5.1. ERMUSR 05-20-2014 ./j
1 Elk Riv:�r
Munici o I al Utilities UTILITIES COMMISSION MEETING
TO: FROM:
Elk River M cipal Utilities Commission Tom Sagstetter—Conservation and Key Accounts
John Dietz— I air Manager
Al Nadeau— ice Chair
Daryl Thompson—Trustee
MEETING DI., TE: AGENDA ITEM NUMBER:
May 20, 2014 5.1
SUBJECT:
Dispersed Ge -ration (On-Site Generator)/Interruptible Load Program
BACKGRO D:
Currently E' i U offers two programs that provide financial incentives for large commercial or
industrial custlihers to avoid using large amounts of energy over the ERMU coincidental billing
peak. There a - two programs that customers can participate in. The first is the Dispersed
Generation/Interruptible Program. This program requires that a customer completely disconnect
from the distri s ution system when called on or reduce their load to a Pre-determined Demand
Level (PDL). ustomers can either reduce demand by using a back-up generator or they can
manually deer i ase load to reach their PDL without a back-up generator.
The second pr i gram is the Off-Peak Program where customers customize their production hours
to avoid majo energy consumption between the hours of 3:00 p.m. and 10:00 p.m. This
program has lo er demand costs for the entire month as long as the customer does not run
Monday throu-,h Friday between the peak hours of 3:00 to 10:00 p.m. Any demand that is
recorded duri the peak hours is billed at the applicable Demand Rate for that month.
At this time b s h programs are available for all commercial customers that are demand billed and
have a peak loi d of at least 100 kW. The Dispersed Generation/Interruptible Program is a
program that i I offered through the ERMU wholesale power provider and is strongly
recommended l or only customers who have back-up generation. Customers that participate in
the Dispersed 1 eneration/Interruptible Program that do not have back-up generation are
challenged to 1 eet the requirements for interrupting load or operating over the coincidental
billing peak if hey are not operating 24 hour per day, 7 days a week.
Customers pa `icipating in the Dispersed Generation/Interruptible Program are generally given at
least 30 minutes' notice to reduce load to zero, or to their PDL or below, on any given day and
time. If the c ,tomer is not operating, there is no load to provide a monthly billing credit. If the
customer is ping and does not drop load they can be financially penalized and removed from
the program.
.
'POWERED 11
p
: Page 1 of 4 NATURE
Reliable Public
Power Provider P O W E R E D T o S E R V E
83
The Dispersed Generation/Interruptible program is a program that responds to wholesale electric
transmission signals in the market on a daily basis. When customers enroll in the Dispersed
Generation/Interruptible program the demand that is agreed to be shed is equivalent to a small
power plant that the wholesale energy provider depends on to meet peak day demands. If the
load is not dropped or it is not operating and subsequently cannot be dropped it is the same as the
power supplier having to go out and purchase additional resources to meet demands on the
system because the agreed on demand was not available for the large transmission system to use.
In the event that the Dispersed Generation/Interruptible loads are not asked to reduce load over
the coincidental billing peak demand hour, the customer will receive only the applicable demand
credits for the metered demand that exceeds the PDL. If a customer does not have demand over
the billing peak there is no credit available.
DISCUSSION:
One of ERMU's commercial customers has requested that a new program be offered or that
special exceptions be made for them to better align with their business operations. This request
has led to staff assessing the programs and determining that there are four items that require
Utilities Commission discussion and consideration for action:
1. The Dispersed Generation/Interruptible program has been in a state of declining support
from the wholesale power market because the value of demand has been decreasing over
time. For the past three years the financial incentives have been decreasing and are going
to continue to decrease into the foreseeable future. As ERMU transitions to a new
wholesale power supplier that does not offer this type of program it should be considered
that now may be a time to start the transition away from the Dispersed
Generation/Interruptible program. A conservative position for ERMU would be to put a
moratorium on new participants in this program until this topic has been evaluated by the
new wholesale power supplier.
2. In an effort to make the Dispersed Generation/Interruptible Program easier to understand
for all customers; staff is recommending the adoption of a new tariff sheet and contract
for the program. Both the tariff sheet and Interruptible contract have been updated to
reflect specific details and examples that will make the concepts easier to understand
such as when and how demand credits are calculated.
3. The Utilities Commission will need to take action specific to the commercial customer
requesting to be accommodated. New Plastics Plus had requested to apply for the
Dispersed Generation/Interruptible program. However, at the October 9, 2012 Utility
Commission meeting the Commission and New Plastics Plus mutually agreed that the
Interruptible program was not a good fit for New Plastics Plus. The result of that
POMEflEO BY
Page 2 of 4 NATURE
Reliable Public
Power Provider P O W E R E D T 0 S E R V E
84
agree -nt was to remove New Plastics Plus from the Interruptible program and place
them on the Off-Peak program. Other details of the agreement are outlined in the
attach:I letter dated November 27, 2012.
New P .stics Plus is now requesting that the Utility Commission take action to be
recons a ered for the Interruptible that they were removed from in November, 2012. New
Plastic i Plus has the desire to operate their facility from 5:00 a.m. to 10:00 p.m. Monday
throug I Friday.
ERM supports the growth of all our customers, but the operation over the peak hours
(3:00 8 m. to 10:00 p.m.) should be considered when determining eligibility for these
progr. i s. Participating customers are agreeing to have their electrical load interrupted,
or red ed, and especially those participants without backup generators may be less than
satisfi,i when their business is interrupted during the workday—possibly for several
days i i a row or on weekends. It should be clearly understood that if a customer is asked
to red ,e load they must reduce load or be charged a penalty and removed from the
progr. I . It also needs to be fully understood that if there is no call for load control any
credits alculated will be based on the demand measured at the meter at during the
month , hour coincidental peak hour. The coincidental peak can occur anytime during
the mo th. Coincidental billing peaks could occur on Saturdays, Sundays, Holidays, and
are not I imited to anytime during the day.
New P .stics Plus has requested to be allowed to apply to be on the Interruptible program
again . d to receive the program credits even when they do not meet the rules of the
progr. 1 as a special accommodation by ERMU in an effort to partner with them.
ACTION RE 0 UESTED:
Regarding the I ispersed Generation/Interruptible Program, staff requests the Commission
consider and prove one of the following three alternatives:
1. Put a ,oratorium on all new participants in the Dispersed Generation/Interruptible
Progr. . As ERMU transitions to a new wholesale power supplier that does not offer
this t 1- of program it should be considered that now may be a time to start the transition
away om the Dispersed Generation/Interruptible program. A conservative position for
ERM would be to put a moratorium on new participants in this program until this topic
has be evaluated by the new wholesale power supplier.
2. Begin • phase out of the Dispersed Generation/Interruptible Program in light of the
transitillin to a new wholesale power supplier that does offer this type of program.
Generation/Interruptible Contint e to offer the Dispersed Generation/Interru tible Program and approve:
I
rrWERED B 1
Page 3 of 4 ATOP
Reliable Public
Power Provider PowERED To SERVE
85
a. Approve the updated tariff sheet for the Dispersed Generation/Interruptible
Program
b. Approve the updated contract for the Commercial Interruptible Load Agreement.
Staff recommends Option 1. Putting a moratorium on all new participants until the program can
be evaluated by the new wholesale power supplier.
On October 9, 2012, the Utilities Commission made a decision to remove New Plastics Plus
from the Interruptible Program. Staff recommends that the Commission does not reverse that
decision.
ATTACHMENTS:
• Dispersed Generation (On-Site Generator)/Interruptible Load Program Tariff Sheet
• Commercial Interruptible Load Agreement
• November 27, 2012 Letter to New Plastics Plus
1NATUPIPage 4 of 4 �
Reliable Public
Power Provider P O W E R E D T o S E R V E
86
ELK RIVER MUNICIPAL UTILITIES
Dispersed Generation (On-Site Generator)/Interruptible Load Program
Available: Within established Elk River Municipal Utilities Rate areas.
Applicable: Existing Customers, or to new Customers receiving all electrical power from
ERMU and with demands between 100 kW and 1,500 kW of connected load.
Customers with on-site generation greater than 1,500 kW may also qualify, but special
terms and conditions may apply on a case by case basis. Customer must agree to
operate on-site generation and/or limit load to a mutually agreed to Predetermined
Demand Level (PDL) upon notification by ERMU or its designated agent. Customer must
be served by ERMU under the Demand Electric Service Tariff. Customer must execute a
Dispersed Generation Agreement or Interruptible Service Agreement to participate in
either program. Customer is subject to the terms and conditions of the applicable
Agreement. Not applicable to resale, standby or auxiliary service.
Special Conditions: Customer must conduct normal business practices between the
hours of 3:00 PM to 10:00 PM, Monday through Friday. Customer must provide access
to a phone line or reimburse ERMU for all costs associated with providing program
interruption notification and remote metering needs. Customer must have the means to
operate on-site generation and/or reduce load to the PDL within 30 minutes following
notification by ERMU or its agent. Credits apply only during months in which the
Customer is fully operational.
Customer represents and warrants that interruptible load of at least 100 kW shall
be available for interruption upon request by ERMU or its designated agent
twenty-four hours per day, seven days per week, three hundred sixty five day per
year in order to receive credit.
Dispersed Generation/Interruptible Credits:
ERMU shall compensate Customer for load interruptions maintained at or below
the PDL when requested by ERMU or its designated agent, at the rates indicated
below:
Monthly Credit/Kw*
Summer (June, July, and Aug) $14.00 per kW
Winter (Dec, Jan, and Feb) $10.00 per kW
Spring/Fall (Mar, Apr, May, Sept, Oct, Nov) $6.00 per kW
*Credit applies only during months in which Customer coincidental
demand is at least 100 kW over the PDL.
The difference between Customer's coincidental peak demand at the time of
notice to interrupt and the PDL shall be used as a basis for establishing
Customer's monthly credit. In months in which no notice to interrupt is given, the
87
difference between Customer's coincidental peak demand and the PDL shall be
used as a basis for establishing Customer's monthly demand credit.
In the event that participating customers are not controlled during the monthly
coincidental billing peak demand hour, the customer will receive applicable
demand credits only for metered demand that exceeds the PDL and is greater
than 100 kW. The demand credit is based on the applicable rates above to the
kW difference between the metered demand and the PDL using hourly interval
meter data measured one hour prior to the monthly coincidental billing peak
demand hour.
In the event the participating customer is not operating at the time of the
coincidental billing peak there is no credit calculated in that month. The customer
must be operating at least one hour prior to the coincidental billing demand peak
or the time designated for interruption to receive credit.
Example 1: Notice for disconnect or interruption is given at 11:00 a.m. for
disconnect or interruption at 3:00 p.m. The participating customer begins
shut down at 2:30 and has a peak demand for that month on the day of
the interruption at 2:15 with a total load of 350 kW. The customer has a
PDL of 50. For this example the participating customer would receive a
credit for the difference between the Customer's coincidental peak
demand (350 kW) and the PDL (50 kW). The customer would receive a
credit for the 300 kW reduction times the seasonal rate indicated above.
Example 2: There is no notice to disconnect or interrupt for this example
month. The coincidental billing peak occurs on a Tuesday night at 11:00
p.m. The customer had a demand of 45 kW at the time of the coincidental
billing peak (11:00 p.m.). In months with no notice the difference between
the participating Customer's coincidental peak demand (45 kW) and the
PDL (50 kW) shall be used to calculate the monthly credit. The difference
between the coincidental billing peak and PDL in this example is -5. Since
the participating customer was not operating and did not have any
demand in excess of 100 kW to interrupt there is no credit given for this
month.
In any month in which the difference between the Customer's coincidental peak
demand and the PDL is not at least 100 kW, no credit will be given. If the
difference between the Customer's coincidental peak demand and the PDL
remains less than 100 kW for two or more consecutive months, a new PDL may
be established or ERMU shall have the right to terminate the Dispersed
Generation or Interruptible Service Agreement.
88
If Customer fails to interrupt load down to the PDL for the specified length of time
of the control period in any calendar month a $5.00/kW demand penalty will be
added to the Customers bill. The demand penalty will be determined using the
maximum uncontrolled kW demand, defined as the highest hourly interval above
the PDL recorded during all control periods in the billing month. The Customer
will not receive the monthly credit for that month or any succeeding months until
performance has been demonstrated to the satisfaction of ERMU personnel. If
Customer fails to perform more than two times in any calendar year, ERMU
reserves the right to terminate the Agreement.
Approved Adopted May 20, 2014
Effective June 1, 2014
89
COMMERCIAL INTERRUPTIBLE LOAD AGREEMENT
THIS COMMERCIAL INTERRUPTIBLE LOAD AGREEMENT, made as of this t,
day of , 2014 by and among Elk River Municipal Utilities, "ERMU"and (Insert
Company Name) "Customer", applies to commercial customers of between 100 kW and
1500 kW peak load who agree to interrupt between 100 kW and 1500 kW of their load when
requested to do so by ERMU.
Subject to the terms and conditions of this Agreement, and in reliance to the representations
and covenants herein contained, ERMU and Customer agree as follows:
ARTICLE 1. DEFINITIONS. As used in this Agreement the following terms have the
meanings given them unless the context requires otherwise:
Agreement means this Agreement, as it may be from time to time modified, amended
or supplemented.
Coincidental Peak Demand means Customer electrical power use measured in
kilowatts (kW) averaged over a continuous 60 minute period at the time of ERMU's
monthly billing peak.
Demand and/or Load means Customer electrical power use measured in kilowatts
(kW) averaged over a continuous 15 minute period.
Demand Penalty means the amount the customer will be charged for failure to
control during any control period. The Demand Penalty will be determined using the
maximum uncontrolled kW demand, defined as the highest hourly interval recorded
during all control periods in the billing month.
Distribution System means ERMU's electric delivery system.
Interruptible Load means the difference between Customer's Coincidental Peak
Demand and a Predetermined Demand Level Customer agrees to attain
following notification by ERMU to reduce demand.
Kilowatt(kW)means unit of electric power equal to 1000 watts.
Kilowatt-hour (kWh)means unit of electric energy equal to one kilowatt of power
supplied to or taken from an electric circuit steadily for one hour.
Predetermined Demand Level (PDL)means the maximum level of electric power
Customer agrees to attain when notice to interrupt load is given by ERMU or its
designated agent. For the purposes of this Agreement, Customer agrees to interrupt
enough load to attain a PDL of kW when requested.
Seasonal Loads means Customers whose load varies by season. In some cases, the
90
cu' omer may not be operating during certain months of the year. That should be
no i.d by attaching a statement indicating typical months of operation (months in
which Customer would expect Interruptible Load credit on the bill).
S s lin./fall season means the period from March 1 through May 31, and
September 1 through November 30.
Su I mer means the period from June 1 through August 31.
Ut i means Elk River Municipal Utilities
W'[ ter means the period from December 1 through February 28 or 29.
ARTICL ! 2. TERM. This Agreement shall begin at 12:01 a.m. on April 1st, 2012 and
shall Conti i 1 ue until termination as provided for in Article 12.
ARTICL 1! 3. LOAD INTERRUPT AVAILABILITY. For the term of this Agreement,
Customer i-presents and warrants that Interruptible Load of at least 100 kW shall be
available fir interruption upon request by ERMU or its designated agent twenty-four hours
per day, s= en days per week, three hundred sixty five day per year in order to receive credit
set forth i Article 6. Duration and frequency of interruptions are subject to the limitations set
forth in A `icle 7.
ARTICL 11 4. SAFETY AND OPERATING STANDARDS. Safety and Operating
Standards ,ender which ERMU operates are imposed to protect ERMU employees and the
general puiilic, and are intended to guarantee a quality of service to all customers. Customer e in a manner that insures the safety of must
Operation,�lf Customer load disconnect equipment must llowpelectric servicegto other
public.
customers o remain within prescribed limits.
Se ion l: Ins 1 ection. An inspection certificate issued by the state electrical
ins ector is required for wiring changes made by Customer for participation in this
Agreement. All changes must comply with the IEEE, the National Electrical Code,
Nat onal Electric Safety Code, and applicable local codes. An inspection by ERMU
pe 1.onnel is also required prior to finalizing this Agreement. All Federal, State, and
loc.1 safety codes pertaining to installation, operation, and maintenance of Customer-
owt ed load disconnect and collateral equipment shall be followed and are the
rest onsibility of Customer.
Se 1. ion 2: Safe E 1 ui 1 ment. Each manufacturer has specific methodologies
an ii equipment to assure safe operation of load disconnect equipment. Either of
the ollowing methods are an acceptable means for interrupting Customer load
fro the Distribution System.
tomatic Load Disconnect. Customer's equipment may be designed to
a 1 tomatically disconnect or shut down all or a portion of the Customer's load
I en requested to do so by ERMU or its designated agent. Auto reconnect to
t i e utility source shall be designed to restore Customer load in increments not to
2
91
exceed 25 kW spaced at least 15 seconds apart.
Manual Disconnect. A means shall be available to manually disconnect or
shut down all or a portion of the Customer's load when requested to do so by
ERMU or its designated agent. Manual reconnect to the utility source shall be
made in increments not to exceed 25 kW spaced at least 15 seconds apart.
Section 3: Power Quality. Operation of Customer's load disconnect equipment
must not cause any reduction in the quality of service provided by ERMU to its other
customers nor interfere with the operation of the Distribution System or ERMU's
power supplier's transmission system. If, in the opinion of ERMU, quality of service
to other customers is compromised, it shall be the responsibility of Customer to take
any corrective action that may be required and/or for reimbursing ERMU for the cost
of corrective action which ERMU deems necessary to provide and restore service to
prescribed limits. Operation of Customer's load disconnect equipment shall be made
in a manner such that Total Harmonic Distortion (THD) levels shall be less than 1%
and power factor of 95% lagging or higher is maintained.
ARTICLE 5. LOAD DISCONNECT or INTERRUPTION OPERATION Upon not
less than thirty minutes notice by ERMU or its designated agent, Customer shall interrupt
enough load to attain the PDL as stated in Article 1. During such period ERMU shall not be
obligated to serve that portion of the load interrupted to reach the PDL. Exceptions to the
thirty minute notice may occur in system emergency situations, but every attempt will be
made to give as much advance notice as possible under system emergency situations.
ARTICLE 6. COMPENSATION TO CUSTOMER.
Section 1: ERMU shall compensate Customer for load interruptions maintained at
or below the PDL when requested by ERMU or its designated agent, at the rates
indicated below:
Monthly Credit/Kw*
Summer (June, July, and Aug) $14.00 per kW
Winter (Dec, Jan, and Feb) $10.00 per kW
Spring/Fall (Mar,Apr, May, Sept, Oct,Nov $ 6.00 per kW
*Credit applies only during months in which Customer coincidental peak
demand is at least 100 kW over the PDL.
The difference between Customer's coincidental peak demand at the time of notice to
interrupt and the PDL shall be used as a basis for establishing Customer's monthly
credit. In months in which no notice to interrupt is given, the difference between
Customer's coincidental peak demand and the PDL shall be used as a basis for
establishing Customer's monthly demand credit.
In the event that participating customers are not controlled during the Coincidental Peak
Demand hour, the customer will receive applicable demand credits only for metered Demand
3
92
that exceee s the PDL and is greater than 100 kW. The demand credit is based on the
applicable rates above to the kW difference between the metered Demand and the PDL using
hourly interval meter data measured during the monthly Coincidental Peak Demand hour.
In the eve t the customer is not operating at the time of the Coincidental Peak Demand there
is no credi in calculated in that month. The customer must be operating at least one hour
prior to the Coincidental Peak Demand hour or the time designated for interruption to receive
credit.
Example 1: Notice for disconnect or interruption is given at 11:00 a.m. for a
disconnect or interruption at 3:00 p.m. The participating customer begins shut
down at 2:30 and has a peak demand for that month on the day of the
interruption at 2:15 with a total load of 350 kW. The customer has a PDL of
50. For this example the participating customer would receive a credit for the
difference between the Customer's coincidental peak demand (350 kW) and
the PDL(50 kW). The customer would receive a credit for the 300 kW
reduction times the seasonal rate indicated above.
Example 2: There is no notice to disconnect or interrupt for this example
month. The Coincidental Peak Demand occurs on a Tuesday night at 11:00
p.m. The customer had a Demand of 45 kW at the time of the Coincidental
Peak Demand(11:00 p.m.). In months with no notice the difference between
the participating Customer's Coincidental Peak Demand(45 kW) and the PDL
(50 kW) shall be used to calculate the monthly credit. The difference between
the Coincidental Peak Demand and PDL in this example is -5. Since the
participating customer was not operating and did not have any Demand in
excess of 100 kW to interrupt there is no credit given for this month.
In : y month in which the difference between the Customer's Coincidental Peak
De and and the PDL is not at least 100 kW,no credit will be given. If the difference
bet' een the Customer's Coincidental Peak Demand and the PDL remains less than
100 kW for two or more consecutive months, a new PDL may be established or
E U shall have the right to terminate this Agreement as indicated in Article 12.
Ex eptions to the right to terminate will be made for seasonal loads, but that
ex I eption must be noted as defined under Seasonal Loads in Article 1.
If ustomer fails to interrupt load down to the PDL for the specified length of time of
the control period in any calendar month a$5.00/kW Demand Penalty may be added
to 'he Customers bill. The Demand Penalty will be determined using the maximum
um entrolled kW Demand, defined as the highest hourly interval above the PDL
recorded during all control periods in the billing month. The Customer will not
rec ive the monthly credit for that month or any succeeding months until performance
ha• been demonstrated to the satisfaction of ERMU personnel. If Customer fails to
pe form more than two times in any calendar year, ERMU reserves the right to
to inate this Agreement as indicated in Article 12.
4
93
Section 2: Compensation to Customer pursuant to Article 6, Section 1 above
shall be paid as a credit applied to Customer's monthly electric bill from ERMU, and
shall not be paid to Customer in cash. That monthly credit shall be determined by
multiplying the difference between the coincidental peak demand and the PDL by the
appropriate seasonal rate in effect for that month.
ARTICLE 7. MAXIMUM HOURS OF REQUESTED LOAD INTERRUPTION.
Except as otherwise agreed upon in writing, ERMU shall not request Customer's load to be
interrupted more than 6 hours per day and not more than 300 hours per calendar year.
ARTICLE 8. METERING. Appropriate electronic demand and energy metering
equipment will be installed and maintained by ERMU in such a manner that it records energy
and demand on a one-hour basis with regard to Customer's load. Customer shall provide
access to a telephone line for remote meter reading and notification, and shall reimburse
ERMU for the cost special metering if required. Customer shall pay a $ per month
customer charge to compensate ERMU for additional metering and administrative costs.
ERMU reserves the right to install additional metering to measure load interrupted directly at
no cost to Customer.
ARTICLE 9. TESTING. Customer shall perform tests to verify load interruption
capabilities to ERMU or its designated agent. Steps will be taken to minimize test frequency
and duration so as not to unduly impact Customer's operation. However, such tests shall be
for a duration of at least 15 minutes at times when load interrupt notifications are normally
anticipated.
ARTICLE 10. INSPECTION. ERMU shall have the right at all reasonable times to enter
upon Customer's premises to inspect load disconnect and metering equipment, and to remove
the metering equipment upon the termination of this Agreement.
ARTICLE 11. LOAD DISCONNECT EQUIPMENT MAINTENANCE. Customer
shall be solely responsible for the maintenance, repair, and replacement of the load
disconnect and collateral equipment. Customer shall make every attempt to assure load
disconnect equipment is capable of interrupting load down to the PDL especially during
January, February, June, July,August and December in any year during the term of this
Agreement. At other times, Customer shall give ERMU not less than thirty(30) days notice
prior to taking load disconnect equipment out of service.
ARTICLE 12. TERMINATION. ERMU or Customer may terminate this Agreement by
giving not less than six (6)months written notice to the other party. In the event of two
consecutive failures of Customer to perform the obligations set forth in Articles 3, 4, and 5 of
this Agreement during any calendar year, ERMU may terminate the Agreement upon
fourteen (14) days written notice to Customer prior to the termination date. This Agreement
shall terminate immediately in the event Customer terminates its service from ERMU.
5
94
ARTICL 13. NOTICES. All notices to interrupt load shall be made by the Internet.
Written no ices pursuant to this Agreement shall be conveyed by first class mail,postage
prepaid to ustomer and ERMU at the following addresses:
To Customer: Company name:
Address:
Attention:
Telephone number:
To ERMU: Elk River Municipal Utilities
PO Box 430
Elk River, MN 55330
Attention: General Manager
Phone number 763/441-2020
Notificatio of change of address, contact person, or telephone number must be made by
similar written notice.
ARTICL t 14. HEADINGS. The headings used in this Agreement are for convenience
only and s i all not be deemed to constitute a part hereof, and shall not be deemed to limit,
characteri.e or in any way affect the provisions of the Agreement.
ARTICL : 15. ENTIRE AGREEMENT. This Agreement contains all of the terms and
conditions agreed upon by the parties hereto with respect to the subject matter of the
Agreemen , and no other promises, agreements or undertakings, written or oral,regarding the
subject ma ter of this Agreement shall be of any force or effect.
ARTICL t 16. MODIFICATIONS. No change, amendment or modification of any
provision it the Agreement shall be valid unless it is in writing, dated subsequent to the date
hereof, an. signed by the parties hereto.
IN WITN SS WHEREOF, the parties hereto have executed this Agreement as of the day
and year fi st above written.
Elk Rive Municipal Utilities Company Name
By: By:
(G=neral Manager) Title:
Revised 5/i 0/14
6
95
Elk River ,
Municipal Utilities Phone: 763-441-2020
13069 Orono Parkway•P.O.Box 430 Fax: 763-441-8099
Elk River,MN 55330-0430 www.elkriverutilities.com
November 27,2012
Mr.Eric Fortman
New Plastics Plus,Inc.
12671 Meadowvale Road, Suite C
Elk River,Minnesota 55330
Re: Elk River Municipal Utilities Account with New Plastics Plus,Inc.
Dear Mr. Fortman:
ERMU is a municipal utility owned by the City of Elk River and operated for the
benefit of its customers and the residents of Elk River. ERMU has adopted several incentive
programs to help its customers reduce power costs by reducing demand when energy prices are
highest. These programs are designed to pass savings achieved by ERMU and its power
suppliers to customers who reduce their peak demand. If customers do not reduce their peak
demand as required by these programs,there is no savings to pass on to the customers.
ERMU offers two programs which could potentially assist NPP in significantly reducing
its power cost. They are ERMU's Commercial Off-Peak Program and ERMU's Commercial
Interruptible Load Program.
The current Commercial Off-Peak Program requires participating customers to reduce
peak electric demand by curtailing energy demand between 2 p.m. and 10 p.m. on weekdays to
save on peak demand charges from wholesale power suppliers. NPP was enrolled in this
program in early 2011,but was not able to, or chose not to;take full advantage of the program by
reducing production between 2 p.m. and 10 p.m. After leaving the Off Peak Program NPP in an
attempt to again lower demand charges enrolled in the Commercial Interruptible program.
At the October 9th, 2012 Utility Commission meeting it was understood by the
Commission, ERMU Staff, and NPP that the Commercial Interruptible Program was not a good
fit for NPP. Effective for the billing month of October NPP will be removed from the
Commercial Interruptible Program and be placed on the Off Peak Program. The September bill
[ MILD er
' �® NATURE
Lpe VI Public
Y O W 9 f�ovider P O W E R E D T o $ E R V E
96
1
will be pai• in full for all the current demand and energy charges for the September billing
period and • ober will be billed on the Off-Peak rate.
Th- are$4,370.26 in penalty and interest charges that date back to November 2011. At
the center •M the issue is a credit for $1,430 that ERMU staff said they would pay in two
payments($r;15 each),one in May and one in late 2011 if NPP continued to operate in Elk River.
On May 4, ;011 the NPP April bill was re-calculated that resulted in the full credit $1,430.92
being given ',t that time. NPP was expecting the second half of the credit in late 2011 and did
not receive i and stated they were paying the bill short until the credit was received. Review of
the billing .tory does not establish a consistent pattern for short paying in the amount of$715,
but does app:ar to be discounting current balances by the amount of penalties and interest.
Outlined below are the requirements and understandings that will resolve the questions
regarding; 0i mmercial Interruptible Program participation, Commercial Off-Peak Program
participation, and current account status.
1) This -tter will constitute formal notice that NPP has been removed from the Commercial
Int- I ptible Program effective September 30,2012.
2) NPP i, 11 be enrolled in the Commercial Off-Peak Program effective October 1,2012.
3) With respect to NPP's current account status, it is my understanding that you believe
NPP fi as a credit due related to NPP's participation in the Off-Peak Program. This credit,
in th 1 amount of$1,430.92, was to be applied to the NPP account in two installments:
one- �, in May, 2011; and the balance by 2011 year end, if NPP remained an ERMU
cust•N•er. However,the entire credit of$1,430.92 was applied to NPP's account on May
4,20;�1. Therefore,there is no credit balance due to NPP for the Off-Peak Program.
4) As a Pesult of confusion over the Off-Peak Program credit, as of November,2011 ERMU
waiv 1• all prior penalties and the NPP account was current. However, since November,
2011 the account has been persistently delinquent and there is a current delinquent
bal. e of$4,370.26.
5) E' ' 1 's policies provide that payment for electric charges is due on the 15th of each
mo i. If a payment due is not received by the 15th,the account incurs a 10%penalty on
the c l ent charges. Accounts which are not brought current within 30 days of the due
date :11i e subject to disconnection from electric service.
6) NPP � derstands that when bills are paid late the late fees and interest have already been
chart-• to the account. The payment amount that is paid late is first applied to late fees
and 1 terest charges and the unpaid balance is carried forward as past due energy and
de+l .; d charges.
7) Attach ed is a summary of NPP's billing history from November 2011 to October 22,
2012 hich documents the delinquencies and the current balance. ERMU will agree that
$4,3 1.26 in penalties,interest,and fees is due to ERMU.
8) The . ount NPP will be responsible for is $2,040.51 if an automatic payment method is
established for future payments.
9) NPP 1, enrolled in the Commercial Off-Peak Program as of October 1,2012,
10)The ■F ff-Peak Program for the remainder of 2012 will have the On-Peak hours of 2:00
p.m. • 10:00 p.m.Monday through Friday until December 31,2012.
97
11)Subject to final Utilities Commission approval, on January 1, 2013 ERMU will
implement new On-Peak hours and a Low Load Factor Credit for the Commercial Off-
Peak Program participants. The On-Peak hours will be 3:00 p.m. to 10:00 p.m. Monday
through Friday. The Low Load Factor Credit will be applied in months where the
customers demand is greater than the kWh consumed in the billing month divided by 75.
The credit will be equal to the monthly kWh use divided by 75 less the maximum Off-
Peak demand then multiplied by the Off Peak demand rate. (Example LLF Credit -
Monthly kWh = 6,500; Maximum Off-Peak Demand = 350 kW; On-Peak Demand = 50
kW; ((6,500/75)-350)*$5.9(2013 demand rate)=-$1,553.67)
This letter will serve as notice that if the NPP account is not paid in full by January 15th,
2013,electric service to the address will be disconnected on or about February 7th,2013 pursuant
to ERMU's policies. If electric service is disconnected, it will not be reconnected until all
delinquent amounts for energy usage and penalties (including a reconnect fee) are paid, and an
escrow is deposited at ERMU in the amount of two months estimated energy usage.
Sincerely,
Elk River A 'ci.
By , �./ f./W;�
Thomas J irags •r
cc: Troy Adams
Peter Beck
98