ERMUSR 05-14-2013 HANDOUT #1 NEW MEMBER AGREEMENT
between
THE CITY OF ELK RIVER
and
MINNESOTA MUNICIPAL POWER AGENCY
This Agreement is hereby entered into as of the l— day of 2013 by and between
the City of Elk River, Minnesota by its Utilities Commission ("City"), and the Minnesota
Municipal Power Agency ("MMPA").
WHEREAS, the City of Elk River and MMPA (the "Parties") have held discussions
relating to the application of the City to become a member of MMPA; and
WHEREAS, the City and MMPA desire to have the City of Elk River admitted as a
member of MMPA and the City will approve the MMPA Agency Agreement of May 11, 1992 as
since amended(the "Agency Agreement"):
NOW, THEREFORE, the City and MMPA agree as follows:
1. Execution of Power Sales Agreement. Prior to the admission of the City as a
member of MMPA,the Parties will execute a Power Sales Agreement ("PSA")
under which the City will purchase electric power and energy from MMPA from
and after October 1, 2018. The execution by the parties of the PSA shall be
performed and be effective on the same date as this Agreement.
2. Buy In. The City agrees to pay a buy in equal to 120% of its proportionate share
of the net position (equity) and rate-related accruals of MMPA (the "Buy In") as
of the date it begins purchasing electric power and energy from MMPA (the
"Start Date"). The Buy In will be calculated through the following formula:
[(City Wholesale Energy Purchases)/(MMPA Wholesale Energy Sales to
Members) * (Total MMPA Net Position + Rate Stabilization Fund Balance+
Accrued Major Maintenance + Accrued Energy Adjustment Clause—Future
Recoverable Costs (Deferred Costs))] * 1.2
The energy purchases and sales used in the above calculation will be calculated as
the sum of the most recent twelve (12) months for which data is available for both
parties at the time the calculation is made. The MMPA financial amounts shall be
calculated as of the Start Date. The City may pay the Buy In prior to the Start
Date based on estimates, with a true-up calculation performed as of the Start Date.
The Buy In must be paid in full prior to the Start Date. However, if such payment
would cause the City's electric rates to be uncompetitive, MMPA and the City
agree to negotiate in good faith an alternative payment schedule.
3. Execution of Agreements. The City will adopt and agree to the terms of the
MMPA Agency Agreement and the City and MMPA shall simultaneously execute
this Agreement and the new Power Sales Agreement.
4. Proper Authorizations. The City and MMPA shall each take all necessary steps to
authorize and execute the documents necessary to implement the admission of the
City as a member of MMPA.
5. Effective Date of Membership. The admission of the City as a member of
MMPA shall become effective upon the date that the appropriate documents are
filed with the Secretary of State of the State of Minnesota pursuant to the Agency
Agreement. MMPA shall promptly cause the filing of said documents.
6. No Other Payments. Except for the Buy In,the City will not be liable to MMPA
for any payments prior to the Start Date. The City will not be responsible for any
assessments or Energy Adjustment Clause ("EAC") charges prior to the Start
Date and will not have any rights to any EAC refunds or any other distributions
made to MMPA members prior to the Start Date.
IN WITNESS WHEREOF, the City of Elk River and the Minnesota Municipal Power
Agency, through duly authorized officers, have signed this Agreement, effective upon the date
first set forth above.
MINNESOTA MUNICIPAL POWER AGENCY CITY OF ELK RIVER
BY ITS UTILITIES COMMISSION
By `1 �`��i
Its Chairman I It! hair, U'Tries Commission
Attested: Attested:
Date: Date:Date: may )� 2P13
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