RESOLUTION] #. [ORDINANCE][RESOLUTION] OF THE [CITY][TOWN][AUTHORITY] OF , ("[CITY][TOWN]") (i) AUTHORIZING THE EXECUTION OF A GAS SUPPLY CONTRACT ("CONTRACT") WITH THE PUBLIC ENERGY AUTHORITY OF KENTUCKY ("PEAK") FOR THE PURCHASE OF NATURAL GAS FROM PEAK; (ii) ACKNOWLEDGING THAT PEAK WILL ISSUE ITS GAS SUPPLY REVENUE BONDS TO FUND THE PURCHASE OF A SUPPLY OF NATURAL GAS FROM BP ENERGY COMPANY ("BPEC"), WHICH GAS WILL BE USED TO MAKE DELIVERIES UNDER THE CONTRACT; AND (iii) FOR OTHER PURPOSES WHEREAS, the [City] [Town] [Authority] of owns and operates a municipal [gas distribution] or [electric] utility and is authorized by the provisions of to acquire, purchase, transport, store and manage supplies of gas necessary to meet the requirements of the residential, commercial and industrial customers served by such utility; and WHEREAS, the acquisition of secure, reliable and economic supplies of natural gas is necessary for the prudent and businesslike operation of the utility owned by the [City][Town], the continued economic development of its community and the promotion of the public health, safety and welfare; and WHEREAS, the Public Energy Authority of Kentucky which was formed pursuant to the Natural Gas Acquisition Authority Act, KRS 353.400 to 353.410., has offered to sell to the [City][Town], pursuant to the Contract, a supply of natural gas in the quantities on the dates set forth in the Contract, on the condition that PEAK issues its Gas Supply Revenue Bonds, 2018 Series A (the "Bonds") the proceeds of which will be used to acquire a supply of natural gas (the "Gas Supply") pursuant to a Prepaid Agreement with BPEC (the "Prepaid Agreement'); and WHEREAS, the [City] [Town] is a Government Agency, as such term is defined in the Gas Supply Contract, and desires to enter into the Contract with PEAK. NOW, THEREFORE, BE IT RESOLVED by the [City] [Town] of as follows: 1. The [City][Town] hereby approves the execution and delivery of the Gas Supply Contract, in substantially the form previously submitted to the [City][Town] and attached hereto as Exhibit A, pursuant to which the [City][Town] will agree to purchase specified quantities of natural gas from PEAK, such deliveries to be made on the dates, at the volumes and for the prices set forth in such Gas Supply Contract. 2. The [Mayor][Other Official] of the [City][Town] is hereby authorized to execute any such other closing documents or certificates which may be required or contemplated in G-1 ME1 27165045v.1 connection with the execution and delivery of the Contract or carrying out the intent and purpose of this resolution. 1"M ITS Attest: [SEAL] G-2 ME1 27165045M EXHIBIT H FORM OF REMARKETING NOTICE To: Public Energy Authority of Kentucky From: [ ], Participant Check the box to indicate type of remarketing. Daily Monthly Seasonal Remarketing Notice Remainder of the current Reset Period Period for which remarketing is requested: , 20_ through , 20_ Buyer requests that Seller remarket the amounts of Gas listed below pursuant to Article IX of the Agreement for the following reason(s): Delivery ii Daily r cQuantity subject to remarketing t) H-1 ME1 27165045v.1 HUTCHINSON UTILITIES COMMISSION Board Action Form &F,WK, Agenda Item: Approval of ISDA Agreements Presenter: Jeremy Carter Agenda Item Type: Time Requested (Minutes): 5 New Business Attachments: Yes BACKGROUND/EXPLANATION OF AGENDA ITEM: A component of the natural gas prepay purchase program requires that Hutchinson Utilities Commission convert a percentage of its existing "fixed price" natural gas commodity contracts into index based contracts. The mechanism utilized to preform these "swaps" are the ISDA 2002 Master Agreement, ISDA Schedule to the 2002 Master Agreement, ISDA Credit Support Annex and Paragraph 13, Elections and Variables. BOARD ACTION REQUESTED: Approval of ISDA documents Fiscal Impact: Reduction in base load costs Included in current budget: Budget Change: PROJECT SECTION: Total Project Cost: Remaining Cost: I DAV International Swaps and Derivatives Association, Inc. 2002 MASTER AGREEMENT May 18, 2018 datedas of ..................................................................... BP Energy Company Hutchinson Utility Commission .................................................................................... and .............................................................................. have entered and/or anticipate entering into one or more transactions (each a "Transaction") that are or will be governed by this 2002 Master Agreement, which includes the schedule (the "Schedule"), and the documents and other confirming evidence (each a "Confirmation") exchanged between the parties or otherwise effective for the purpose of confirming or evidencing those Transactions. This 2002 Master Agreement and the Schedule are together referred to as this "Master Agreement". Accordingly, the parties agree as follows:- 1. Interpretation (a) Definitions. The terms defined in Section 14 and elsewhere in this Master Agreement will have the meanings therein specified for the purpose of this Master Agreement. (b) hiconsistency. In the event of any inconsistency between the provisions of the Schedule and the other provisions of this Master Agreement, the Schedule will prevail. In the event of any inconsistency between the provisions of any Confirmation and this Master Agreement, such Confirmation will prevail for the purpose of the relevant Transaction. (c) Single Agreement. All Transactions are entered into in reliance on the fact that this Master Agreement and all Confirmations form a single agreement between the parties (collectively referred to as this "Agreement"), and the parties would not otherwise enter into any Transactions. 2. Obligations (a) General Conditions. (i) Each party will make each payment or delivery specified in each Confirmation to be made by it, subject to the other provisions of this Agreement, (it) Payments under this Agreement will be made on the due date for value on that date in the place of the account specified in the relevant Confirmation or otherwise pursuant to this Agreement, in freely transferable funds and in the manner customary for payments in the required currency. Where settlement is by delivery (that is, other than by payment), such delivery will be made for receipt on the due date in the manner customary for the relevant obligation unless otherwise specified in the relevant Confirmation or elsewhere in this Agreement. Copyright C 2002 by International Swaps and Derivatives Association, Inc. (iii) Each obligation of each party under Section 2(a)(i) is subject to (1) the condition precedent that no Event of Default or Potential Event of Default with respect to the other party has occurred and is continuing, (2) the condition precedent that no Early Termination Date in respect of the relevant Transaction has occurred or been effectively designated and (3) each other condition specified in this Agreement to be a condition precedent for the purpose of this Section 2(a)(iii). (b) Change of Account Either party may change its account for receiving a payment or delivery by giving notice to the other party at least five Local Business Days prior to the Scheduled Settlement Date for the payment or delivery to which such change applies unless such other party gives timely notice of a reasonable objection to such change. (c) Netting of Payments. If on any date amounts would otherwise be payable: — in the same currency; and (ii) in respect of the same Transaction, by each party to the other, then, on such date, each party's obligation to make payment of any such amount will be automatically satisfied and discharged and, if the aggregate amount that would otherwise have been payable by one party exceeds the aggregate amount that would otherwise have been payable by the other party, replaced by an obligation upon the party by which the larger aggregate amount would have been payable to pay to the other party the excess of the larger aggregate amount over the smaller aggregate amount. The parties may elect in respect of two or more Transactions that a net amount and payment obligation will be determined in respect of all amounts payable on the same date in the same currency in respect of those Transactions, regardless of whether such amounts are payable in respect of the same Transaction. The election may be made in the Schedule or any Confirmation by specifying that "Multiple Transaction Payment Netting" applies to the Transactions identified as being subject to the election (in which case clause (ii) above will not apply to such Transactions). If Multiple Transaction Payment Netting is applicable to Transactions, it will apply to those Transactions with effect from the starting date specified in the Schedule or such Confirmation, or, if a starting date is not specified in the Schedule or such Confirmation, the starting date otherwise agreed by the parties in writing. This election may be made separately for different groups of Transactions and will apply separately to each pairing of Offices through which the parties make and receive payments or deliveries. (d) Deduction or Withholding for Tax. (i) Cross -Up. All payments under this Agreement will be made without any deduction or withholding for or on account of any Tax unless such deduction or withholding is required by any applicable law, as modified by the practice of any relevant governmental revenue authority, then in effect. If a party is so required to deduct or withhold, then that party ("X") will:-- (1) promptly notify the other party ("Y") of such requirement; (2) pay to the relevant authorities the full amount required to be deducted or withheld (including the full amount required to be deducted or withheld from any additional amount paid by X to Y under this Section 2(d)) promptly upon the earlier of determining that such deduction or withholding is required or receiving notice that such amount has been assessed against Y; (3) promptly forward to Y an official receipt (or a certified copy), or other documentation reasonably acceptable to Y, evidencing such payment to such authorities; and ISDA® 2002 (4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to the payment to which Y is otherwise entitled under this A reement, such additi 1 1401 rVCCTVC4,71-J -I-Vn CC--d11-k-VFCA-11 I'l ILIMCILLAILLUUM I dAr;b, Miculcr UhhUbseu agairfse X or Y) will equai the full amount Y would have received had no such deduction or withholding been required. However, X will not be required to pay any additional amount to Y to the extent that it would not be required to be paid but for: — (A) the failure by Y to comply with or perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d); or (B) the failure of a representation made by Y pursuant to Section 3(0 to be accu and true unless such failure would not have occurred but for (I) any action taken by 11 taxing authority, or brought in a court of competent jurisdiction, after a Transaction axw=f kViii (,rn?r4W&g to this Agreement) or (II) a Change in Tax Law. (ii) Liability. If-.— (1) X is required by any applicable law, as modified by the practice of any relevant governmental revenue authority, to make any deduction or withholding in respect of which X would not be required to pay an additional amount to Y under Section 2(d)(i)(4); (3) a liability resulting from such Tax is assessed directly against X, I -T r"Nc--.M vrm' ev-si-,-�.: #MTCJ' MIL UU1411LJ 11W1 NiMesm-ilt inciTaing any related liability for penalties only if Y has failed to comply with or perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)). 3. Representations each date on which a Transaction is entered into and, in the case of the representations in Section 3(f), at all times until the termination of this Agreement). If any "Additional Representation" is specified in the Schedule or any Confirmation as applying, the party or parties specified for such Additional Representation will make and, if applicable, be deemed to repeat such Additional Representation at the time or times specified for such Additional Representation. (a) Basic Representations. ti) %, Status. It is duly organised and validly existing under the laws of the jurisdiction of its organisatia-n tr incorporation and, if relevant under such laws, in good standing; Powers. It has the power to execute this Agreement and any other documentation relating to this Agreement to which it is a party, to deliver this Agreement and any other documentation relating to this Agreement that it is required by this Agreement to deliver and to perform its obligations under this Agreement and any obligations it has under ani Credit Sugort Document to which it is a t)artv and has ISDAO 2002 (iii) No Violation or Conflict Such execution, delivery and performance do not violate or conflict with aw law i licable to it, ani rivisli mn6iixowur a ST—ri(JI'l i iti waiiiii Wolia*Ai W i d11j UTIMULALUI 1UNLIMMOV11 Oinuing O=F affecting it or any of its assets; (iv) Consents. All governmental and other consents that are required to have been obtained by it with resn 31t=MWA-t* in full force and effect and all conditions of any such consents have been complied with; and (v) Obligations Binding. Its obligations under this Agreement and any Credit Support Document to which it is a party constitute its legal, valid and binding obligations, enforceable in accordance with their re;ect ve terms Isub ect to a licable bank-ruitc,��msation ins v I. 'kb) Absence of Certain Events. No Event of Default or Potential Event of Default or, to its knowledge, Termination Event with respect to it has occurred and is continuing and no such event or circumstance would occur as a result of its entering into or -,rerforming its which it is a party. (c) Absence of Litigation. There is not pending or, to its knowledge, threatened against it, any of its Credit Support Providers or any of its applicable Specified Entities any action, suit or proceeding at law or in equity or before any, court. tribunaL—govemmental bodko a ,--gencii or official or, an�ie� c validity or enforceability against it of this Agreement or any Credit Support Document to which it is a party or its ability to perform its obligations under this Agreement or such Credit Support Document. (d) Accuracy of Specified Inforniation. All applicable information that is furnished in writing by or on behalf of it to the other = and is identified for the �,=,ose of this Section 3W, in the Schedule information, true, accurate and complete in every material respect. (e) Payer Tax Representation. Each representation specified in the Schedule as being made by it for the purpose of this Section 3(e) is accurate and true. (f) Payee Tax Represeistations. Each representation specified in the Schedule as being made by it for the purpose of this Section 3(f) is accurate and true. (g) No Agency. It is entering into this Agreement, including each Transaction, as principal and not as agent of any person or entity. 1MMMMz!U=- Each party agrees with the other that, so long as either party has or may have any obligation under this Agreement or under any Credit Support Document to which it is a party: — (a) Furnish Specified Iqforination. It will deliver to the other party or, in certain cases under clause (iii) below, to such government or taxing authority as the other party reasonably directs:— (i) any forms, documents or certificates relating to taxation specified in the Schedule or any Confirmation; ffR ISDA@ 2002 (iii) upon reasonable demand by such other party, any form mdocument that may berequired m reasonably requested in writing in order to allow such other party orits Credit Support Provider m make payment under this Agreement or any applicable Credit Support Document without any deduction or withholding for or on account of any Tax or with such deduction or withholding at a reduced rate (so long as the completion, execution or submission of such form v,document would not materially prejudice the legal or cnnuncmiu| position of the party in receipt of such dcmand), with any such /bno or document to be accurate and completed inumanner reasonably satisfactory tosuch other party and tube executed and /ubv delivered with any reasonably required certification, in each case by the date specified in the Schedule msuch Confirmation or, ifnone iospecified, as soon as reasonably practicable. (u) Maintain Authorlsations. It will use all reasonable efforts to maintain in full force and effect all consents uf any governmental or other authority that are required to be obtained by it with respect to this Agreement or any Credit Support Document tnwhich it isaparty and will use all mmsnoub|e efforts tnobtain any that may become necessary inthe future. (o) Comply With Lanm Itwill comply inall material respects with all applicable laws and orders towhich it may be subject if failure ov to comply would materially impair its ability to perform its obligations under this Agreement o,any Credit Support Document towhich itiamparty. (d) Tax Agreement. It will give notice of any failure of a representation made by it under Section 3(f) to be accurate and true promptly upon learning ofsuch failure. (o) Payment of Stamp Tax. Subject to Section l|.it will pay any Stamp Tax levied orimposed upon itnrin respect of its execution or performance of this Agreement by a jurisdiction in which it is incorporated, organised, managed and controlled or considered to have its seat, or where an Office through which it is acting for the purpose n[this Agreement is located ("Stamp Tax Jurisdiction"), and will indemnify the other party against any Stamp Tax levied or imposed upon the other party or in respect of the other party's execution or performance of this Agreement by any such Stamp Tax Jurisdiction which is not also a Stamp Tax Jurisdiction with respect tothe other party. 5. Events m7Default and Termination Events (u) Events oyDefault. The occurrence atany time with respect touparty or, if applicable, any Credit Support Provider of such party or any Specified Entity of such party of any of the following events constitutes (subject to Sections 5(u)and 6(o)(iv))unevent nfdefault (an "Event oyT)efau|t") with respect tosuch pany:— (i) Failure to Jay or Deliver. Failure by the party to make, when duu, any payment under this Agreement or delivery under Section 2(u)(i) or9(b)(i)(2) or (4) required to be made by it if such failure is not remedied on or before the first Local Business Day in the case of any such payment or the first Local Delivery Day in the case of any such delivery after, in each case, notice of such failure is given to the party; (ii) Breach oyAgremnent, Repudiation ofAgrez mnu (l) Failure by the party to comply with or perform any agreement or obligation (other than an obligation to make any payment under this Agreement or delivery under Section 2(a)(i) or 9(h)(i)(2) or (4) or to give notice of a Termination Event or any agreement or obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party in accordance with this Agreement if such failure is not remedied within 30 days after notice of such failure is given to the party; or (2) the party diaafDuno, disclaims, repudiates or rejects, in whole vrinpart, nrchallenges the validity of, this Master Agreement, any Confirmation executed and delivered hythat party orany ��l Transaction evidenced 6ysuch vConfirmation (or such action is taken by any person mentity appointed nrempowered moperate bmact uuits hehalf); (iii) Credit Support Default. (D Failure by the party many Credit Support Provider ofsuch party mcomply with m perform any agreement orobligation to be complied with orperformed hyit in accordance with any Credit Support Document if such failure is continuing after any applicable grace period has elapsed; (2) the expiration mtermination of such Credit Support Document or the failing or ceasing of such Credit Support Document, or any security interest granted by such party or such Credit Support Provider to the mbe, party pursuant to any such Credit Support Document, to he in full force and effect for the purpose of this Agreement (in each case other than in accordance with its terms) prior to the satisfaction of all obligations of such party under each Transaction to which such Credit Support Document relates without the written consent of the other party; nr (i4 Misrepresentation. A.representation (other than urepresentation under Sncduu](e) m3(f))made or repeated or deemed mhave been made o,repeated hythe party orany Credit Support Provider of such party in this Agreement or any Credit Support Document proves to have been incorrect or misleading in any material respect when made or repeated or deemed to have been made or repeated; M Default Under Specified Transaction. The party, any Credit Support Provider of such party or any applicable Specified Entity of such party:— (U defaults (other than hyfailing »o make udelivery) under uSpecified Tramuodom or any credit support arrangement relating to a Specified Trmunmctkm and, u8c, giving effect to any applicable muiuo requirement or grace period, such default results in a liquidation of, an acceleration v[obligations under, orunearly termination of, that Specified Transaction; (2) defaults, after giving effect tuany applicable notice requirement orgrace period, inmaking any payment due on the last payment or exchange date of, or any payment on early termination of, a Specified Transaction (or, if there iaonapplicable notice requirement nrgrace period, such default continues for atleast one Local Business Day); (3) defaults in making any delivery due under (including any delivery due on the last delivery or exchange date n0 n Specified 7mv000duo or any credit support arrangement relating to u Specified Transaction and, after giving effect toany applicable notice requirement o,grace period, such default results in a liquidation of, an acceleration of obligations under, or an early termination of, all transactions outstanding under the documentation applicable tnthat SpxcifiudTransaction; nr (4) disaffirms, disclaims, repudiates or rejects, in whole or in part, or challenges the validity of, a Specified Transaction o,any credit support arrangement relating /o u Specified Tumoumdnn that is, ineither case, unnfinncdorevidenced hyudocument orother confirming evidence executed and delivered hythat party, Credit Support Provider or5pecificdEntity (or such action iotaken hy any person orentity appointed mrempowered tooperate itnract ooits bohmif); (vi) Cross -Default If "Cross -Default" is specified inthe Schedule as applying mthe party, the occurrence orexistence o�-- (1) udefault, event ofdefault mother similar condition mevent (however described) io respect of such party, any Credit Support Provider ofsuch party many applicable Specified Entity of such party under one or more agreements or instruments relating to Specified Indebtedness of any of them (individually or collectively) where the aggregate principal amount of such agreements or instruments, either alone or together with the amount, if any, referred to in clause (2) below, is not less than the applicable Threshold Amount (as specified in the Schedule) which has resulted in such Specified Indebtedness becoming, or becoming capable at such time of being doo|xoed, due and payable under such uQneomcnm or instruments beOuvo it would otherwise have been due and payable; or C0 u default by such purty, such Credit Support Provider or such Specified Entity (individually or collectively) in making one or more payments under such agreements or instruments unthe due date for payment (after giving effect uoany applicable notice requirement m grace period) in an aggregate amount, either alone or together with the amount, if any, referred to in clause (|) above, ofnot less than the applicable Threshold Amount; (viV Bankruptcy. The purty, any Credit Support Provider of such party or any applicable Specified Entity of such party: — Nis dissolved (other than pursuant to a consolidation, amalgamation mmerger); (2)becomes insolvent or is unable to pay its debts or fails or admits inwriting its inability generally to pay its debts as they become due; (3) makes a general assignment, arrangement or composition with or for the benefit of its creditors; (4)(A) institutes or has instituted against it, by a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or organisation or the jurisdiction of its boud or home office, u proceeding seeking m judgment of insolvency or bankruptcy o, any other n:|ic[ under any bankruptcy or insolvency law or other similar law affecting creditors' hghoo, or a petition is presented for its winding -up o, liquidation hyitorsuch regulator, supervisor orsimilar official, or (B) has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or u petition in presented for its winding -up or Uquidation, and such proceeding or petition is instituted or presented by a person or entity not described in clause (A) above and either (I) results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding -up or liquidation or imnot dismissed, discharged, stayed or restrained in each case within 15 days of the institution or presentation thereof, (5) has a resolution passed for its winding -up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger); (6) ooubm or becomes subject to the appointment of an administrator, provisional liquidator, conservator, n,udvor, tmstwo, custodian o,other similar official for ito,for all "rsubstantially all its assets; (7) has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all nrsubstantially all its assets and such secured party maintains possession, orany such pmc000 is not diomiasod, discharged, stayed or restrained, in each case within 15 days thereafter; (8)causes oriasubject tuany event with respect tuitwhich, under the applicable laws o[ any jurisdiction, has onanalogous effect toany ofthe events opucificdinclauses (|)to(7)above (imuiuni,o); or (9) ,mbeo any action in furtherance of, or indicating its consent to, uppm,ui of, or acquiescence in, any nfthe foregoing acts; ^r (viii) Merger WithoutAssumption. The party or any Credit Support Provider of such party consolidates 2Lam--aIgamates with, or merges reincorporates or reconstitutes into or as, another entity and, at the time of such consolidation, amalgamation, merger, transfer, reorganisation, reincorporation or reconstitution:— (1) the resulting, surviving or transferee entity fails to assume all the obligations of such party or such Credit Su!i9ort Provider under this or its predecessor was a party; or r2) the benefits of any Credit Support Document fail to extend (without the consent of the other -alki) to the iverformance bVA such resulting. survivin or r9=4rwy-o4g, *f iV under this Agreement. (b) Termination Events. The occurrence at any time with respect to a party or, if applicable, any Credit Support Provider of such party or any Specified Entity of such party of any event specified below constitutes (subject to Section 5(c)) an Illegality if the event is specified in clause (i) below, a Force Majeure Event if the event is specified in clause (ii) below, a Tax Event if the event is specified in clause (iii) below, a Tax Event Upon Merger if the event is specified in clause (iv) below, and, if specified to be applicable, a Credit Event Upon Merger if the event is specified pursuant to clause (v) below or an Additional Termination Event if the event is specified pursuant to clause (vi) below:— (i) Illegality. After giving effect to any applicable provision, disruption fallback or remedy specified t�e of - payment, delivery or compliance were required on that day (in each case, other than as a result of a breach by the party of Section 4(b (1) for the Office through which such party (which will be the Affected Party) makes and receives payments or deliveries with respect to such Transaction to perform any absolute or contingent obligation to make a payment or delivery in respect of such Transaction, to receive a payment or delivery in respect of such Transaction or to comply with any other material provision of this Agreement relating to such Transaction; or (2) for such party or any Credit Support Provider of such party (which will be the Affects - party or Credit Support Provider has under any Credit Support Document relating to su, Transaction I to rece ve a wiment or deli vil, u4i r i' i1rct-t-flitra", -I. (ii) Force Majeure Event After giving effect to any applicable provisi on, disruption fallback or remedv s i ecified in, or i ursuaii tiW , J.Ji ji I it-im-plor'll. , 09&kA - - *III tidau or J (1) the Office through which such party (which will be the Affected Party) makes and receivm �zyixaexts +r 4eliveries wM reslect tt suck Tr27.s2cti#n is 7revciite:i fr+m perfvrming an), a'*sYl)Ji :tr contingent obligation to make a payment or delivery in respect of such Transaction, fi- receiving a payment or delivery in respect of such Transaction or from complying with any otl payment, delivery or compliance were required on that day), or it becomes impossible 161 AIT.T019-11-IN impracticable for such Office so to perform, receive or comply (or it would be impossible or impracticable for such Office so to perform, receive or comply if such payment, delivery or compliance were required on that day); or (2) such party or any Credit Support Provider of such party (which will be the Affected Party) is prevented from performing any absolute or contingent obligation to make a payment or delivery which such vartyj or Credit SMort Provider has under anki such Transaction, from receiving a payment or delivery under such Credit Support Document or .......... -F&4lium Support Provider- as n "S X reasonable efforts (which will not require such party or Credit Support Provider to incur a loss, other than immaterial, incidental expenses), overcome such prevention, impossibility or impracticability; (iii) Tax Event Due to (1) any action taken by a taxing authority, or brought in a court of competent iurisdiction after a Transaction is entered into —(regardless of whether *Y respect to a party to this Agreement) or (2) a Change in Tax Law, the party (which will be the Affected P: Will nr there is a substantial likelihood that 'iv) Tax Event Upon Merger. The party (the "Burdened Party") on the next succeeding Scheduled Settlement Date will either (1) be required to pay an additional amount in respect of an Indemniflable Tax under Section 2(d)(i)(4) (except in respect of interest under Section 9(h)) or (2) receive a payment from )V�d Wi 11 'l il 4s Wli 111ili1ig 101111 i i'll"All www"miWil-9, Imm 'Il 11111 " 11,IN .......... . as of the date of this Master Agreement) to, or reorganising, reincorporating or reconstituting into or as, another entity (which will be the Affected Party) where such action does not constitute a Merger Without Assumption; (v) Credit Event Upon Merger. If "Credit Event Upon Merger" is specified in the Schedule as 91,Ilyixg t+ tke Xzky, 2. :Vesi),-Azt�i Ev(:xt (m-iefixei )ieltw) trccYrs witk res�ect tq sych -.paKy,—vNy Cre4it Support Provider of such party or any applicable Specified Entity of such party (in each case, "X") and such Designated Event does not constitute a Merger Without Assumption, and the creditworthiness of X or, if awlicable. the successor, surviving or Support Document, is materially weaker immediately after the occurrence of such Designated Event than that of X immediately prior to the occurrence of such Designated Event (and, in any such event, such party or its successor, surviving or transferee entity, as appropriate, will be the Affected Party). A "Designated Event" with respect to X means that:— (1) X consolidates or amalgamates with, or merges with or into, or transfers all or substantia 43:1 �01 I � date of this Master Agreement) to, or reorganises, reincorporates or reconstitutes into or as, another entity; (2) any person, related group of persons or entity acquires directly or indirectly the beneficial 41.1aXVj.0 . I . 1- NOW�- WN19111#1 (3) X effects any substantial change in its capital structure by means of the issuance, 0 0-6 W - Ohl (vi) Additional Termination Event If any "Additional Termination Event" is specified in the Schedule or any Confirmation as applying, the occurrence of such event (and, in such event, the Affected Party or Affected Parties will be as specified for such Additional Termination Event in the Schedule or such Confirmation). (c) Hierarchy of Events. (i) An event or circumstance that constitutes or gives rise to an Illegality or a Force Majeure Event will not, for so long as that is the case, also constitute or give rise to an Event of Default under Section delivery or a failure to comply with any other material provision of this Agreement or a Credit Support Document, as the case may be. (iii) If an event or circumstance which would otherwise constitute or give rise to a Force Majeure Event also constitutes an Illegality, it will be treated as an Illegality, except as described in clause (ii) above, and not a Force Majeure Event. (d) Deferral of Payments and Deliveries During Waiting Period. If an Illegality or a Force Majeure Event has occurred and is continuing with respect to a Transaction, each payment or delivery which would otherwise be required to be made under that Transaction will be deferred to, and will not be due until:— (i) the first Local Business Day or, in the case of a delivery, the first Local Delivery Day (or the first day that would have been a Local Business Day or Local Delivery Day, as appropriate, but for the the case may be; or a Local elivery Day, the first following day that is a Local Business Day or Local Delivery Day, as appropriate. R OWN"Wimp.111, WON 10 IS A® 2002 compliance with the relevant provision by the Affected Party's head mhome office and (iv) the Affected Iarty'ohead or home office fails so to perform or comply due to the occurrence of an event or circumstance which would, if that head or home office were the Office through which the Affected Party makes and receives payments and deliveries with respect to the relevant Transaction, constitute orgive due to uoIllegality u,aForce 8&ajcun:Event, and such failure would otherwise constitute an Event of Default under Section 5(a)(i) or 5(a)(iii)(1) with respect to such party, then, for solong asthe relevant event or circumstance continues to exist with respect to both the Office referred to in 8uobvn j(h)(i)(l) or5(b)(ii)(|), oothe case may be, and the Affected yarty`mhead orhome office, such failure will not constitute anEvent ofDefault under Section 5(a)(i)or5(a)(iii)(l). w. Early Termination; Close -Out Netting (a) Right $mTerminate Following Event of Default lfatany time uuEvent ufDefault with respect tooparty (the "Defaulting Party") has occurred and is then continuing, the other party (the "Non -defaulting Party") may, by not more than 2Odays notice mthe Defaulting Party specifying the relevant Event ofDefault, designate aday not earlier than the day such notice iseffective ^m anEarly Termination Date in respect of all outstanding Transactions. If, however, "Automatic Early Termination" is specified in the Schedule as applying to u party, tboo an Early Termination Date in respect of all outstanding Transactions will occur immediately upon the occurrence with respect tosuch party o[aoEvent ofDefault specified inSection 5(m)(vii)(l). (3)^ (5).(6)or, ou the extent analogous thereto, (8),and aoofthe time immediately preceding the institution ofthe relevant proceeding orthe presentation ofthe no|mmm petition upon the occurrence with respect to such party of an Event of Default specified in Section 5(a)(vii)(4)or, tothe extent analogous thereto, (8). (W Right mTerminate Following Termination Event. W Notice. ITaTermination Event other than uForce M8ajnur Event occurs, uuAffected Party will, promptly upon becoming aware ofit, notify the other party, specifying the nature ofthat Termination Event and each Affected Tmnuuohoo, and will also give the other puny such other information nhom that Termination Event as the other party may reasonably require. If a Force Majeure Event occurs, each party will, promptly upon becoming ^wmn: of it, use all n:aaooub|e efforts to notify the other party, specifying the nut"n, of that Force Majeunc Event, and will also give the other party such other information about that Force DYajcorcEvent oathe other party may reasonably require. VV Transfer to Avoid Termination Event, IfuTax Event occurs and there bonly one Affected Party, mifaTax Event Upon Merger occurs and the Burdened Party iathe Affected Party, the Affected Party will, as a condition to its right to designate an Early Termination Date under Section 6(b)(iv), use all reasonable efforts (which will not ,cqnim, such party to incur u |mym, mbcr than immaterial, incidental expenses) to transfer within 2Odays after itgives notice under Section 6(b)(i)all its rights and obligations under this Agreement in nwpout of the Affected 7nanmuohuna to another of its 0Oiccu or Affiliates so that such Termination Event ceases uoexist. If the Affected Party ionot able tnmake such utransfer itwill give notice tuthe other party »othat effect within such 20 day period, whereupon the other party may effect such transfer within 30 6uyo after the notice imgiven under Section 6(h)(i). Any such transfer hyaparty under this Section 6(b)(ii) will he subject to and conditional upon the prior written consent of the other party, which consent will not be withheld if such other party's policies in effect atsuch time would permit it toenter into transactions with the transferee o^the terms proposed. (iii) Two Affected Pardcs. l[uTax Event occurs and there are two Affected Parties, each party will use all rcamoouh|e cObrtm to reach agreement within 30 days after notice of such occurrence is given under Section 6(h)(i)toavoid that Termination Event. I ISDAS 2002 (iv) Right to Terminate. (1) If. — 'A) a transfer under Section 6(b)(ii) or an agreement under Section 6(b)(iii), as tG ia after an Affected Party gives notice under Section 6(b)(i); • I IXTORITs Moi ST 111TWIRM - - - I the Burdened Party in the case of a Tax Event Upon Merger, any Affected Party in the case • a Tax Event or an Additional Termination Event if there are two Affected Parties, or the • Party in the case of a Credit Event Upon Merger or an Additional Termination Event if there is only one Affected Party may, if the relevant Termination Event is then continuing, by not more than 20 dMs, otice to the othe iql r jart�, desi�natl i ?rlie • to PRIGN ism ON olid"KeWl I Val IMIT4 N FEW, e i (2) If at any time an Illegality or a Force Majeure Event has occurred and is then continuing and any applicable Waiting Period has expired: — (A) Subject to clause (B) below, either party may, by not more than 20 days notice the other 12:vty�* respect o less an all Affected Transactions. Upon receipt of a notice designat Early Termination Date in respect of less than all Affected Transactions, the other pa bd111 - C tdJ Ub d io , 00- W WiN W, il 416LO44 W., iw �w other Affected •: Ll Zdl IJ I V1 111111dLIU11 (B) An Affected Party (if the Illegality or Force Majeure Event relates to performan w� payment or delivery under, or to compliance with any other material provision of, t relevant Credit Support Document) will only have the right to design7alte an Ea Termination Date under Section 6(b)(iv)(2)(A) as a result of an Illegallityund Sectitx 5()r)(i)(2) rr--2 Forro- M,2jcurg Event 274er Sectii#,A • fo,llqwihg the In . designation by the other party of an Early Termination Date, pursuant Section 6(b)(iv)(2)(A), in respect of less than all Affected Transactions. (C) Effect of Designation. 0) If notice designating an Early Termination Date is given under Section 6(a) or 6(b), the Early Termination Date will occur ,• the •. so designated, whether • not the relevant Event of Default or • Event is then continuing. 1 u*-1 "Aft'LOwl' Im wig YA 'LiJ I'll 10140118 P- 12 ISDAO 2002 (d) Calculations; Payment Date. (i) Statement. On or as soon as reasonably practicable following the occurrence of an Early Termination Date, each party will make the calculations on its part, if any, contemplated by Section 6(e) and will provide to the other party a statement (1) showing, in reasonable detail, such calculations (including any quotations, market data or information from internal sources used in making such calculations), (2) specifying (except where there are two Affected Parties) any Early Termination Amount payable and (3) giving details of the relevant account to which any amount payable to it is to be paid. In the absence of written confirmation from the source of a quotation or market data obtained in determining a Close-out Amount, the records of the party obtaining such quotation or market data will be conclusive evidence of the existence and accuracy of such quotation or market data. (i i) Payment Date. An Early Termination Amount due in respect of any Early Termination Date will, together with any amount of interest payable pursuant to Section 9(h)(ii)(2), be payable (1) on the day on which notice of the amount payable is effective in the case of an Early Termination Date which is designated or occurs as a result of an Event of Default and (2) on the day which is two Local Business Days after the day on which notice of the amount payable is effective (or, if there are two Affected Parties, after the day on which the statement provided pursuant to clause (i) above by the second party to provide such a statement is effective) in the case of an Early Termination Date which is designated as a result of a Termination Event. (e) Payments on Early Termination. If an Early Termination Date occurs, the amount, if any, payable in respect of that Early Termination Date (the "Early Termination Amount") will be determined pursuant to this Section 6(e) and will be subject to Section 6(f). (i) Events of Default. If the Early Termination Date results from an Event of Default, the Early Termination Amount will be an amount equal to (1) the sum of (A) the Termination Currency Equivalent of the Close-out Amount or Close-out Amounts (whether positive or negative) determined by the Non - defaulting Party for each Terminated Transaction or group of Terminated Transactions, as the case may be, and (B) the Termination Currency Equivalent of the Unpaid Amounts owing to the Non -defaulting Party less (2) the Termination Currency Equivalent of the Unpaid Amounts owing to the Defaulting Party. If the Early Termination Amount is a positive number, the Defaulting Party will pay it to the Non -defaulting Party; if it is a negative number, the Non -defaulting Party will pay the absolute value of the Early Termination Amount to the Defaulting Party. (ii) Termination Events. If the Early Termination Date results from a Termination Event:— (1) One Affected Party. Subject to clause (3) below, if there is one Affected Party, the Early Termination Amount will be determined in accordance with Section 6(e)(i), except that references to the Defaulting Party and to the Non -defaulting Party will be deemed to be references to the Affected Party and to the Non -affected Party, respectively. (2) Two Affected Parties. Subject to clause (3) below, if there are two Affected Parties, each party will determine an amount equal to the Termination Currency Equivalent of the sum of the Close-out Amount or Close-out Amounts (whether positive or negative) for each Terminated Transaction or group of Terminated Transactions, as the case may be, and the Early Termination Amount will be an amount equal to (A) the sum of (I) one-half of the difference between the higher amount so determined (by party "X") and the lower amount so determined (by party "Y") and (II) the Termination Currency Equivalent of the Unpaid Amounts owing to X less (B) the Termination Currency Equivalent of the Unpaid Amounts owing to Y. If the Early Termination Amount is a positive number, Y will pay it to X; if it is a negative number, X will pay the absolute value of the Early Termination Amount to Y. 13 ISDA@ 2002 (3) Mid -Market Events. If that Termination Event is an Illegality or a Force Majeure Event, then the Early Termination Amount will be determined in accordance with clause (1) or (2) above, as appropriate, except that, for the purpose of determining a Close-out Amount or Close-out Amounts, the Determining Party will: — (A) if obtaining quotations from one or more third parties (or from any of the Determining Party's Affiliates), ask each third party or Affiliate (I) not to take account of the current creditworthiness of the Determining Party or any existing Credit Support Document and (II) to provide mid -market quotations; and (B) in any other case, use mid -market values without regard to the creditworthiness of the Determining Party. (iii) Adjustment for Bankruptcy. In circumstances where an Early Termination Date occurs because Automatic Early Termination applies in respect of a party, the Early Termination Amount will be subject to such adjustments as are appropriate and permitted by applicable law to reflect any payments or deliveries made by one party to the other under this Agreement (and retained by such other party) during the period from the relevant Early Termination Date to the date for payment determined under Section 6(d)(ii). (iv) Adjushnent for Illegality or Force Majeure Event, The failure by a party or any Credit Support Provider of such party to pay, when due, any Early Termination Amount will not constitute an Event of Default under Section 5(a)(i) or 5(a)(iii)(1) if such failure is due to the occurrence of an event or circumstance which would, if it occurred with respect to payment, delivery or compliance related to a Transaction, constitute or give rise to an Illegality or a Force Majeure Event. Such amount will (1) accrue interest and otherwise be treated as an Unpaid Amount owing to the other party if subsequently an Early Termination Date results from an Event of Default, a Credit Event Upon Merger or an Additional Termination Event in respect of which all outstanding Transactions are Affected Transactions and (2) otherwise accrue interest in accordance with Section 9(h)(ii)(2). (v) Pre -Estimate. The parties agree that an amount recoverable under this Section 6(c) is a reasonable pre -estimate of loss and not a penalty. Such amount is payable for the loss of bargain and the loss of protection against future risks, and, except as otherwise provided in this Agreement, neither party will be entitled to recover any additional damages as a consequence of the termination of the Terminated Transactions. (0 Set -Off. Any Early Termination Amount payable to one party (the "Payee") by the other party (the "Payer"), in circumstances where there is a Defaulting Party or where there is one Affected Party in the case where either a Credit Event Upon Merger has occurred or any other Termination Event in respect of which all outstanding Transactions are Affected Transactions has occurred, will, at the option of the Non -defaulting Party or the Non - affected Party, as the case may be ("X") (and without prior notice to the Defaulting Party or the Affected Party, as the case may be), be reduced by its set-off against any other amounts ("Other Amounts") payable by the Payee to the Payer (whether or not arising under this Agreement, matured or contingent and irrespective of the currency, place of payment or place of booking of the obligation). To the extent that any Other Amounts are so set off, those Other Amounts will be discharged promptly and in all respects. X will give notice to the other party of any set-off effected under this Section 6(fl. For this purpose, either the Early Termination Amount or the Other Amounts (or the relevant portion of such amounts) may be converted by X into the currency in which the other is denominated at the rate of exchange at which such party would be able, in good faith and using commercially reasonable procedures, to purchase the relevant amount of such currency. 14 ISDA@ 2002 If an obligation is unascertained, X may in good faith estimate that obligation and set off in respect of the estimate, subject to the relevant party accounting to the other when the obligation is ascertained. Nothing in this Section 6(f) will be effective to create a charge or other security interest. This Section 6(f) will be without reludice and in addition to aw riiht of set-o6 offset, combination of accounts, lien, ri 041 0-1 -11=TPITO - W i &Wti ny&;Pl-f-SrfrnTUFTY1,TfC::IIIY-FCqLnCnICIf�-UlI Mllul I UIU ?d1LJ IN dL aftJ LIM�1_1111CI If ISO CHUCYcl. 'III STE)j cut klincTLYr"r operation of law, contract or otherwise). rAMMEM111 =M MI i,bligation in or under this Agreement may be transferred (whether by way of security or otherwise) by either party without the prior written consent of the other party, except that:— r, a) a party may make such a transfer of this Agreement pursuant to a consolidation or amalgamation with, or merger with or into, or transfer of all or substantially all its assets to, another entity (but without prejudice to any other right or remedy under this Agreement); and (b) a party may make such a transfer of all or any part of its interest in any Early Termination Amount payabl4 tt,t�y dxrv?gaN associated with that interest pursuant to Sections 8, 9(h) and 11. Any purported transfer that is not in compliance with this Section 7 will be void. 8. Contractual Currency (a) Payment in the Contractual Currency. Each payment under this Agreement will be made in the relevant currency specified in this Agreement for that payment (the "Contractual Currency"). To the extent permitted by applicable law, any obligation to make payments under this Agreement in the Contractual Currency will not be I milli ININIMMIN 110RIONOW 11 IMI 111"M11111111141 W1 M UWI 'Jol?v I IJMWWJJ1W�.I COAQ., Immix W a ount in the Contractual Currency of all amounts payable in respect of this Agreement. If for any reason the amount in the Contractual Currency so received falls short of the amount in the Contractual Currency payable in resiect of this Aireement, the wrti reouired to make the imment will to the extent permitted 6 aj Currenc�L.qayable in res this A reement, the prty receiving the zayment wi such excess. (b) Judgment& To the extent permitted by applicable law, if any judgment or order expressed in a currency other than the Contractual Currency is rendered (i) for the payment of any amount owing in respect of this If PUICI P-drLJ-LIFC WIPIPLUIL '@it any sMTr1LV?WM?RLM Cithtmoy2l Cyne4cy rece,�f iy sych 1,2rty 2k. 2-v*zseqYei%ce itX;xif ih sychither eyrrezey arit will mfyni U. *-4-aw #if re.r4weU�,5mm Atmpwi��- �,� • paid in such other currency if such shortfall or such excess arises or results from any variation between the rate of Moi AM rM I "44AW611 W-WO&W M 111 ".-Mi'Ll, * am ••- W I -994111MI4111MI 15 ISDA@ 2002 of "I ' _fv&wlyfly FMSnTf7UII-ITTIn tWJ-11 iL it' it t 3, 1"ItrXA'sn the Contractual Currency with the amount of the currency of the judgment or order actually received by such party. (c) Separate Indemnities. To the extent permitted by applicable law, the indemnities in this Section 8 constitute separate and independent obligations from the other obligations in this Agreement. mL amitsT separate and independent causes of action, will apply notwithstanding any indulgence granted by the party to which sums payable in respect of this Agreement. (d) Evideiice of Loss. For the purpose of this Section 8, it will be sufficient for a party to demonstrate that it would have suffered a loss had an actual exchange or purchase been made. l KHMTIRITITI MI, r ,a) Entire Agreement. This Agreement constitutes the entire agreement and understanding of the parties with respect to its subject matter. Each of the parties acknowledges that in entering into this Agreement it has not relied on any oral or written representation, warranty or other assurance (except as provided for or referred to in thiw nothing in this Agreement will limit or exclude any liability of a party for fraud. (b) Amendments. An amendment, modification or waiver in respect of this Agreement will only be effective if in writing (including a writing evidenced by a facsimile transmission) and executed by each of the parties or confirmed by an exchange of telexes or by an exchange of electronic messages on an electronic messaging system. (c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and 6(c)(ii), the obligations of the parties under this Agreement will survive the termination of any Transaction. (d) Remedies Cumuladve. Except as provided in this Agreement, the rights, powers, remedies and privileges provided in this Agreement are cumulative and not exclusive of any rights, powers, remedies and privileges provided by law. (e) Counterparts and Confirmations. (i) This Agreement (and each amendment, modification and waiver in respect of it) may be executed and delivered in counterparts (including by facsimile transmission and by electronic messaging system), each of which will be deemed an original. (i i) The parties intend that they are legally bound by the terms of each Transaction from the moment they agree to those terms (whether orally or otherwise). A Confirmation will be entered into as soon as practicable and may be executed and delivered in counterparts (including by facsimile transmission) or be created by an exchange of telexes, by an exchange of electronic messages on an electronic messaging system or by an exchange of e-mails, which in each case will be sufficient for all purposes to evidence a binding supplement to this Agreement. The parties will specify therein or through another effective means that any such counterpart, telex, electronic message or e-mail constitutes a Confirmation. 40 No Waiver of Right& A failure or delay in exercising any right, power or privilege in respect of this 1 Agreement will not be presumed to operate as a waiver, and a single or partial exercise of any right, power or [virivilege will not be presumed to preclude any subsequent or further exercise, of that right, power or privilege or the exercise of any other right, power or privilege. (g) Headhigs. The headings used in this Agreement are for convenience of reference only and are not to affect the construction of or to be taken into consideration in interpreting this Agreement. 16 ISDAS 2002 (h) Interest arid Compensation. (i) Prior to Early Termination. Prior to the occurrence or effective designation of an Early Termination Date in respect of the relevant Transaction: — (I) Interest on Defaulted Payments. If a party defaults in the performance of any payment obligation, it will, to the extent permitted by applicable law and subject to Section 6(c), pay interest (before as well as after judgment) on the overdue amount to the other party on demand in the same currency as the overdue amount, for the period from (and including) the original due date for payment to (but excluding) the date of actual payment (and excluding any period in respect of which interest or compensation in respect of the overdue amount is due pursuant to clause (3)(B) or (C) below), at the Default Rate. (2) Compensation for Defaulted Deliveries. If a party defaults in the performance of any obligation required to be settled by delivery, it will on demand (A) compensate the other party to the extent provided for in the relevant Confirmation or elsewhere in this Agreement and (B) unless otherwise provided in the relevant Confirmation or elsewhere in this Agreement, to the extent permitted by applicable law and subject to Section 6(c), pay to the other party interest (before as well as after judgment) on an amount equal to the fair market value of that which was required to be delivered in the same currency as that amount, for the period from (and including) the originally scheduled date for delivery to (but excluding) the date of actual delivery (and excluding any period in respect of which interest or compensation in respect of that amount is due pursuant to clause (4) below), at the Default Rate. The fair market value of any obligation referred to above will be determined as of the originally scheduled date for delivery, in good faith and using commercially reasonable procedures, by the party that was entitled to take delivery. (3) Interest on Deferred Payments. If. — (A) a party does not pay any amount that, but for Section 2(a)(iii), would have been payable, it will, to the extent permitted by applicable law and subject to Section 6(c) and clauses (B) and (C) below, pay interest (before as well as after judgment) on that amount to the other party on demand (after such amount becomes payable) in the same currency as that amount, for the period from (and including) the date the amount would, but for Section 2(a)(iii), have been payable to (but excluding) the date the amount actually becomes payable, at the Applicable Deferral Rate; (B) a payment is deferred pursuant to Section 5(d), the party which would otherwise have been required to make that payment will, to the extent permitted by applicable law, subject to Section 6(c) and for so long as no Event of Default or Potential Event of Default with respect to that party has occurred and is continuing, pay interest (before as well as after judgment) on the amount of the deferred payment to the other party on demand (after such amount becomes payable) in the same currency as the deferred payment, for the period from (and including) the date the amount would, but for Section 5(d), have been payable to (but excluding) the earlier of the date the payment is no longer deferred pursuant to Section 5(d) and the date during the deferral period upon which an Event of Default or Potential Event of Default with respect to that party occurs, at the Applicable Deferral Rate; or (C) a party fails to make any payment due to the occurrence of an Illegality or a Force Majeure Event (after giving effect to any deferral period contemplated by clause (B) above), it will, to the extent permitted by applicable law, subject to Section 6(c) and for so long as the event or circumstance giving rise to that Illegality or Force Majeure Event continues and no Event of-1—elault or Potential Event of Default with respect to that pa has occurred and is continuing, pay interest (before as well as after judgment) on t • a Tkkat.. NERS "11 MINMITIMMMW 0. 6 • VNP)UILJ' *CCIIN k7rill, CAMMIT11 anj periou in resp interest • compensation in respect • the overdue amount is due • t clause above), at the Applicable Deferral Rate. (4) Compensation for Deferred Deliveries. If: — (A) a •, w• not perform any obligation that, • for Section 2(a)(iii), would haM been required to be settled •. delivery; I Mzm�� (C) a party fails to make a delivery due to the occurrence of an Illegality or a Force Majeure Event at a time when any applicable Waiting Period has expired, (ii) Early Termination. Upon the occurrence or effective designation of an Early Termination Date in respect • a Transaction:— F ,J) Unpaid Aniounts. For the purpose • • an Unpaid Amount in respect • tk- relevant Transaction, and to the extent permitted by applicable law, interest will accrue on the '&; fqAaaar�4A'mkwfirg if required to be settled by delivery included in such determination in the same currency as that amount, for the period from (and including) the date the relevant obligation was (or would have been but for Section 2(a)(iii) or 5(d)) required to have been performed to (but excluding) the relevant Early Termination Date, at the Applicable Close-out Rate. (2) Interest on Early Termination Aniounts. If an Early Termination Amount is due in respect of such Earlv together with interest (before as well as after judgment) on that amount in the Termination date the amount is paid, at the Applicable Close-out Rate. (iii) Interest Calculation. Any interest pursuant to this Section 9(h) will be calculated on the basis of daily compounding and the actual number of days elapsed. 18 ISDA@ 2002 (a) If Section 10(a) is specified in the Schedule as applying, each party that enters into a Transaction through an Office other than its head or home office represents to and agrees with the other party that, notwithstanding the place of booking or its jurisdiction of incorporation or organisation, its obligations are the same in terms of recourse against it as if it had entered into the Transaction through its head or home office, except that a party will not have recourse to the head or home office of the other party in respect of any payment or delivery deferred pursuant to Section 5(d) for so long as the payment or delivery is so deferred. This representation and agreement will be deemed to be repeated by each party on each date on which the parties enter into a Transaction. (b) If a party is specified as a Multibranch Party in the Schedule, such party may, subject to clause (c) below, enter into a Transaction through, book a Transaction in and make and receive payments and deliveries with respect to a Transaction through any Office listed in respect of that party in the Schedule (but not any other Office unless otherwise agreed by the parties in writing). W The Office through which a party enters into a Transaction will be the Office specified for that party in the relevant Confirmation or as otherwise agreed by the parties in writing, and, if an Office for that party is not specified in the Confirmation or otherwise agreed by the parties in writing, its head or home office. Unless the parties otherwise agree in writing, the Office through which a party enters into a Transaction will also be the Office in which it books the Transaction and the Office through which it makes and receives payments and deliveries with respect to the Transaction. Subject to Section 6(b)(ii), neither party may change the Office in which it books the Transaction or the Office through which it makes and receives payments or deliveries with respect to a Transaction without the prior written consent of the other party. [WHMMJM=, A Defaulting Party will on demand indemnify and hold harmless the other party for and against all reasonable out-of- pocket expenses, including legal fees, execution fees and Stamp Tax, incurred by such other party by reason of the enforcement and protection of its rights under this Agreement or any Credit Support Document to which the Defaulting Party is a party or by reason of the early termination of any Transaction, including, but not limited to, costs of collection. I (a) Effectiveness. Any notice or other communication in respect of this Agreement may be given in any manner described below (except that a notice or other communication under Section 5 or 6 may not be given by electronic messaging system or e-mail) to the address or number or in accordance with the electronic messaging system or e-mail details provided (see the Schedule) and will be deemed effective as indicated:— W if in writing and delivered in person or by courier, on the date it is delivered; (ii) if sent by telex, on the date the recipient's answerback is received; (iii) if sent by facsimile transmission, on the date it is received by a responsible employee of the recipient in legible form (it being agreed that the burden of proving receipt will be on the sender and will not be met by a transmission report generated by the sender's facsimile machine); (iv) if sent by certified or registered mail (airmail, if overseas) or the equivalent (return receipt requested), on the date it is delivered or its delivery is attempted; (v) if sent by electronic messaging system, on the date it is received; or 19 ISDAS 2002 unless the date of that delivery (or attempted delivery) or that receipt, as applicable, is not a Local Business Day or that communication is delivered (or attempted) or received, as applicable, after the close of business on a Local a Local Business Day. (b) Change of Details. Either party may by notice to the other change the address, telex or facsimile number or electronic messaging system or e-mail details at which notices or other communications are to be given to it. 13. Governing Law and Jurisdiction (a) Governing Law. This Agreement will be governed by and construed in accordance with the law specified in the Schedule. (b) Jurisdiction. With respect to any suit, action or proceedings relating to any dispute arising out of or in connection with this Agreement ("Proceedings"), each party irrevocably:— (i) submits:- 91, N i WMIONWIC-A 14 19 RVIL144 03 $go] ally -A 61 fig I F.111togill 11*m Ing Org d1o1wdkillf �!_CLSLOAI Sig I 1 0 (2) if this Agreement is expressed to be governed by the laws of the State of New York, to the non-exclusive jurisdiction •', the courts • the State of New York and the United States District Court located in the Borough of Manhattan in New York City; (ii) waives any objection which it may have at any time to the laying of venue of any Proceedings brought in any such court, waives any claim that such Proceedings have been brought in an inconvenient forum and further waives the vect to such Proceedings that such cxm-_ any jurisdiction • such party; and lilts] 1F.M111111 ISO 191W 91 K71MION I W41144 (c) Service of Process. Each party irrevocably appoints the Process Agent, if any, specified opposite its name in the Schedule to receive, for it and on its behalf, service of process in any Proceedings. If for any reason any party's Process Agent is unable to act as such, such party will promptly notify the other party and within 30 days appoint a substitute process agent acceptable to the other party. The parties irrevocably consent to service of process given in the manner provided for notices in Section 12(a)(i), 12(a)(iii) or 12(a)(iv). Nothing in this Agreement will affect the right of either party to serve process in any other manner permitted by applicable law. (d) Waiver of Immunities. Each party irrevocably waives, to the extent permitted by applicable law, with respect to itself and its revenues and assets (irrespective of their use or intended use), all immunity on the grounds of sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any court, (iii) relief by way of injunction or order for specific performance or recovery of property, (iv) attachment of its assets (whether before or after judgment) and (v) execution or enforcement of any judgment to which it or its revenues or assets might otherwise be entitled in any Proceedings in the courts of any jurisdiction and irrevocably agrees, to the extent permitted by applicable law, that it will not claim any such immunity in any Proceedings. 20 ISDAS 2002 14. Definitions As used in this Agreement: — "Additional Representation " has the meaning specified in Section 3. "Additional Termination Event" has the meaning specified in Section 5(b). "Affected Party" has the meaning specified in Section 5(b). OM WO 'M W IIIIIIIIIIII-INWIP all Transactions unless the relevant Credit Support Document references only certain Transactions, in which case those Transactions and, if the relevant Credit Support Document constitutes a Confirmation for a Transaction, that Transaction) and (b) with respect to any other Termination Event, all Transactions. LIJOCLIJ UI HILITUM13:1 tne-porson or any entni 111,,t1jr Uy InUlye r common control with the person. For this purpose, "control" of any entity or person means ownership of a majority of the voting power of the entity or person. "Agreement" has the meaning specified in Section I (c). "Applicable Close-out Rate" means: — (a) in respect of the determination of an Unpaid Amount:— (i) in respect of obligations payable or deliverable (or which would have been but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate; (ii) in respect of obligations payable or deliverable (or which would have been but for Section 2(a)(iii)) by a Non -defaulting Party, the Non -default Rate; (iii) in respect of obligations deferred pursuant to Section 5(d), if there is no Defaulting Party and for so long as the deferral period continues, the Applicable Deferral Rate; and (iv) in all other cases following the occurrence of a Termination Event (except where interest accrues pursuant to clause (iii) above), the Applicable Deferral Rate; and W for the period from (and including) the relevant Early Termination Date to (but excluding) the date (determined in accordance with Section 6(d)(ii)) on which that amount is payable:— (2) if the Early Termination Amount is payable by a Non -defaulting Party, the Non -default Rate; and 21 ISDAS 2002 (ii) for the period from (and inc►uding) the date (determined in accordance with Section 6(d)(ii)) on which that amount is payable to (but excluding) the date of actual payment:— (1) if a party fails to pay the Early Termination Amount due to the occurrence of an event or circumstance which would, if it occurred with respect to a payment or delivery under a Transaction, constitute or give rise to an Illegality or a Force Majeure Event, and for so long as the Early Termination Amount remains unpaid due to the continuing existence of such event or circumstance, the Applicable Deferral Rate; (2) if the Early Termination Amount is payable by a Defaulting Party (but excluding any period in respect of which clause (1) above applies), the Default Rate; (3) if the Early Termination Amount is payable by a Non -defaulting Party (but excluding any period in respect of which clause (1) above applies), the Non -default Rate; and (4) in a►l other cases, the Termination Rate. (a) for the purpose of Section 9(h)(i)(3)(A), the rate certified by the relevant payer to be a rate offered to the payer by a major bank in a relevant interbank market for overnight deposits in the applicable currency, such bank to be selected in good faith by the payer for the purpose of obtaining a representative rate that will reasonably reflect conditions prevailing at the time in that relevant market; (b) for purposes of Section 9(h)(i)(3)(B) and clause (a)(iii) of the definition of Applicable Close-out Rate, the rate certified by the relevant payer to be a rate offered to prime banks by a major bank in a relevant interbank market for overnight deposits in the applicable currency, such bank to be selected in good faith by the payer after consultation with the other party, if practicable, for the purpose of obtaining a representative rate that will reasonably reflect conditions prevailing at the time in that relevant market; and lop W M it) if it were • fund • • funding the relevant amount. "Automatic Early Termination " has the meaning specified in Section 6(a). "Burdened Party" has the meaning specified in Section 5(b)(iv). "Change in Tax Law" means the enactment, promulgation, execution • ratification • or any change in -rfr into the relevant Transactio-c. I I polo qVIK011- lot • i•• • I W•IW• I A I's W. U 1;. 9. ... IMpi"Vailing circumstances kexpressed as a posilive numoer) or gains or Me for the Determining Party the economic equivalent of, (a) the material terms of that Terminated Transaction or group oil I 'M 11111 W1 Nil 22 ISDA@ 2002 Section 2(a)(iii)) and (b) the option rights of the parties in respect of that Terminated Transaction or group of Terminated Transactions. Any Close-out Amount will be determined by the use commercially reasonable procedures in order to produce a commercially reasonable result. The Determining Imillo*li-'-IwilmR 111111 MIN Iloilo 11 1111 "IN I 1 11 1 1, 1 I fli-Vtow v.- rwr twol vv'—o�- I - — MmAsl following the Early Termination Date as would be commercially reasonable. LOJ M 41-1-J A% M MWA 11"INY-1,79 t-J tJ I KAV a tax 11111.1,1014 LUM OWS] KAUA#IKYA" 11 1414do a INIP Hgo•1"1-i I of 1 11r, 14011 NIMILMI 16MAM41 11 ff Mi " 4 44 UUM7, limitation, one or more of the following types of information:— (i) quotations (either firm or indicative) for replacement transactions supplied by one or more third parties that may take into account the creditworthiness of the Determining Party at the time the quotation is provided and the terms of an- relevant third party providing the quotation; (ii) information consisting of relevant market data in the relevant market supplied by one or more third parties including, without limitation, relevant rates, prices, yields, yield curves, volatilities, spreads, correlations or other relevant market data in the relevant market; or (iii) information of the types described in clause (i) or (ii) above from internal sources (including any of the course of its business for the valuation of similar traisactiots. IM e May C t— I •u imi a ion, ea er in e re evan mar e s, end -users of the relevant product, information vendors, brokers and other sources of market infon-nation. Wit out duplication of amounts calculated based on information described in clause ii� 16 or �iii) above. or other 1 , 11WOURKIIII M, IN will", 11111 MASON V I AAWYMN re-establishing any hedge related to a Terminated Transaction or group of Terminated Transactions (or any gain resulting from any of them). Commercially reasonable procedures used in determining a Close-out Amount may include the following:— (1) application to relevant market data from third parties pursuant to clause (ii) above or information from internal sources pursuant to clause (iii) above of pricing or other valuation models that are, at the time of the determination of the Close-out Amount- used bl; the Transaction or group of Terminated Transactions; and 23 ISDA@ 2002 (2) application of different valuation methods to Terminated Transactions or groups of Terminated Transactions depending on the type, complexity, size or number of the Terminated Transactions or group of Terminated Transactions. "Confirination "has the meaning specified in the preamble. "consent" includes a consent, approval, action, authorisation, exemption, notice, filing, registration or exchange control consent. "Contractual Currency" has the meaning specified in Section 8(a). "Convention Court" means any court which is bound to apply to the Proceedings either Article 17 of the 1968 Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters or Article 17 of the 1988 Lugano Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters. "Credit Event Upon Merger" has the meaning specified in Section 5(b). "Credit Support Document" means any agreement or instrument that is specified as such in this Agreement. "Credit Support Provider" has the meaning specified in the Schedule. "Cross -Default" means the event specified in Section 5(a)(vi). "Default Rate" means a rate per annurn equal to the cost (without proof or evidence of any actual cost) to the relevant payee (as certified by it) if it were to fund or of funding the relevant amount plus 1% per annum. "Defaulting Party" has the meaning specified in Section 6(a). "Designated Event' has the meaning specified in Section 5(b)(v). "Determining Party" means the party determining a Close-out Amount. "Early Termination Amount has the meaning specified in Section 6(e). "Early Termination Date " means the date determined in accordance with Section 6(a) or 6(b)(iv). "electronic messages" does not include e-mails but does include documents expressed in markup languages, and "electronic messaging systein " will be construed accordingly. "English law" means the law of England and Wales, and 'English " will be construed accordingly. 'Event of Default" has the meaning specified in Section 5(a) and, if applicable, in the Schedule. "Force Majeure Event" has the meaning specified in Section 5(b). "General Business Day" means a day on which commercial banks are open for general business (including dealings in foreign exchange and foreign currency deposits). "Illegality" has the meaning specified in Section 5(b). 24 ISDA@ 2002 "Indeynnifiable Tax" means any Tax other than aTax that would not be imposed in respect of a payment under this Agreement but for apresent mformer connection between the jurisdiction of the government mtaxation authority imposing such Tax and the recipient of such payment or m p*omo nn|mued to such recipient (including, xidbom limitation, uconnection arising from such recipient orrelated person being o,having been ucitizen orresident of such jurisdiction, or being or having been organised, present or engaged in a trade or business in such jurisdiction, or having or having had u pnrounom optah|imbmnro or fixed p|uoo of business in such jurisdiction, but excluding a connection arising solely from such recipient orrelated person having executed, dc|ivcred, performed its nh|igmioow or received a payment under, or enforced, this Agreement or a Credit Support Document). "law" includes any treaty, law, rule or regulation (as modified, iuthe case of tax matters, by the practice of any relevant governmental revenue authority), and "unlawful"will bcconstrued accordingly. "Local Business Day" means (a) in relation to any obligation under Section 2(a)(i), a General Business Day in the place or places onenDod in the relevant Confirmation and m day on wbob a relevant settlement system is open or operating as specified in the relevant Confirmation or, if p|uoo or a settlement system is not so specified, as otherwise agreed by the parties in writing or determined pursuant to provisions contained, or incorporated by reference, in this Agreement, (b) for the purpose of determining when a Waiting Period expires, a General Business Day in the place where the event o, circumstance that 000mitmnu or gives boo to the Illegality orForce 8&ajcvrc Event, as the case may be, occurs, (c) in relation to any other payment, a General Business Day in the place where the relevant account is located and, if different, in the principal financial centre, if any, of the currency of such payment and, if that ovncnoy dvr, not have e single recognised principal financial centre, u day on which the settlement system necessary to accomplish such payment is open, (d) in relation to any notice or other communication, including notice oomomp|mzd undo, Sxodun5(o)(i). a General Business Day (or m day that would have been a (3eoc,a| Business Day but for the occurrence of an event or circumstance which would, if it occurred with respect to payment, delivery o,compliance related touTransaction, constitute nrgive rise tounIllegality ormForce D&ajcu,cEvent) io the place ,pooifirdiothe address for notice provided hythe recipient and, inthe case nfunotice contemplated hy Dnmion2(h)' in the place when, the relevant new account i, to be located and (r)io relation to Soohom5(e)(")(2). a General Business Day inthe relevant locations for performance with respect tnsuch Specified Transaction. "Local Delivery Day" means, for purposes of Sections 5(a)(i) and 5(d), a day on which settlement systems necessary to accomplish the relevant delivery are generally open for business mthat the delivery iscapable of being accomplished inaccordance with customary market practice, ivthe place nynoifindiothe relevant Confirmation or, if not so specified, in a location as determined in accordance with customary marketpractice for the relevant delivery. "Master Agreement" has the meaning specified iothe preamble. "Merger With out Assumption "means the event specificdinSection 5(a)(viii). "Multiple Transaction Payment Netting" has the meaning upcoifiodinSection 2k1. "Non -affected Party" means, oolong aethere ioonly one Affected Party, the other party. "Non -default Rate" means the rate certified by the Non -defaulting Party mbe^rate offered to the Non -defaulting Party hyumajor bank inurelevant interbank market for overnight deposits inthe applicable currency, such bank ov be selected in good faith by the Non -defaulting Party for the purpose ofobtaining urepresentative rate that will reasonably reflect conditions prevailing at the time in that relevant market. "Non -defaulting Party" has the meaning specified iuSection 6(a) "Office" means a branch or office of a party, which may be such party's head or home office. "Other Amounts" has the meaning specified inSection 6(f). "Payee°has the meaning specified 6uSection 6(f). "Payer" has the meaning specified in Sectiou6(f). "Potential Event gfDefault" means any event which, with the giving vfnotice o,the lapse oftime o,both, would constitute unEvent vfDefault. "Prommwings''has the meaning specified i^Section l3(h). "Process Agent" has the meaning specified iothe Schedule. "rate of exchange " includes, without limitation, any premiums and costs of exchange payable in connection with the purchase n[o,conversion into the Contractual Currency. "Relevant Jurisdiction" means, with respect to o party, the jurisdictions (4 in which the party is incorporated, organised, managed and controlled mconsidered mhave its seat, (b)where an Office through which the party is acting for purposes ufthis Agreement inlocated, (u)inwhich the party executes this Agreement and kOinrelation m any payment, from o,through which such payment iemade. "8c6edule~has the meaning specified ivthe preamble. "Scheduled Settlement Date" means adate uuwhich apayment ordelivery is tubemade under Section 2(4(i)with respect vouTransaction. ^Spec�ed Entity" has the meaning spocificdinthe Schedule. "Specified Indebtedness" means, subject to the Sobcdu\c' any obligation (whether present or §/ture, contingent or otherwise, as principal or surety or otherwise) in respect of borrowed money. "Specified Transaction" means, subject to the Schedule, (a) any transaction (including an agreement with respect to any such transaction) now existing or hereafter entered into between one party mthis Agreement (or any Credit Support Provider of such party or any applicable Specified Entity of such party) and the other party to this Agreement (or any Credit Support Provider of such other party or any applicable Specified Entity of such other party) which is not a Transaction under this Agreement but (i) which is a rate swap transaction, swap option, basis swap, forward rate tm0000hon' commodity swap, commodity option, equity o,equity index owup, equity o,equity index option, bond mpdou, interest n4u option, foreign exchange truu*vctinn, cap trmupvcbnn' floor tnmyaohnu, collar transaction, currency swap transaction, cross -currency rate swap transaction, currency option, credit protection transaction, credit owam, credit default swap, credit default opdon, total return swap, credit opm:ud tnmoucdou, n,muno6mae transaction, reverse repurchase transaction, huy/sel\-backtransaction, ocuuddeo lending tomauudoo, weather index transaction ur forward purchase o,sale ofasecurity, commodity orother fiouncidinstrument u,interest (including any option with respect tnany vfthese transactions) v,(ii)which ioatype n[transaction that ivsimilar many transaction referred tu in clause (i) above that is uu,nendy, or in the future becomes, recurrently cmencd into in the financial markets (including t*nno and conditions incorporated by reference iosuch agreement) and which ivaforward, swap, b`ture, option o, other derivative on one or more rates, currencies, commodities, equity oecuhdca or o«bo, equity instruments, debt securities or other debt instruments, economic indices or measures of economic risk or value, or other benchmarks against which payments or deliveries are to be made, (b) any combination of these transactions and (c) any other transaction identified as a Specified Transaction in this Agreement or the relevant confirmation. "StanipTax" means any stamp, registration, documentation msimilar tax. "Stanip Tax Jurisdiction - has the meaning specified in Section 4(e). "Tax" means any present or future tax, levy, impost, duty, charge, assessment or fee of any nature (including interest, penalties and additions thereto) that is imposed by any government or other taxing authority in respect of any payment under this Agreement other than a stamp, registration, documentation or similar tax. "Tax Event" has the meaning specified in Section 5(b). "Tim Event Upon Merger" has the meaning specified in Section 5(b). "Terminated Transactions" means, with respect to any Early Termination Date, (a) if resulting from an Illegality or a Force Majeure Event, all Affected Transactions specified in the notice given pursuant to Section 6(b)(iv), (b) if resulting from any other Termination Event, all Affected Transactions and (c) if resulting from an Event of Default, all Transactions in effect either immediately before the effectiveness of the notice designating that Early Termination Date or, if Automatic Early Termination applies, immediately before that Early Termination Date. "Termination Currency" means (a) if a Termination Currency is specified in the Schedule and that currency is freely available, that currency, and (b) otherwise, euro if this Agreement is expressed to be governed by English law or United States Dollars if this Agreement is expressed to be governed by the laws of the State of New York. "Termination Currency Equivalent" means, in respect of any amount denominated in the Termination Currency, such Termination Currency amount and, in respect of any amount denominated in a currency other than the Termination Currency (the "Other Currency"), the amount in the Termination Currency determined by the party making the relevant determination as being required to purchase such amount of such Other Currency as at the relevant Early Termination Date, or, if the relevant Close-out Amount is determined as of a later date, that later date, with the Termination Currency at the rate equal to the spot exchange rate of the foreign exchange agent (selected as provided below) for the purchase of such Other Currency with the Termination Currency at or about 11:00 a.m. (in the city in which such foreign exchange agent is located) on such date as would be customary for the determination of such a rate for the purchase of such Other Currency for value on the relevant Early Termination Date or that later date. The foreign exchange agent will, if only one party is obliged to make a determination under Section 6(e), be selected in good faith by that party and otherwise will be agreed by the parties. "Termination Event" means an Illegality, a Force Majeure Event, a Tax Event, a Tax Event Upon Merger or, if specified to be applicable, a Credit Event Upon Merger or an Additional Termination Event. "Termination Rate" means a rate per annum equal to the arithmetic mean of the cost (without proof or evidence of any actual cost) to each party (as certified by such party) if it were to fund or of funding such amounts. "Threshold Amount' means the amount, if any, specified as such in the Schedule. "Transaction " has the meaning specified in the preamble. "Unpaid Amounts" owing to any party means, with respect to an Early Termination Date, the aggregate of (a) in respect of all Terminated Transactions, the amounts that became payable (or that would have become payable but for Section 2(a)(iii) or due but for Section 5(d)) to such party under Section 2(a)(i) or 2(d)(i)(4) on or prior to such Early Termination Date and which remain unpaid as at such Early Termination Date, (b) in respect of each Terminated Transaction, for each obligation under Section 2(a)(i) which was (or would have been but for Section 2(a)(iii) or 5(d)) required to be settled by delivery to such party on or prior to such Early Termination Date and which has not been so settled as at such Early Termination Date, an amount equal to the fair market value of that which was (or would have been) required to be delivered and (c) if the Early Termination Date results from an Event of Default, a Credit Event Upon Merger or an Additional Termination Event in respect of which all outstanding Transactions are Affected Transactions, any Early Termination Amount due prior to such Early Termination Date and which remains unpaid as of such Early Termination Date, in each case together with any amount of interest accrued or other 27 ISDA@ 2002 "Waiting Period" means:— t' of ... or circumstance under Section 5(b)(i),other than in the caseof f f periodwhere the relevant payment, delivery or compliance is actually required on the relevant day (in which case no s ! I, daysl! r 1, Business D, f� Period ft fovwwirexce of 1 ♦! f s -" t ! Pon IN WITNESS WHEREOF the parties have executed this document on the respective dates specified below with effect from the date specified on the first page of this document. BP Energy Company ................................................................................... (Name of Party) By: ............................................................................. Name: Title: Date: Hutchinson Utility Commission .................................................................................... (Name of Party) By: ............................................................................. Name: Title: Date: 28 ISDA® 2002 ISDA SCHEDULE to the 2002 Master Agreement dated as of May 18, 2018 between BP Energy Company ("Party A"), a corporation incorporated under the State laws of Delaware and Hutchinson Utilities Commission ("Party B"), a municipal utility organized under the laws of Minnesota Part 1 - Termination Provisions In this Agreement: (a) "Specified Entity" means: in relation to Party A and in relation to Party B, for the purpose of: Section 5(a)(v): Not Applicable Section 5(a)(vi): Not Applicable Section 5(a)(vii): Not Applicable Section 5(b)(v): Not Applicable (b) "Specified Transaction " has the meaning given to it in Section 14 of the Agreement. (c) The "Cross Default" provisions of Section 5(a)(vi) will not apply to Party A and will not apply to Party B. (d) The "Credit Event Upon Merger" provisions of Section 5(b)(v) will apply to Party A and will apply to Party B. (e) The "Automatic Early Termination" provision of Section 6(a) will not apply to Party A and will not apply to Party B. (f) "Termination Currency "means United States Dollars. (g) Additional Termination Event will not apply to Party A and will not apply to Party B. (D0327668. DOC / 3 }29 Part 2 - Tax Representations (a) Payer Tax Representation: For the purpose of Section 3(e), Party A and Party B w make the following representation: I It is not required by any applicable law, as modified by the practice, application or official interpretation of any relevant governmental revenue authority, of any Relevant Jurisdiction or under any applicable tax treaty between the Relevant Jurisdictions to make any deduction or withholding for or on account of any Tax from any payment (other than interest under Section 9(h) of this Agreement) to be made by it to the other party under this Agreement. In making this representation, it may rely on: G) the accuracy of any representations made by the other party pursuant to Section 3(f) of this Agreement; (ii) the satisfaction of the agreement of the other party contained in Section 4(a)(i) or 4(a)(iii) of this Agreement and the accuracy and effectiveness of any document provided by the other party pursuant to Section 4(a)(i) or 4(a)(iii) of this Agreement; and (iii) the satisfaction of the agreement of the other party contained in Section 4(d) of this Agreement, provided that it shall not be a breach of this representation where reliance is placed on clause (ii) and the other party does not deliver a form or document under Section 4(a)(iii) by reason of material prejudice to its legal or commercial position. (b) Payee Tax Representations: For the purpose of Section 3(f) of this Agreement, Party A and Party B each make the representation(s) specified below: (1) For the purpose of Section 3(0 of this Agreement, Party A represents that (i) it is a corporation organized and existing under the laws of the State of Delaware, (ii) it is a U.S. person within the meaning of Section 7701 of the Internal Revenue Code, and (iii) its U.S. taxpayer identification number is 36-3421804. (2) For the purpose of Section 3(f) of this Agreement, Party B represents that (i) it is a municipal utility organized and existing under the laws of the State of Minnesota, (ii) it is a U.S. person within the meaning of Section 7701 of the Internal Revenue Code, and (iii) its U.S. taxpayer identification number is 41-600525 1. (a) For the purpose of Section 4(a)(i) of this Agreement, tax forms, documents or certificates to be delivered are: Party required to deliver Form/Document/Certificate Date by which to bc document delivered Party B Applicable tax withholding Upon execution of this documentation as required per Agreement. Section 4(a). (b) For the purpose of Section 4(a)(ii) of this Agreement, other documents to be delivered are: Party required Form/Document/ to by which to be Covered by to deliver Certificate delivered Section 3(d) document Representation Party A A certified copy of the Upon execution oft `s Yes resolution of the Board Agreement. of Directors of Party A of its relevant committee, authorizing such party to enter into this Agreement and each Transaction, and an incumbency certificate. Party A Certification of the Upon execution of this Yes authenticity of the Agreement. signature of Party A's signatory certified by Party A's Company Secretary. Party A Most recent annual Upon written request, Yes audited financial unless publicly available statements of Party A's through EDGAR or some Credit Support other source. Provider. Party A The guaranty of its Upon the execution of this No Credit Support Agreement. Provider. Party A Disclosures of Material Available at No Information Concerning www.ecresource..co Swans. Party B A certified copy all Upon execution of this Yes ordinances, resolutions, Agreement. public notices and other documents evidencing the authorization of such party to enter into this Agreement and each Transaction, and an incumbency certificate or other evidence of authority ad specimen signatures with respect to signatories executing this Agreement or any Credit Support Document. Party B Certification of the Upon execution of this Yes authenticity of the Agreement. signature of Party B's signatory certified by Party B's Company Secretary. Party B Most recent annual Upon written request, Yes audited financial unless publicly available statements of Party B or through EDGAR or some its Credit Support other source. Provider, (if apiplicable). Party B The guaranty of its Upon the execution of this No Credit Support Agreement. Provider. Party B Dodd -Frank related Upon the execution of this No documentation to Agreement. include DF Protocol #1, DF Protocol #2, CFTC OCR Form, establishmnet of GMEI number, establishment of FiaTech record. Part 4 - Miscellaneous (a) Addressesfor Notices. For the purpose of Section 12(a) of this Agreement: Address: BP Energy Company 201 Helios Way Houston, Texas 77075 Attention: Confirmation Department Facsimile No.: 281-227-8470 E-mail: nagpconfirmations(a-),bp.com 0 1 1 1 201 Helios Way Houston, Texas 77079 I I I P f4 41 rim 64 Swiml, Address: BP Energy Company 201 Helios Way Houston, Texas 77079 Facsimile No.: 713-323-5935 Telephone No.: 832-664-2338 E-mail: aMfs I (d)bp.com Wire Payment Instructions: JP Morgan Chase Bank, NY 7 ABA: 021-000021 Acct No.: 910-2-548097 New York, NY 10081-6000 E-mail: BPEnergyNotice(& ,bp.com Telephone No.: 713-323-0911 �M- Address: Hutchinson Utilities Commission 225 Michigan St SE Hutchinson, Minnesota 55350 Facsimile No.: 320-587-4721 Telephone No.: 320-234-0507 E-mail: jwebster@ci.hutchinson.nm.us FIX I so. 225 Michigan St SE Hutchinson, Minnesota 55350 Attention: John Webster I =1 - I I I F I I R- Ms T@*To M 0 1 1 11116111 Address: Hutchinson Utilities Commission 225 Michigan St SE Hutchinson, Minnesota 55350 Attention: John Webster I I R Me MT@ M 04 Re MY, 4 1 1=0 Wire Payment Instructions: Bank: ABA: Acct No.: (b) Process Agent. For the purpose of Section 13(c) of this Agreement: (c) Offices. The provisions of Section 10(a) will apply to this Agreement. (d) Multibranch Party. For the purpose of Section I 0(b) of this Agreement: - I ITOMRI Party B is not a Multibranch Party. (e) Calculation Agent. The Calculation Agent is Party A, with any calculation or determination made by Party A in such capacity to be binding and conclusive, subject to Party B's right to contest such calculations, and provided further that Party B's payment or delivery of any amounts calculated by Party A shall not constitute a waiver of Party B's right to contest Party A's calculations. (f) Credit Support Document. Details of any Credit Support Document: 13, the terms and conditions of which are incorporated into, and constitute an integral p! art of, this Agreement. With respect to Party A, the guaranty of its Credit Support Provider. Credit Support Provider means in relation to Party A, BP Corporation North America Inc., an Indiana corporation. (h) Governing Law. This Agreement will be governed by and construed in accordance with New York law, without reference to its choice of law doctrine other than Section 5-1401 of the New York General Obligations Law. (i) Jurisdiction. Section 13(b) of the Agreement is hereby amended by (i) deleting the word "non-exclusive" appearing in paragraph (i)(1) and (i)(2) thereof and substituting therefor the word "exclusive" and (ii) deleting Section 13(b)(ii) and substituting therefor the following sentence: "Nothing in this Agreement precludes either party from bringing Proceedings in any other jurisdiction if (A) the courts of the State of New York or the United States District Court located in the Borough of Manhattan in New York City lacks jurisdiction over the parties or the subject matter of the Proceedings or declines to accept the Proceedings on the grounds of lacking such jurisdiction; (B) the Proceedings are commenced by a party for the purpose of enforcing against the other party's property, assets or estate any decision or judgment rendered by any court in which Proceedings may be brought as provided hereunder; (C) the Proceedings are commenced to appeal any such court's decision or judgment to any higher court with competent appellate jurisdiction over that court's decisions or judgments if that higher court is located outside the State of New York or Borough of Manhattan, such as a federal court of appeals or the U.S. Supreme Court; or (D) any suit, action or proceeding has been commenced in another jurisdiction by or against the other party or against its property, assets or estate (including, without limitation, any suit, action or proceeding described in Section 5(a)(vii)(4) of this Agreement), and, in order to exercise or protect its rights, interests or remedies under this Agreement, the party (1) joins, files a claim, or takes any other action, in any such suit, action or proceeding, or (2) otherwise commences any Proceeding in that other jurisdiction as the result of that other suit, action or proceeding having commenced in that other jurisdiction." (k) Netting of Payments. "Multiple Transaction Payment Netting" will apply for the purpose of Section 2(c) of this Agreement to all Transactions. (1) "Affiliate" will have the meaning specified in Section 14 of this Agreement. (m) "Absence of Litigation': (a) Section 3(c) is amended by the inclusion of the word "adversely" before the word "affect" in the third line. (b) For the purpose of Section 3(c): "Specified Entity" means in relation to Party A, Not Applicable. "Specified Entity" means in relation to Party B, Not Applicable. (n) No Agency. The provisions of Section 3(g) will apply to Party A and will apply to Party B. (o) Additional Representation. Will apply. For the purpose of Section 3 of this Agreement, the following will each constitute an Additional Representation (which representations will be deemed to be repeated by each party, as appropriate, on each date on which a Transaction is entered into): (i) Eligible Contract Participant. It constitutes an "eligible contract participant" as such term is defined in the U.S. Commodity Exchange Act, as amended. (ii) Swap Agreement. This Agreement and any Transaction entered into hereunder constitutes a "swap agreement" within the meaning of the United States Bankruptcy Code (11 USC Sec. 10 1 (53B) (2000)). (iii) Line of Business. It has entered into this Agreement (including each Transaction) in conjunction with its line of business (including financial intermediation services) or the financing of its business. (iv) Relationship Between the Parties. In connection with the negotiation of, the entering into, and the confirming of the execution of, this Agreement, any Credit Support Document to which it is a party, and each Transaction: (i) it is acting as principal (and not as agent or in any other capacity, fiduciary or otherwise); (ii) the other party is not acting as a fiduciary or financial or investment advisor for it; (iii) it is not relying upon any representations (whether written or oral) of the other party other than the representations expressly set forth in this Agreement and in such Credit Support Document; (iv) the other party has not given to it (directly or indirectly through any other person) any advice, counsel, assurance, guaranty, or representation whatsoever as to the expected or projected success, profitability, return, performance, result, effect, consequence, or benefit (either legal, regulatory, tax, financial, accounting, or otherwise) of this Agreement, such Credit Support Document, or such Transaction; (v) it has consulted with its own legal, regulatory, tax, business, investment, financial, and accounting advisors to the extent it has deemed necessary, and it has made its own investment, hedging, and trading decisions based upon its own judgment and upon any advice from such advisors as it has deemed necessary, and not upon any view expressed by the other party; (vi) all trading decisions have been the result of arm's length negotiations between the parties; and (vii) it is entering into this Agreement, such Credit Support Document, and such Transaction with a full understanding of all of the risks hereof and thereof (economic and otherwise), and it is capable of assuming and willing to assume (financially and otherwise) those risks. (v) Party B Representations. Party B makes the following representations: (a) The execution and delivery of this Agreement by Party B and the consummation of the Transactions contemplated thereby have been duly authorized by all necessary governmental action on behalf of Party B, and Party B is not subject to any charter, bylaw, lien or encumbrance, agreement, instrument, order or decree of any court or governmental body which would prevent the consummation of the Transactions contemplated by this Agreement. The execution, delivery and performance of this Agreement by Party B does not and will not violate any material statute, ordinance or governmental rule or regulation or orders applicable to Party B, or result in a breach or constitute a default under any indenture or agreement to which it is a party or by which it or its property may be bound. This Agreement has been duly executed and delivered by Party B, and this Agreement does, and such documents and instruments executed as the result thereof shall, constitute legal, valid and binding obligations of Party B enforceable in accordance with their terms, subject, however, to the effects of bankruptcy, insolvency, reorganization, moratorium and similar laws from time to time in effect relating to the rights and remedies of creditors, as well as to general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law). (b) Party B has not employed any investment banker, broker or finder in connection with the transactions contemplated by this Agreement nor has it taken any action which would give rise to a valid claim against Party A for a brokerage commission, finder's fee or other like payment. (c) Party B has not declared a financial emergency and there are no known facts or circumstances present that would cause it to do so at this time. (d) Party B further agrees that Party A is not a "utility" as such term is used in 11 U.S.C. Section 366, and Party B agrees to waive and not to assert the applicability of the provisions of 11 U.S.C. Section 366 in any bankruptcy proceeding involving Party B and this Agreement. (e) Section 13(d) is, with respect to Party B, hereby intentionally deleted from this Agreement. In lieu thereof, Party B represent that is not entitled to claim immunity on the grounds of sovereignty or other similar grounds with respect to itself or its revenues or assets (irrespective of their use or intended use) from (i) suit, (ii) jurisdiction of any court, (iii) relief by way of injunction, order for specific performance or for recovery of property, (iv) attachment of its assets (whether before or after judgment) or (v) execution of enforcement of any judgment to which it or its revenues or assets might otherwise be made subject to in any proceedings (as defined in Section 13(b)) in the courts of any jurisdiction and no such immunity (whether or not claimed) may be attributed to such party or its revenues or assets. (f) Party B represents that sufficient assets of Party B are and shall at all times be available to satisfy Party B's obligations under this Agreement (g) This Agreement has been, and each Transaction hereunder will be (and, if applicable, has been), entered into for purposes of managing its borrowings or investments and not for purposes of speculation. (h) The obligations of Party B to make payments to Party A under this Agreement and each Transaction (a) are not subject to appropriation or similar action and (b) do not (1) constitute any kind of indebtedness of Party B or (2) create any kind of lien on or security interest in any property or revenues of Party B which, in either case (1) or (2), is proscribed by any constitution, charter, law, rule, regulation, government code, constituent or governing instrument, resolution, guideline, ordinance, order, writ, judgment, decree, charge, or ruling to which Party B (or any of its officials in their respective capacities as such) or its property is subject. (p) Recording of Telephone Conversations. To the extent permitted by applicable law, each party: (i) consents to the recording of telephone conversations between the trading, marketing and other relevant personnel of the parties in connection with this Agreement or any potential Transaction, (ii) agrees to obtain prior to entering into any Transaction any necessary consent of, and give any necessary notice of such recording to, its relevant personnel, (iii) agrees that recordings may be submitted in evidence in any Proceedings, provided that nothing herein shall be construed as a waiver of any objection or evidentiary challenges regarding the authenticity or accuracy of such evidence , and (iv) acknowledges to the other party and consents that such other party may from time to time and without further notice (A) retain electronic transmissions (including telephone conversations, e-mail and instant messaging between the parties' respective representatives in connection with the Agreement, any potential Transaction and any Transaction or other commercial matters between the parties) on central and local databases for their respective legitimate purposes, and (B) monitor electronic transmissions through their internal and external networks for purposes of security and compliance with applicable laws, regulations and internal policies for their legitimate business purposes. Each party further agrees that it will indemnify, defend and hold the other party harmless from any and all damages, losses, claims, liabilities, judgments, costs and expenses, including but not limited to reasonable attorney's fees and costs of court arising directly or indirectly from or out of such party's failure to obtain any consent necessary from a party's trading, marketing and other relevant personnel, agents or representatives or such party's failure to give any notice required to such individuals. (a) General Conditions. Section 2(a)(ii) shall be amended by the deletion of the final sentence thereof and the addition of the following in substitution therefor: "The parties agree that all payments under this Agreement shall be made by wire transfer of immediately available funds to the party receiving payment, at the account specified by such party." (b) Limitation on Condition Precedent. With respect to any Transaction entered into under this Agreement, Section 2(a)(iii) of this Agreement is hereby amended by (i) adding "or Incipient Illegality (in the case of Party B)" after the words "Potential Event of Default" and (ii) adding the following phrase at the end of clause (1) immediately before the last comma of such phrase: "(provided, however, that in relation to any Transaction, if an Event of Default or a Potential Event of Default has occurred and is continuing for longer than ten (10) days without an Early Termination Date being designated, then the condition specified in this clause (1) shall cease to be a condition precedent to the obligations under Section 2(a)(i))." (c) Change of Account. Section 2(b) of this Agreement is hereby amended by the insertion of the following at the end thereof after the word "change": 66 , provided that if such new account shall not be in the same jurisdiction having the same power to tax as the original account, the party not changing its account shall not be obliged to pay any greater amounts and shall not receive less as a result of such change than would have been the case if such change had not taken place." (d) Deduction or Withholdingfor Tax. Section 2(d)(i)(4) is amended by the addition of or" at the end of sub -paragraph (B) and the addition of a new sub -paragraph (C) as follows: "(C) Y refusing to supply any form or document under Section 4(a)(iii) on grounds of material prejudice to its legal or commercial position." (e) Representations. The opening paragraph of Section 3 is amended by replacing "in the case of the representations in Section 3(f)" with "in the case of the representations in Sections 3(f) and 3(h)(iv)" and adding the following new sub -sections 3(h), 3(i) and 30): "(h) Dodd Frank Representations. (i) Hedging Transactions. Unless otherwise noted in the applicable Confirmation for any Transaction, such Transaction constitutes for Party B a bona fide hedging transaction as defined in CFTC Regulation 1.3 (z) (17 C.F.R. § 1.3(z)). (ii) End User Clearing Exemption. If with respect to any Transaction Party B has elected an exemption from the clearing requirement under Section 2(h)(7)(A) of the CEA, then as of the date of the execution of such Transaction (and not as of the date of this Agreement) (1) it is not a "financial entity" as defined in Section 2(h)(7)(C)(i) of the CEA, subject to certain exceptions in Sections 2(h)(7)(C)(ii), 2(h)(7)(C)(iii) and 2(h)(7)(D) of the CEA; (2) it is using such Transaction to hedge or mitigate commercial risk; (3) it has reported the information required to be submitted under 17 C.F.R. § 50.50(b)(1)(iii) in an annual filing made no more than 365 days prior to the Trade Date of such Transaction, pursuant to 17 C.F.R. § 50.50(b)(2), and (4) to the extent it is required to do so under Section 20) of the CEA and 17 C.F.R. § 50.50(b)(1)(iii)(D)(2), it has obtained all necessary approvals by the appropriate committee of its board of directors (or equivalent body) to rely on the exception to the clearing requirement under Section 2(h)(7)(A) of the CEA. (iii) Special Entity Status, Party B is a federal agency, state agency, ci county, municipality or other political subdivision of a state, or a instrumentality, department or entity established thereby, or any other Spec' Entity as defined by the CFTC Regulation 23.40 1 (c). 1i (iv) DF Protocols. Each of the parties hereby agrees to enter into additional reasonable documentation or modify existing documentation between the parties 4, ffWtfr-J413Z4 �,7TM-14,flf- Frank Wall Street Reform and Consumer Protection Act, the CEA and/or CFTC Regulations thereunder, including, upon reasonable request, adhering to or entering into such other protocols, suggested amendments, market conventions and other contractual provisions published by ISDA from time to time and intended to enhance one or both party's compliance with the CEA, the Dodd - Frank Wall Street Reform and Consumer Protection Act, CFTC Regulations and other applicable laws, or to facilitate the orderly processing of Transactions. (i) Canadian Regulatory Requirements Representations. Party B represents that: (i) it is not a Canadian Person with respect to any jurisdiction of Canada; 1 U-14 at I a I IM IM sit) i M tol SO it) a 11N.2 I F I al I I I I t- I (iii) it is not registered as a dealer, derivatives dealer, or in an altemati category such as a large derivative participant, under any securities or derivativ laws in Canada, as a consequence of trading in derivatives in any jurisdiction Canada." I Variation Margin Requirements Representations. Party B represents that it is not a Financial End User, Swap Dealer or Major Swap Participant as set forth in CFTC Regulations 1.3 and 23.151. M Absence of Certain Events. Section 3(b) shall be amended by the adding "Incipient Illegality (in the case of Party B)" after the words "to its knowledge,". (g) Agreements. Section 4 is hereby amended by adding the following subsections and "(g)" thereto: "(f) Notice of Incipient Illegality. If an Incipient Illegality occurs, Party B will, promptly upon beconiing aware of it, notify the other party, specifying the nature of that Incipient Illegality and will also give such other information about that Incipient Illegality as the other party may reasonably require. (g) Security and Source of Payment of Party Bs Obligations. The obligations of F"arty B to make all payments of any amount due to Party A under this Agreement and each Transaction hereunder (including, without liniiting the foregoing, payments to be made by Party B pursuant to Sections 2, 6 and 11) shall be [secured by/solely from] r 1 99 (h) Bankruptcy. Clause (6) of Section 5(a)(vii) of this Agreement is hereby amended to read in its entirety as follows: IS I IN 0 6 1 UU#,LIILULIIII, conser-TaLor, all or substantially all its assets or (B) in the case of a Government Entity, any Cre Support Provider of such Government Entity or any applicable Specified Entity of su Government Entity, (1) there shall be appointed or designated with respect to it pursua to applicable law, an entity such as an organization, board, commission, authori agency or body (a "Financial Oversight Board") to monitor, review , overse- recommend or declare a financial emergency or similar state of financial distress wil respect to it and (H) such Financial Oversight Board lawfully assumes control of Par V - respect to it which is analogous to any of the actions or events listed in clauses through (5) and (7) of this paragraph;" Merger Without Assumption. Section 5(a)(viii) of this Agreement is hereby amended to read in its entirety as follows: "(viii) Merger Without Assumption. The party or any Credit Support Provider of such party consolidates or amalgamates with, or merges with or into, or transfers all or substantially all its assets to, another entity (or, without limiting the foregoing, if such party is a Government Entity, an entity such as an organization, board, commission, authority, agency, or body succeeds to the principal functions of, or powers and duties granted to, such art or ani Credit Suwort Proviier off sucin artv) and. at Ae ti,-tce of (1) the resulting, surviving, transferee, or successor entity fails to assume all the ,tbligations of such party or such Credit Support Provider under this Agreement or any Credit Su ,tr pursuant to an agreement reasonably satisfactory to the other party to this Agreement; IN1 4 lot 0 6 6 0 MOOD (3) in the case of Party B, the revenues are no longer available for the satisfaction of such resulting, surviving, transferee or successor entity's obligations to the other party hereto." Tax Event. Section 5(b)(iii) shall be amended by the addition of "or (C)" after the words "or (B)" at the end of the last line. (k) Credit Event Upon Merger. Section 5(b)(v)(1) shall be amended by the insertion of the following at the end thereof after the word "entity": "(or, without limiting the foregoing, in the case of Party B, an entity such as an organization, board, commission, authority, agency or body succeeds to the principal functions of, and/or powers and duties granted to, X, or any Credit Support Provider of X) (1) Set off. Section 6(f) is deleted in its entirety and replaced with the following: "Set-off. Without affecting or prejudicing the provisions of this Agreement requiring the calculation and payment of certain net payment amounts on Scheduled Settlement Dates, all payments will be made without Set-off or counterclaim; provided, however, that any Early Termination Amount payable to one party (the "Payee") by the other party (the "Payer") in circumstances where there is a Defaulting Party or where there is one Affected Party in the case where either a Credit Event Upon Merger has occurred or any other Termination Event in respect of which all outstanding Transactions are Affected Transactions has occurred, will, at the sole option of the Non -defaulting Party or the Non -affected Party, as the case may be ("") (and without prior Notice to the Defaulting Party or the Affected Party, as the case may be), will be reduced by its setoff against any other amounts payable by the Payee to the Payer (whether arising under this Agreement, matured or contingent and irrespective of the currency, place of payment or place of booking of the obligation (collectively "Other Amounts"). Additionally, the set-off rights under this section include but are not limited to the following: (i) any Early Termination Amount against any Posted Credit Support held by a party relating to the Agreement; (ii) any Early Termination Amount against any amount(s) (including any excess collateral, security or credit support) owed by or to a party under any other agreement or arrangement between the parties; (iii) any Early Termination Amount owed to the Non -defaulting Party against any amount(s) (including any excess collateral, security or credit support) owed by the Non -defaulting Party or its Affiliates to the Defaulting Party under any other agreement or arrangement; (iv) any Early Termination Amount owed to the Defaulting Party against any amount(s) (including any excess collateral, security or credit support) owed by the Defaulting Party to the Non -defaulting Party or its Affiliates under any other agreement or arrangement; and/or (v) any Early Termination Amount owed to the Defaulting Party against any amount(s) (including any excess collateral, security or credit support) owed by the Defaulting Party or its Affiliates to the Non -defaulting Party under any other agreement or arrangement. If an obligation is unascertained, X may in good faith estimate that obligation and set off in respect of the estimate subject to the relevant party accounting to the other when the obligation is ascertained. To the extent that Other Amounts or any other sums otherwise owed by the Non - defaulting Party's Affiliate to the Defaulting Party, have been setoff by the Non - defaulting Party pursuant to this Section 6(f), the Non -defaulting Party's Affiliate shall not be liable to, and shall be released by, the Defaulting Party; provided further that the Defaulting Party shall be forever estopped from asserting that the Non -defaulting Party's Affiliate owes the Other Amounts or other sums to the Defaulting Party. The obligations of the Non -defaulting Party, the Non -defaulting Party's Affiliates, the Defaulting Party and the Defaulting Party's Affiliates under this Agreement or otherwise in respect of such Other Amounts or other sums shall be deemed satisfied and discharged to the extent of any such setoff. For this purpose, the Other Amounts or other sums subject to the setoff may be converted at the applicable prevailing exchange rate into U.S. Dollars by the Non -defaulting Party. The Non -defaulting Party will give the Defaulting Party notice of any setoff effected under this section provided that failure to give such notice shall not affect the validity of the setoff. Nothing in this paragraph shall be deemed to create a charge or other security interest. "Setoff' as used herein means setoff, offset, combination of accounts, right of retention or withholding or similar right or requirement to which the Non -defaulting Party is entitled or subject to (whether arising under this Agreement, another contract, applicable law or otherwise) that is exercised by, or imposed on, the Non -defaulting Party." W Counterparts and Confirmations. (i) Section 9(e)(i) shall be amended by deleting the words "and by electronic messaging system"; and (ii) The second and third sentences of Section 9(e)(ii) shall be deleted and replaced by the following: "Any Transaction may be effectuated in an EDI transmission or telephone conversation or other electronic means of communication with the offer and acceptance constituting the agreement of the parties. The parties shall be legally bound from the time they so agree to transaction terms and may each rely thereon. Any such Transaction shall be considered a "writing" and to have been "signed". Notwithstanding the foregoing sentence, the parties agree that Party A (the "Confirming Party") will promptly send a Confirmation to Party B to confirm a telephonic transaction by any reasonable means, including, without limitation, by facsimile, hand delivery, courier, or certified United States mail (return receipt requested) within three Business Days of a Transaction, provided that the failure to send a Confirmation shall not invalidate the oral agreement of the parties. Confirming Party adopts its confirming letterhead, or the like, as its signature on any Confirmation as the identification and authentication of Confirming Party. If the Confirmation contains any provisions other than those relating to the commercial terms of the transaction (i.e., price, quantity, performance obligation, delivery point, period of delivery and/or transportation/transmission conditions), which modify or supplement the Transaction or the terms of this Master Agreement (e.g., Force Majeure, arbitration or additional representations and warranties), such provisions shall not be deemed to be accepted pursuant to this Section 9(e)(ii) but must be expressly agreed to by both parties; provided that the foregoing shall not invalidate any Transaction agreed to by the parties. If Party A's Confirmation is materially different from Party B's understanding of the Transaction, Party B shall notify the Confirming Party via facsimile, EDI or mutually agreeable electronic means by the Confirm Deadline, unless Party B has previously sent a Confirmation to the Confirming Party. The failure of Party B to so notify the Confirming Party in writing by the Confirm Deadline constitutes Party B's agreement to the terms of the Transaction described in the Confirming Parry's Confirmation. If there are any material differences between timely sent Confirmations governing the same Transaction, or if Party B has timely objected to the terms of the Confirnring Parry's Confirmation, such Transaction remains valid and the parties remain legally bound thereby, however, both parties shall in good faith attempt to resolve such differences. Once such material differences are resolved, the Confirming Party shall transmit a written Confirmation to Party B, and such written Confirmation shall be accepted (or disputed) pursuant to the provisions of this Section 9(e)(ii). The provisions of this Section 9(e)(ii) may be repeated as many times as necessary to produce a written Confirmation that is accepted or deemed accepted by Party B. In the event of a conflict among the terms of (i) a binding Confirmation pursuant to this Section 9(e)(ii), (ii) the oral agreement of the parties (which may be evidenced by a recording of such transaction, oral testimony, data in a computer system, trade tickets, and/or notes), and (iii) this Master Agreement, the terms of the items shall govern in the priority listed in this sentence. "Confirin Deadline" shall mean the earlier of (1) 5:00 p.m. in Party B's time zone on the fifth New York Business Day following the New York Business Day a Confirmation is received by Party B; provided, if the Confirmation is received after 5:00 p.m. in Party B's time zone, it shall be deemed received at the opening of the next New York Business Day, or (2) on and after the effective date of the confirmation rules set forth in CFTC Regulation 23.501, such earlier time as is set forth in the compliance schedule in CFTC Regulation 23.501(a), as modified by CFTC Regulation 23.501(c). "New York Business Day" shall mean any day except for a Saturday, Sunday or a day on which the Federal Reserve Bank of New York is closed. Notwithstanding the provisions of Section 12(a)(iii) of the Agreement, a written Confirmation and any other writing related to or in response to a written Confirmation shall be deemed delivered to the receiving party (i) when actually received by the receiving party or (ii) with respect to a written Confirmation and other writing delivered by facsimile, when the sending party's facsimile machine indicates by an electronic or written facsimile log that the receiving party's facsimile machine received such written Confirmation. Party A shall not be required to maintain or retain a paper -based version of the written Confirmation delivered to Party B. In addition to a paper -based version of the written Confirmation delivered to Party B, the following shall constitute a "written Confirmation" for all purposes of this Agreement: (i) an electronic image of a paper -based version of the written Confirmation, and (ii) data in Party A's computer system. Any document generated by the parties with respect to a Transaction, including this Agreement, may be imaged and stored electronically ("Imaged Documents"). Imaged Documents may be introduced as evidence in any proceeding as if such were original business records and neither party shall contest the admissibility of Imaged Documents as evidence in any proceeding, provided however, that nothing herein shall be construed as a waiver of any objection or evidentiary challenges regarding the authenticity or accuracy of such evidence." (iii) Notwithstanding the foregoing, the Confirming Party will endeavour to send the Confirmation to the other Party as soon as technologically practicable, but in any event will endeavour to do so in accordance with the compliance schedule set forth in CFTC Regulation 23.501(a), as modified by CFTC Regulation 23.501 (c). (n) Notices. The wording of Section 12(a)(iii) shall be replaced in its entirety by the following: "if sent by facsimile transmission, on receipt by the sender of a valid transmission report." (0) ISDA Definitions and Inconsistency. G) This Agreement, each Confirmation and each Transaction between the parties are subject to the 2005 ISDA Commodity Definitions as published by the International Swaps and Derivatives Association, Inc., ("the Definitions"), and will be governed in all relevant respects by the provisions set forth in the Definitions, without regard to any amendment to the Definitions subsequent to the date hereof. The provisions of the Definitions are incorporated by reference and shall be deemed a part of this Agreement, except that sub -annexes B to I inclusive shall not apply. (ii) In the event of any inconsistency between the provisions of this Agreement and the Definitions, this Agreement will prevail. In the event of any inconsistency between the provisions of any Credit Support Document and the Definitions, the Credit Support Document will prevail. Subject to Section I(b) of this Agreement, in the event of any inconsistency between the provisions of any Confirmation and this Agreement or the Definitions, the Confirmation will prevail for the purpose of the relevant Transaction. (p) Market Disruption Events; Additional Market Disruption Events. The "Market Disruption Events" specified in Section 7.4(c) of the Definitions shall apply; and (ii) "Additional Market Disruption Events" shall apply only if specified in the relevant Confirmation. The "Disruption Fallbacks" specified in Section 7.5(c) of the Definitions shall apply, except that: "Fallback Reference Price" and "Calculation Agent Determination" shall not apply; (ii) for the purposes of Section 7.6 of the Definitions, the Maximum Days of Disruption will be five (5) Commodity Business Days; and (iii) "Reference Dealers" means, with respect to any transaction for which the relevant Commodity Reference Price is "Commodity -Reference Dealers", the four independent leading dealers selected in good faith and jointly agreed upon by the parties satisfying all the criteria that the parties apply generally at the time of deciding whether to offer or to make an extension of credit or to enter into a transaction comparable to this Transaction. Such dealers will be appointed to make a determination of the Commodity -Reference Price, taking into consideration the latest available quotation for the Commodity -Reference Price and any other information that in good faith they deem relevant. If the parties have not agreed upon the appointment of the dealers on or before the sixth Commodity Business Day following the first Pricing Date on which the Market Disruption Event occurred or existed, or if a determination of the relevant Commodity -Reference Price cannot be obtained from at least four dealers, the next applicable Disruption Fallback will apply to the Transaction. Severability. In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. The parties shall endeavour, in good faith negotiations, to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions. (s) Payment Date During Transfer Period. If the parties are required by Section 6(b)(ii) to make efforts to transfer certain obligations under this Agreement in connection with a Termination Event, and a Payment Date (as defined in the related Confirmation) will occur under the relevant Affected Transaction during the period specified in Section 6(b) for those efforts, then the payment(s) due to be made on that Payment Date shall be postponed until the earlier of (i) the Local Business Day following the day on which a transfer is effected in consequence of such efforts; (ii) the Local Business Day following the day on which such period ends, if an Early Termination Date is not designated by a party on such day; and (iii) the Early Termination Date for the relevant Affected Transaction, with such postponed payment(s) then being treated as Unpaid Amounts. In either case, the postponed payment(s) shall bear interest (before as well as after judgment) at the Applicable Deferral Rate from (and including) such Payment Date to (but excluding) the date of actual payment. Termination Payments by Non -defaulting Party. Notwithstanding the provisions of Sections 6(d) and 6(e) of the Agreement, if there is a Defaulting Party, the obligations of the Non -defaulting Party to pay to the Defaulting Party any amount under Section 6(e) shall not arise until, and shall be subject to the conditions precedent that, the Non - defaulting Party shall have received confirmation satisfactory to it in its sole discretion that (i) all Transactions are terminated in accordance with Section 6(c), and (ii) all obligations (contingent or absolute, matured or uninatured) of the Defaulting Party and any Affiliate of the Defaulting Party to make any payment to the Non -defaulting Party or any Affiliate of the Non -defaulting Party shall have been fully and finally performed; and provided, further, that if under the foregoing provisions it is determined that the Non - defaulting Party is to make a payment to the Defaulting Party, there shall be deducted from the amount of such payment all amounts which the Defaulting Party may be obligated to pay under Section 11. I I: Lai 113 D1 C N W.1 {D0327668.DOC / 3}46 1 1 � � 1 U• 1 1. ,,. 111 pi I IN iiiiii (v) Definitions. Section 14 shall be amended to add the following definitions: "Canadian: Person " with respect to a jurisdiction in Canada, means a person or company, that is not an individual that is organized under the laws of, has its head office in or has its principal place of business in the jurisdiction. For this purpose, "person" includes unincorporated organizations such as partnerships, associations, syndicates and trusts, "company" includes any incorporated entity, and "Jurisdiction" means a province or territory of Canada or, with respect to jurisdiction of organization only, the federal jurisdiction of Canada. "EDI " shall mean an electronic data interchange pursuant to an agreement entered into by the parties, specifically relating to the communication of a Transaction. "Government Entity" means Party B. "Incipient Illegality" means (a) the enactment by any legislative body with competent jurisdiction over a Government Entity of legislation which, if adopted as law, would render unlawful the performance by such Government Entity of any absolute or contingent obligation to make a payment or delivery or to receive a payment or delivery in respect of a Transaction or the compliance by such Government Entity with any other material provision of this Agreement relating to such Transaction, (b) any duly authorized action by a Government Entity in respect of such Government Entity to the effect that performance under this Agreement or similar agreements is unlawful or (c) the occurrence with respect to a Government Entity of any event that constitutes an Illegality." "TR Rules" means Ontario Securities Commission Rule 91-507, Manitoba Securities Commission Rule 91-507, Autorit6 des marches financiers Reg. 91-507 and Multilateral Instrument 96-101 and equivalent statutes, rules, regulations, instruments, directives or orders as and when finalized by any Canadian provincial, territorial, or federal regulatory authority, body or agency with jurisdiction to regulate derivatives activities or to regulate persons with respect to their derivatives activities. (w) 2002 Master Agreement Protocol. The parties agree that, with effect from the date of this Agreement, the terms of each Annex to the 2002 Master Agreement Protocol published by the International Swaps and Derivatives Association Inc. on July 15, 2003, (the "Protocol") shall apply to this Agreement as if the parties had adhered to the Protocol without amendment. ID0327668.DOC / 3}47 (x) WAIVER OF RIGHT TO TRIAL BYJURY. EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO A TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY TRANSACTION. (y) Right to Clear and Choose DCO. Notwithstanding anything in DF Supplement Section 2.24, if a Transaction is subject to mandatory clearing requirements under Section 2(h) of the CEA, and the party other than BP Energy Company fails to designate a DCO in connection with the execution of the Transaction, then BP Energy Company may select a DCO to which the other party has transaction rights to be the DCO for such Transaction on behalf of such other party. (Z) Party B's Global Market Entity Identifier (GMEI) utility Legal Entity Identifier ("LEI") is 5493006H504KBMJSAU33. (aa) Withholding Tax Imposed on Payments to Non -US Counterparties Under the United States Foreign Account Tax Compliance Act. "Tax" as used in Part 2(a) of this Schedule (Payer Tax Representation) and "Indemnifiable Tax" as defined in Section 14 of this Agreement shall not include any U.S. federal withholding tax imposed or collected pursuant to Sections 1471 through 1474 of the U.S. Internal Revenue Code of 1986, as amended (the "Code"), any current or future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code (a "FATCA Withholding Tax"). For the avoidance of doubt, a FATCA Withholding Tax is a Tax the deduction or withholding of which is required by applicable law for the purposes of Section 2(d) of this Agreement. IN WITNESS WHEREOF the parties have executed this document on the respective dates specified below with effect from the date specified on the first page of this document. BP Energy Company Hutchinson Utilities Commission ("Party A") ("Party B") By . .......... Bya Name: Name: Title: Title - .Date: Date-, 11 �� i �� (Bilateral Form) (ISDA Agreements Subject to New York Law Only) ISDAS International Swaps and Derivatives Association, Inc. to the Schedule to the dated as of May 18, 2018 between P Energy Company and Hutchinson Utility Commission ("Party A") ("Party B") This Annex supplements, forms part of, and is subject to, the above -referenced Agreement, is part of its Schedule and is a Credit Support Document under this Agreement with respect to each party. Accordingly, the parties agree as follows: Paragraph 1. Interpretation (a) Definitions and Inconsistency. Capitalized terms not otherwise defined herein or elsewhere in this Agreement have the meanings specified pursuant to Paragraph 12, and all references in this Annex to Paragraphs are to paragraphs of this Annex. In the event of any inconsistency between this Annex and the other provisions of this Schedule, this Annex will prevail, and in the event of any inconsistency between Paragraph 13 and the other provisions of this Annex, Paragraph 13 will prevail. (b) Secured Party and Pledgor. All references in this Annex to the "Secured Party" will be to either party when acting in that capacity and all corresponding references to the "Pledgor" will be to the other party when acting in that capacity; provided, however, that if Other Posted Support is held by a party to this Annex, all references herein to that party as the Secured Party with respect to that Other Posted Support will be to that party as the beneficiary thereof and will not subject that support or that party as the beneficiary thereof to provisions of law generally relating to security interests and secured parties. Paragraph 2. Security Interest Each party, as the Pledgor, hereby pledges to the other party, as the Secured Party, as security for its Obligations, and grants to the Secured Party a first priority continuing security interest in, lien on and right of Set-off against all Posted Collateral Transferred to or received by the Secured Party hereunder. Upon the Transfer by the Secured Party to the Pledgor of Posted Collateral, the security interest and lien granted hereunder on that Posted Collateral will be released immediately and, to the extent possible, without any further action by either party. Copyright © 1994 by International Swaps and Derivatives Association, Inc. ISDA ® 1994 = (a) Delivery Amount. Subject to Paragraphs 4 and 5, upon a demand made by the Secured Party on or promptly following a Valuation Date, if the Delivery Amount for that Valuation Date equals or exceeds the Pledgor's Minimum Transfer Amount, then the Pledgor will Transfer to the Secured Party Eligible Credit Support having a Value as of the date of Transfer as least equal to the applicable Delivery Amount (rounded pursuant to Paragraph 13). Unless otherwise specified in Paragraph 13, the "Delivery Amount" applicable to the Pledgor for any Valuation Date will equal the amount by which: (i) the Credit Support Amount (ii) the Value as of that Valuation Date of all Posted Credit Support held by the Secured Party. (b) Return Amount. Subject to Paragraphs 4 and 5, upon a demand made by the Pledgor on or promptly following a Valuation Date, if the Return Amount for that Valuation Date equals or exceeds the Secured Party's Minimum Transfer Amount, then the Secured Party will Transfer to the Pledgor Posted Credit Support specified by the Pledgor in that demand having a Value as of the date of Transfer as close as practicable to the applicable Return Amount (rounded pursuant to Paragraph 13). Unless otherwise specified in Paragraph 13, the "Return Amount" applicable to the Secured Party for any Valuation Date will equal the amount by which: (i) the Value as of that Valuation Date of all Posted Credit Support held by the Secured Party (ii) the Credit Support Amount. "Credit Support Amount" means, unless otherwise specified in Paragraph 13, for any Valuation Date (i) the Secured Party's Exposure for that Valuation Date plus (ii) the aggregate of all Independent Amounts applicable to the Pledgor, if any, minus (iii) all Independent Amounts applicable to the Secured Party, if any, minus (iv) the Pledgor's Thresholds provided, however, that the Credit Support Amount will be deemed to be zero whenever the calculation of Credit Support Amount yields a number less than zero. Paragraph 4. Conditions Precedent, Transfer Timing, Calculations and Substitutions (a) Conditions Precedent. Each Transfer obligation of the Pledgor under Paragraphs 3 and 5 and of the Secured Party under Paragraphs 3, 4(d)(ii), 5 and 6(d) is subject to the conditions precedent that: no Event of Potential Event of or + + Condition has occurred and continuingrespect• the other party; (ii) no Early Termination Date for which any unsatisfied payment obligations exist has occurred or has been designated as the result of an Event of Default or Specified Condition with respect to the other party. (b) Transfer Thning. Subject to Paragraphs 4(a) and 5 and unless otherwise specified, for the Transfer of Eligible Credit Support or Posted Credit Support is made by the Notification Time, then MR91011 I I UWNW11- + + f. (c) Calculations. All calculations of Value and Exposure for purposes of Paragraphs 3 and 6(d) will be made by the Valuation Agent as of the Valuation Time. The Valuation Agent will notify each party (or the other party, if the Valuation Agent is a party) of its calculations not later that the Notification Time on the Local Business Day following the applicable Valuation Date (or in the case of Paragraph 6(d), following the date of calculation). li+y�7(Q ZOOMWM�� (i) Unless otherwise specified in Paragraph 13, upon notice to the Secured Party specifying the items of Posted Credit Support to be exchanged, the Pledgor may, on any Local Business Day, Transfer to the Secured Party substitute Eligible Credit Support (the "Substitute Credit Support"); and (ii) subject to Paragraph 4(a), the Secured Party will Transfer to the Pledgor the items of Posted Credit Support specified by the Pledgor in its notice not later than the Local Business Day following the date on which the Secured Party receives the Substitute Credit Support, unless otherwise specified in Paragraph 13 (the "Substitution Date"); provided that the Secured Party will only be obligated to Transfer Posted Credit Support with a Value as of the date of Transfer of that Posted Credit Support equal to the Value as of that date of the Substitute Credit Support. If a party (a "Disputing Party") disputes (1) the Valuation Agent's calculation of a Delivery Amount or a Return Amount or (II) the Value of any Transfer of Eligible Credit Support or Posted Credit Support, then (1) the Disputing Party will notify the other party and the Valuation Agent (if the Valuation Agent is not the other party) not later than the close of business on the Local Business Day following (X) the date that the demand is made under Paragraph 3 in the case of (I) above or (Y) the date of Transfer in the case of (II) above, (2) subject to Paragraph 4(a), the appropriate party will Transfer the undisputed amount to the other party not later than the close of business on the Local Business Day following (X) the date that the demand is made under Paragraph 3 in the case of (I) above or (Y) the date of Transfer in the case of (II) above, (3) the parties will consult with each other in an attempt to resolve the dispute and (4) if they fail to resolve the dispute by the Resolution Time, then: (i) In the case of a dispute involving a Delivery Amount or Return Amount, unless otherwise specified in Paragraph 13, the Valuation Agent will recalculate the Exposure and the Value as of the Recalculation Date by: (A) utilizing any calculations of Exposure for the Transactions (or Swap Transactions) that the parties have agreed are not in dispute; (B) calculating the Exposure for the Transaction (or Swap Transactions) in dispute by seeking four actual quotations at mid -market from Reference Market -makers for purposes of calculating Market Quotation, and taking the arithmetic average of those obtained; provided that if four quotations are not available for a particular Transaction (or Swap Transaction), then fewer than four quotations may be used for that Transaction (or Swap Transaction); and if no quotations are available for a particular Transaction (or Swap Transaction), then the Valuation Agent's original calculations will be used for that Transaction (or Swap Transaction); and (C) utilizing the procedures specified in Paragraph 13 for calculating the Value, if disputed, of Posted Credit Support. (ii) In the case of a dispute involving the Value of any Transfer of Eligible Credit Support or Posted Credit Support, the Valuation Agent will recalculate the Value as of the date of Transfer pursuant to Paragraph 13. Following a recalculation pursuant to this Paragraph, the Valuation Agent will notify each party (or the other party, if the Valuation Agent is a party) not later than the Notification Time on the Local Business Day following the Resolution Time. The appropriate party will, upon demand following that notice by the Valuation Agent or a resolution pursuant to (3) above and subject to Paragraphs 4(a) and 4(b), make the appropriate Transfer. Paragraph 6. Holding and Using Posted Collateral (a) Care of Posted Collateral. Without limiting the Secured Party's rights under Paragraph 6(c), the Secured Party will exercise reasonable care to assure the safe custody of all Posted Collateral to the extent required by applicable law, and in any event the Secured Party will be deemed to have exercised reasonable care if it exercises at least the same degree of care as it would exercise with respect to its own property. Except as specified in the preceding sentence, the Secured Party will have no duty with respect to Posted Collateral, including, without limitation, any duty to collect any Distributions, or enforce or preserve any rights pertaining thereto. (b) Eligibility to Hold Posted Collateral, Custodians. (i) General. Subject to the satisfaction of any conditions specified in Paragraph 13 for holding Posted Collateral, the Secured Party will be entitled to hold Posted Collateral or to appoint an agent (a "Custodian") to hold Posted Collateral for the Secured Party. Upon notice by the Secured Party to the Pledgor of the appointment of a Custodian, the Pledgor's obligations to make any Transfer will be discharged by making the Transfer to that Custodian. The holding of Posted Collateral by a Custodian will be deemed to be the holding of that Posted Collateral by the Secured Party for which the Custodian is acting. (ii) Failure to Satisfy Conditions. If the Secured Party or its Custodian fails to satisfy any conditions for holding Posted Collateral, then upon a demand made by the Pledgor, the Secured Party will, not later than five Local Business Days after the demand, Transfer or cause its Custodian to Transfer all Posted Collateral held by it to a Custodian that satisfies those conditions or to the Secured Party if it satisfies those conditions. I i I , . a 1111 11�111111111111111111 - a 4 , a - 117-ROA (Q 116 11 to 16 4 1 rwR%rw14RT1[-T4 vim a FAMI 11! [4 a IM I r! In Ewm I I TP] 0111 It I IQ a 011 a I (c) Use of Posted Collateral. Unless otherwise specified in Paragraph 13 and without limiting the rights and obligations of the parties under Paragraphs 3, 4(d)(ii), 5, 6(d) and 8, if the Secured Party is not a Defaulting party or an Affected Party with respect to a Specified Condition and no Early Termination Date has occurred or been designated as the result of an Event of Default or Specified Condition with respect to the Secured Party, then the Secured Party will, notwithstanding Section 9-207 of the New York Uniform Commercial Code, have the right to: (i) sell, pledge, rehypothecate, assign, invest, use, commingle or otherwise dispose of, or otherwise use in its business any Posted Collateral it holds, free from any claim or right of any nature whatsoever of the Pledgor, including any equity or right of redemption by the Pledgor; and (ii) register any Posted Collateral in the name of the Secured Party, its Custodian or a nominee for either. For purposes of the obligation to Transfer Eligible Credit Support or Posted Credit Support pursuant to Paragraphs 3 and 5 and any rights or remedies authorized under this Agreement, the Secured Party will be deemed to continue to hold all Posted Collateral and to receive Distributions made thereon, regardless of whether the Secured Party has exercised any rights with respect to any Posted Collateral pursuant to (i) or (ii) above. (d) Distributions and Interest Amount. (i) Distributions. Subject to Paragraph 4(a), if the Secured Party receives or is deemed to receive Distributions on a Local Business Day, it will Transfer to the Pledgor not later than the following Local Business Day any Distributions it receives or is deemed to receive to the extent that a Delivery Amount would not be created or increased by that Transfer, as calculated by the Valuation Agent (and the date of calculation will be deemed to be a Valuation Date for this purpose). 4 ISDA 0 1994 (ii) InterestAniount. Unless otherwise specified in Paragraph 13 and subject to Paragraph 4(a), in lieu of any interest, dividends or other amounts paid or deemed to have been paid with respect to Posted Collateral in the form of Cash (all of which may be retained by the Secured Party), the Secured Party will Transfer to the Pledgor at the times specified in Paragraph 13 the Interest Amount to the extent that a Delivery Amount would not be created or increased by that Transfer, as calculated by the Valuation Agent (and the date of calculation will be deemed to be a Valuation Date for this purpose). The Interest Amount or portion thereof not Transferred pursuant to this Paragraph will constitute Posted Collateral in the form of Cash and will be subject to the security interest granted under Paragraph 2. Paragraph 7. Events of Default For purposes of Section 5(a)(iii)(1) of this Agreement, an Event of Default will exist with respect to a party if. (i) that party fails (or fails to cause its Custodian) to make, when due, any Transfer of Eligible Collateral, Posted Collateral or the Interest Amount, as applicable, required to be made by it and that failure continues for two Local Business Days after notice of that failure is given to that party; (ii) that party fails to comply with any restriction or prohibition specified in this Annex with respect to any of the rights specified in Paragraph 6(c) and that failure continues for five Local Business Days after notice of that failure is given to that party; or (iii) that party fails to comply with or perform any agreement or obligation other than those specified in Paragraphs 7(i) and 7(ii) and that failure continues for 30 days after notice of that failure is given to that party. Paragraph 8. Certain Rights and Remedies (a) Secured Party's Rights and Remedies. If at any time (1) an Event of Default or Specified Condition with respect to the Pledgor has occurred and is continuing or (2) an Early Termination Date has occurred or been designated as the result of an Event of Default or Specified Condition with respect to the Pledgor, then, unless the Pledgor has paid in full all of its Obligations that are then due, the Secured Party may exercise one or more of the following rights and remedies: (i) all rights and remedies available to a secured party under applicable law with respect to Posted Collateral held by the Secured Party; (ii) any other rights and remedies available to the Secured Party under the terms of Other Posted Support, if any; (iii) the right to Set-off any amounts payable by the Pledgor with respect to any Obligations against any Posted Collateral or the Cash equivalent of any Posted Collateral held by the Secured Party (or any obligation of the Secured Party to Transfer that Posted Collateral); and (iv) the right to liquidate any Posted Collateral held by the Secured Party through one or more public or private sales or other dispositions with such notice, if any, as may be required under applicable law, free from any claim or right of any nature whatsoever of the Pledgor, including any equity or fight of redemption by the Pledgor (with the Secured Party having the right to purchase any or all of the Posted Collateral to be sold) and to apply the proceeds (or the Cash equivalent thereof) from the liquidation of the Posted Collateral to any amounts payable by the Pledgor with respect to any Obligations in that order as the Secured Party may elect. Each party acknowledges and agrees that Posted Collateral in the form of securities may decline speedily in value and is of a type customarily sold on a recognized market, and, accordingly, the Pledgor is not entitled to prior notice of any sale of that Posted Collateral by the Secured Party, except any notice that is required under applicable law and cannot be waived. (b) Pied or's Rights and Remedies. If at any time an Early Termination Date has occurred or been designated as the result of an Event of Default or Specified Condition with respect to the Secured Party, then (except in the case of an Early Termination Date relating to less than all Transactions (or Swap Transactions) where the Secured Party has paid in full all of its obligations that are then due under Section 6(e) of this Agreement): (i) the Pledgor may exercise all rights and remedies available to a pledgor under applicable law with respect to Posted Collateral held by the Secured Party; (ii) the Pledgor may exercise any other rights and remedies available to the Pledgor under the terms of Other Posted Support, if any; (iii) the Secured Party will be obligated immediately to Transfer all Posted Collateral and the Interest Amount to the Pledgor; and (iv) to the extent that Posted Collateral or the Interest Amount is not so Transferred pursuant to (iii) above, the Pledgor may: (A) Set-off any amounts payable by the Pledgor with respect to any Obligations against any Posted Collateral or the Cash equivalent of any Posted Collateral held by the Secured Party (or any obligation of the Secured Party to Transfer that Posted Collateral); and () to the extent that the Pledgor does not Set-off under (iv)(A) above, withhold payment of any remaining amounts payable by the Pledgor with respect to any Obligations, up to the Value of any remaining Posted Collateral held by the Secured Party, until that Posted Collateral is Transferred to the Pledgor. (c) Deficiencies and E.vcess Proceeds. , Party will Transfer to the Pledgor 8(b) after satisfaction in full of all amounts payable by the Pledgor with respect to any Obligations; the rR`ledgor in all events will remain liable for any amounts remaining unpaid after any liquidation, Set -oft trid/or application under Paragraphs 8(a) and 8(b). d Final Returns. When no amounts are or thereafter may become payable b Paragraphy the Pledgor with respect to any Obligations (except for any potential liability under Section 2(d) of this Agreement), the Secured Party will Transfer to the Pledgor all Posted Credit Support and the Interest Amount, if any. , Representations Each party represents to the other party (which representations will be deemed to be repeated as of each date on which it, as the Pledgor, power to grant the Pledgornecessary actions to and has taken all authorizer trid lien; r " . upon of any Eligible Collateral to the Secured Party Annex, the Secured Party will have a valid and perfected first priority (assuming_ .oration or any third-partyoother entity within the control of �. Pledgor involvedCollateral requiredgives the notices and takes the action of de, applicable law for perfection of that (iv) the performance hyitofits obligations under this Annex will not result inthe creation ofany security interest, lien o, other couumbnmoe on any Posted Collateral other than the security interest and lien granted under Paragraph 2. Paragraph10. Expenses (a) General. Except amotherwise provided in paragraphs 18(b)and lU(c)' each party will pay its own costs and expenses in connection with performing its obligations under this Annex and neither party will be liable for any costs and expenses incurred hythe other party inconnection herewith. (b) Posted Credit Support. The Bcdgorwill promptly pay when due all taxes, assessments orcharges of any nature that are imposed with respect to Posted Credit Support held by the Secured Party upon becoming aware of the nmnc, regardless of whether any portion of that Posted Credit Support is subsequently disposed of under Paragraph 6(c), except for those taxes, assessments and charges that result from the exercise nfthe Secured party`xrights under Paragraph 6(o). (o) L&7a6dam6nalAppMicauiomofPosted Credit Support. All reasonable costs and expenses incurred hy or on behalf of the Secured Party or the Pledgor in connection with the liquidation and/or application of any Posted Credit Support under Paragraph 8 will be payable, on demand and pursuant to the Expenses Section ofthis Agreement, bythe Defaulting Party or, ifthere inonDefaulting Party, equally 6ythe parties. Pmragraphll. MiseeDaneoom (a) Defaaft hiterext. A Secured Party that fails to make, when due, any Transfer of Posted Collateral orthe Interest Amount will beobligated tnpay the 9|cdgor(to the extent permitted under applicable |mv) an amount equal to interest at the Default Rate multiplied by the Value of the items of property that were required to be Transferred, from (and including) the date that Posted Collateral or Interest Amount was required to be Transferred to (but excluding) the date of Transfer of that Posted Co||m1cm| o, Interest Amount. This interest will be calculated on the basis of daily compounding and the actual number of days elapsed. (b) Further Assurances. Promptly following ademand made byaparty, the other party will execute, deliver, file and cconnd any financing statement, specific assignment nrother document and take any other action that may be necessary or desirable and reasonably requested by that party to create, preserve, perfect or validate any security interest or lien granted under Paragraph 2, to enable that party to cucroiso or enforce its rights under this Annex with respect to Posted Credit Support or an Interest Amount or to effect ordocument arelease ofasecurity interest ooPosted Collateral oraoInterest Amount. (o) Further Protection. The y|cdgor*U| promptly give notice to the Secured Party of, and defend against, any suit, action, proceeding or lien that involves Posted Credit Support Transferred by the Pledgor orthat could adversely affect the security interest and lien granted by it under Paragraph 2, unless that suit, action, proceeding orlien results from the exercise ofthe Secured party'nrights under Paragraph h(u). (d) Good Faith and Commercially Reasonable Manner. 9cdbmoanoc of all obligations under this Annex, induding, but not limited to, all calculations, valuations and dctcnninu1ioon made by either party, will bemade ingood faith and ioacommercially reasonable manner. (c) Densands and Notices. All demands and notices made by a party under this Annex will be made as specified in the Notices Section of this Agreement, except as otherwise provided in Paragraph 13. (f) Specifications of Certain Matters. Anything referred to in this Annex as being specified in Paragraph 13 also may be specified in one ormore Con6nnm1ioun nrother documents and this Annex will beconstrued accordingly. Paragrapb12. Definitions Auused inthis Annex: - "Cash"means the lawful currency ofthe United States ofAmerica. "Credit Support Amount" has the meaning specified inParagraph l "K]mtodian"has the meaning specified ioParagraphs 6(6)(i)and l3. "Delivery Amount" has the meaning specified inParagraph 3(a). "Disputing Party" has the meaning specified inParagraph 5. "Distributions" means with respect to ynmtcd CoUaucm| other than Cash, all principal, interest and other payments and distributions nfcash orother property with respect thereto, regardless ofwhether the Secured Party has disposed ofthat Posted Collateral under Paragraph 6(o). Distributions will not include any item nfproperty acquired 6ythe Secured Party upon any disposition nrliquidation nfPosted Collateral or, with respect to any Posted Collateral in the bmnn of Cash, any distributions on that collateral, un|cnm otherwise specified herein. "Eligible Collateral" means, with respect toaparty, the items, ifany, specified oosuch for that party in Paragraph l3. "Eligible Credit Support" means Eligible Collateral and Other Eligible Support. "Exposure" means for any Valuation Date orother date for which Exposure is oa|ou|muod and subject to Paragraph 5 in the case of a dispute, the amount, if any, that would be payable to a party that is the Secured Party by the other party (expressed as a positive number) or by a party that is the Secured Party to the other party (expressed as a negative number) pursuant to Section 6(c)(ii)(2)(A) of this Agreement an if all Transactions (or Swap Transactions) were being terminated an of the relevant Valuation Time; provided that Market Quotation will be determined bythe Valuation Agent using its cnhma1eo at mid -market ofthe amounts that would be paid for Replacement Transactions (as that tcnn in defined in the dcbnidnu of "Market Quotation"). "Independent Awnownt" means, with respect to a party, the amount specified as such for that party in Paragraph 13; ifuoamount is specified, zero. "Interest Amount" means, with respect to an Interest Period, the aggregate sum of the amounts of interest calculated for each day in that Interest Period on the principal amount of Posted Collateral in the 0unn of Cash held hythe Secured Party oothat day, determined bythe Secured Party for each such day asfollows: (x) the amount nfthat Cash nnthat day; multiplied by (y)the Interest Rate ineffect for that day; divided 6y (z) 360. "Interest Period" means the period from (and including) the last Local Business Day on which an Interest Amount was Transferred (or, if no Interest Amount has yet been Transferred, the Local Business Day on which Posted Collateral in the bmnn of Cash was Transferred to or received by the Secured Party) to (hut excluding) the Local Business Day onwhich the current Interest Amount intobeTransferred. "Interest Rate" means the rate specified inParagraph l3. "Local Business Day", unless mhunpinc specified in Paragraph 13, has the meaning specified in the Definitions Section of this Agreement, except that references to a payment in clause (h) thereof will be deemed tninclude aTransfer under this Annex. "Minimum Transfer Amount" means, with respect to a party, the amount specified as such for that party in Paragraph 13; if no amount is specified, zero. "Notification Time" has the meaning specified in Paragraph 13. "Obligations" means, with respect to a party, all present and future obligations of that party under this Agreement and any additional obligations specified for that party in Paragraph 13. "Other Eligible Support" means, with respect to a party, the items, if any, specified as such for that party in Paragraph 13. "Other Posted Support" means all Other Eligible Support Transferred to the Secured Party that remains in effect for the benefit of that Secured Party. "Pledgor" means either party, when that party (i) receives a demand for or is required to Transfer Eligible Credit Support under Paragraph 3(a) or (ii) has Transferred Eligible Credit Support under Paragraph 3(a). "Posted Collateral" means all Eligible Collateral, other property, Distributions, and all proceeds thereof that have been Transferred to or received by the Secured Party under this Annex and not Transferred to the Pledgor pursuant to paragraph 3(b), 4(d)(ii) or 6(d)(i) or released by the Secured Party under Paragraph 8. Any Interest Amount or portion thereof not Transferred pursuant to Paragraph 6(d)(ii) will constitute Posted Collateral in the form of Cash. "Posted Credit Support" means Posted Collateral and Other Posted Support. "Recalculation Date" means the Valuation Date that gives rise to the dispute under Paragraph 5; provided, however, that if a subsequent Valuation Date occurs under Paragraph 3 prior to the resolution of the dispute, then the "Recalculation Date" means the most recent Valuation Date under Paragraph 3. "Resolution Time" has the meaning specified in Paragraph 13. "Return Amount" has the meaning specified in Paragraph 3(b). "Secured Party" means either party, when that party (i) makes a demand for or is entitled to receive Eligible Credit Support under Paragraph 3(a) or (ii) holds or is deemed to hold Posted Credit Support. "Specified Condition" means, with respect to a party, any event specified as such for that party in Paragraph 13. "Substitute Credit Support" has the meaning specified in Paragraph 4(d)(i). "Substitution Date" has the meaning specified in Paragraph 4(d)(ii). "Threshold" means, with respect to a party, the amount specified as such for that party in Paragraph 13; if no amount is specified, zero. "Transfer" means, with respect to any Eligible Credit Support, Posted Credit Support or Interest Amount, and in accordance with the instructions of the Secured Party, Pledgor or Custodian, as applicable: (i) in the case of Cash, payment or delivery by wire transfer into one or more bank accounts specified by the recipient; (ii) in the case of certificated securities that cannot be paid or delivered by book -entry, payment or delivery in appropriate physical form to the recipient or its account accompanied by any duly executed instruments of transfer, assignments in blank, transfer tax stamps and any other documents necessary to constitute a legally valid transfer to the recipient; (iii) in the case of securities that can be paid or delivered by book -entry, the giving of written instructions to the relevant deyositoQ,,, institution or other entit, with a written copy thereofto the recipient, to result in a legally effective transfer •'the relevant interest to the recipient;and (iv) in the case of #le Support or Other Posted Support,• e• in Paragraph 13. "Valuation Agent" has the meaning specified in Paragraph 13. "Valuation Percentage" means, for any item of Eligible Collateral, the percentage specified in Paragra "fatue" means for any Valuation Date or other date for which Value is calculated and subject to Paragra 5 in the case of a dispute, with respect to: i MMMBMMW�# #' Valuation(B) a security, the bid price obtained by the Valuation Agent multiplied by the applicable Percentage, 10 ISDA 8 1994 Paragraph 13. Elections and Variables (a) Security Interest for "Obligations" following additional obligations: With respect to Party A: Not Applicable With respect to Party B: Not Applicable (b) Credit Support Obligations. The term "Obligations" as used in this Annex includes the (i) Delivery Amount, Return Amount and Credit Support Amount. (A) "Delivery Amount" has the meaning specified in Paragraph 3(a), unless otherwise specified here: NO CHANGE (B) "Return Amount" has the meaning specified in Paragraph 3(b), unless otherwise specified here: NO CHANGE (C) "Credit Support Amount" has the meaning specified in Paragraph 3, unless otherwise specified here: NO CHANGE (ii) Eligible Collateral. The following item will qualify as "Eligible Collateral" for Party A and for Party B: Cash, with a Valuation Percentage of 100%. (iii) Other Eligible Support. The following item will qualify as "Other Eligible Support" for Party A and for Party B: an Eligible Letter of Credit, as defined herein. The Valuation Percentage of an Eligible Letter of Credit shall be 100% of the available balance thereof, unless an Eligible Letter of Credit Default shall occur and be continuing with respect to such Eligible Letter of Credit, in which case, the Valuation Percentage shall be zero. (iv) Thresholds. (A) "Independent Amount" means: Not Applicable. (B) "Threshold" means with respect to Party A and Party B on any day the amount set forth below opposite the Credit Rating assigned by S&P or Moody's, as applicable, on such day to Party A's Credit Support Provider and to Party B, provided, however, that the Threshold for a party shall be zero upon the occurrence and during the continuance of an Event of Default, Potential Event of Default, or Specified Condition with respect to such party Moody'sRating S&PRating Threshold Party A Aa2 and above AA and above $ 60,000,000 Aa3 AA- $ 50,000,000 A2 to Al A to A+ $ 40,000,000 A3 A- $ 35,000,000 Baal BBB+ $ 30,000,000 Baa2 BBB $ 15,000,000 Baa3 and below BBB- and below $ 10,000,000 (C) "Minimum Transfer Amount" means with respect to Party A and Party B: (i) $100,000 or (ii) if an Event of Default, Potential Event of Default, or Specified Condition has occurred and {D0327672.DOC 12 } 11 is continuing with respect to a party, then in respect of such party the Minimum Transfer Amount shall be (D) Rounding. The Delivery Amount will be rounded up to the nearest integral multiple of 11 AAI and the Return Amountbe rounded down to the nearest integralmultiple of 100,000, unless the Return Amount is less than $ 100,000,Amount will not be rounded. (c) Valuation and Timing purposes"Valuation Agent" means, for of Paragraph 3, and, for purposes of Paragraph 6(d), the Secured Party receiving or deemed to receive the Distributions or mapplicable. Secured Party be the Valuationfor purposes of close (d) Conditions Precedent and Secured Party's Rights and Remedies. The following Termination Event(s) will be a "Specified Condition" for the party specified (that party being the Affected Party if the Termination Event occurs with respect to that party): Tax Event .\ Creditw v (e) Substitution. (i} "Substitution ate" has the meaning specified in Paragraph 4(d)(ii), unless otherwise specified here: The second Local Business Day following the date on which the Secured Party receives the Substitute Credit Support. (ii) Consent. If specified here as applicable, then the Pledgor must obtain the Secured Party's consem for • . pursuant to Paragraph w Not Applicable (iii) Notice. For purposes of Paragraph w . yy . .amended . i 11u.\ \ \ Days''. r \ (f) Dispute Resolution. The provisions of Paragraph 5 will not apply, and if a dispute as to a Delivery Amount, Return Amountor w Party's calculation, made in good faith and in a commercially reasonable \ \ (g) Holding and Using Posted Collateral. (i) Eligibility to Hold Posted Collateral; Custodians. Party A and its Custodian will be entitled to hold Posted Collateral pursuant to Paragraph 6(b), subject to the following conditions: (1) Posted Collateral may be held only in one or more accounts in any jurisdiction in the United States. (2) If Posted Collateral is held by a Custodian, the Custodian shall be a Qualified Institution. (3) If Posted Collateral is held by Party A, Party A's Credit Support Provider's Credit Rating by S&P shall be no less than BBB, or if not rated by S&P no lower than Baa2 by Moody's and Party A shall not be a Defaulting Party. Party B and its Custodian will be entitled to hold Posted Collateral pursuant to Paragraph 6(b), subject to the following conditions: (1) Posted Collateral may be held only in one or more accounts in any jurisdiction in the United States. (2) If Posted Collateral is held by a Custodian, the Custodian shall be a Qualified Institution. (3) If Posted Collateral is held by Party B, Party B's (or Party B's Credit Support Provider's, if applicable) Credit Rating by S&P shall be no less than BBB, or if not rated by S&P no lower than Baa2 by Moody's and Party B shall not be a Defaulting Party. Initially, the Custodian for Party A and Party B is: To be designated by Party A or Party B, as appropriate, in the first demand, which shall be in writing, for Eligible Credit Support hereunder. (ii) Use of Posted Collateral. The provisions of Paragraph 6(c) will apply to the parties; provided, however, if a party is a Defaulting Party, the provisions of Paragraph 6(c) shall not apply to such party and all Posted Collateral in such party's possession shall be delivered to a Custodian (that is a Qualified Institution) within 2 Business Days of such party becoming a Defaulting Party. (h) Distributions and Interest Amount. (i) Interest Rate. The "Interest Rate" will be: (i) with respect to Cash held by a party, for any day, the "Federal Funds (Effective)" rate in effect for such day, as published in the most recent weekly statistical release designated as H.15(519), or any successor publication, published by the Board of Governors of the Federal Reserve System, and (ii) with respect to Cash held by the Custodian of a party, the Interest Rate will not apply but the provisions of Paragraph 13(h)(iii) shall apply. (ii) Transfer of Interest Amount. The Transfer of the Interest Amount will be made on or before three Local Business Days after the last Local Business Day of each calendar month and on any Local Business Day that Posted Collateral in the form of Cash is Transferred to the Pledgor pursuant to Paragraph 3(b). (iii) Alternative to Interest Amount. The provision of Paragraph 6(d)(ii) will apply; provided, however, that with respect to Cash held by the Custodian of a party, the "Interest Amount" shall ID0327672.DOC / 2} 13 mean the earnings, from time to time, of the investment and reinvestment of Eligible Collateral constituting Cash by the Custodian of a party in an interest -bearing account selected by the Secured Party and consented to by the Pledgor, such consent not to be unreasonably withheld, conditioned, or delayed. (i) Additional Representation(s). None. (i) "Value" with respect to Other Eligible Support and Other Posted Support means: In respect of an Eligible Letter of Credit on a date, the maximum stated amount remaining available for payment to the beneficiary thereunder on such date multiplied by the Valuation Percentage. (ii) "Transfer" with respect to Other Eligible Support and Other Posted Support means: (1) For purposes of Paragraph 3(a), delivery of an Eligible Letter of Credit by the Pledgor or issuer of the Eligible Letter of Credit to the Secured Party at the address of the Secured Party specified in the Notices Section of this Agreement, or delivery of an executed amendment to such Eligible Letter of Credit (extending the term or increasing the amount available to the Secured Party thereunder) by the Pledgor or the issuer of the Eligible Letter of Credit to the Secured Party at the address of the Secured Party specified in the Notices Section of this Agreement; and (2) For purposes of Paragraph 3(b), by the return of an outstanding Eligible Letter of Credit by the Secured Party to the Pledgor, at the address of the Pledgor specified in the Notices Section of this Agreement, or delivery of an executed amendment to the Eligible Letter of Credit in form and substance satisfactory to the Pledgor (reducing the amount available to the Secured Party thereunder) by the Pledgor or the issuer of the Eligible Letter of Credit to the Secured Party at the Secured Party's address specified in the Notices Section of this Agreement. If a Transfer is to be effected by a reduction in the amount of an outstanding Eligible Letter of Credit previously issued for the benefit of the Secured Party, the Secured Party shall not unreasonably withhold its consent to a commensurate reduction in the amount of such Eligible Letter of Credit and shall take such action as is reasonably necessary to effectuate such reduction. (iii) "Eligible Letter of Credit Provisions". Other Eligible Support and Other Posted Support in the form of an Eligible Letter of Credit shall be subject to the following provisions: (1) Unless otherwise agreed in writing by the parties, each Eligible Letter of Credit shall be Transferred in accordance with the provisions of this Annex, and the Secured Party shall be the named beneficiary under each Eligible Letter of Credit. The Pledgor shall (i) cause the renewal of each Transferred Eligible Letter of Credit on a timely basis as provided in the relevant Eligible Letter of Credit in order to maintain the then -applicable Credit Support Amount requirements, (ii) if the issuer of an Eligible Letter of Credit previously Transferred to the Secured Party has indicated its intent not to renew such Eligible Letter of Credit, Transfer a substitute Eligible Letter of Credit, and (iii) if the issuer of an Eligible Letter of Credit shall commit an Eligible Letter of Credit Default of the type specified in clause (ii) or (iii) of the definition thereof (including but not limited to such issuer's failure to honor the Secured Party's properly documented request to draw thereon), Transfer for the benefit of the Secured Party Eligible Credit Support within one (1) Local Business Day after the Pledgor receives notice of such dishonor, provided that, at the time the Pledgor is required to perform in accordance with (i), (ii), or (iii) immediately above, the Delivery Amount applicable to the Pledgor equals or exceeds the Pledgor's Minimum Transfer Amount. (2) The Pledgor may, at its option, Transfer an Eligible Letter of Credit by (A) causing the issuing bank to execute an amendment increasing the outstanding amount available for drawing under a previously Transferred Eligible Letter of Credit or (B) establishing one or more additional Eligible Letters of Credit. If (i) the Pledgor shall fail to cause the issuing bank to renew, substitute, or sufficiently increase the amount of a Transferred Eligible Letter of Credit, Transfer one or more additional Eligible Letters of Credit, or otherwise Transfer sufficient Eligible Credit Support as required by this Agreement (including this Annex), and (ii) the Delivery Amount applicable to the Pledgor equals or exceeds the Pledgor's Minimum Transfer Amount as a result of such failure, then the Secured Party may draw on the entire available balance of any Transferred Eligible Letter of Credit in accordance with the stated requirements of the Eligible Letter of Credit. The Pledgor shall remain liable for any amounts due and owing to the Secured Party and remaining unpaid after the application of the amounts so drawn by the Secured Party. (3) Upon the occurrence of an Eligible Letter of Credit Default solely of the type specified in clause (i) of the definition thereof, the Pledgor agrees to deliver a substitute Eligible Letter of Credit or other Eligible Credit Support to the Secured Party in an amount at least equal to that of the Eligible Letter of Credit to be substituted on or before the first (1st) Business Day after written demand by the Secured Party. In the case of an Eligible Letter of Credit Default of the types specified in clauses (iv) and (v) of the definition thereof, the Pledgor shall deliver any such substitute Eligible Letter of Credit or other Eligible Credit Support within three (3) Business Days after written demand by the Secured Party. Notwithstanding any provision in this Agreement or this Annex, the issuer of an Eligible Letter of Credit shall not be relieved of any liability it may have to any party resulting from the occurrence of an Eligible Letter of Credit Default with respect to it. (iv) "Certain Rights and Remedies". (1) Secured Parry's Rights and Remedies. For purposes of Paragraph 8(a)(ii), the Secured Party may draw on any Transferred Eligible Letter of Credit in an aggregate amount equal to any amounts payable by the Pledgor with respect to any Obligations. (2) Pledgor's Rights and Remedies. For purposes of Paragraph 8(b)(ii), (i) the Secured Party will be obligated immediately to Transfer any Eligible Letter of Credit to the Pledgor and (ii) the Pledgor may, to the extent that any such Eligible Letter of Credit is not Transferred to the Pledgor as required pursuant to (i) immediately above, Set-off any amounts payable by the Pledgor with respect to any Obligations against any such Eligible Letter of Credit up to the full amount drawable thereunder and to the extent its rights to Set-off are not exercised, withhold payment of any remaining amounts payable by the Pledgor with respect to any Obligations, up to the sum of the Value of any remaining Posted Collateral and Eligible Letters of Credit held by the Secured Party, until any such Posted Collateral and Eligible Letters of Credit are Transferred to the Pledgor. (k) Demands and Notices. All demands, specifications and notices under this Annex will be made pursuant to the Notices Section of this Agreement, unless otherwise specified here: Party A: Not Applicable Party B: Not Applicable (1) Addresses for Transfers. Party A: Attention: Collateral Department, Telephone No.: (832) 664-2400 or (281) 892-4767; Fax No: (713) 354-0996; e-mail to: CollateralGroup@bu.com, or such address as Party A shall notify Party B, in writing. Party B: Such address as Party B shall notify Party A, in writing. (m) Other Provisions. (i) Duty of the Secured Party to Preserve Collateral. Without limiting the generality of the final sentence of Paragraph 6(a), the Secured Party will have no responsibility (A) to inquire or give the Pledgor notice about any decline in the value of, or default under or in respect of, any item of Posted Collateral, or to give the Pledgor notice that any right with respect to any such item may expire or (B) to take any action to seek to sell, to collect payments due under or to enforce or preserve rights relating to any item of Posted Collateral, including conversion, exchange and similar rights that, if not exercised, may expire or adversely affect the value of the item of Posted Collateral. (ii) Costs. Without limiting any other provision of the Agreement, the Pledgor shall pay all costs involved in obtaining and maintaining in effect any Eligible Letter of Credit. The Pledgor shall be responsible for, and shall reimburse the Secured Party for, all transfer taxes and other costs involved in the transfer of Eligible Collateral from the Pledgor to the Secured Party or any agent for safekeeping of the Secured Party. If the Secured Party shall incur any loss by reason of the Pledgor's failure to pay any such taxes and costs, the Secured Party shall have the right, in accordance with Paragraph 8(a) hereof, to draw under any Eligible Letter of Credit or liquidate any Posted Collateral and apply the proceeds thereof to satisfy its claim against the Pledgor for such taxes and costs. (iii) Rights and Remedies Under Paragraph 8(a). The Secured Party will be entitled to exercise the rights and remedies provided for in Paragraph 8(a) if the Pledgor fails to pay when due any amount payable by it under Section 6 of this Agreement in connection with a Termination Event, even if the Pledgor is not the Affected Party. (iv) Events of Default. Delete and replace Paragraph 7(i) with the following: "(i) that party fails (or fails to cause its Custodian) to make, when due, any Transfer of Eligible Credit Support, Posted Credit Support or the Interest Amount, as applicable, required to be made by it and that failure continues for two Local Business Days after notice of that failure is given to that party;" (v) Additional Definitions. Paragraph 12 is hereby amended by adding the following: "Credit Rating" means, with respect to a party (or its Credit Support Provider, as the case may be) or entity on any date of determination, the lower of the respective rating then assigned by S&P or Moody's, as the case may be, to the lower of either the issuer rating or the unsecured, senior long-term debt obligations, as the case may be (in either case, not supported by third -party credit enhancement). "Eligible Letter of Credit" shall mean a standby, transferable, irrevocable letter of credit, in a form substantially similar to Schedule 1 attached hereto and incorporated herein by reference, issued in favor of the Secured Party by a Qualified Institution (other than a party hereto or any of its Affiliates); provided, however, that at such time as there shall be an Eligible Letter of Credit Default, any Eligible Letter of Credit affected by such Eligible Letter of Credit Default shall cease to constitute an Eligible Letter of Credit and Eligible Credit Support for purposes of satisfying the Pledgor's obligations hereunder. "Eligible Letter of Credit Default" shall mean with respect to an outstanding Eligible Letter of Credit, the occurrence of any of the following events: (i) the issuer of such Eligible Letter of Credit shall cease to be a Qualified Institution; (ii) the issuer of the Eligible Letter of Credit shall fail to comply with or perform its obligations under such Eligible Letter of Credit if such failure shall be continuing after the lapse of any applicable grace period; (iii) the issuer of such Eligible Letter of Credit shall disaffirm, disclaim, repudiate or reject, in whole or in part, or challenge the validity of, such Eligible Letter of Credit; (iv) such Eligible Letter of Credit shall expire or terminate, or there shall be 30 or less days remaining until the expiration of such Eligible Letter of Credit, or such Eligible Letter of Credit shall fail or cease to be in full force and effect at any time during the term of the Agreement; or (v) any event analogous to an event specified in Section 5(a)(vii) of this Agreement shall occur with respect to the issuer of such Eligible Letter of Credit provided, however, that no Eligible Letter of Credit Default shall occur in any event with respect to an Eligible Letter of Credit after the time such Eligible Letter of Credit is required to be canceled or returned to the Pledgor in accordance with the terms of this Annex. "Moody's" means Moody's Investors Service (or any successor thereto). "Qualified Institution" shall mean the United States office of a commercial bank or trust company organized under the laws of the United States of America or a political subdivision thereof or a foreign bank with a branch office located in the United States and, in either case, having a Credit Rating of "A-" or higher by S&P or "AY or higher by Moody's, and assets of at least $10 billion. "S&P" means Standard & Poor's, a division of The McGraw-Hill Companies, Inc. or any successor thereto. EXECUTED on the dates specified below but effective as of the date first written above. Party A: Party B: BP Energy Company Hutchinson Utilities Commission By: .... By:....... Name. Named. Title: Title: Date: Date: Re: Credit No. We (the "Issuing Bank") hereby establish our Irrevocable Transferable Standby Letter of Credit (this "Letter of Credit) in your favor for the account of (the "Account Party"), for the aggregate amount not exceeding United States Dollars ($ , available to you at sight upon demand at our counters at (Location on or before the expiration hereof against presentation to us of one or more of the following statements, dated and signed by [Party A] [Party B]: 1. "Either (i) an Event of Default (as defined in the ISDA Master Agreement dated as of among , as the same may be amended (the "Master Agreement")) or (ii) a Specified Condition (as defined in the Master Agreement) with respect to the Account Party has occurred and is continuing; and the Account Party has not paid in full all of its Obligations (as defined in the Master Agreement) that are due as of the date of this statement. Wherefore, the undersigned does hereby demand payment of [the entire available balance] [or] [$ 1 of the Letter of Credit"; and/or 2. "An Early Termination Date (as defined in the Master Agreement) has occurred or been designated as the result of an Event of Default or Specified Condition with respect to the Account Party; and the Account Party has not paid in full all of its Obligations (as defined in the Master Agreement) that are due as of the date of this statement. Wherefore, the undersigned does hereby demand payment of [the entire available balance] [or] [$ of the Letter of Credit"; and/or 3. "An Eligible Letter of Credit Default (as defined in the Master Agreement) has occurred and is continuing with respect to this Letter of Credit. Wherefore, the undersigned does hereby demand payment of [the entire available balance] [or] [$ 1 of the Letter of Credit"; and/or 4. "The Account Party has failed to cause the issuing bank to renew, substitute, or sufficiently increase the amount of a Transferred (as defined in the Master Agreement) Eligible Letter of Credit, Transfer (as defined in the Master Agreement) one or more additional Eligible Letters of Credit, or otherwise Transfer sufficient Eligible Credit Support (as defined in the Master Agreement) as required by the Master Agreement; and the Delivery Amount (as defined in the Master Agreement) applicable to the Account Party equals or exceeds the Account Party's Minimum Transfer Amount (as defined in the Master Agreement) as a result of such failure. Wherefore, the undersigned does hereby demand payment of [the entire available balance] [or] [$ of the Letter of Credit." Terms defined in the Master Agreement shall have the same meanings when used in this Letter of Credit. The amount which may be drawn by you under this Letter of Credit shall be automatically reduced by the amount of any drawings paid through the Issuing Bank referencing this Letter of Credit No. Partial and multiple drawings are permitted hereunder. We hereby agree with you that documents drawn under and in compliance with the terms of this Letter of Credit shall be duly honored upon presentation as specified. If monies duly paid by us under this Letter of Credit are not immediately applied against amounts that are due and payable by the Account Party under the Master Agreement, then the monies must be held in accordance with the Master Agreement, and any Return Amounts involving such monies that arise on any subsequent Valuation Dates shall be promptly repaid by you to us. This Letter of Credit shall be governed by the Uniform Customs and Practice for Documentary Credits, 2007 Revision, International Chamber of Commerce Publication No. 600 (the "UCP"), except to the extent that the terms hereof are inconsistent with the provisions of the UCP, including but not limited to Articles 14(b) and 36 of the UCP, in which case the terms of this Letter of Credit shall govern. With respect to Article 14(b) of the UCP, the Issuing Bank shall have a reasonable amount of time, not exceed three (3) banking days following the date of its receipt of documents from the beneficiary, to examine t tocuments and determine whether to take up or refuse the documents and to inform the beneficiary accordingly. In the event of an Act of God, riot, civil commotion, insurrection, war or any other cause beyond o control that interrupts our business (collectively, an "Interruption Event") and causes the place for presentation this Letter of Credit to be closed for business on the last day for 12resentation the ewig date of this Letter of Crel U-M Lj' kJ'.V,) UdICHUdl UdJS d1R:r 111t: p1dGe 10r preSentall reopens for business. I This Letter of Credit is transferable, and we hereby consent to such transfer, but otherwise may not be amended, changed or modified without the express written consent of the beneficiary, the Issuing Bank and the Account Party.