5.4 ERMUSR 10-11-2005 16
Elk River
' Municipal Utilities
13069 Orono Parkway phone: 763.441.2020
Elk River,MN 55330 Fax.763.441.8099
October 5, 2005
' To: Elk River Municipal Utilities Commission
Jerry Takle
John Dietz
' Jim Tralle
From: Bryan Adams
Subject: Target Data Center update
' Your staff and city attorney Peter Beck has had several meetings with Target concerning
their proposed project in Elk River. Originally Target was adamant about having two
independent sources of feed to their facility. I presented to them our 75% ratchet
11110 provision as a minimum bill which provided us the revenue to pay for their requested
intrastructure regardless of their actual power and energy needs. Target ultimately
decided that if they were to pay for redundant electrical feed, they would only require one
' electric feed. Attached for your review is the final electrical service agreement.
Part of Targets initial request was two feeders from two different substations. Substation
' west and a new bay at station 14. We are currently upgrading the west substation to meet
our normal system growth along with Target. This transformer was purchased last
month. The station 14 substation upgrade was originally scheduled for the 2010 time
' frame, but was moved up to satisfy Targets initial request of 2 feeds. Now that Target
only requests 1 feed, do we still go ahead with station 14 upgrade at an approximate cost
of$80,000? Because Great River Energy is now allowing us to upgrade station 14 staff
' recommends we still proceed.
' Also attached is a proposed construction schedule for the substation and Target feed
projects.
NM ._ I M M IIIIII I M ii me me em me um em Imr NM
Elk River Municipal Utilitiesi I I 1 I ' j
Otsego Station 14 Sublation Additions Construction ScheduleI r2 i I 1 - -
- -- - Year 2005 I ► + - j - -T
9/14/20051 + I
1 Year
- , i20I06
►T
-i-
Description Sept 'October NovemberDec-Mar Apnl-T- May June July Augustj- .Sept
_ �}Otsego I
Set New Trans West Sub
11 -
Test Energize -
Earthwork - 1 t - - T — -
Concrete/Ducts , - ' 1 I-+ ---
-- I ! + j
Fencing - 4-- -- 4 I I -- 4
Grounding
t I. j I 1 --I - 1
Set High Voltage Gear III ! I Set Low Voltage Steel
Set 69 KV Trans Rupter 1.1 I I :
Set Transformer from West Sub - I j 1 1 I
Set Low Voltage Reclosure 1- j i -
MeteringII.
Rock Srface -r- I I I
Tie-in Distribution
Energize&TestT
Landscaping I k I '
Station 14 I - -fi--F 1. I I I 1 -
Earthwork- - I� T 4 � - i I -rrt-
Grounding - - T } - I - -"------- _Tt -+ I _T
Concrete/Ducts 11 1 1 -T
Fencing �- _ 1
eHigh Voltage ear
Set Low Voltage Step �I IEi1-
SetLowVoltageReclosure
Rupteriii61 -T t-1 -H t --
I t- �} i--
Metering - - -
Rock Surface 1 +- In
7 � f— T -�
I t
Tie-m Distribution f i }�_ y i � +' T
Energize&Test
T-
Target Feeder , 1 I I - C 1 I - j - - I I
Otsego Substation schedule
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ELECTRIC SERVICE AGREEMENT
THIS AGREEMENT, made and entered into this day of , 2005, by
and between the Elk River Municipal Utilities, a municipal utility organized under the
Ilaws of the State of Minnesota ("Municipal Utility"), and TARGET CORPORATION, a
Minnesota corporation ("Target").
IWITNESSETH:
I WHEREAS, Target is currently contemplating the acquisition of a certain parcel of
land depicted on Exhibit A attached hereto (the "Site Plan") consisting of approximately
26.26 acres, which is platted as "Lot 1, Block 1, Elk Path Business Center, 3rd Addition"
I (the "Property");
I WHEREAS, Target's current intention is to construct and operate a technology
center on the Property (the "Project");
I WHEREAS, Target would not move forward with the acquisition of the Property
and the development of the Project unless it receives adequate assurances that Municipal
Utility will use its best efforts to assure that certain levels of electric service will be
RPavailable to the Project;
I WHEREAS, Target has requested that Municipal Utility install a new primary
electrical feed for the Project capable of supplying 10.3 megawatts of power to the Project;
and
IWHEREAS, Municipal Utility has agreed to install the necessary substation and
wires to provide the new primary electrical feed as requested by Target.
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NOW, THEREFORE, in consideration of the premises and the mutual promises
Iand conditions hereinafter contained, it is hereby agreed as follows:
1. Electrical Power. Municipal Utility agrees to use its best efforts to deliver
I the following electrical service to the Property by the dates set forth below (collectively,
"Electric Power"):
I (a) Temporary/Construction Power. Power service for construction of the
Project with 300 kilowatt, 400 amps, 3 phase, 4 wire, 480 volt service. This
Iservice will be available as of October 3, 2005.
1111)
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(b) Emergency Power. Emergency power service to the Project with 500
kilowatt, 600 amps, 3 phase, 4 wire, 480 volt service. This service will be
available as of November 13, 2006.
(c) New Primary Feed. A Primary Feed for power of 10.3 megawatts, 500
Iamps, 3 phase, 3 wire, 12,460 volt service. Municipal Utility will use its best
efforts to provide the new Primary as soon as possible, but no later than
November 13, 2006. The approximate location of the new Primary Feed is
Idepicted on Exhibit B attached hereto.
I 2. Down Time. Although Municipal Utility will use its best efforts to ensure
the continuous operation of the new Primary Feed, Target acknowledges that supplying
the Project with power from a single Primary Feed creates a risk that a substation failure,
Icut line or other problem with the Primary Feed could result in Municipal Utilities
inability to supply the desired 10.3 megawatts of power for an extended time. During any
I time that the Primary Feed is down, Municipal Utility will only be able to supply
approximately 2 megawatts of power to the Project from Municipal Utilities existing
power system. Target acknowledges and accepts the risk of down time in the Primary
I Feed and releases Municipal Utility from any claims arising from such down time except
to the extent that Target would have such a claim under applicable law independent of
this Agreement at law or in equity.
RP
3. Cancellation Fees. Target acknowledges that Municipal Utility must order
I the necessary equipment for the new Primary Feed and substation equipment
immediately, and hereby agrees that if Target fails to construct the Project, then Target
shall be responsible for the payment of fees actually incurred by Municipal Utility for
I cancellation of those orders up to a maximum amount of One Hundred Fifty Thousand
and No/100 Dollars ($150,000.00).
I4. Cost of Electric Charges. Target and Municipal Utility hereby agree that
Target shall pay for Electric Power as follows ("Electric Charges"):
I (a) Commercial/Industrial Rates. Target shall pay the
"Commercial/Industrial" rates as promulgated from time to time by
I Municipal Utility in accordance with all applicable laws and regulations,
with the exception set forth in Section 4(b) below. The current
"Commercial/Industrial" rates are set forth on Exhibit C attached hereto.
(b) Most Favored Nation. Municipal Utility agrees that Target shall not be
I required to pay Electric Charges at a higher rate than that paid or which
would be payable by any other customer of Municipal Utility, with the
following exceptions:
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(i) Municipal Utility may, in its sole discretion, charge a lower rate to a
I customer which is paying for more than 10.3 megawatts of electricity,
without having to reduce Target's rate; and
I (ii) If Municipal Utility's power suppliers impose a surcharge or
"ratcheted rate" on large power users, which surcharge or rate applies to
Target, Municipal Utilities shall have the right to pass such surcharge or
Iratcheted rate on to Target.
I (c) Target shall pay for one-half of metering facility costs for the Project,
currently estimated to be approximately $15,000, depending on the final
metering arrangement.
I 5. Standards of Power Delivery. Electric Power and energydelivered to
rY
Target by Municipal Utility shall be delivered in compliance with all applicable laws and
Iregulations, and in accordance with the other standards of The Institute of Electrical and
Electronics Engineers, Inc., or, if mandated, such different standard as is applicable to
IMunicipal Utility by operation of federal or state law or regulation.
6. Notices - All notices and demands specified herein shall be deemed
1110 appropriately and timely given when delivered personally or deposited in the United
States mail to the addresses hereinafter set forth by certified mail (return receipt
I requested). The addresses of the parties hereto are as follows until changed by written
notice given as above:
I If to Municipal Utility at: Elk River Municipal Utilities
Attn: General Manager
13069 Orono Parkway
1 Elk River, Minnesota 55330
I If to Target at: Target Corporation
Real Estate - Existing Stores
1000 Nicollet Mall
IMinneapolis, MN. 55403
with a copy to: Target Corporation
IConstruction Department
Attn: Roger Johnson
I TRTK-0700
1000 Nicollet Mall
IPMinneapolis, MN 55403
I
511
with a copy to: Target Corporation
I Energy Operations (TFS-7CH)
Attn: Aaron Rosha
3701 Wayzata Boulevard
I 1000 Nicollet Mall
Minneapolis, MN 55403
Iand: Ryan Companies
Attn: Jim Todd
I 50 South Tenth Street, Suite 300
Minneapolis, MN 55403
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[SIGNATURE PAGES FOLLOW]
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LID IN WITNESS WHEREOF, the City and Developer have caused this Agreement to be
duly' executed on this day and year first above written.
ll
ELK RIVER MUNICIPAL UTILITIES
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By:
IBryan Adams, P.E.
Its: General Manager
I By:
IIts: , Elk River
Municipal Utility Commission
ITARGET
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TARGET CORPORATION
By
11 Its:
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STATE OF MINNESOTA )
I )ss.
COUNTY OF SHERBURNE )
I The foregoing instrument was acknowledged before me this day of by
Bryan Adams, General Manager of Elk River Municipal Utility and
of the Elk River Municipal Utility Commission.
INotary Public
STATE OF MINNESOTA )
I )ss.
COUNTY OF SHERBURNE )
IThe foregoing instrument was acknowledged before me this day of ,
, by .
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Notary Public
MO
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ELK RIVER MUNICIPAL UTILITIES
' Demand Electric Service
Available: Within established Elk River Municipal Utilities Rate areas
' Applicable: Existing Customers, or to new Customers with demands of 50 kW or more
for three (3) consecutive months whose entire requirements are taken through one meter,
under a contract of standard form (Not applicable to resale, standby or auxiliary service )
' Character Of Service: AC, 60 cycles, 120 volts or 120/240 volts, single-phase, 120/208
volts, or 277/480 volts, three-phase Four wire, 240 volts three-phase wilt only be
' applicable to existing customers now being served by this voltage A customer requiring
voltages other than that already established shall be required to provide suitable space
location of Elk River Municipal Utilities transformers, metering and associated equipment
Special Conditions: One meter shall be installed to service one class of business If
additional buildings are required for a given business, they shall be interconnected by the
customer to obtain one meter If additional meters and services are requested by the
customer, each shall be treated as a separate customer
' Meter to be accessible to our service department at anytime
Rate:
Subject to application of Cost Adjustment
110 Demand Service:
Account Maintenance Charge $35 00 per month
' ummer Winter
Demand Charge S$11 25 $8 50 in KW/month
Energy Charge. $ 0 0418 $0 0418 in KWh/month
' Minimum Bill: Maximum billing demand during previous twelve months times 3 0%of the
demand charge, or the actual demand multiplied by the demand charge , whichever is
greater plus $1 00 per kVA per month of excess transformer capacity requested by
' customer
Sales tax applicable unless exemption is filed
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ELK RIVER MUNICIPAL UTILITIES 1111
Demand Electric Service I
Summer: The summer rate shall apply to the Customer's use from May 1 through
September 30
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Winter: The winter rate shall apply to the Customer's use from October 1 through April
30.
Determination Of Billing Demand: The billing demand shall be the highest measured
demand ( corrected for power factor if required) during any fifteen (15) minute period
occurring in the current billing period
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Fluctuating Loads: Customers operating equipment having a highly fluctuating or large
instantaneous demand, such as welders and X-ray machines, shall be required to pay all
non-betterment costs of isolating the load from the balance of Elk River Municipal Utilities'
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system so that the load will not unduly interfere with service on Elk River Municipal
Utilities' lines In addition, Customers who fail to provide adequate corrective equipment
shall be required to own and maintain their own transformers No motor larger than ten
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(10) HP will be allowed to be across-the-line started without notification and written
authorization from Elk River Municipal Utilities
Power Factor Adjustment: For loads of 50 KW or more, or at the option of Elk River
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Municipal Utilities for loads of less than 50 KW, power factor adjustments will be made in
the billing demand, when the power factor, as determined by test, at the time of the
Customer's maximum use is less than 95% If the power factor, as measured by Elk River
Municipal Utilities'electric department, is lower than 95%, the monthly demand charge
4111
may be multiplied by the ratio 95% to the measured power factor, or at Elk River
Municipal Utilities' option, the power factor may be corrected at the Customer's expense
Terms of Payment: Bills are due and payable upon receipt and delinquent if not paid by
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the due date noted the bill. There will be a ten (10) percent late payment charge added to
all accounts that are not paid by the due date
Terms and Conditions:
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1 Usage may be fractionalized on the actual days of service for application of a
change in rate
2. Service will be furnished under Elk River Municipal Utilities rules.
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3 Extensions made for service under this schedule are subject to the provisions of Elk
River Municipal Utilities' rules governing Extension of Service and Facilities.
4 The rates set forth herein may be modified by the amount of any governmental
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changes imposed and levied on transmission, distribution, production, or the sale of
electrical power
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Approved /1--) AZ/%1/1— Ad 41111/
ENecoptednve JanuaryDecember,1, 200513. 2004