2.6 ERMUSR 02-14-2017 Elk River
Municipal Utilities UTILITIES COMMISSION MEETING
TO: FROM:
Elk River Municipal Utilities Commission Troy Adams, P.E.—General Manager
John Dietz—Chair
Al Nadeau—Vice Chair
Daryl Thompson—Trustee
MEETING DATE: AGENDA ITEM NUMBER:
February 14, 2017 2.6
SUBJECT:
Agreement Resolving Electric Service Territory Loss of Revenue Dispute
BACKGROUND:
ERMU and Connexus Energy representatives had identified an area of dispute regarding Loss of
Revenue (LOR) calculations outlined in the Electric Service Territory Agreement(agreement)
dated March 20, 2015. The dispute was in regards to the definition of"Municipal Development."
DISCUSSION:
On January 4, Connexus and ERMU leadership met per the agreement's alternative dispute
resolution procedure. The meeting produced resolution terms favorable to both parties. These
terms were discussed with the Commission during the January Commission meeting.
The dispute resolution terms were drafted into agreement form, reviewed by both parties' legal
counsels, and executed by Connexus leadership.
ACTION REQUESTED:
Approve the attached agreement resolving the loss of revenue dispute for the electric service
territory agreement with Connexus Energy.
ATTACHMENTS:
• ERMU/Connexus Energy Agreement Resoling Dispute Under Electric Service Territory
Agreement Entered Into On March 20, 2015.
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AGREEMENT RESOLVING DISPUTE UNDER ELECTRIC SERVICE TERRITORY
AGREEMENT ENTERED INTO ON MARCH 20,2015
This Agreement (the "Agreement") is made and entered as of January 31, 2017, by and
between Elk River Municipal Utilities and Connexus Energy. The Parties, after having been
fully advised on the issues, completed the alternative dispute resolution process stated in the
Electric Service Territory Agreement entered into on March 20, 2015 (the "2015 Agreement").
The Parties have reached a compromise agreement with respect to loss of revenue payments for
certain existing commercial properties following the Transfer Date, and desire to set forth the
terms of their agreement.
NOW THEREFORE, in consideration of the premises and of the mutual covenants contained
herein,the sufficiency of which is acknowledged,the Parties agree as follows:
1. The loss of revenue base rate of$0.01 per kWh (as described in Section 2.5 of the 2015
Agreement) shall apply to the electric load associated with accounts 1-3 listed on Exhibit
A: Morrell Trucking,GATR Volvo Truck Center, and Sportech(at 168th Circle).
2. The loss of revenue base rate of'$0.022 per kWh (as described in Section 2.3(b) of the
2015 Agreement) shall apply to the electric load associated with the six remaining
accounts (4-9) listed on Exhibit A: Preferred Powder Coating, Alliance Machine,
Medical Intrusion (Suite 1 and Suite 2), Crystal Distribution Inc., and Sportech (at 175th
Avenue).
3. The 2015 Agreement remains in full force and effect. Any capitalized terms that are not
defined in this Agreement shall have the meaning provided in the 2015 Agreement.
4. This Agreement does not address any properties or electrical load outside of those listed
in Exhibit A.
5. This Agreement may be executed in counterpart copies by the Parties and each
counterpart, when taken together with the other, shall be deemed one and the same
executed Agreement.
6. By executing this Agreement, the Parties acknowledge that they: a) enter into this
Agreement knowingly, voluntarily and freely, b) have had an opportunity to consult an
attorney before signing this Agreement, and c)have not relied upon any representation or
statement not set forth herein.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by a
duly authorized representative as of the date first above written.
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Exhibit A
Municipal Development Rate (Section 2.5 of 2015 Agreement)
Account Current Customer Address Base Rate
1 GATR Volvo Truck 10743 168 Circle $0.010/kWh
Center
2 Morrell Trucking 10775 170 Circle $0.010/kWh
3 Sportech Inc. 10752 168 Circle $0.010/kWh
Loss of Revenue Payment, Area 1 Rate (Section 2.3(b) of 2015 Agreement)
Account Current Customer Address Base Rate
4 Alliance Machine 17520 Tyler St $0.022 /kWh
5 Crystal Distribution Inc. 17560 Tyler St $0.022/kWh
6 Medical Extrusion 17507 Tyler St, Suite 1 $0.022/kWh
7 Medical Extrusion 17507 Tyler St, Suite 2 $0.022 /kWh
8 Preferred Powder 10846 175th Court $0.022/kWh
Coating
9 Sportech Inc. 10800 175th Ave $0.022/kWh
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