5.3. ERMUSR 05-13-2008J~
Elk River ^~
Municipal Utilities
13069 Orono Parkway • P.O. Box 430
Elk River, MN 55330-0430
May 1, 2008
To: Elk River Municipal Utilities Commission
Jerry Takle
John Dietz
Jerry Gumphrey
From: Bryan Adams
Subject: Transmission Facility Assignment Agreement
Phone: 763.441.2020
Fax: 763.441.8099
At the April Elk River Municipal Utilities Commission meeting, authorization was given to
execute the Transmission Facility Assignment Agreement contingent upon approval of Connexus
and Great River Energy.
Jerry Takle and I talked with both Connexus and Great River Energy about this agreement. They
indicated there is no conflict of interest. nor does it create a hardship or undesired consequences.
Great River Energy was very encouraged that we are taking advantage of this opportunity.
Attached is an executed copy of this agreement along with an explanation of operational control.
TRANSMISSION FACILITIES ASSIGNMENT AGREEMENT
This Assignment Agreement ("Agreement") shall confirm the agreement reached on April ~~ ~, 2008, by and between the
Central Minnesota Municipal Power Agency ("CMMPA") acting for itself, its members, the Midwest Municipal
Transmission Group and its members and the City of Elk River ("City"). Hereinafter, CMMPA and City are sometimes
referred to singly as "Party" and collectively as "Parties", with respect to the intent to assign operational control of qualifying
transmission facilities under the terms and conditions as follows:
Assignee:
Assignor:
Governing
Agreements:
Contract Term
CMMPA
City C~= L. \L ~ • ~,,~ ~. 1.141 1 C. ~ ~ a` ~J ~Y' 1 fir„ t `C ~ ~~ .
The Midwest Independent Transmission System Operator ("MISO") Transmission and Energy
Markets Tariff ("TEMT"), effective March 1, 2005; Transmission Owner (TO) Agreement
between CMMPA and MISO
January 1, 2008 through December 31, 2013.
Transmission Facilities: All of City's transmission facilities regardless of voltage as more fully set forth on attachment
<<A,>
Assignment: City does hereby transfer operational control of its transmission facilities to CMMPA during the
term of this agreement and any renewal terms. The City shall retain physical control of its
transmission facilities along with the obligations to repair, maintain and insure these facilities in
accordance with good utility practices. CMMPA has no liability for, and by execution of this
agreement assumes no liability for, City's transmission facilities.
Reassignment: City acknowledges that CMMPA will fully reassign and convey operational control of qualifying
transmission facilities to MISO in accordance with MISO requirements and Federal Energy
Regulatory Commission (FERC) law and policy.
NERC Compliance
Responsibility City retains all responsibilities to comply with the North American Electric Reliability Corporation
(NERC) rules and regulations. If City wishes to assign NERC compliance responsibility to
CMMPA, it must do so in a separate agreement.
Designated Market
Participant
Transmission
Scheduling: CMMPA shall use Utilities Plus ("UP") as its designated MISO Market Participant ("MP") to
schedule transactions as defined in the TEMT and in accordance with all MISO rules and
regulations.
Designated MISO
Transmission Owner (TO)
Collection of
Revenues: City hereby appoints CMMPA as its MISO TO agent for all purposes required under the TO
Agreement and TEMT including but not limited to the submittal and collection of all Annual
Transmission Revenue Rights payments under the TEMT and protesting or contesting, on its
behalf, any errors in billing or related matters. On its behalf, City authorizes CMMPA to obtain
rate recovery and revenue distribution from MISO and other TOs as necessary.
Disbursement of
Revenues Received: CMMPA shall, after collecting reasonable fees and costs for its services and those of UP and
subject to any other relevant agreements with the City, disburse the revenues received from MISO
and other TOs for the use of City's transmission facilities to the City in an equitable manner.
Other MISO
Charges: City. shall also be responsible for and reimburse CMMPA for any other miscellaneous MISO
charges reasonably allocable to City, which CMMPA may pay, including but not limited to
administrative and scheduling charges and Revenue Sufficiency Guarantees associated with the
use of transmission facilities under this Agreement. City shall also be responsible for and
reimburse CMMPA for City's allocable share of CMMPA costs incurred in performing its TO
agent function including all costs incurred under the TO Agreement with MISO.
Superseding
Agreement: The parties to this agreement acknowledge that they are in the process of developing, negotiating
and drafting a comprehensive Transmission Ownership Agreement and other permanent
agreements governing the relationship between City and CMMPA. These agreements will include
City's Big Stone Power Station II and CAPX 2020 transmission investments and other permanent
service agreements. The parties therefore acknowledge that upon the completion and execution of
the comprehensive Transmission Ownership Agreement and other permanent agreements, the
terms and conditions of those agreements shall supersede the terms and conditions of this interim
agreement. Transactions thereafter shall be governed by the more comprehensive terms and
conditions of the comprehensive Transmission Ownership Agreement and other permanent
agreements. Such agreements shall be consistent with MISO requirements and FERC law and
policy.
The terms and conditions in this Agreement shall remain in effect for the term of the transactions described herein.
CMMPA as to its signatory and City as to its signatory each hereby represents and warrants that the person executing this
Agreement on its respective behalf is duly authorized to do so, and that, by each execution set forth below, such party is
hereby duly and lawfully bound by this Agreement.
Central Minnesota Municipal Power Agency City of Elk 'ver
Signed: _ Signed / '~'~2n° ~ ~./lrrr /`%C~.
Title: Title '` ~/~
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Date: Date: ~ ~ ~-'~
\\ntserver\users\IvIICHAELG\CMMPA\Ameren Energy Marketing Company\Assignment Agreement elk river doc
Page 1 of 2
nbirkholz@goslawfirm.com
From: "Jablon, Robert A." <robert.jablon@spiegelmcd.com>
To: "Marv" <marvg@windom-mn.com>; <nbirkholz@goslawfirm.com>
Cc: <alucero@northlc.com>; <SStein@rwbeck.com>; <DPainter@rwbeck.com>; "Bob Schulte"
<rhs@schulteassociates.com>; "Steve Thompson" <stevet@utplus.com>;
<amcMahon@nixonpeabody.com>; "Colleen Knudtson" <colleenk@utplus.com>; "'Central Files"
<central@SpiegelMcD.com>; "Shamraj, Larissa" <larissa.shamraj@spiegelmcd.com>; "Coleman,
Sharon" <sharon.coleman@spiegelmcd.com>
Sent: Thursday, April 03, 2008 4:10 PM
Subject: RE: CMMPA -Transmission Assignment Agreement -Request for Execution
I send this a-mail after having spoken with Mike Gavin and Andrew, whom I believe are agreement.
The term "operational control" comes out of FERC orders in which FERC wanted to recognize a wholesale
transmission grid over which all wholesale transmission users (as opposed to retail users -- i. e., end electricity
users or utility residential and business customers) could transmit without utilities like Xcel or Windom giving up
transmission ownership. Practically, operational control in a physical sense means that MISO can force
transmission over facilities as part of the grid, including to offset transmission congestion or protect against
emergencies. However, practically for Windom little if anything will change. Power flows over the grid now as it
flows and realistically I do not anticipate that uses of your facilities will change.
Thus, Windom may be entitled to receive payment for your transmission essentially for its use as it is being used
now. But MISO can only pay you if it has "operational control" over the transmission. Because transmission
costs are included in MISO's transmission costs and the rates all pay for transmission, MISO can only justify
payment to Windom if MISO has "operational control." The above refers to "operational control" in a physical
sense, that is the operation of the transmission system.
MISO will not get "operational control" of Windom's transmission in a financial sense. All that is happening is that
Windom will give CMMPA authority to submit Windom's transmission costs to MISO (i.e., acost-of-service for
Windom to recover your "revenue requirements" or as it is known in the trade your ATRR). MISO will review
Windom's ATRR (i.e., the costs for your transmission, including an allowed return similar to that which Xcel earns)
and if it approves, it will pay CMMPA who will pay Windom. No financial rights will be transferred to MISO.
However, all grid users will help pay for Windom transmission (just as you now pay for other grid owners
transmission now through transmission rates). At present Windom pays for IOU and cooperative transmission
through transmission rates plus all of its own transmission costs.
I hope that this helps.
If you have questions, please call.
Privileged and Confidential
Robert A. Jablon
robert. jablon~spiegelmcd. com
Spiegel & McDiarmid t,t,P
1333 New Hampshire Ave., NW
Washington, DC 20036
Direct Dial 202.879.4070
Home 202.333.5332
Cell 202.669.4820
Fax 202.393.2866
07802.004
From: Marv [mailto:marvg@windom-mn.com)
Sent: Thursday, April 03, 2008 3:47 PM
To: nbirkholz@goslawfirm.com
4/ 16/2008