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4.3. ERMUSR 05-10-2011Elk River Municipal Utilities 1306) Orono Parkway • P.O. Box 430 ELk River, MN 55330-0430 UTILITIES COMMISSION MEETING Phone: 763.441.2020 Fax: 763.441.8099 TO: FROM: Elk River Municipal Utilities Commission Troy Adams, P.E. -Director of Operations John Dietz, Chair Daryl Thompson, Vice Chair Al Nadeau, Trustee MEETING DATE: AGENDA ITEM NUMBER: Ma 10, 2011 4.3 SUBJECT: CAPX2020 Brookings Project and CMMPA Transmission and Owners Services and Asset Assignment A reement BACKGROUND: In May 2006, the Utilities Commission authorized joining Midwest Municipal Transmission Group (MMTG) to explore the potential to obtain ownership in the transmission system. In February 2007, ERMU entered into an agreement to participate through Central Minnesota Municipal Power Agency (CMMPA) in the CAPX2020 Brookings-Twin Cities Transmission Project. In March 2011, [he Commission and Council both approved Resolutions authorizing the Utilities participating in the Brookings Project through CMMPA for an amount not to exceed $7,140,953 without further action. DISCUSSION: Attached is the CMMPA Transmission Owner Services and Asset Assignment Agreement. This agreement is an "umbrella" agreement with CMMPA for which project agreements, like the Brookings Project" would fall under. This agreement authorizes CMMPA to manage ERMU's ownership in this project in aggregate with the other CMMPA Brookings Project participants. Utilities staff and legal counsel were involved in the process of drafring this agreement with CMMPA and the other participants. Approval of this agreement was implied by Commission and Council when approving the participation of the Brookings Project In addition to this agreement, the Commission will need to approve a resolution authorizing the agreement The City Council will also need to approve the agreement and resolution authorizing the agreement. This is similar to the requirements for the project agreement. The Utilities' and City's legal counsel will need to provide an opinion letter for both agreements. Counsel is working on these opinion letters. ACTION REQUESTED: Staff recommends Commission action [o approve a resolution authorizing the Transmission and Owners Services and Asset Assignment Agreement and approve the execution of that agreement Staff recommends the Commission approve submitting an action request to the Council to approve a resolution authorizing the Transmission and Owners Services and Asset Assignment Agreement and approve the execution of that agreement. Transmission Owner Services and Asset Assignment Agreement CENTRAL MINNESOTA MUNICIPAL POWER AGENCY Transmission Owner Services and Asset Assignment Agreement With CITY OF ELK RIVER, MINNESOTA April 20, 2011 Transmission Owner Services and Asset Assignment Agreement TABLE OF CONTENTS ARTICLE 1 ........................................................................................................................s Section 101. Term .....................................................................................................3 Section 102. Definitions ............................................................................................4 ARTICLE 2 ...................................................................................................................... 10 Section 201. Applicability of Article 2 ................................................................... 10 Section 202. Effectiveness of Agreement with Respect to CMMPA- Owned Transmission Projects ........................................................................ 10 Section 203. Assignment of Brookings Participation Rights Share ........................ 10 Section 204. Addition of Capacity Rights Related to Future CMMPA- Owned Transmission Projects ........................................................................ 11 Section 205. Modification of Exhibit A .................................................................. 11 Section 206. Termination of Agreement with Respect to CMMPA-Owned Transmission Projects ..................................................................................... 14 ARTICLE 3 ...................................................................................................................... 15 Section 301. Applicability of Article 3 ................................................................... 15 Section 302. Effectiveness of Agreement with Respect to Participant- Owned Transmission Facilities ...................................................................... .15 Section 303. Termination and Replacement of Transmission Facilities Assignment Agreement ................................................................................. .16 Section 304. Assignment of Rights Related to Participant-Owned Transmission Facilities .................................................................................. .16 Section 305. Title, Obligations, Liabilities, and Other Rights and Responsibilities Retained by the Participant .......................................... ........17 Section 306. Specific Participant Obligations Related to Participant- Owned Transmission Facilities ............................................................... ........17 Section 307. CMMPA Specific Rights Related to Participant Failure to Comply with Section 306 ....................................................................... ........19 Section 308. Modification of Exhibit B .......................................................... ........20 Section 309. Termination of Agreement with Respect to Participant- Owned Transmission Facilities ............................................................... ........22 ARTICLE 4 ......................................................................................................................23 Section 401. CMMPA Service Obligations Related to CMMPA-Owned Transmission Projects and Participant-Owned Transmission Facilities ..........................................................................................................23 Section 402. CMMPA Charges for Transmission Owner Services ........................24 i Transmission Owner Services and Asset Assignment Agreement Section 403. Services Administration Committee ..................................................25 Section 404. Participant Records; Information to be Provided by CMMPA and Participant ................................................................................................26 Section 405. Insurance ............................................................................................28 Section 406. Delivery of Participant Opinion .........................................................28 ARTICLE 5 ......................................................................................................................29 Section 501. Definition of Revenues .......................................................................29 Section 502. Allocations of Revenues as Among Projects, Facilities, and Participants .....................................................................................................29 Section 503. Application of Revenues Related to CMMPA-Owned Transmission Projects .....................................................................................3C Section 504. Application of Revenues Related to Participant-Owned Transmission Facilities ...................................................................................31 ARTICLE 6 ......................................................................................................................31 Section 601. Annual Budget ....................................................................................31 Section 602. Billing Statement ................................................................................33 Section 603. Billing Adjustments ............................................................................34 Section 604. Billing Disputes ..................................................................................34 ARTICLE 7 ......................................................................................................................35 Section 701. Reports ...............................................................................................35 Section 702. CMMPA Records and Accounts ........................................................35 ARTICLE 8 ......................................................................................................................35 Section 801. Failure of the Participant to Pay or Perform .......................................35 Section 802. Default by Another Participant ..........................................................37 ARTICLE 9 ......................................................................................................................38 Section 901. Termination, Amendment, and Waiver ....................................... ......38 Section 902. Notices and Communications ....................................................... ......38 Section 903. Arbitration .................................................................................... ......39 Section 904. Governing Law and Venue .......................................................... ......40 Section 905. Obligations of Good Faith and Fair Dealing; Prudent Utility Practice ..................................................................................................... ......40 Section 906. Severability ................................................................................... ......40 Section 907. Assignment of Agreement by Participant .................................... ......40 Section 908. No Unreasonable Adverse Distinction ........................................ ......41 Section 909. Confidentiality of Information ..................................................... ......41 Section 910. Relationship to Other Instrumenis ................................................ ......41 ii Transmission Owner Services and Asset Assignment Agreement Section 911. Duly Authorized Signatories; Binding Effect of Execution ...............42 Section 912. Entire Agreement ...............................................................................42 ATTACHMENT 1 INSTRUCTIONS FOR PREPARING MISO-REQUIRED INFORMATION ATTACHMENT 2 MONTHLY TRANSMISSION OWNER SERVICES COSTS ATTACHMENT 3 BUDGET -ILLUSTRATION ATTACHMENT 4 TRANSMISSION OWNER AGREEMENTS ATTACHMENT 5 PARTICIPANT OPINION ATTACHMENT 6 PARTICIPANT NET COST/REVENUE SHARE - ILLUSTRATION EXHIBIT A CMMPA-OWNED TRANSMISSION PROJECTS AND RELATED PARTICIPANT INTERESTS EXHIBIT B PARTICIPANT-OWNED TRANSMISSION FACILTIIES iii Transmission Owner Services and Asset Assignment Agreement THIS AGREEMENT is executed by and between CMMPA and the undersigned Participant. Capitalized terms used in this preamble and in the recitals that follow have the meanings given in Section 102 of this Agreement. WHEREAS, CMMPA has duly executed an Agency Agreement originally executed on the ls` day of July, 1987, as restated on January 15, 1997, August 11, 2004, May 24, 2006, and January 13, 2010, as the same may be further amended and restated from time to time; and WHEREAS, CMMPA shall have all of the powers enumerated in the Act, including those in Section 453.54 thereof, and in the exercise thereof shall be deemed to be performing an essential governmental function and exercising a part of the sovereign powers of the State of Minnesota; and WHEREAS, the Participant and CMMPA executed the Development Project Agreement dated February 28, 2007 to facilitate CMMPA's pursuit of development activities related to the Brookings Transmission Project; and WHEREAS, CMMPA proposes to acquire the Brookings Transmission Project and may, in the future, acquire other CMMPA-Owned Transmission Projects; and WHEREAS, CMMPA and the Participant have executed, or are concurrently executing, the CMMPA-Participant Brookings Transmission Project Agreement pursuant to which the Participant has purchased a Participant Capacity Rights Share (as such term is defined in the CMMPA-Participant Brookings Transmission Project Agreement); and WHEREAS, effective August 16, 2007, CMMPA became a MISO transmission owner to, among other things, facilitate payment to CMMPA on behalf of the Participants For their costs related to CMMPA-Participant Brookings Transmission Project Agreement, including returns on their investments, and to benefit CMMPA and the Participants, and therefore, in conjunction with executing CMMPA-Participant Brookings Transmission Project Agreement, the Participant must have previously executed (or concurrently execute) this Agreement to address the Brookings Transmission Project as it relates to the MISO and to address such matters as they may relate to future CMMPA-Owned Transmission Projects; and WHEREAS, CMMPA and the Participant desire to enter into this Agreement to facilitate (a) assignment to CMMPA, for the term of this Agreement, of (i) the Participant's Brookings Participation Rights Share, and (ii) the Participant's capacity rights or other participation interests in any additional CMMPA-Owned Transmission Projects; and (b) CMMPA's receipt of Revenues associated with (i) the Participant's Brookings Participation Rights Share, and (ii) the Participant's capacity rights or other participation interests in any additional CMMPA-Owned Transmission Projects; and (c) the allocation of such Revenues in accordance with the terms of this Agreement; and WHEREAS, CMMPA and certain Participants have executed the Transmission Facilities Assignment Agreement dated April 2008, wherein the Participant transferred operational Transmission Owner Services and Asset Assignment Agreement control of and capacity rights with respect to its Participant-Owned Transmission Facilities to CMMPA to facilitate CMMPA's reassignment and conveyance of the operational control of and capacity rights with respect to such facilities to the MISO and receipt by CMMPA of Revenues associated with such facilities; and WHEREAS, CMMPA and Participants that have previously approved and executed the Transmission Facilities Assignment Agreement in 2008 intend that this Agreement shall, on or after the Initial Effective Date, supersede the Transmission Facilities Assignment Agreement to continue to effectuate the purposes of the Transmission Facilities Assignment Agreement in accordance with the terms of this Agreement; Now, THEREFORE, the parties hereto agree as follows: 2 Transmission Owner Services and Asset Assignment Agreement ARTICLE 1 DEFINITIONS Section 101. Term. (a) This Agreement shall take effect on the Initial Effective Date and remain in effect until terminated in accordance with Section 206 or Section 309. The "Initial Effective Date" shall be the earliest to occur of: (i) the date specified on an executed form of Exhibit B to this Agreement (if any), with execution evidenced by the authorized signatures of CMMPA and the Participant on such Exhibit B; (ii) the effective date of the CMMPA-Participant Brookings Transmission Project Agreement; (iii) the effective date of a CMMPA-Participant Transmission Project Agreement other than the CMMPA-Participant Brookings Transmission Project Agreement; or (iv) the date specified in a written notice delivered to the Participant by CMMPA stating that this Agreement shall become effective with respect to Revenues related to recovery of construction work in progress (CWIP) or other development cost related to the Brookings Transmission Project or another CMMPA-Owned Transmission Project. (b) If the Initial Effective Date is established pursuant to clause (iv) of Section 101(a), then: (i) any development rights of the Participant with respect to the Brookings Transmission Project or such other CMMPA-Owned Transmission Project as may be identified in CMMPA's notice to the Participant are assigned to CMMPA as of the Initial Effective Date; (ii) those terms of this Agreement that become effective as of the Initial Effective Date shall apply to Revenues received by CMMPA after the Initial Effective Date, even if such Revenues relate to periods preceding the Initial Effective Date; (iii) the provisions of Article 2 and Article 3 of this Agreement shall not take effect until subsequently made effective pursuant to the terms of Section 202 or 302, as applicable; (iv) all other provisions of this Agreement, exclusive of Sections 503 and 504 shall become effective as of the Initial Effective Date; (v) Section 503 shall become effective concurrently with the date on which Article 2 becomes effective; and (vi) Section 504 shall become effective concurrently with the date on which Article 3 becomes effective. 3 Transmission Owner Services and Asset Assignment Agreement Section 102. Definitions. As used in this Agreement (including its preamble, recitals, and attachments), capitalized terms (whether used in the singulaz or the plural) shall have the meanings specified below: (a) "Act" means the Minnesota Municipal Power Agency Act, Minnesota Statutes, Chapter 453, Sections 453.51 to 453.62, as the same has been heretofore or may be hereinafter amended. (b) "Agreement" and "Transmission Asset Assignment Agreement" mean this Transmission Owner Services and Asset Assignment Agreement between CMMPA and the Participant and all substantially similar agreements entered into by CMMPA and the other Participants with respect to CMMPA-Owned Transmission Projects and any Participant-Owned Transmission Facilities, in each case as the same may be amended from time to time, including all Attachments and Exhibits to this Agreement, as any such Attachment or Exhibit may be revised and updated from time to time, in each case in accordance with the terms of this Agreement. (c) "Annual Budget" means the budget effective for any Contract Year pursuant to Section 601 of this Agreement, which itemizes the estimated Monthly Transmission Owner Services Costs and monthly Revenues during a Contract Year, or, in the case of an amended Annual Budget, during the remainder of a Contract Year. (d) "Applicable Law" means (i) any and all laws (including all statutory enactments and common law), ordinances, constitutions, regulations, treaties, rules, codes, standards, permits, requirements and orders that: (a) have been adopted, enacted, implemented, promulgated, ordered, issued, entered or deemed applicable by or under the authority of any governmental or regulatory agency or body having jurisdiction over a specified Person (or the properties or assets of such Person) and (b) are applicable to the CMMPA-Owned Transmission Projects or the Participant-Owned Transmission Facilities; and (ii) the rules, orders, regulations, practices, procedures and protocols established in compliance with Applicable Law (as defined in clause (i) of this definition) by duly authorized transmission providers (such as MISO), electric reliability organizations (such as NERC and the Midwest Reliability Organization) and comparable Persons that are applicable to the CMMPA-Owned Transmission Projects or the Participant-Owned Transmission Facilities or the transactions, operations, and activities contemplated by this Agreement and the CMMPA-Participant Transmission Project Agreements, or the performance of the obligations of the parties to such agreements; provided, however, that "Applicable Law" shall not include any laws, ordinances, constitutions, regulations, treaties, rules, codes, standards, permits, requirements and orders adopted, enacted, implemented, promulgated, ordered, issued, or entered by CMMPA or the Participant. 4 Transmission Owner Services and Asset Assignment Agreement (e) "Billing Statement" means the written statement, which may include a statement transmitted by facsimile, email, or other electronic means, prepared monthly by CMMPA and delivered to the Participant in accordance with Section 602. (t) "Bond Resolution" means any one or more resolutions, indentures, loan agreements, or other similar instruments providing for the issuance of Bonds issued or to be issued by CMMPA to provide financing with respect to CMMPA- Owned Transmission Projects. (g) "Bonds" means any bonds, notes or other evidences of indebtedness issued from time to time by CMMPA in connection with CMMPA-Owned Transmission Projects or to refund previously issued Bonds. (h) "Brookings Participation Rights Share" means (i) the Participant's rights under that certain Development Project Agreement between CMMPA and the Participant dated as of February 28, 2007, together with (ii) the associated Participant Capacity Rights Share sold to the Participant under the CMMPA- Participant Brookings Project Agreement. (i) `Brookings Transmission Project" means that portion of the Brookings - Southeast Twin Cities transmission project described in Exhibit A to this Agreement with respect to which, pursuant to the applicable Upstream Project Agreements, CMMPA holds ownership and other rights. The term `Brookings Transmission Project" includes (i) any rights held by CMMPA with respect to the development of the Brookings -Southeast Twin Cities transmission project; and (ii) all replacements, restoration, rebuilding, upgrades, capital additions, or modifications to maintain facility transfer capability or reliability after initial commercial operation of the Brookings -Southeast Twin Cities transmission project. (j) "CMMPA" means the Central Minnesota Municipal Power Agency, which has heretofore been duly created and incorporated as a municipal corporation and a political subdivision of the State of Minnesota under provisions of the Act. (k) "CMMPA MISO Transmission Owner Agreement" means the agreement initially effective August 16, 2007, between the MISO and CMMPA providing, among other things, for the MISO's operational control of transmission facilities and disbursement of Revenues to or for the beneftt of CMMPA, as such agreement may be amended, superseded, or replaced from time to time. (1) "CMMPA-Participant Brookings Transmission Project Agreement" means the Brookings -Twin Cities Transmission Project Agreement between CMMPA and the Participant and all substantially similar agreements entered into by CMMPA and other Participants with respect to the Brookings Transmission Project, in each case as the same may be amended from time to time. (m) "CMMPA-Participant Transmission Project Agreements" means (i) the CMMPA-Participant Brookings Transmission Project Agreement; (ii) any other transmission project agreements that CMMPA may from time to time during the term of this Agreement enter into with the Participant providing for, among other things, (A) the purchase by such Participant from CMMPA of capacity rights or 5 Transmission Owner Services and Asset Assignment Agreement other participation interests in connection with CMMPA-Owned Transmission Projects, and (B) the assignment of the Participant's capacity rights or other participation interest in such project pursuant to the terms of this Agreement; and (iii) any agreements between CMMPA and the Participant establishing development rights with respect to the agreements described in clause (i) or (ii) of this definition. (n) "CMMPA-Owned Transmission Projects" means (i) the Brookings Transmission Project; (ii) any other transmission projects with respect to which, during the term of this Agreement, CMMPA enters into aCMMPA-Participant Transmission Project Agreement with the Participant. The term "CMMPA- Owned Transmission Project" includes (A) any rights held by CMMPA with respect to the development of a CMMPA-Owned Transmission Project; and (B) all replacements, restoration, rebuilding, upgrades, capital additions, or modifications made to maintain facility transfer capability or reliability after initial commercial operation of a CMMPA-Owned Transmission Project. (o) "Contract Year" means the 12-month period commencing on January 1 and ending December 31 of each calendar year during the term of this Agreement, except that the first Contract Year under this Agreement shall commence on the date on which CMMPA begins providing Transmission Owner Services under this Agreement, and the last Contract Year shall end at the date of termination of this Agreement in its entirety in accordance with Section 206 or 309 of this Agreement. (p) "FERC" means the Federal Energy Regulatory Commission or its successor. (q) "Funds Trust Agreement" means the agreement that CMMPA has executed with JP Morgan Chase Bank, N.A., as trustee, the MISO, and the Transmission Owners, which supplements provisions of the CMMPA MISO Transmission Owner Agreement with respect to the collection and distribution of certain revenues thereunder, as such agreement may be amended, superseded, or replaced from time to time (including, without limitation, by the substitution of a successor trustee). (r) "Initial Effective Date" has the meaning given such term in Section 101 (a) of this Agreement. (s) "Joint Pricing Zone Revenue Allocation Agreements" and "JPZ Agreements" means agreements that CMMPA has executed or may execute with certain Transmission Owners responsible for distributing revenue to other Transmission Owners, including CMMPA, located in their respective pricing zones, as such agreements may be supplemented, amended, superseded, or replaced from time to time. (t) "Midwest Independent Transmission System Operator" and "MISO" means the Midwest Independent Transmission System Operator, Inc. or any successor organization that serves as the transmission provider under the MISO TEMT or any equivalent or successor tariff. 6 Transmission Owner Services and Asset Assignment Agreement (u) "MISO-Related Documents" means the MISO TEMT, the CMMPA MISO Transmission Owner Agreement, and the JPZ Agreements, collectively. (v) "MISO-Required Information" means such documents and other supporting information as may be required by the MISO pursuant to the MISO TEMT and the JPZ Agreements to facilitate the receipt of Revenues by CMMPA acting in its capacity as Transmission Owner. Such documentation includes, but is not be limited to, Attachment O, Attachment GG, EIA Form 412 templates, and other related documentation or any successor documentation. (w) "MISO Services" means those services requested by CMMPA or its designated agent on behalf of the Participant to be provided by the MISO pursuant to a market participant agreement or similar agreement with the MISO and the MISO TEMT. (x) "MISO TEMT" means the MISO Open Access Transmission and Energy Markets Tariff or any successor, including all schedules or attachments thereto and all business practices manuals related thereto that are in effect from time to time. (y) "Monthly Transmission Owner Services Costs" means the monthly amounts, as more particularly set forth in Attachment 2 to this Agreement, paid or incurred by CMMPA in connection with the provision of Transmission Owner Services. (z) "Municipal Electric System" means all properties and interest in properties, real and personal, of the Participant, including its Participant-Owned Transmission Facilities, used or pertaining to the generation, transmission, transformation, distribution, and sale by the Participant of electric power and energy, including all additions, extensions, expansions, improvements and betterments thereto and equipping thereof, as such properties may at any time exist: provided, however, that to the extent the Participant is not the sole owner of any item of or interest in property, only the Participant's ownership in such item of or interest in property shall be considered part of its Municipal Electric System. (aa) "NERC" means the North American Electric Reliability Corporation or its successor. (bb) "Other Instruments" has the meaning given such term in Section 910 of this Agreement. (cc) "Owner" means each Person (including CMMPA) identified as an "Owner" in the Upstream Project Agreements, as defined in Section 102(pp). (dd) "Participant" means, as the context requires, the Person executing this Agreement, or another Person executing a separate Transmission Asset Assignment Agreement, which Person, in each case, is a "city," as defined i^ Subdivision (3) of Section 453.52 of the Act, located in the State of Minnesota, the State of Iowa or other state of the United States of America as permitted by the Act. 1n general, references to "the Participant" are to the Person executing this Agreement; references to "other Participant" (whether singular or plural) mean one or more Persons that have executed separate Transmission Asset Transmission Owner Services and Asset Assignment Agreement Assignment Agreements; and references to "the Participants" mean the Person executing this Agreement together with all other Persons executing separate Transmission Asset Assignment Agreements, all of which are listed in Attachment 4 to this Agreement. (ee) "Participant Portion of Monthly Transmission Project Costs" means the Participant Portion of Monthly Transmission Project Costs as defined in the CMMPA-Participant Brookings Transmission Project Agreement. (ff) "Participant-Owned Transmission Facilities" means the transmission facilities that are owned by Participant and identified in Exhibit B to this Agreement, including any replacements, restoration, rebuilding, upgrades, capital additions, or modifications to such transmission facilities. (gg) "Person" means any individual; corporation; partnership; limited liability company; association; cooperative association; joint stock company; trust; unincorporated organization; joint venture; federal, state, municipal, or local governmental or regulatory body (including, without limitation, any agency, authority, branch, board, commission, court, department, instrumentality, office, subdivision, or other unit); or other entity with legal constitution under Applicable Law. (hh) "Prudent Utility Practice" at a particular time means any practices, methods and acts (including but not limited to the practices, methods and acts engaged in or approved by a significant portion of the electrical utility industry prior thereto) which, in the exercise of reasonable judgment in the light of the facts known at the time the decision was made, could have been expected to accomplish the desired result at the lowest reasonable cost consistent with good business practices, reliability, safety and expedition. Prudent Utility Practice shall apply not only to functional parts of CMMPA-Owned Transmission Projects and Participant-Owed Transmission Facilities, but also to appropriate structures, landscaping, painting, signs, lighting, or facilities and public relations programs reasonably designed to promote public enjoyment, understanding and acceptance of the CMMPA-Owned Transmission Projects and Participant-Owed Transmission Facilities. Prudent Utility Practice is not intended to be limited to the optimum practice, method or act, to the exclusion of all others, but rather to be a spectrum of possible practices, methods or acts. In evaluating whether any matter conforms to Prudent Utility Practice, the parties shall take into account (i) the fact that CMMPA is a body politic and corporate and apolitical subdivision under the laws of the State of Minnesota, with the statutory duties and responsibilities thereof, (ii) the fact that the Participant is a body politic and corporate or other governmental entity or political subdivision under the laws of the state in which it is located, with the statutory duties and responsibilities thereof, and (iii) in the case of any joint facility, the applicable ownership or participation agreement between the owners or participants of the facility. (ii) "Revenues" has the meaning given such term in Section 501(a) of this Agreement. 8 Transmission Owner Services and Asset Assignment Agreement (jj) "Services Administration Committee" means the committee formed in accordance with Section 403 of this Agreement. (kk) "Transmission Facilities Assignment Agreement" means the agreement entered into by CMMPA and certain Participants transferring operational control of Participant-Owned Transmission Facilities to CMMPA to facilitate CMMPA's reassignment and conveyance of the operational control of such facilities to the MISO and receipt by CMMPA of Revenues. (II) "Transmission Owner" means any Person, including CMMPA, that owns, operates, or controls transmission facilities and is defined as a "Transmission Owner" by the MISO. (mm) "Transmission Owner Agreements" mean any and all agreements that CMMPA may enter into from time to time during the term of this Agreement with other Persons, including the MISO, to enable CMMPA to fulfill its role as Transmission Owner, which agreements are listed in Attachment 4, as the same may be amended or replaced from time to time. (nn) "Transmission Owner Services" shall have the meaning given such term in Section 401 of this Agreement (oo) "Uncontrollable Forces" means the occurrence of an event or series of events that is beyond the reasonable control of the party affected that hinders the performance under contract of such person and does not result from the fault, negligence, intentional misconduct, or willful misconduct of the affected party or such party's failure to comply with Applicable Law or Prudent Utility Practice; and such event or series of events could not have been avoided by the affected party through the exercise of reasonable diligence, including the expenditure of reasonable monies or the taking of reasonable precautionary measures. The term "Uncontrollable Forces" includes (to the extent that such events satisfy the foregoing criteria), the following: (i) acts of God or the public enemy; (ii) war, terrorism, rebellion, sabotage, civil unrest or riot; (iii) fires, explosions, hurricanes, floods, tornadoes, microbursts, other abnormal weather events or other natural catastrophes; (iv) changes to Applicable Law; and (v) strikes and other labor disturbances. Under no circumstance shall Uncontrollable Forces excuse a party's obligations to make payments when due under this Agreement, unless such Uncontrollable Forces result in a failure of the Federal Reserve wire system or other failure of the banking system that deprives a party of access to otherwise available funds. (pp) "Upstream Project Agreements" means those agreements entered into by CMMPA and one or more other Persons providing for the ownership, construction, operation, and maintenance of a CMMPA-Owned Transmission Project. The term "Upstream Project Agreements" does not include any agreement to which one or more Participants are parties. 9 Transmission Owner Services and Asset Assignment Agreement ARTICLE 2 PROVISIONS APPLICABLE TO BROOHINGS PROJECT AND OTHER CMMPA-OWNED TRANSMISSION PROJECT Section 201. Applicability of Article 2. The provisions of this Article 2 shall apply to the Participant and CMMPA only to the extent, and for such period as, there are CMMPA-Owned Transmission Projects identified on Exhibit A with respect to which CMMPA provides Transmission Owner Services to the Participant. For the avoidance of doubt, the effectiveness of this Article 2 is expressly contingent upon the execution by CMMPA and the Participant of at least one CMMPA-Participant Transmission Project Agreement. Furthermore, to the extent the Participant has executed aCMMPA-Participant Transmission Project Agreement that causes the associated CMMPA-Owned Transmission Project to become subject to this Agreement, nothing in this Agreement shall in any manner obligate the Participant to enter into any additional CMMPA-Participant Transmission Project Agreements in the future. Section 202. Effectiveness of Agreement with Respect to CMMPA-Owned Transmission Projects. This Agreement shall be effective with respect to CMMPA-Owned Transmission Projects as of the Initial Effective Date, unless the Initial Effective Date is established pursuant to clause (i) or (iv) of Section 101(a), in which case this Agreement shall be effective with respect to CMMPA-Owned Transmission Projects as of the earliest to occur of (a) the effective date of the CMMPA-Participant Brookings Transmission Project Agreement, or (b) the effective date of aCMMPA-Participant Transmission Project Agreement other than the CMMPA-Participant Brookings Transmission Project Agreement. Once effective with respect to one or more CMMPA-Owned Transmission Projects, this Agreement shall remain in effect with respect to CMMPA-Owned Transmission Projects until such date as all applicable CMMPA-Participant Transmission Project Agreements have terminated in accordance with their terms, unless this Agreement is otherwise terminated as provided for in this Agreement. Section 203. Assignment of Brookings Participation Rights Share. (a) The Participant hereby assigns to CMMPA, as of the date established in accordance with Section 202 and for so long as this Agreement remains in effect with respect to the Brookings Transmission Project, the Participant's Brookings Participation Rights Share. (b) The Participant acknowledges and agrees that the assignment of the Participant's Brookings Participation Rights Share is intended to facilitate CMMPA's conveyance of the operational control of the Brookings Transmission Project to the MISO pursuant to the CMMPA MISO Transmission Owner Agreement and CMMPA's receipt of Revenues in connection with the Brookings Transmission Project, and that the scope of such assignment shall be sufficient to, among other things: (i) permit the MISO to: 10 Transmission Owner Services and Asset Assignment Agreement (A) provide non-discriminatory open access transmission service over the Brookings Transmission Project; (B) receive funds associated with transmission services from transmission customers and distribute such funds to CMMPA or its designee; (C) be responsible for regional system reliability; and (D) provide energy market and ancillary services pursuant to the MISO TEMT; and (ii) otherwise permit CMMPA to fulfill all of its obligations as a Transmission Owner with respect to the Brookings Transmission Project in accordance with the MISO-Related Documents. Section 204. Assignment of Capacity Rights Related to Future CMMPA-Owned Transmission Projects. If, at any time following the Initial Effective Date of this Agreement, CMMPA and the Participant enter into aCMMPA-Participant Transmission Project Agreement in addition to the CMMPA-Participant Brookings Transmission Project Agreement, the CMMPA- Owned Transmission Project subject to such CMMPA-Participant Transmission Project Agreement shall be assigned under and subject to the terms of this Agreement as of the effective date of such CMMPA-Participant Transmission Project Agreement, without any further action or consent by the Participant. The Participant acknowledges and agrees that with respect to any such additional CMMPA-Owned Transmission Project, the effectiveness of this Agreement with respect to such CMMPA-Owned Transmission Project shall: (a) effectuate the assignment of the Participant's capacity rights or other participation interests in such CMMPA-Owned Transmission Project on the same terms applicable to the Brookings Transmission Project pursuant to Section 203 of Yhis Agreement; (b) be reflected in an amendment to Exhibit A of this Agreement, which amendment: (i) shall be prepared and delivered to the Participant by CMMPA as promptly as practicable following the effective date of the applicable CMMPA- Participant Transmission Project Agreement; (ii) shall not require any signature or acknowledgement by the Participant to become effective; and (iii) shall be subject to the obligations set forth in Section 205(f) of this Agreement. Section 205. Modification of Exhibit A. Any modification to Exhibit A of this Agreement shall be subject to the terms of the CMMPA-Participant Transmission Project Agreements, the MISO-Related Documents, and Applicable Law. Any notice of a modification to Exhibit A pursuant to this Section 205 shall specifically identify the CMMPA-Owned Transmission Project(s) to which the notice relates and the date upon which the identified modifications to Exhibit A shall be (or are expected to become) effective. (a) Inclusion of Additional CMMPA-Owned Transmission Proiects 11 Transmission Owner Services and Asset Assignment Agreement If, following the Effective Date, (i) CMMPA and the Participant enter into a CMMPA-Participant Transmission Project Agreement for a new CMMPA- Owned Transmission Project, and (ii) consistent with the terms set forth in such CMMPA-Participant Transmission Project Agreement, CMMPA proposes to add the new CMMPA-Owned Transmission Project to Exhibit A, CMMPA shall give the Participant not less than 60 days' prior written notice, and such addition shall become effective concurrently with the effective date of the applicable CMMPA- Participant Transmission Project Agreement. (b) Improvements, Additions, Upgrades, or Modifications to, or Replacements or Retirements of, CMMPA-Owned Transmission Proiects (i) CMMPA shall be responsible for determining whether improvements, additions, upgrades, or modifications to, or replacements or retirements of, CMMPA-Owned Transmission Projects are appropriate, taking into consideration the applicable terms of the Upstream Project Agreements, the CMMPA-Participant Transmission Project Agreements, and the MISO-Related Documents. (ii) CMMPA shall keep the Participant informed of any improvements, additions, upgrades, or modifications to, or replacements or retirements of CMMPA-Owned Transmission Projects with respect to which the Participant has capacity rights or other participation interests. (iii) CMMPA shall have the right, in its sole discretion and upon 60 days' prior written notice to the Participant, to modify the list of CMMPA-Owned Transmission Projects set forth in Exhibit A to reflect improvements, additions, upgrades, or modifications to, or replacements or retirements of, CMMPA-Owned Transmission Projects. (iv) For the avoidance of doubt, (A) nothing in paragraph (b) of this Section 205 is intended to modify or conflict with the provisions of any Upstream Project Agreement, any CMMPA-Participant Transmission Project Agreement, or the MISO-Related Documents governing determinations, actions, or obligations of either CMMPA or the Participant with respect to improvements, additions, upgrades, or modifications to, or replacements or retirements of, CMMPA-Owned Transmission Projects; and (B) no amendment to Exhibit A of a Transmission Asset Assignment Agreement between CMMPA and another Participant shall affect the rights and obligations of the Participant under this Agreement. (c) Withdrawal of CMMPA-Owned Transmission Proiects from the MISO. (i) CMMPA shall be responsible for determining whether withdrawal of one or more CMMPA-Owned Transmission Projects from the operational control of the MISO is appropriate, taking into consideration the applicable terms of the CMMPA-Participant Transmission Project Agreements and the MISO-Related Documents. (ii) If CMMPA proposes to withdraw one or more CMMPA-Owned Transmission Projects from the operational control of the MISO, CMMPA 12 Transmission Owner Services and Asset Assignment Agreement shall consult with the coordinating committee(s) for the applicable CMMPA-Owned Transmission Projects and the Services Administration Committee concerning, among other things, (A) the necessity or advisability of such withdrawal, (B) potential alternatives for continued tariff recovery of costs associated with the affected CMMPA-Owned Transmission Project(s), and (C) any relevant recommendations by the coordinating committee(s) or the Services Administration Committee. (iii) If, following the consultation process described in paragraph (ii) of this Section 205(c), CMMPA determines, in its sole discretion, to proceed with withdrawal of one or more CMMPA-Owned Transmission Projects from the operational control of the MISO, CMMPA shall: (A) consider any coordinating committee and Services Administration Committee recommendations regarding tariff recovery alternatives in determining the circumstances under which CMMPA would be willing to perform services similar to those provided for in this Agreement under a replacement agreement with the Participant related to the withdrawn CMMPA-Owned Transmission Project(s); (B) comply with all applicable requirements of the corresponding CMMPA-Participant Transmission Project Agreements, the MISO- Related Documents, Applicable Law, and applicable obligations, if any, under any Bond Resolutions for Bonds then outstanding with respect to such CMMPA-Owned Transmission Project(s); (C) give the Participant not less than 90 days' prior written notice of the date on which withdrawal from the MISO shall become effective; and (D) make good faith efforts to negotiate a mutually acceptable replacement agreement addressing CMMPA's provision of services similar to those provided under in this Agreement if requested by the Participant and if the CMMPA Board of Directors determines that CMMPA is willing to provide such services. (d) Regulatory or MISO Approval of Modifications of Exhibit A. In connection with any modification of Exhibit A pursuant to this Section 205, CMMPA shall seek any necessary regulatory or MISO approvals, including any approvals required pursuant to the MISO-Related Documents. (e) Participant Responsibility for Share of Resulting Costs. The Participant shall be responsible for its share of all costs related to CMMPA's actions consistent with the provisions of this Section 205, including without limitation the negotiation of any replacement agreements. (f) Evidence of Rights Satisfactory to the MISO. At any time and from time to time during the term of this Agreement, the Participant shall, upon CMMPA's request, promptly furnish to CMMPA a copy 13 Transmission Owner Services and Asset Assignment Agreement of the then-current form(s) of Exhibit A to this Agreement (or any portion of Exhibit A) or such other written documentation as CMMPA may require to demonstrate to the satisfaction of the MISO the rights that have been assigned by the Participant to CMMPA. pursuant to this Agreement with respect to CMMPA- Owned Transmission Projects. (g) Effect of Removal of CMMPA-Owned Transmission Project. Any removal of a CMMPA-Owned Transmission Project from Exhibit A in accordance with this Section 205 shall terminate all obligations of CMMPA under this Agreement with respect to such CMMPA-Owned Transmission Projects. Section 206. Termination of Agreement with Respect to CMMPA-Owned Transmission Projects. (a) CMMPA and the Participant may terminate this Agreement with respect to those provisions applicable solely to CMMPA-Owned Transmission Projects upon execution by CMMPA and the Participant of a written agreement to terminate. (b) In addition, CMMPA may terminate this Agreement with respect to those provisions applicable solely to CMMPA-Owned Transmission Projects only: (i) upon the effective date of CMMPA's withdrawal from the MISO, in accordance with Section 205(c), of all CMMPA-Owned Transmission Projects in which the Participant has capacity rights or other participation interests; (ii) upon any discontinuance of operations or other termination of the MISO; (iii) as to any specific CMMPA-Owned Transmission Project, upon the effective date of a sale or other transfer of such CMMPA-Owned Transmission Project, provided that such sale or transfer complies with all applicable provisions of the corresponding CMMPA-Participant Transmission Project Agreement, unless such sale or other transfer is made expressly subject to the continued application of this Agreement; or (iv) as to any specific CMMPA-Owned Transmission Project, upon the termination of such CMMPA-Owned Transmission Project in accordance with the corresponding CMMPA-Participant Transmission Project Agreement. (c) Any termination of this Agreement with respect to a CMMPA-Owned Transmission Project shall be consistent with CMMPA's rights, duties and obligations as a Transmission Owner under the MISO-Related Documents and the Funds Trust Agreement and subject to CMMPA's satisfaction of all such duties and obligations, and shall also be subject to the Participant's payment and satisfaction of all costs, obligations, and liabilities incurred by CMMPA in connection with CMMPA's provision of Transmission Owner Services with respect to those CMMPA-Owned Transmission Projects to which such termination applies. 14 Transmission Owner Services and Asset Assignment Agreement (d) If this Agreement is terminated with respect to all CMMPA-Owned Transmission Projects and, as of the effective date of such termination, CMMPA is not providing Transmission Owner Services with respect to any Participant-Owned Transmission Facilities, then termination of this Agreement with respect to all CMMPA-Owned Transmission Projects shall terminate this Agreement in its entirety. ARTICLE 3 PROVISIONS APPLICABLE TO PARTICIPANT-OWNED TRANSMISSION FACILITIES Section 301. Applicability of Article 3. The provisions of this Article 3 shall apply to the Participant and CMMPA only to the extent, and for such period as, there is an Exhibit B to this Agreement, executed by the Participant and CMMPA, identifying Participant-Owned Transmission Facilities with respect to which CMMPA provides Transmission Owner Services to the Participant. If the Participant and CMMPA have not executed an Exhibit B to this Agreement, no part of this Article 3 shall apply to either the Participant or CMMPA. Section 302. Effectiveness of Agreement with Respect to Participant-Owned Transmission Facilities. With respect to Participant-Owned Transmission Facilities, if any, listed in Exhibit B to this Agreement, this Agreement shall be effective as of the Initial Effective Date, unless the Initial Effective Date is established pursuant to clause (ii), (iii), or (iv) of Section 101(a), in which case this Agreement shall be effective with respect to Participant-Owned Transmission Facilities, if any, as of the date specified on an executed form of Exhibit B to this Agreement, with execution evidenced by the authorized signatures of CMMPA and the Participant on such Exhibit B. Once effective with respect to one or more Participant-Owned Transmission Facilities, this Agreement shall remain in effect for a period of five years unless sooner terminated in accordance with Section 309. Thereafter, this Agreement shall continue in effect until terminated in accordance with Section 309. 15 Transmission Owner Services and Asset Assignment Agreement Section 303. Termination and Replacement of Transmission Facilities Assignment Agreement. As of the date established in accordance with Section 302, any Transmission Facilities Assignment Agreement in effect between CMMPA and the Participant shall terminate and be superseded by this Agreement; provided, however, that if there are obligations or liabilities of either party under any Transmission Facilities Assignment Agreement that have not been fully performed or satisfied as of the date such Transmission Facilities Assignment Agreement is superseded by this Agreement, such obligations or liabilities shall remain in effect and become obligations and liabilities under this Agreement. Section 304. Assignment of Rights Related to Participant-Owned Transmission Facilities. (a) The Participant hereby agrees to and confirms the continuation of the transfer and conveyance of operational control of and capacity rights with respect to the Participant-Owned Transmission Facilities as initially effectuated pursuant to the Transmission Facilities Assignment Agreement. Such transfer and conveyance shall continue in effect from the date established in accordance with Section 302 until this Agreement is terminated in accordance with Section 309. (b) The Participant acknowledges and agrees that the transfer and conveyance of operational control of and capacity rights with respect to the Participant-Owned Transmission Facilities is intended to facilitate CMMPA's continued conveyance of operational control of and capacity rights with respect to the Participant-Owned Transmission Facilities to the MISO pursuant to the CMMPA MISO Transmission Owner Agreement and CMMPA's receipt of Revenues in connection with the Participant-Owned Transmission Facilities. The scope of such transfer and conveyance shall be sufficient to, among other things, (i) permit the MISO to: (A) provide non-discriminatory open access transmission service over the Participant-Owned Transmission Facilities; (B) receive funds associated with transmission services from transmission customers and distribute such funds to CMMPA or its designee; (C) be responsible for regional system reliability; (D) provide energy mazket and ancillary services pursuant to the MISO TEMT; and (ii) otherwise permit CMMPA to fulfill all of its obligations as a Transmission Owner with respect to Participant-Owned Transmission Facilities in accordance with the MISO-Related Documents. (c) In addition to the Participant's transfer and conveyance of operational control of and capacity rights with respect to the Participant-Owned Transmission Facilities pursuant to paragraphs (a) and (b) of this Section 304, the Participant hereby grants to CMMPA the following non-exclusive rights, which CMMPA may further grant to other Persons: (i) access to its Participant-Owned Transmission Facilities; 16 Transmission Owner Services and Asset Assignment Agreement (ii) use of its distribution facilities to effectuate transmission transactions under the MISO TEMT; and (iii) the ability to provide transmission services over its Participant-Owned Transmission Facilities. Section 305. Title, Obligations, Liabilities, and Other Rights and Responsibilities Retained by the Participant. Notwithstanding the Participant's transfer of operational control and capacity rights to CMMPA pursuant to Section 304 of this Agreement, the Participant shall retain physical control of its Participant-Owned Transmission Facilities and all obligations to: (a) plan, operate, maintain, repair, replace, upgrade, make additions or capital improvements to, and insure Participant-Owned Transmission Facilities, all in accordance with Prudent Utility Practice; and (b) comply with Applicable Law, including, without limitation, any NERC standards pertaining to the Participant-Owned Transmission Facilities and any requirements imposed by the MISO. The Participant acknowledges and agrees that CMMPA (i) has assumed no obligations or liability whatsoever with respect to any portion of the Participant's Municipal Electric System other than the Participant-Owned Transmission Facilities, and (ii) shall have no obligations of any kind with respect to the Participant-Owned Transmission Facilities except those specifically set forth in this Agreement. Without limiting the generality of the foregoing sentence, CMMPA shall have no liability, and by the execution of this Agreement assumes no liability, for planning, operating, maintaining, repairing, replacing, insuring, or making upgrades or additions or capital improvements to, the Participant's Municipal Electric System, including without limitation any liability for compliance with NERC standards pertaining to such Municipal Electric System or payment of related NERC or FERC penalties. Nothing in this Section 305 shall limit CMMPA's exercise of the rights provided under Section 307 of this Agreement. Section 306. Specific Participant Obligations Related to Participant-Owned Transmission Facilities. (a) ~ecific Obligation Related to Plannine, Oaerations, and Maintenance. The Participant shall at all times and in accordance with Prudent Utility Practice and Applicable Law, including all applicable NERC standards: (i) plan, operate, and maintain equipment and facilities associated with its Municipal Electric System (including Participant-Owned Transmission Facilities and distribution facilities) in accordance with all applicable terms of the MISO TEMT, the CMMPA MISO Transmission Owner Agreement, the MISO regional transmission planning process, and any other regional transmission planning processes in which the MISO or its members are required to participate; 17 Transmission Owner Services and Asset Assignment Agreement (ii) to the extent required by the MISO TEMT, make its generation interconnected to the Municipal Electric System available for re-dispatch and the provision of ancillary services, including without limitation reactive power and voltage control; and (iii) follow directives issued pursuant to the MISO TEMT or the CMMPA MISO Transmission Owner Agreement, including without limitation operational directives and directives to curtail its load thereto. (b) Specific Obligations Related to Construction and Upgrades. The Participant shall at all times and in accordance with Prudent Utility Practice and Applicable Law (including all applicable NERC standards) be responsible for constructing (or permitting the construction of) improvements, additions, upgrades, and modifications to its Participant-Owned Transmission Facilities and for the addition of new transmission and distribution facilities to be located on its Municipal Electric System that are required: (i) to accommodate requests by generators to interconnect; (ii) to add new delivery points for service to load; (iii) for reliability or delivery; or (iv) for any other reason; all in accordance with the MISO TEMT and the CMMPA MISO Transmission Owner Agreement. (c) Participant Responsibility for Fines Penalties or Other Liabilities Resulting from Participant's Failure to Operate Maintain Plan and Construct Municipal Electric System in Accordance with Section 306(a) and (b). Any fines, penalties, or other liability resulting from any failure of the Participant to fully comply with the requirements set forth in paragraphs (a) and (b) of this Section 306 (including, without limitation, fines or penalties imposed by NERC, FERC, the MISO, or any other body with legal or regulatory jurisdiction applicable to the Participant's Municipal Electric System) shall be the sole responsibility of and shall be timely paid by the Participant. (d) Rate Covenant. The Participant shall establish, maintain and collect rates and charges for the electric service from its Municipal Electric System so as to provide revenues sufficient, together with available reserves from its Municipal Electric System, to enable the Participant to pay to CMMPA all amounts payable under this Agreement and all other amounts payable from and all lawful charges against or liens on the revenue of its Municipal Electric System and to operate and maintain its Municipal Electric system in a sound, businesslike manner in accordance with Prudent Utility Practice. 18 Transmission Owner Services and Asset Assignment Agreement Section 307. CMMPA Specific Rights Related to Participant Failure to Comply with Section 306. If CMMPA determines, in good faith and in accordance with Prudent Utility Practice, or if CMMPA is notified by a third party (including, without limitation, the MISO, NERC, or FERC) that the Participant's failure to take the actions required by Section 306 of this Agreement have caused, or, if uncured will cause, CMMPA to be in default or violation with respect to the MISO-Related Documents or Applicable Law, CMMPA shall promptly deliver written notice to the Participant identifying the default or violation. Unless the default or violation is not subject to cure, CMMPA shall include in such notice a deadline by which the Participant must achieve full compliance with Section 306. Any such deadline shall provide the Participant a reasonable period of time to cure the default or violation, which shall be not less than 90 days unless the MISO-Related Documents or Applicable Law requires a cure in less than 90 days. If the Participant has not achieved full compliance with Section 306 by the deadline specified in CMMPA's notice to the Participant under this Section 307, CMMPA shall have the right, without further action by or notice to the Participant, to exercise the rights set forth in paragraphs (a) through (e) of this Section 307, all of which shall be cumulative with respect to each other and with respect to any other legal or equitable remedies provided under this Agreement or by Applicable Law. (a) Withholding Revenues. Consistent with CMMPA's obligations under Article 5, CMMPA shall have the right to withhold from the Participant any Revenues otherwise due to the Participant under this Agreement with respect to Participant-Owned Transmission Facilities if the CMMPA Board of Directors determines that withholding such Revenues from the Participant is appropriate and: (i) Revenues are withheld from CMMPA as a result of the Participant's failure to take the actions required by Section 306; or (ii) CMMPA determines that it is necessary or advisable to pay on the Participant's behalf amounts the Participant is required, but has failed, to pay in accordance with Section 306(c); or (iii) CMMPA otherwise has incurred or will incur fines, penalties, Loss of Revenues, additional expenses, or other financial liability or damages as a result of the Participant's failure to take the actions required by Section 306. The amount of any Revenues withheld under paragraph (a) of this Section 307 may not exceed the amount determined by the CMMPA Board of Directors to be sufficient to fully offset amounts withheld from or paid or incurred by CMMPA as described in items (i), (ii), and (iii) of paragraph (a) of this Section 307. (b) CMMPA Actions. CMMPA shall have the right (but not the obligation) to take such actions and provide such financing as are necessary to cure the default or violation, and to exercise any rights granted to CMMPA under this Agreement necessary to enable 19 Transmission Owner Services and Asset Assignment Agreement CMMPA to take such actions and provide such financing as are necessary to cure the default or violation. (c) Arran¢ement for Third Party Actions. CMMPA shall have the right (but not the obligation) to arrange for a third party to take such actions and provide such financing as are necessary to cure the default or violation, and to assign to such third party any rights granted to CMMPA under this Agreement necessary to enable the third party to take such actions and provide such financing as are necessary to cure the default or violation. (d) Termination of Services and Withdrawal of Facilities from MISO. CMMPA shall have the right to terminate the provision of Transmission Owner Services with respect to the Participant-Owned Transmission Facilities and notify the MISO of withdrawal from the MISO of the Participant-Owned Transmission Facilities, subject to such terms as are applicable to such withdrawal and termination in accordance with Section 308 of this Agreement. (e) Injunctive Relief and Specific Performance. The parties recognize that failure by the Participant to fulfill its obligations under Section 306 of this Agreement could result in serious adverse consequences to CMMPA and other Participants, including the potential for irreparable harm for which monetary damages would not provide an adequate remedy. In such circumstances, CMMPA shall be entitled to injunctive relief to prevent or remedy a violation or default by the Participant under Section 306, and to compel specific performance of the Participant's obligations under Section 306, without the posting of any bond and without proof of any actual damages. (f) No Limitation on Participant's Riehts of Termination. Nothing in this Section 307 shall limit or modify any right the Participant may have under Section 309 to terminate this Agreement with respect to CMMPA's provision of Transmission Owner Services for Participant-Owned Transmission Facilities. Section 308. Modification of Exhibit B. Any modification of Exhibit B to this Agreement shall be subject to any applicable requirements in the MISO-Related Documents, and Applicable Law. Any notice of a modification to Exhibit B pursuant to this Section 308 shall specifically identify the Participant-Owned Transmission Facilities to which the notice relates and the date upon which the Participant wishes the requested modifications to Exhibit B to take effect. (a) Inclusion of Newly Acquired or Constructed Particiuant-Owned Transmission Facilities. (i) If, following the effective date of this Agreement with respect to Participant-Owned Transmission Facilities, the Participant proposes to acquire or construct new Participant-Owned Transmission Facilities for which the Participant wishes CMMPA to provide Transmission Owner 20 Transmission Owner Services and Asset Assignment Agreement Services, the Participant shall provide not less than 60 days' prior written notice to CMMPA as provided this Section 308. (ii) CMMPA shall request authorization from the CMMPA Board of Directors to provide Transmission Owner Services with respect to any newly acquired or constructed Participant-Owned Transmission Facilities, and shall provide such Transmission Owner Services in accordance with this Agreement if authorized by the CMMPA Board of Directors and consistent with all applicable requirements of the MISO TEMT, and the CMMPA MISO Transmission Owner Agreement, the MISO regional transmission planning process, and any other regional transmission planning processes in which the MISO or its members are required to participate. (b) Improvements, Additions, Upgrades, or Modifications to, or Replacements or Retirements of, any Participant-Owned Transmission Facilities. (i) In addition to complying with its obligations under Section 306 of this Agreement, the Participant shall be responsible for determining whether any other improvements, additions, upgrades, or modifications to, or replacements or retirements of Participant-Owned Transmission Facilities are appropriate, taking into consideration the requirements applicable to such actions pursuant to this Agreement, including, without limitation, all applicable requirements of the MISO TEMT, the CMMPA MISO Transmission Owner Agreement, the MISO regional transmission planning process, and another other regional transmission planning processes in which the MISO or its members are required to participate. (ii) The Participant shall keep CMMPA informed of any new acquisition or construction of, improvements, additions, upgrades, or modifications to, or replacements or retirements of Participant-Owned Transmission Facilities. (iii) If the Participant undertakes to improve, make additions to, or upgrade, modify, retire, or replace any of the Participant-Owned Transmission Facilities, the Participant shall provide not less than 60 days' prior written notice to CMMPA as provided in this Section 308. (c) Withdrawal of Participant-Owned Transmission Facilities from the Operational Control of the MISO. If the Participant wishes to withdraw one or more of its Participant-Owned Transmission Facilities from the operational control of the MISO, the Participant shall provide CMMPA with not less than five years' written notice (unless CMMPA agrees to a shorter period consistent with the applicable terms of the MISO-Related Documents). (d) CMMPA Actions to Obtain Necessary Approvals. CMMPA shall seek any required regulatory or MISO approvals necessary for any change in Exhibit B requested by the Participant in accordance with this Section 308, including any approvals required pursuant to the MISO-Related Documents. 21 Transmission Owner Services and Asset Assignment Agreement (e) Parties' Actions to Effect Modifications to Exhibit B. Provided that: (i) CMMPA has received all necessary approvals as contemplated by paragraph (d) of this Section 308 above; and (ii) the Participant has complied with all requirements under this Agreement, the MISO-Related Documents, and Applicable Law (including, without limitation, any requirements imposed by regulatory authorities with applicable jurisdiction), modifications to Exhibit B requested by the Participant in accordance with this Section 308 shall take effect upon the execution and delivery by CMMPA and the Participant of a revised form of Exhibit B (or such other date as may be specified in the revised form of Exhibit B executed and delivered by CMMPA and the Participant). (fj Participant Responsibility for Resulting Costs. The Participant shall be responsible for any and all costs resulting from actions taken in connection with its Participant-Owned Transmission Facilities as described in this Section 308, including without limitation actions required to enable CMMPA to begin providing, or continue to provide, or terminate the provision of Transmission Owner Services. (g) Effect of Removal of Participant-Owned Transmission Facilities. Any removal of Participant-Owned Transmission Facilities from Exhibit B in accordance with this Section 308 shall terminate all obligations of CMMPA under this Agreement with respect to such Participant-Owned Transmission Facilities. Section 309. Termination of Agreement with Respect to Participant-Owned Transmission Facilities. (a) Those provisions of this Agreement applicable solely to Participant-Owned Transmission Facilities may be terminated with respect to all Participant-Owned Transmission Facilities only upon: (i) written agreement of the parties; (ii) the effective date of the Participant's withdrawal of all of its Participant- Owned Facilities in accordance with Section 308; (iii) any discontinuance of operations or other termination of the MISO; (iv) the effective date of an assignment, lease, sale, or other transfer of the Participant's Municipal Electric System, provided that such assignment, lease, sale, or transfer complies with the provisions set forth in Section 907; or 22 Transmission Owner Services and Asset Assignment Agreement (v) five years' written notice by CMMPA to the Participant or by the Participant to CMMPA requesting termination of this Agreement with respect to the Participant-Owned Transmission Facilities. (b) Any termination of this Agreement with respect to Participant-Owned Transmission Facilities shall be consistent with CMMPA's rights, duties and obligations as a Transmission Owner under the MISO-Related Documents and the Funds Trust Agreement and shall be subject to the Participant's payment and satisfaction of all costs, obligations, and liabilities incurred by CMMPA, through the effective date of termination, in connection CMMPA's provision of Transmission Owner Services with respect to Participant-Owned Transmission Facilities. (c) If, as of the effective date of termination of this Agreement with respect to Participant-Owned Transmission Facilities, CMMPA is not providing Transmission Owner Services with respect to any CMMPA-Owned Transmission Projects, then termination of this Agreement with respect to Participant-Owned Transmission Facilities shall terminate this Agreement in its entirety. ARTICLE 4 CMMPA PROVISION OF TRANSMISSION OWNER SERVICES; CERTAIN RIGHTS AND OBLIGATIONS APPLICABLE TO ALL FACILITIES Section 401. CMMPA Service Obligations Related to CMMPA-Owned Transmission Projects and Participant-Owned Transmission Facilities. With respect to all CMMPA-Owned Transmission Projects and all Participant-Owned Transmission Facilities subject to this Agreement, CMMPA shall provide the services described below in this Section 401 and such other services as the CMMPA Board of Directors, in its sole discretion, may determine are necessary or appropriate to effectuate the purposes of this Agreement, which, together, shall be the "Transmission Owner Services." Transmission Owner Services shall include: (a) fulfillment of obligations applicable to CMMPA as a Transmission Owner in accordance with the MISO-Related Documents and the Funds Trust Agreement, including but not limited to: (i) CMMPA development and submittal of MISO-Required Information; (ii) preparation and submittal of FERC filings, including, as applicable: (A) new formula rate proposals or changes to a component of the formula rate that affect only the transmission revenue requirement associated with CMMPA-Owned Transmission Projects and Participant-Owned Transmission Facilities and no other Transmission Owner's transmission revenue requirements; (B) incentive or performance based rate filings; and (C) the recovery of costs under Schedule 1 or a successor or replacement schedule(s) and other ancillary services offered to customers under the MISO TEMT; (iii) participation in transmission planning and related committee activities conducted by the MISO or other regional transmission planning processes; 23 Transmission Owner Services and Asset Assignment Agreement (iv) submittal of proposed modifications related to CMMPA-Owned Transmission Projects and Participant-Owned Transmission Facilities for potential inclusion in the MISO regional transmission plan and any other applicable transmission plans; (v) coordinate with the MISO with respect to the design, procurement, installation and construction of improvements, additions and modifications to CMMPA-Owned Transmission Projects pursuant to CMMPA- Participant Transmission Project Agreements that are required, pursuant to the terms of the MISO-Related Documents, to accommodate requests by generators to interconnect or for reliability or delivery or otherwise required to comply with Applicable Law; (vi) coordinate with the MISO with respect to the Participant's design, procurement, installation and construction of improvements, additions and modifications to Participant-Owned Transmission Facilities that are required, pursuant to the terms of the MISO-Related Documents, to accommodate requests by generators to interconnect or for reliability or delivery or otherwise required to comply with Applicable Law; provided, however, that such coordination shall not relieve the Participant of any of its obligations under this Agreement; (vii) the performance of studies and analysis and the compilation and provision of data and information in connection with evaluations of requests for interconnection and transmission service that impact CMMPA-Owned Transmission Projects or Participant-Owned Transmission Facilities; and (viii) communications with Participants, the MISO, Transmission Owners and others concerning the operational status of, and other matters pertaining to or affecting, CMMPA-Owned Transmission Projects and Participant- Owned Transmission Facilities; and (b) determination of the Participant's share of Revenues associated with CMMPA- Owned Transmission Projects and Participant-Owned Transmission Facilities in accordance with Article 5. Section 402. CMMPA Charges for Transmission Owner Services. (a) As payment for the Transmission Owner Services provided to the Participant in accordance with this Agreement, CMMPA shall charge to the Participant a portion of the Monthly Transmission Owner Services Costs, as set forth in Attachment 2 to this Agreement and in accordance with paragraph (b) of this Section 402, relating to: (i) those CMMPA-Owned Transmission Projects in which the Participant has capacity rights or other participation interests; and (ii) the Participant-Owned Transmission Facilities, if any, for which CMMPA is providing Transmission Owner Services. (b) The portion of the Monthly Transmission Owner Services Costs charged to the Participant shall be in accordance with generally accepted accounting and ratemaking principles and shall be established: 24 Transmission Owner Services and Asset Assignment Agreement (i) by directly assigning, to the extent practicable, all costs incurred by CMMPA exclusively for the provision of Transmission Owner Services; (ii) through the rates, charges, and fees included in CMMPA's Annual Budget for CMMPA's administrative and general and other costs associated with its provision of Transmission Owner Services under this Agreement; and (iii) in such other manner as the CMMPA Board of Directors shall determine, to the extent any such costs cannot be assigned or allocated in accordance with paragraphs (i) and (ii) of this Section 402(b). (c) Charges for Monthly Transmission Owner Services Costs shall be billed to the Participant in accordance with Section 602 of this Agreement. Section 403. Services Administration Committee. (a) Creation and Composition of Services Administration Committee. Promptly following the Initial Effective Date, a Services Administration Committee shall be established. The Services Administration Committee shall consist of: (i) one representative for each CMMPA-Owned Transmission Project for which CMMPA provides Transmission Owner Services under this Agreement, who shall be appointed on an annual basis by a majority vote of Participants that are participating in such CMMPA-Owned Transmission Project; (ii) one representative for those Participants that are receiving Transmission Owner Services under Transmission Asset Assignment Agreements with respect to Participant-Owned Transmission Facilities, who shall be appointed on an annual basis by a majority vote of such Participants; (iii) one non-voting staff person of CMMPA appointed by the CMMPA Board of Directors; and (iv) if the appointment of Services Administration Committee representatives pursuant to paragraphs (i) and (ii) of this Section 403(a) results in an even number of voting representatives, one additional representative appointed jointly by the representatives appointed pursuant to paragraphs (i) and (ii) of this Section 403(a). For the avoidance of doubt, the results of votes to appoint representatives pursuant to paragraphs (i) and (ii) of this Section 403(a) shall (A) be determined on the basis of the number of Participants casting votes (as opposed, for example, to weighting by relative capacity rights or other participation interests held with respect to the applicable CMMPA-Owned Transmission Projects or Participant- Owned Transmission Facilities), and (B) require a majority vote of all Participants eligible to vote with respect to appointment of a given representative (as opposed to only those Participants casting votes). (b) Scope of Services Administration Committee's Activities. 25 Transmission Owner Services and Asset Assignment Agreement The Services Administration Committee shall: (i) serve in a general capacity as liaison with CMMPA staff and the CMMPA Board of Directors on behalf of the Participants by which the representatives are appointed; (ii) in conjunction with the Annual Budget process as set forth in Section 601 of this Agreement, conduct an annual review of the allocation of costs and Revenues under this Agreement, and inform the CMMPA Board of Directors of the results of such review and matters for further consideration, if any, identified by Participants or the Services Administration Committee; (iii) provide consultation and recommendations as contemplated by Sections 205(c), 405, 502, and 601, and vote on approval of amendments to Attachments 2 as contemplated by Section 901(6); (iv) meet as necessary to carry out its responsibilities under this Agreement; and (v) not duplicate the functions and activities of the coordinating committees under CMMPA-Participant Transmission Project Agreements. (c) Governance of Services Administration Committee. (i) The Services Administration Committee shall elect a chairperson, who shall serve as liaison to the CMMPA Board of Directors. (ii) A meeting of the Services Administration Committee may be called by the chairperson or at the request of at least two representatives. (iii) Each Participant representative on the Services Administration Committee shall have one vote in matters submitted to a Services Administration Committee vote. (iv) The affirmative votes of over 50% of the Participant representatives on the Services Administration Committee shall be required for the Services Administration Committee to take action. (d) Authority of Services Administration Committee. Except as specifically provided in Section 901(6) with respect to approval of amendments to Attachment 2 to this Agreement, no vote, recommendation, or other action of the Services Administration Committee shall be binding on CMMPA or the CMMPA Board of Directors. Section 404. Participant Records; Information to Be Provided by CMMPA and Participant. (a) The Participant shall keep accurate records and accounts pertaining to its Municipal Electric System, including the Participant-Owned Transmission Facilities, in a manner that supports the Participant's obligations under this Agreement to provide CMMPA with information needed for the preparation of 26 Transmission Owner Services and Asset Assignment Agreement MISO-Required Information. A firm of certified public accountants, experienced in electric utility accounting for a similar organization, to be employed by the Participant, shall audit such records and accounts annually. Such records and accounts shall be made available for inspection by CMMPA at any reasonable time. Such annual certified audit, including all written comments and recommendations of such accountants, shall be provided to CMMPA upon its request for such information. (b) To the extent that the Participant's books and records are not kept in accordance with the Uniform System of Accounts, Participant shall assist CMMPA in the development of certain reporting information required by the M1S0 using the Uniform System of Accounts. (c) CMMPA and the Participant acknowledge and agree that to facilitate CMMPA's receipt of Revenues in connection with CMMPA-Owned Transmission Projects and Participant-Owned Transmission Facilities, CMMPA is required to prepare and submit MISO-Required Information at least annually or as otherwise required under the MISO TEMT and the JPZ Agreements. Attachment 1 sets forth the specific process and procedures to be followed by CMMPA and the Participant for the preparation, completion, and submittal of MISO-Required Information. (d) The Participant shall cooperate with and provide to CMMPA such information as may required for CMMPA to timely prepare and submit the MISO-Required Information related to CMMPA-Owned Transmission Projects and Participant- Owned Transmission Facilities. For any required submittal or update of MISO- Required Information, the Participant shall deliver to CMMPA such attestations as may be reasonably required by CMMPA in connection with submittal of MISO-Required Information. If required, CMMPA shall provide such attestations to the MISO. (e) With respect to the development of MISO-Required Information and other supporting information, CMMPA and the Participant shall make good faith efforts to ensure that neither CMMPA nor the Participant will double recover costs as a result of the reported information therein and shall so attest as necessary. (~ In addition to complying with the requirements of paragraphs (a) through (e) of this Section 404, (i) CMMPA and the Participant shall cooperate and exchange any additional information as necessary to fully carry out the intent of the requirements included in this Section 404; and (ii) the Participant shall supply CMMPA, upon request, with such information and documentation, and take such further actions, as are reasonably necessary to effectuate the terms of this Agreement, including without limitation delivery of (A) any opinions by an attorney or firm of attorneys, as CMMPA shall reasonably determine to be requisite to and necessary or desirable with respect to the provision of Transmission Owner Services, and (B) financial statements and other information reasonably available to allow CMMPA to respond to requests for such information from any federal, state, or local regulatory body (including, without limitation, FERC) or NERC or the MISO. 27 Transmission Owner Services and Asset Assignment Agreement (g) CMMPA and the Participant shall work together in good faith to implement the provisions of this Section 404. The Participant acknowledges and agrees that the Participant's failure to timely comply with the requirements set forth in this Section 404 may impair CMMPA's ability to receive or preclude CMMPA from receiving Revenues, and shall, for purposes of Section 801 of this Agreement, be deemed a default by Participant under this Agreement. CMMPA shall not be responsible for any loss or delay of Revenues otherwise due to the Participant to the extent the loss or delay results from the Participant's failure to timely comply with the requirements set forth in this Section 404. In addition, to the extent the Participant's failure to timely comply with the requirements set forth in this Section 404 results in loss of Revenues that would have otherwise been due to another Participant, the Participant shall be liable to CMMPA for such loss, and CMMPA shall have the right to retain Revenues otherwise due to Participant under this Agreement to the extent of, and shall apply such retained Revenues to mitigate, any such loss. Section 405. Insurance. CMMPA shall procure and maintain in force, as a Monthly Transmission Owner Services Cost, such insurance as may be required by the Transmission Owner Agreements or Prudent Utility Practice, or that CMMPA may reasonably deem desirable, but without duplicating any insurance coverage provided by insurance obtained in accordance with applicable CMMPA-Participation Transmission Project Agreements. Subject to the provisions of the Transmission Owner Agreements, any proceeds of such insurance received by CMMPA relating to the provision of Transmission Owner Services shall be used to offset Monthly Transmission Owner Services Costs that would otherwise be payable under this Agreement. In determining the amount of insurance to maintain for purposes of this Agreement, CMMPA shall consult with, and provide an opportunity for input and recommendations from, the Services Administration Committee. Nothing herein shall prevent Participant from purchasing additional insurance and CMMPA shall reasonably cooperate with Participant's actions to do so. Section 406. Delivery of Participant Opinion. If requested by CMMPA in connection with the execution and delivery of this Agreement and at such other times as CMMPA shall reasonably request, the Participant shall furnish CMMPA with an opinion by an attorney or firm of attorneys, addressed to CMMPA and such other parties as CMMPA requests, to the effect of the matters set forth on Attachment 5 hereto. 28 Transmission Owner Services and Asset Assignment Agreement ARTICLE 5 REVENUE ALLOCATION AND APPLICATION OF REVENUES Section 501. Definition of Revenues. (a) As used in this Agreement, the term "Revenues" means (i) revenues received by or credited to CMMPA pursuant to the MISO- Related Documents and the Funds Trust Agreement that are properly allocable to the CMMPA-Owned Transmission Projects or the Participant- Owned Transmission Facilities, subject to any adjustments and other offsets required pursuant to the MISO-Related Documents and the Funds Trust Agreement; and (ii) interest income, true-ups, withdrawals from a working capital fund, and other revenues received by CMMPA in connection with the provision of Transmission Owner Services under this Agreement. (b) Revenues may take the form of a credit or offset to charges included on CMMPA invoices for MISO Services purchased by CMMPA on behalf of the Participants. (c) The term "Revenues" includes only payments made to CMMPA that are specifically related to recovery of costs related to and return on assets in CMMPA-Owned Transmission Projects or the Participant-Owned Transmission Facilities. Exclusions from "Revenues" encompass, but are not limited to, CMMPA (i) recovery of costs related to and return on general plant assets; (ii) recovery of and return on working capital that is not directly related to the CMMPA-Owned Transmission Projects or the Participant-Owned Transmission Facilities; (iii) recovery of transmission operating and maintenance expenses that are not allocated or assigned to the Participant; and (iv) recovery of administrative, general, and other indirect costs incurred by CMMPA that are not allocated or assigned to the Participant. Section 502. Allocations of Revenues as Among Projects, Facilities, and Participants. (a) For each month of each Contract Year during the term of this Agreement, CMMPA shall determine, consistent with the terms of this Section 502, the allocation of Revenues attributable to (i) each of the CMMPA-Owned Transmission Projects, (ii) each Participant with capacity rights or other participation interests in each of the CMMPA-Owned Transmission Projects, and (iii) each of the Participant-Owned Transmission Facilities. (b) To the extent practicable, such allocation shall reflect the basis on which such Revenues are received by CMMPA, consistent with: (i) the revenue distribution methodology used in the JPZ Agreements to distribute Revenues to CMMPA; and 29 Transmission Owner Services and Asset Assignment Agreement (ii) the revenue distribution methodology used by the MISO to distribute Revenues to CMMPA that are not otherwise distributed to CMMPA pursuant to the JPZ Agreements. (c) To the extent Revenues cannot be allocated in accordance with paragraph (b) above, Revenues shall be allocated based on generally accepted accounting and ratemaking principles. (d) In determining the allocation of Revenues among the specific Participants to a particular CMMPA-Owned Transmission Project, CMMPA shall, in addition to applying the provisions of paragraphs (b) and (c) above, carry out the terms of the corresponding CMMPA-Participant Transmission Project Agreement governing allocation among Participants of amounts received or incurred with respect to such CMMPA-Owned Transmission Project. (e) If the Initial Effective Date is established pursuant to clause (iv) of Section 101(a) of this Agreement, then, for any period following the Initial Effective Date during which neither Article 2 nor Article 3 is in effect, the allocation of any Revenues received by CMMPA shall correspond to the rights assigned to CMMPA pursuant to Section 101(b)(i) of this Agreement. (f) With the approval of the CMMPA Board of Directors and upon not less than 60 days' prior written notice to the Participant (or such shorter period as may be required for CMMPA to comply with its obligations under or treat Revenues consistent with the MISO-Related Documents), CMMPA may revise the manner in which Revenues are allocated for purposes of this Agreement if: (i) the methodology used to distribute Revenues to CMMPA under the JPZ Agreements is modified; (ii) the methodology used by MISO to distribute Revenues to CMMPA that are not otherwise distributed to CMMPA pursuant to the JPZ Agreements is modified; or (iii) the CMMPA Board of Directors determines, consistent with the terms of this Agreement, that such revision is necessary to effectively carry out the purposes of this Agreement. (g) In considering whether to revise the manner in which Revenues are allocated for purposes of this Agreement, CMMPA shall consult with, and provide an opportunity for input and recommendations from, the Services Administration Committee. Section 503. Application of Revenues Related to CMMPA-Owned Transmission Projects. (a) Application of Brookings Project Revenues. For each month of each Contract Year during the term of this Agreement, any Revenues properly allocable to the Participant for such month in accordance with Section 502 for the Brookings Transmission Project shall be applied, after deducting amounts due under this Agreement for Transmission Owner Services, 30 Transmission Owner Services and Asset Assignment Agreement to one or both of (i) costs of acquisition, construction, and financing related to the Brookings Transmission Project, and (ii) the Participant Portion of Monthly Transmission Project Costs (as that term is defined in the CMMPA-Participant Brookings Transmission Project Agreement) for such month. If any Revenues properly allocable to the Brookings Transmission Project remain after application of Revenues pursuant to the preceding sentence, such amounts shall be credited against any other amounts due from Participant in connection with the Participant's receipt of MISO Services or otherwise applied or remitted for the benefit of the Participant; provided, however, that CMMPA shall have the right to retain any such remaining Revenues pursuant to the terms of Section 404(8) or 801 of this Agreement. (b) Application of Other CMMPA-Owned Transmission Proiect Revenues. If, at any time during the term of this Agreement, CMMPA is providing Transmission Owner Services to the Participant with respect to any CMMPA- Owned Transmission Projects other than the Brookings Transmission Project, the application of any Revenues properly allocable to the Participant for such month with respect to such CMMPA-Owned Transmission Project shall be consistent with the terms applicable the Brookings Transmission Project as set forth in Section 503(a). Section 504. Application of Revenues Related to Participant-Owned Transmission Facilities. For each month of each Contract Year during the term of this Agreement, the Revenues, if any, properly allocable to the Participant for such month in accordance with Section S02 for Participant-Owned Transmission Facilities shall be credited, after deducting amounts due under this Agreement for Transmission Owner Services, against any other amounts due from Participant in connection with the Participant's receipt of MISO Services or otherwise applied or remitted for the benefit Participant; provided, however, that CMMPA shall have the right to retain any such remaining Revenues pursuant to the terms of Section 404(g), 307, or 801 of this Agreement. ARTICLE 6 BUDGET, BILLING, AND PAYMENT OBLIGATIONS Section 601. Annual Budget. (a) At least 90 days before the start of each Contract Year (beginning with the first full Contract Year following the Contract Year during which the Initial Effective Date occurs), CMMPA shall deliver to the Participant a preliminary Annual Budget for the Contract Year, which shall: (i) set forth all the components of Monthly Transmission Owner Services Costs in accordance with in Attachment 2; (iij set forth a monthly estimate of Revenues; 3l Transmission Owner Services and Asset Assignment Agreement (iii) be based, among other things, on information provided pursuant to the CMMPA MISO Transmission Owner Agreement and the JPZ Agreements and CMMPA estimates of other costs to provide Transmission Owner Services; (iv) state the monthly costs and revenues on an individual Participant basis and on a composite basis for all Participants; and (v) show monthly costs and revenues separately for each CMMPA-Owned Transmission Project and each Participant's Participant-Owned Transmission Facilities. (b) Not more than 30 days following CMMPA's delivery of the preliminary Annual Budget for a given Contract Year, CMMPA shall convene a meeting of the Services Administration Committee at which CMMPA will make individuals familiar with the budgeting process available to answer questions and receive feedback from the Services Administration Committee concerning the preliminary Annual Budget. The Services Administration Committee may, if it chooses, provide recommendations to CMMPA concerning the preliminary Annual Budget, which shall not be binding on CMMPA but which CMMPA shall consider, as it deems appropriate, in preparing a final Annual Budget for the applicable Contract Year. (c) As promptly as practicable following the Services Administration Committee meeting convened in accordance with Section 601(b), CMMPA shall deliver to the Participant a final Annual Budget for the upcoming Contract Year, consistent with the terms set forth in Section 601(a), which shall reflect such changes, if any, to the preliminary Annual Budget as CMMPA determines in good faith are warranted by comments or recommendations received from the Services Administration Committee or other circumstances relevant to the Transmission Project. (d) Subject to the requirements set forth in Section 601(a), the Annual Budget delivered to the Participant in accordance with this Section 601, may, but shall not be required to, be presented as a portion of a larger annual budget document prepared by CMMPA, including but not limited to budget information for all of its operations or for those CMMPA operations relating to transmission facilities and services. If, in its sole discretion, CMMPA elects to disclose to the Services Administration Committee annual budget information relating to CMMPA operations and activities in addition to the Transmission Owner Services, such disclosure shall not obligate CMMPA to deliver to the Participant Annual Budget information beyond that required by the terms of Section 601(a) of this Agreement. 32 Transmission Owner Services and Asset Assignment Agreement Section 602. Billing Statement. (a) On or before the first day of each month of each Contract Year or other time period as determined by CMMPA (with reasonable prior notice to the Participant), CMMPA shall prepare and deliver to the Participant, including by facsimile, email, or other electronic transmission, a Billing Statement showing: (i) amounts due for Transmission Owner Services provided by CMMPA with respect to CMMPA-Owned Transmission Projects, consistent with the Annual Budget; (ii) amounts due for Transmission Owner Services provided by CMMPA with respect to any Participant-Owned Transmission Facilities, consistent with the Annual Budget; (iii) Revenues to be credited, applied, or remitted with respect to CMMPA- Owned Transmission Projects in accordance with Article 5 of this Agreement; (iv) Revenues to be credited, applied, or remitted with respect to Participant- Owned Transmission Facilities in accordance with Article 5 of this Agreement; and (v) net amounts due to or payable by the Participant (b) CMMPA shall have the right to true up the monthly Billing Statement to the extent that estimated amounts included therein vary from actual costs and credits incurred or received by CMMPA. CMMPA shall be permitted to issue and collect, in a single Billing Statement, the Monthly Transmission Owner Services Costs due from the Participant for multiple months, including the current month. Any amounts shown in the Billing Statement to be paid to one party by the other shall be due and payable on the 25~' day of the month, and any amounts due and not paid on or before the close of business on the 25`h day of the month shall be subject to a service charge of one and one-half percent (1%z%) per month. Remittances received by mail will be accepted without assessment of said charges, provided that the postmark indicates that the payment was mailed on or before such day. If the 25`h day of the month is a Sunday or other non-business day of the parties, the next following business day shall be the last day on which payment may be mailed without addition of said charges. (c) Subject to the requirements set forth in Section 602(a), any Billing Statement delivered to the Participant in accordance with Section 602(a), may, but shall not be required to, be combined with billing statements required or permitted to be delivered to the Participant pursuant to other agreements with, or services provided by, CMMPA, including but not limited to any CMMPA-Participant Transmission Project Agreements. 33 Transmission Owner Services and Asset Assignment Agreement Section 603. Billing Adjustments. On or before 120 days after the end of each Contract Year, CMMPA shall submit to the Participant a statement of the actual aggregate Monthly Transmission Owner Services Costs and monthly Revenues for such Contract Year. If the actual aggregate Monthly Transmission Owner Services Costs, monthly Revenues, and any other charges and credits applicable to the Participant for such Contract Year for CMMPA-Owned Transmission Projects and Participant-Owned Transmission Facilities exceed the amounts on the basis of which the Participant has been billed, the deficiency shall be added to the next succeeding Billing Statement or, at CMMPA's discretion, spread over the remainder of the then-current Contract Year. If the actual aggregate Monthly Transmission Owner Services Costs, monthly Revenues, or other amounts payable for such Contract Year are less than the amounts on the basis of which the Participant has been billed, CMMPA shall credit such balance on the next succeeding Billing Statement, or, by agreement of the Participant and CMMPA, on the Billing Statements delivered to the Participant for the remainder of the then-current Contract Year. Section 604. Billing Disputes. (a) Except as set forth below in paragraph (b) of this Section 604, the Participant shall not have the right to challenge any Billing Statement or other bill, invoice or statement rendered by CMMPA for any known claim or claim that it could have reasonably known, invoke arbitration of the same or bring any court or administrative action of any kind questioning the propriety of the same after a period of twenty-four months from the date of rendering. In the case of a Billing Statement or other bill, invoice or statement containing estimates for any known claim or claim that it could have reasonably known, the Participant shall not have the right to challenge its accuracy after a period of twenty-four months from the date of its adjustment to reflect the actual amounts due. The Participant's right to challenge any Billing Statement or other bill, invoice or statement rendered by CMMPA with respect to claims not subject to the twenty-four month limitation periods set forth above shall be limited to the twenty-four month period from the date on which the Participant knew, or reasonably should have known, of the facts and circumstances giving rise to the claim. (b) [n the event of any dispute as to any portion of any Billing Statement (including its reasonableness or appropriateness), if payment is due from one party to the other party, the party from which payment is due shall nevertheless pay the full amount shown on the Billing Statement when due. The Participant shall give written notice of any dispute concerning a Billing Statement (other than any dispute based upon information not reasonably available to the Participant at the time required to give notice under this paragraph (b)) to CMMPA not later than the date such payment is due. Such notice shall identify the amount in dispute and set forth a full statement of grounds on which such dispute is based. No adjustment shall be considered or made for disputed charges unless notice is given, as aforesaid. CMMPA shall give consideration to such dispute and shall advise the Participant with regard to its position relative thereto within 120 days following receipt of such written notice. Upon final determination (whether by 34 Transmission Owner Services and Asset Assignment Agreement agreement, arbitration, adjudication or otherwise) of the correct amount, any difference between such correct amount and such full amount shall be properly reflected in the Billing Statement next submitted to the Participant after such determination. The difference shallinclude a service charge of one and one-half percent (1 %,%) per month. ARTICLE 7 REPORTS; RECORDS AND ACCOUNTS Section 701. Reports. (a) CMMPA shall prepare, or cause to be prepared, and issue to the Participant the following reports for each Contract Year: (i) financial and operating statement relating to the provision of Transmission Owner Services; and (ii) status of the Annual Budget. (b) CMMPA shall cause to be prepared and issued to the Participants, no later than 180 days after the conclusion of each Contract Year, audited information concerning the Revenues and costs related to Transmission Owner Services, consistent with Section 702 of this Agreement. If such information includes information that is not publicly available, CMMPA may condition disclosure of such information on the Participant's written agreement to keep such information confidential. Section 702. CMMPA Records and Accounts. CMMPA shall keep accurate records and accounts in a manner similar to the FERC Uniform System of Accounts and Generally Accepted Accounting Princip]es or such other system as may be reasonably approved by CMMPA. A firm of certified public accountants, experienced in electric utility accounting for a similar organization, to be employed by CMMPA, shall audit CMMPA's records and accounts annually. Such records and accounts shall be made available for inspection by the Participant at any reasonable time. The portion of such annual certified audit relating to the provision of Transmission Owner Services, including all written comments and recommendations of such accountants, shall be provided to the Participants in accordance with Section 701 of this Agreement. ARTICLE 8 OBLIGATIONS IN THE EVENT OF DEFAULT Section 801. Failure of the Participant to Pay or Perform. (a) The provisions of this Section 801 are in addition to the specific provisions in Sections 404(g) and 307 related to the matters addressed by those sections. Any 35 Transmission Owner Services and Asset Assignment Agreement time periods or procedures set forth in Section 404(g) or 307 with respect to the matters addressed by those sections shall control over otherwise conflicting provisions in this Section 801. In addition, the parties specifically contemplate that (i) the Participant's obligation to continue performance notwithstanding any protest as permitted by paragraph (c) of this Section 801, and (ii) the rights specified in paragraphs (d) and (e) of this Section 801, shall apply with respect to all defaults under this Agreement, irrespective of the applicability of Sections 404(g) and 307. (b) Subject to the provisions of paragraph (a) of this Section 801, upon any failure of the Participant to make any payment in full when due under this Agreement or to perform any obligation herein, CMMPA shall make demand upon the Participant, and if said failure is not cured within 20 days from the date of such demand it shall constitute a default at the expiration of such period. CMMPA shall also provide notice of such demand to the other Participants. (c) If the Participant in good faith disputes the legal validity of said demand, it shall nonetheless make such payment or perform such obligation within said 20-day period under protest directed to CMMPA. Such protest shall specify the reasons upon which the protest is based. (d) At any time the Participant is in default under this Agreement, CMMPA may (i) bring any suit, action, or proceeding in law or in equity, including mandamus, injunction, specific performance, declaratory judgment, or any combination thereof, as may be necessary or appropriate to enforce against the Participant any covenant, agreement or obligation of this Agreement; and (ii) with respect to any default by the Participant of its payment obligations under this Agreement, retain Revenues to which the Participant would otherwise be entitled under this Agreement (after application of the terms of Article 5 and Sections 404(8) and 307). In addition, with respect to any default by the Participant of its payment obligations for Transmission Owner Services provided for Participant-Owned Transmission Facilities, CMMPA shall have the right to terminate this Agreement with respect to such Transmission Owner Services. All remedies specified in this Section 801 shall be in addition to all other legal or equitable remedies provided for in this Agreement (including, without limitation, Sections 404(8) and 307) or by Applicable Law. (e) CMMPA shall be entitled to recover from the Participant any and all legal fees and other costs incurred by CMMPA as a result of the Participant's default. 36 Transmission Owner Services and Asset Assignment Agreement Section 802. Default by Another Participant. (a) If another Participant is in default under its Transmission Asset Assignment Agreement, then, if the CMMPA Board of Directors determines that it is necessary to maintain CMMPA's status in good standing as a Transmission Owner or to comply with Applicable Law: (i) CMMPA may take action to cure such defaulting Participant's default to the extent necessary to maintain CMMPA's status in good standing as a Transmission Owner or enable CMMPA to comply with Applicable Law; (ii) if the default arises in connection with Participant-Owned Transmission Facilities of such defaulting Participant, CMMPA shall make good faith, commercially reasonable efforts to exercise CMMPA's rights under Section 307 of such defaulting Participant's Transmission Asset Assignment Agreement; and (iii) if deemed necessary by CMMPA, CMMPA may include as Monthly Transmission Owner Services Costs the costs and expenses incurred by CMMPA in taking any actions described in paragraphs (i) and (ii) of this Section 802(a). (b) CMMPA may commence such suits, actions or proceedings, at law or in equity, including suits for speciftc performance, as may be necessary or appropriate to enforce against the defaulting Participant its obligations under its Transmission Asset Assignment Agreement. (c) CMMPA shall be entitled to recover from the defaulting Participant any and all legal fees and other costs incurred by CMMPA as a result of that Participant's default. (d) If the Participant's share of Monthly Transmission Owner Services Costs includes costs resulting from a default by another Participant under its Transmission Asset Assignment Agreement, then, to the extent CMMPA is able to recover all or a portion of such amounts through legal action or exercise of its contractual remedies against such defaulting Participant, CMMPA shall make commercially reasonable efforts to reimburse to the Participant such amounts to the extent available from damages or other remedies obtained by CMMPA through such legal action or contractual remedies against the defaulting Participant (net of CMMPA's direct and indirect costs incurred in connection with such legal action or exercise of contractual remedies). Section 803. Uncontrollable Forces. A party shall not be in default under this Agreement with respect to an obligation it is unable to perform to the extent such inability results from Uncontrollable Forces. A party unable to perform an obligation due to Uncontrollable Forces shall make commercially reasonable efforts to overcome such inability and to mitigate the consequences to the other party of its inability to perform. 37 Transmission Owner Services and Asset Assignment Agreement ARTICLE 9 MISCELLANEOUS PROVISIONS Section 901. Termination, Amendment, and Waiver. (a) This Agreement shall not be subject to termination by either party under any circumstances, whether based upon the default of the other party under this Agreement or default of another Participant under another Transmission Asset Assignment Agreement, or any party's default under any other instrument, or otherwise, except as specifically provided in this Agreement. (b) This Agreement may be amended only by a written instrument specifically referring to this Agreement, executed and delivered by CMMPA and the Participant, except that CMMPA may, with the approval of the CMMPA Board of Directors, revise any of Attachments 1, 3, 4, 5, and 6 to this Agreement as necessary or appropriate to reflect updated or changed information, amendments to CMMPA-Participant Transmission Project Agreements, or changes in Applicable Law. CMMPA may not modify Attachment 2 except with the approval of the CMMPA Board of Directors and the Services Administration Committee. Exhibit A may be modified as provided Section 205 of this Agreement. Exhibit B may be modified as provided Section 308 of this Agreement. (c) No term, .condition, warranty, representation, or covenant contained in this Agreement may be waived except by a written instrument executed by the party waiving compliance. Any such waiver shall be effective only in the specific instance and for the specific purpose for which it was given and shall not be deemed a waiver of any other provision or of the same breach or default upon any recurrence. No failure on the part of either party to exercise, and no delay in exercising, any right conferred by this Agreement shall operate as a waiver thereof nor shall any single or partial exercise of any right preclude any other or further exercise thereof or the exercise of any other right. Section 902. Notices and Communications. Any formal notice, demand, approval, proposal, protest, direction or request provided for in this Agreement to be delivered, given or made to the Participant shall be deemed delivered, given or made if delivered in writing in person or mailed by registered or certified mail, postage prepaid, return receipt requested, addressed to the Person and at the address designated in writing filed with CMMPA by the Participant or delivered in such other manner as may be agreed upon from time to time by CMMPA and the Participant. The Participant may change such designation, at any time and from time to time, by giving notice to CMMPA as below provided. Any formal notice, demand or request to be delivered, given or made to CMMPA must specifically reference this Agreement and shall be deemed delivered, given or made if delivered in writing, in person, or sent by mail or other means as provided above to the following address: 38 Transmission Owner Services and Asset Assignment Agreement Chief Executive Officer Central Minnesota Municipal Power Agency 459 South Grove Street Blue Earth, Minnesota 56013 or such other address designated by CMMPA, as provided above; with a copy to: Michael M. Gavin 017 Hennepin Ave. N. Glencoe, MN 55336 meavinid:eoslawtirm.com. Routine communications to facilitate the parties' general implementation of this Agreement (such as MISO-Required Information, reports, meeting notices, etc.) may be exchanged by the parties by electronic means or any other manner mutually acceptable to the parties. Section 903. Arbitration. In the event that a dispute arises between the parties as to the interpretation or performance of this Agreement, then upon written request of either party, representatives with settlement authority for each party shall meet in person and confer in good faith to resolve the dispute. Any dispute under this Agreement may be submitted to arbitration at the request of either CMMPA or the Participant provided that the other party agrees. Copies of any such request shall be given to the other Participants and shall specify the issue or issues in dispute. Within ten days afrer receipt of such a request CMMPA and the Participant shall confer and attempt to agree upon appointment of a single arbitrator. If such agreement is not accomplished, CMMPA or the Participant may request the American Arbitration Association to appoint an arbitrator. The arbitrator shall conduct a hearing within thirty days thereafrer, unless such time is extended by agreement of CMMPA and the Participant, shall notify the parties of his or her decision, stating his or her reasons for such decision, in writing, and separately listing his or her findings of fact and conclusions of law. The arbitrator shall not have power to amend, add to, or remove provisions from this Agreement. Subject to such limitation, the decision of the arbitrator shall be final and binding on CMMPA and the Participant except that either party may exercise available statutory rights under Minnesota law to petition a court of competent jurisdiction for review of the arbitrator's decision. The pendency of arbitration shall affect neither the obligation of a party to make any payment in full when due under this Agreement nor the obligations of this Agreement upon the failure of a party to make any payment in full when due under this Agreement. The prevailing party of a disputed matter shall be entitled to recover from the other party its reasonable legal fees and other costs of arbitration and court proceedings. 39 Transmission Owner Services and Asset Assignment Agreement Section 904. Governing Law and Venue. This Agreement is made under and shall be governed by the taw of the State of Minnesota, exclusive of principles related to choice of law. Venue for any proceeding concerning this Agreement shall be in any state or federal court of competent jurisdiction located in the State of Minnesota. Section 905. Obligations of Good Faith and Fair Dealing; Prudent Utility Practice. Each of CMMPA and the Participant acknowledges and agrees that (a) in performing this Agreement, it has an obligation of good faith and fair dealing, and (b) its actions and determinations pursuant to this Agreement shall be consistent with Prudent Utility Practice. The provisions of this Section 905 shall apply, without limitation, to the governing bodies, employees, and consultants of each of CMMPA and the Participant. Section 906. Severability. If any section, paragraph, clause or provision of this Agreement shall be finally adjudicated by a court of competent jurisdiction to be invalid, the remainder of this Agreement shall be unaffected by such adjudication and all of the remaining provisions of this Agreement shall remain in full force and effect as though such section, paragraph, clause or provision or any part thereof so adjudicated to be invalid had not been included herein. However, the parties shall attempt to negotiate provisions that reasonably substitute for the invalid provision in order to place the parties in the position that they would have been had the stricken clause or provision not been found invalid. Section 907. Assignment of Agreement by Participant. This Agreement shall inure to the benefit of, and shall be binding upon the parties to this Agreement and their respective successors and assigns; provided, however, that the Participant shall not take any action to effect an assignment, lease, sale, or other transfer of this Agreement, or any interest or rights conferred herein (any of the foregoing, a "Transaction") except in accordance with any applicable terms of the MISO-Related Documents and the Funds Trust Agreement and subject to the additional requirements set forth in this Section 907. (a) Transactions Involvin¢ CMMPA-Owned Transmission Projects. Any Transaction resulting in an assignment of the Participant's rights under a CMMPA-Participant Transmission Project Agreement must be (i) an assignment of all of the Participant's rights in such CMMPA-Owned Transmission Project; and (ii) permitted by the terms governing assignment by the Participant, as set forth in such CMMPA-Participant Transmission Project Agreement. 40 Transmission Owner Services and Asset Assignment Agreement (b) Transactions Involvine Participant-Owned Transmission Facilities. If the Transaction is part of the assignment, lease, sale, or other transfer of the Participant's entire Municipal Electric System, and such Municipal Electric System includes Participant-Owned Transmission Facilities: (i) the assignee, lessee, purchaser, or transferee must (A) be acceptable to CMMPA, and (B) have agreed in writing to assume all of the Participant's obligations under this Agreement; or (ii) the Participant must give to CMMPA notice of the Transaction sufficient to meet the notice requirements for termination under Section 309; or (iii) the Participant pays any and all costs incurred by CMMPA as a result of CMMPA commitments made or costs incurred to provide Transmission Owner Services to Participant with respect to the period following the effective date of the Transaction. (c) Coordination of Parties Related to Transaction Involving Municipal Electric System. If the Participant has determined that it will assign, lease, sell, transfer, or otherwise dispose of its Municipal Electric System, the Participant shall provide timely notification to CMMPA. CMMPA and the Participant shall then establish a schedule for CMMPA and its legal counsel to respectively address the applicable requirements of this Section 907. No such assignment, lease, sale, transfer, or other disposition shall relieve the Participant of any obligation hereunder. The parties shall seek to reasonably facilitate Transactions among Participants, to entities related to the Participant, and to other municipalities. Section 908. No Unreasonable Adverse Distinction. The terms, conditions and provisions of this Agreement and the other Transmission Asset Assignment Agreements shall apply comparably to all Participants and CMMPA shall not make any unreasonable adverse distinction among the Participants with respect to the provision of Transmission Owner Services. Section 909. Confidentiality of Information. (a) CMMPA and the Participant shall cooperate in good faith to reasonably protect the confidentiality of information exchanged by the parties under this Agreement that is (i) treated by the providing party as non-public, and (ii) labeled or otherwise clearly identified as confidential. (b) To the extent that (i) CMMPA provides confidential or proprietary information to the Participant in connection with the provision of Transmission Owner Services, and (ii) such information is required to be treated as confidential pursuant to the Upstream Project Agreements, the MISO-Related Agreements, MISO or FERC policy, or other limiting agreements or policies, the use and treatment of such information shall be in accordance with the applicable provisions of such agreement(s) or policies. If the Participant is granted access to any "critical 41 Transmission Owner Services and Asset Assignment Agreement energy infrastructure information" (as defined in 18 C.F.R. § 388.113(c)(1) or any successor provision) of CMMPA or any other Person, the Participant shall comply with all applicable requirements of 18 C.F.R. Part 388 pertaining to the critical energy infrastructure information. Section 910. Relationship to Other Instruments. The Participant and CMMPA acknowledge and agree that CMMPA, in the provision of Transmission Owner Services, is bound by and must comply with the requirements of Applicable Law, all Upstream Project Agreements, the CMMPA-Participant Transmission Project Agreements, the MISO-Related Documents, the Funds Trust Agreement, the Transmission Owner Agreements, and all licenses, permits and regulatory oversight and approvals necessary for the provision of Transmission Owner Services ("Other Instruments"). The Participant and CMMPA therefore agree that this Agreement is subject to the terms and provisions of such Other Instruments, as they may be amended or supplemented from time to time. Consistent with this Agreement, the Upstream Project Agreements, the CMMPA-Participant Transmission Project Agreements, the MISO-Related Documents, the Funds Trust Agreement, and the Transmission Owner Agreements, CMMPA shall take such actions as it determines in good faith are necessary or appropriate to seek to enforce its rights under the Upstream Project Agreements, the CMMPA-Participant Transmission Project Agreements, the MISO-Related Documents, the Funds Trust Agreement, and the Transmission Owner Agreements. Section 911. Duly Authorized Signatories; Binding Effect of Execution. Each of CMMPA, as to its signatory, and the Participant, as to its signatory, hereby represents and warrants that the individual executing this Agreement on its behalf is duly authorized to do so, and that, by such execution set forth on the signature page to this Agreement, such party is hereby duly and lawfully bound by this Agreement. Section 912. Entire Agreement. This Agreement, together with the CMMPA-Participant Transmission Project Agreements, and subject to the remaining Other Instruments and other documents specifically referenced by this Agreement, constitutes the entire agreement of the parties with respect to its subject matter, and supersedes all prior oral or written agreements, understandings, representations and warranties, and courses of conduct and dealings between the parties with respect to its the subject matter. For the avoidance of doubt, the provisions of Sections 905 and 908 shall apply to all provisions of this Agreement, including Exhibits and Attachments. 42 Transmission Owner Services and Asset Assignment Agreement IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day of , 2011. CENTRAL MINNESOTA MUNICIPAL POWER AGENCY By Title: President By Title: Secretary CITY OF ELK RIVER, MINNESOTA By By Title: ELK RIVER MUNICIPAL UTILITIES, MINNESOTA By _ Title: sy _ Title: 43 Transmission Owner Services and Asset Assignment Agreement ATTACHMENTI INSTRUCTIONS FOR PREPARING MISO-REQUIRED INFORMATION 1. Participant-Owned Transmission Facilities (a) By the end of February of each current year, the Participant to provide to CMMPA all ftnancial and other data pertaining to the Participant-Owned Transmission Facilities for the previous calendar year to facilitate CMMPA's compliance with MISO Documentation requirements, including the updating of Attachment O, the development of the Form 412 template, or the development of other similar documentation requirements per the MISO TEMT, CMMPA MISO TO Agreement, and JPZ Agreements. Participant agrees that such data shall be based on Participant's most recent audited financial statements or other data as agreed to by the parties if audited data is not available. (b) Based on data provided by the Participant, CMMPA develops a draft Attachment O and Form 412 template and distributes such documents to the Participant by the end of March for review and comment by the Participant by April 15. (c) CMMPA to submit Attachment O, Form 412 template and other required documentation to the MISO by April 30. (d) CMMPA to provide Participant a copy of submittal. 2. CMMPA-Owned Transmission Projects (a) To the extent applicable, by the end of February of each current year, Participant to provide to CMMPA certain financial and other data for the previous calendar year for each CMMPA-Owned Transmission Project to facilitate CMMPA's compliance with the requirements of MISO-Required Information, including the updating of Attachments O and GG, the development of the Form 412 template or other similar documentation required by the MISO-Related Documents. (b) CMMPA develops MISO-Required Information, including Attachments O and Attachment GG for each applicable CMMPA-Owned Transmission Project and submits such information to the MISO by April 30. 3. Participant Attestation (a) Participant shall submit an attestation statement to CMMPA in the form as attached to this Agreement by April 30. 44 Transmission Owner Services and Asset Assignment Agreement CMMPA will update MISO-Required Information in connection with Participant-Owned Transmission Facilities and CMMPA-Owned Transmission Projects for material changes at such other times during the year to the extent required or permitted under the MISO- Related Documents. 45 Transmission Owner Services and Asset Assignment Agreement ATTACHMENT2 MONTHLY TRANSMISSION OWNER SERVICES COSTS For each calendar month of a Contract Year (or shorter time period as determined at the reasonable discretion of CMMPA), Monthly Transmission Owner Services Costs shall include the items of cost paid or incurred by CMMPA for such month in connection with the provision of Transmission Owner Services pursuant to this Agreement. "Monthly Transmission Owner Services Costs" shall include those costs identified in this Attachment 2. (a) Costs incurred by CMMPA under the MISO-Related Documents and the Funds Trust Agreement, including, but not limited to, administrative and membership fees, and assessed penalties; (b) All costs incurred by CMMPA in connection with CMMPA performing its Transmission Owner obligations under the MISO-Related Documents and the Funds Trust Agreement, including but not limited to the following; Costs associated with the preparation and submittal of MISO-Required Information and the determination of the Participant's share of Revenues associated with CMMPA-Owned Transmission Projects and Participant- Owned Transmission Facilities; Costs associated with the preparation and submittal of filings at FERC as provided for in Section 401 of this Agreement; Costs associated with transmission planning activities, including submittal by CMMPA of proposed modifications related to Participant-Owned Transmission Facilities and CMMPA-Owned Transmission Projects for potential inclusion in the MISO regional transmission plan; Costs associated with the management by CMMPA of the design, procurement, installation, and construction of improvements, additions and modifications to CMMPA-Owned Transmission Projects pursuant to CMMPA-Participant Transmission Project Agreements that are required to accommodate requests by generators to interconnect or for reliability or delivery or for any other reason, all in accordance with the MISO TEMT and the CMMPA MISO Transmission Owner Agreement; Costs associated with the management by CMMPA of the design, procurement, installation, and construction of improvements, additions and modifications to Participant-Owned Transmission Facilities that are required to accommodate requests by generators to interconnect or for reliability or 46 Transmission Owner Services and Asset Assignment Agreement delivery or for any other reason, all in accordance with the MISO TEMT and the CMMPA MISO Transmission Owner Agreement; Costs associated with CMMPA conducting studies and analysis and compiling data and information, all in connection with evaluations of requests for interconnection and transmission service that impacts CMMPA- Owned Transmission Projects and Participant-Owned Transmission Facilities; Costs associated with CMMPA communicating with Participants, MISO, Transmission Owners and others concerning the operational status and other matters pertaining to or affecting CMMPA-Owned Transmission Projects and Participant-Owned Transmission Facilities. (c) all costs and expenses relating to injury and damage claims required to be paid by CMMPA in connection with its provision of Transmission Owner Services; and (d) such other costs as may be determined by CMMPA to be properly allocable to the provision of Transmission Owner Services under this Agreement, including but not limited to, (i) administrative and general costs, insurance and overhead costs and any charges payable by CMMPA in connection with the Transmission Project; (ii) working capital reasonably required in connection with the provision of Transmission Owner Services; and (iii) a share, determined by CMMPA to be properly allocable to the provision of Transmission Owner Services under this Agreement, of all operation and maintenance costs related to the operation and conducting of the business of CMMPA, including salaries, fees for legal, engineering, and other services and all other expenses properly related to the conduct of the affairs of CMMPA. 47 Transmission Owner Services and Asset Assignment Agreement ATTACHMENT3 CMMPA Budget -Illustration for Example Participant The following is an illustrative format of a CMMPA budget that sets forth the aggregate sum of Monthly Transmission Owner Services Costs for a sample Contract Year to be paid by an example Participant. Descri tion Amount $ 000 CMMPA-Owned Transmission Projects 1. Aggregate Monthly Transmission Owner Services Costs a. Costs incurred by CMMPA under Transmission Owner Agreements $ b. Preparation of MISO Documentation (including Participant revenue projections) $ c. Prepare FERC Documents & Filings $ d. Transmission planning activities and evaluation of interconnection and transmission service requests $ e. Manage design, procurement and construction of improvements and modifications $ f Administrative and General Costs $ g. Other Allocable Costs $ h. Subtotal $ Participant-Owned Transmission Facilities 2. Aggregate Monthly Transmission Owner Services Costs a. Costs incurred by CMMPA under Transmission $ Owner Agreements b. Preparation of MISO Documentation (including $ Participant revenue projections) $ c. Prepare FERC Documents & Filings d. Transmission planning activities and evaluation of $ interconnection and transmission service requests e. Manage design, procurement and construction of $ improvements and modifications $ f. Administrative and General Costs $ g. Other Allocable Costs $ h. Subtotal 3. Total Aggregate Monthly Transmission Owner Services $ Costs for the a licable Contract Year 48 Transmission Owner Services and Asset Assignment Agreement ATTACHMENT4 TRANSMISSION OR'NER AGREEMENTS CMMPA has adopted an Agency Agreement and has entered into, or will enter into, a number of agreements that pertain to performance of CMMPA's role as a Transmission Owner and its provision of Transmission Owner Services pursuant to this Agreement. Such Transmission Owner Agreements, which are subject to change from time to time during the term of this Agreement, are: A reement Date Executed Fourth Restated Agency Agreement, Central Minnesota Municipal Fourth Power Agency, Originally Adopted July 1, 1987, restated as of Restatement as of January 15, 1997, August 11, 2004, May 24, 2006, and January 13, 2010 January 13, 2010, as the same may be further amended and restated from time to time Brookings-Twin Cities Transmission Project Agreement between Dated CMMPA and the following Participants: February 14, 2011 ]. Blue Earth, Minnesota, City of-Blue Earth Light & Water 2. Elk River, Minnesota, City of-Elk River Municipal Utilities 3. Fairfax, Minnesota, City of 4. Granite Falls, Minnesota, City of 5. Independence, Iowa, City of-Independence Light & Power 6. Indianola, Iowa, City of-Indianola Municipal Utilities 7. Janesville, Minnesota, City of-Janesville Municipal Utilities 8. Kenyon, Minnesota, City of-Kenyon Municipal Utility 9. Montezuma, Iowa, City of-Montezuma Municipal Light & Power 10. Mountain Lake, Minnesota, City of-Mountain Lake Municipal Utilities 11. Sleepy Eye, Minnesota, City of-Sleepy Eye Public Utilities 12. Springfield, Minnesota, City of-Springfield Public Utilities Commission 13. Waverly, Iowa, City of- Waverly Light & Power 14. Willmar, Minnesota, City of-Willmar Municipal Utilities 15. Windom, Minnesota, City of-Windom Municipal Utilities CMMPA MISO Transmission Owner Agreement August 16, 2007 Funds Trust Agreement Effective April 1, 2006 Joinder (Funds Trust Agreement) between CMMPA, JPMorgan Effective Chase Bank, Midwest Independent Transmission System Operator, January 1, 2008 Inc. and the Beneficiaries Joint Pricing Zone Revenue Allocation Agreement between GRE, April 14, 2010 CMMPA, NSP and SMMPA 49 Transmission Owner Services and Asset Assignment Agreement ITC Midwest Joint Pricing Zone Revenue Allocation Agreement November 5, 2010 between ITC Midwest, GRE, SMMPA and CMMPA Joint Pricing Zone Revenue Allocation Agreement between NSP, April 5, 2011 GRE, SMMPA, CMMPA and NWEC 50 Transmission Owner Services and Asset Assignment Agreement ATTACHMENTS PARTICIPANT OPINION [n accordance with Section 406 of this Agreement, the Participant shall furnish CMMPA with an opinion by an attorney or firm of attorneys to the effect that: (a) Valid Existence. The Participant is a municipal corporation or other eligible person or entity duly created and validly existing pursuant to the Constitution and Statutes of the State of Minnesota or other State of the United States, or is otherwise organized and authorized as a Participant. (b) Performance. The Participant has full legal right and authority to enter into this Agreement and to carry out its obligations hereunder. (c) Rates and Charges. The Participant has full legal right and authority to fix, impose and collect rates and charges, and such rates and charges are not subject to the regulatory jurisdiction of any State government, local government (other than that of the Participant), or regulatory authority. (d) Ownership of Electric Utility System. The Participant has Legal title to and the beneficial interest in and is beneficially possessed of the electric utility system or integrated utility system such Participant owns, maintains, and operates. (e) Authorization, Execution. At meetings duly called and held at which quorums were present and acting throughout, the governing body of the Participant duly approved this Agreement and its execution and delivery on behalf of the Participant, this Agreement has been duly authorized, executed and delivered by the appropriate officers of the Participant, and assuming that CMMPA has all the requisite power and authority to execute and deliver, and has duly authorized, executed and delivered, this Agreement, this Agreement constitutes the legal, valid and binding obligation of the Participant enforceable in accordance with its terms subject, however, to the effect of, and to restrictions and limitations imposed by or resulting from, bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting creditors' rights generally. No opinion need be rendered as to the availability of any particular remedy. (t) No Violation, Etc. The execution and delivery of this Agreement by the Participant, the performance by the Participant of its obligations hereunder and the consummation of the transactions contemplated herein do not and will not contravene any provision of the Charter or Certificate of Incorporation or any other organizational document of the Participant and any amendment thereto under which the Participant is organized and presently operating or any existing law or any existing order, injunction, judgment, decree, rule or regulation of any court or administrative agency having jurisdiction over the Participant or its property or result in a breach or violation of any of the terms and provisions of, or constitute a default under, any existing bond resolution, indenture, mortgage, deed of trust or other agreement to which the Participant is a party or by which it or its property is bound. 51 Transmission Owner Services and Asset Assignment Agreement (g) Aonrovals. All approvals, consents or authorizations of, or registrations or filings with, any governmental or public agency, authority or person required on the part of the Participant in connection with the execution, delivery and performance of this Agreement have been obtained or made. (h) Litigation. To the knowledge of such attorney or firm of attorneys afrer due inquiry, there is no litigation or other proceedings pending or threatened in any court or other tribunal of competent jurisdiction (either State or Federal) questioning the creation; organization or existence of the Participant or the validity, legality or enforceability of this Agreement. 52 Transmission Owner Services and Asset Assignment Agreement EXHIBIT A CMMPA-OWNED TRANSMISSION PROJECTS 53 Transmission Owner Services and Asset Assignment Agreement EXHIBIT A-I DESCRIPTION OF BROOKINGS TRANSMISSION PROJECT Description -Brookings, S.D. -Southeast Twin Cities 345-kV Line ("Brookings Pro'ect" CMMPA and four other parties have entered into the Upstream Project Agreements for the Brookings Project, which provide for the development, construction, acquisition, completion, and operation and maintenance of the Brookings Project, including upgrades and other improvements and capital additions. The four parties that entered into the Upstream Project Agreements with CMMPA for the Brookings Project are Northern States Power, Great River Energy, Otter Tail Power Company, and Western Minnesota Municipal Power Agency. The Brookings, South Dakota, to southeast Twin Cities proposal is a 210-mile 345-kV transmission line between the Brookings County Substation near Brookings, South Dakota, and a new substation, Hampton Corner, in the southeastern quadrant of the Twin Cities area, plus a 30-mile 345-kV transmission line between Marshall and the Granite Falls area. Alternatively, a portion of the proposal could follow an existing 230-kV line corridor between Granite Falls and near New Prague, Minnesota. Parts of the new transmission infrastructure may be located in the following Minnesota counties: Brown, Carver, Chippewa, Dakota, LeSueur, Lincoln, Lyon, McLeod, Redwood, Renville, Rice, Scott, Sibley and Yellow Medicine. The proposal also includes the following connections to the existing transmission system: ^ Brookings County Substation near Brookings, South Dakota ^ Lyon County Substation near Marshall, Minnesota. ^ Anew substation (Hazel Run) near Granite Falls, Minnesota. ^ A 230-kV line from Hazel Run to Minnesota Valley Substation on the east side of Granite Falls. ^ Franklin Substation or a new substation in the Franklin area. ^ Anew substation (Union Hill), west of New Prague, to connect with the existing Twin Cities to Mankato 345-kV line. ^ Lake Marion Substation or a new substation further south in the Interstate 35 corridor to connect to an existing 115-kV line. ^ Anew substation (Hampton Corner) to connect the line to an existing 345-kV line northeast of Hampton, Minnesota. As used in this Agreement, the term "Brookings Transmission Project" means that portion of the Brookings Project with respect to which, pursuant to the applicable Upstream Project Agreements, CMMPA holds ownership and other rights. 54 Transmission Owner Services and Asset Assignment Agreement PARTICIPANT SHARES IN BROOKINGS TRANSMISSION PROJECT Brookin s Transmission Pro'ect Partici ants* Share 1. Blue Earth, City of-Blue Earth Light & Water 2. Elk River, CiTy of-Elk River Municipal Utilities 3. Fairfax, City of 4. Granite Falls, City of 5. Independence, Iowa, City of-Independence Light & Power 6. Indianola, Iowa, City of-Indianola Municipal Utilities 7. Janesville, Ciry of-Janesville Municipal Utilities 8. Kenyon, City of-Kenyon Municipal Utility 9. Montezuma, Iowa, City of-Montezuma Munici al Li ht & Power 10. Mountain Lake, CiTy of-Mountain Lake Munici al Utilities 11. Sleepy Eye, City of-Sleepy Eye Public Utilities 12. Springfield, City of-Springfield Public Utilities Commission 13. Waverly, Iowa, City of-Waverly Light Rc Power 14. Willmar, City of- Wi]Imar Municipal Utilities 15. Windom, City of-Windom Municipal Utility Total [Information on Participant Shares to be added when ftnal ownership allocations are known.] 55 Transmission Owner Services and Asset Assignment Agreement EXHIBIT B PARTICIPANT-OWNED TRANSMISSION FACILITIES ELK RIVER (ER) 1. TRANSMISSION FACILITIES ER 69 kV tap to ER 69 kV Sub Line SUBSTATION FACILITIES ER 69/4.16 kV Sub (High side only) 56 Transmission Owner Services and Asset Assignment Agreement The Participant attests that as of the execution dates included in this Exhibit B it is not recovering the costs or any portion thereof of its Participant-Owned Transmission Facilities pursuant to separate third party agreements. Participant agrees that so long as the parties' obligations under this Agreement remain in effect for its Participant-Owned Transmission Facilities included in this Exhibit B it will not enter into separate third party agreements providing for the recovery of its costs associated with these facilities. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day of , 2011. CENTRAL MINNESOTA MUNICIPAL POWER AGENCY By Title: President By Title: Secretary CITY OF ELK RIVER, MINNESOTA By Title: By Title: ELK RIVER MUNICIPAL UTILITIES, MINNESOTA By Title: By s~ Transmission Owner Services and Asset Assignment Agreement EXHIBIT B-1 INFORMATIONAL PARTICIPANT-OWNED TRANSMISSION FACILITIES have been assigned to CMMPA by: 1) Blue Earth, City of -Blue Earth Light & Water 2) Delano, City of -Delano Municipal Utilities 3) Elk River, City of -Elk River Municipal Utilities 4) Fairfax, City of 5) Mountain Lake, City of -Mountain Lake Municipal Utilities 6) Windom, City of -Windom Municipal Utility 58 RESOLUTION 11-02 A RESOLUTION OF THE ELK RIVER MUNICIPAL UTILITIES A RESOLUTION AUTHORIZING A TRANSMISSION OWNER SERVICES AND ASSET ASSIGNMENT AGREEMENT WITH CENTRAL MINNESOTA MUNICIPAL POWER AGENCY BE IT RESOLVED by the Elk River Municipal Utilities Commission, hereinafter "Commission", as the governing body of the Elk River Municipal Utilities, a Minnesota municipal utility, of the City of Elk River, Minnesota (hereinafter referred to as "City"), as follows: Section 1. It was previously determined that it was in the best interest of the Commission to utilize the resources and services of the Central Minnesota Municipal Power Agency "CMMPA" to participate in the development and investment in the acquisition, construction, ownership and operation of high voltage electrical transmission including negotiation of contracts, planning, transmission needs studies, transmission arrangements, engineering and technical assistance. Section 2: The Commission now wishes to properly update and supplement its relationship with CMMPA and also authorize the administration by CMMPA of the Commission's participation in and receipt of revenues from such transmission projects as are approved by the Commission and the City and the City's own qualifying transmission facilities which it designates for administration by CMMPA, if any. Section 3: The Commission does hereby approve the Transmission Owner Services and Asset Assignment Agreement with the Central Minnesota Municipal Power Agency dated the 20`~ day of April, 20 t 1. Section 4: The President (Chairman) and the Secretary are hereby authorized and directed to execute the Transmission Owner Services and Asset Assignment Agreement (specifically including execution of the attached Exhibit B) for and on behalf of the Commission, the same to be exclusively evidenced by such execution. Adopted this 10`s day of May, 2011. John J. Dietz, Chair Attest: Troy Adams, Secretary/Director of Operations CERTIFICATE I, Troy Adams, the Secretary of the Elk River Municipal Utilities Commission, do hereby certify that attached hereto is a true and correct copy of a resolution (other than the exhibits thereto) duly adopted by the Commission at a meeting duly held on the I Oa' day of May, 2011 notice of such meeting having been given in accordance with law and at which meeting a quorum was present and acting throughout. I also do hereby certify that such resolution has not been amended in any way from the date of such adoption to the date hereof. IN WITNESS WHEREOF I have hereunto set my hand this 10`h day of May, 2011. Troy Adams, Secretary/Director of Operations