5.2. ERMUSR 02-20-2007Elk River
Municipal Utilities
13069 Orono Parkway
Elk River, MN 55330
February 7, 2007
To: Elk River Municipal Utilities Commission
Jerry Takle
Jim Tralle
Jerry Gumphrey
From: Bryan Adams
Subject: Letter of Agreement for Joint Land Use
Waco Substation
Q~' hone: 763.441.2 020
~ -'~ :x:763.441.8099
Great River Energy finalized the land purchase for the new Waco Substation. As you
may recall, this new substation will serve the United Health Group data center. Attached
is an agreement between Great River Energy and Elk River Municipal Utilities for joint
use of this facility. Great River Energy purchased approximately five acres of land of
which the Elk River Municipal Utilities will utilize approximately one acre. Great River
Energy is asking the Elk River Municipal Utilities to make a one time payment of
$1.00/sq. ft. or $43,560 for our one acre of land.
Jerry Takle authorized me to execute this agreement if it is consistent with Great River
Energy's policy. Great River Energy required this agreement to be signed by January 23,
2007. Attached is Great River Energy's policy addressing shared facilities. (See the
attached policy, section 5.13)
Staff recommends approval of this agreement.
Letter Agreement between
Great River Energy and Elk River Municipal
Utilities for Joint Use of the new Waco Substation
Site
THIS AGREEMENT is dated this '~-~ day of ~~~"`~~'~`~2007,
between Great River Energy (hereinafter referred to as "GRE"), a Minnesota
cooperative corporation, and Elk River Municipal Utilities (hereinafter referred to
as "ERMU"), a Minnesota municipal corporation, both whom may be referred to
individually as "Party", or collectively as "Parties".
RECITALS
WHEREAS, GRE intends to build a future new bulk transmission
substation called Waco Substation (the "Substation"), and
WHEREAS, ERMU desires to construct at the Substation site a
"Distribution Substation" in the 2007 timeframe for the purpose of ERMU load
serving needs, and
WHEREAS, GRE is seeking to purchase approximately 5 acres of land for
the Substation site, and
WHEREAS, GRE and ERMU have agreed to such joint use of the
Substation site, and
NOW THEREFORE, the Parties agree as follows:
GRE shall purchase and retain ownership of approximately five (5) acres of
land for the Substation site, to be located at S25, T33N, R27W, Sherburne
County, Minnesota. GRE anticipates closing on the land purchase on
January 19, 2007.
2. The ERMU owned Distribution Substation shall occupy one (1) acre of land
on the SE corner of the five (5) acre Substation site. See the attached plot
plan, "Waco Substation, drawing number S274-10D, dated 8-17-06."
3. GRE shall grant to ERMU rights to occupy the Distribution Substation site.
ERMU shall have rights to construct, own, operate, maintain, and reconstruct
as necessary, facilities applicable to the stated Distribution Substation. The
term of this occupation shall coincide with the term of this Agreement, as
specified in provision 7, below.
4. In acknowledgement of the occupation arrangement agreement stated in
provision 3, above, ERMU shall make cone-time payment to GRE, due within
60 calendar days following the close date of GRE's Substation land purchase.
Distribution construction shall not commence until payment has been
received. GRE shall invoice ERMU for actual cost per square foot for GRE's
purchase of the Substation site portion to be occupied by ERMU. This
Substation land purchase is estimated at $1.00 per square foot. For one acre
of land, GRE estimates ERMU's cost share total as $43,560. Should the
purchase price increase by more than 10%, GRE shall notify and receive
consent to proceed from ERMU prior to closing on the land purchase.
5. GRE shall have review and approval rights for the ERMU Distribution
Substation design and construction plans. ERMU shall provide reasonable
time for GRE to perform its review. Should GRE request a modification of
design and/or construction plans, the Parties agree to negotiate in good faith
regarding such modifications.
6. GRE shall be responsible for paying all local real estate taxes that are
attributable to the five acre parcel owned by GRE. ERMU shall be
responsible for paying all personal property taxes, if any, for its distribution
substation equipment that will be located within the GRE parcel.
7. This Agreement shall become effective upon its execution and shall continue
in full force and effect for a term to coincide with the physical ownership,
location, and interconnection of the Substation and Distribution Substation,
collectively.
8. This Agreement constitutes the sole and entire agreement between the
Parties hereto and supersedes any previous written or oral agreements with
respect to the subject matter of this Agreement. No other terms or conditions
shall be binding upon either Party unless accepted by both Parties in writing.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed as of the day and year first above written.
Great River Energy
Elk River Municipal Utilities
Je n Cassell Mayhew
Manager, Transmission Planning,
Contracts & Strategy
er~~d
Adams
al Manager
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69KV 'EB' TANJSM. LINE '^~
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C~CSAH 35 (ZEBULON ST. NW)
GRE Transmission Division Operating Guideline 201
Effective July 2001
Revised May 2003
5.1.2.7 construction permits
5.1.3 Land: The Member System will reimburse GRE for the portion of the land
occupied at an average cost per acre. This is typically 1/3 of an acre.
5,1.5 Control House: Refer to Operating Guideline # 3-17 Distribution Substation
Metering/Control Building.
5.1.6 The Member System will submit to GRE for review all design and construction
drawings for the Distribution Facilities.
5.1.7 GRE will provide the Member System with an easement for the Distribution
Facilities.
6. GRE AND MEMBER SYSTEM TO JOINTLY INSTALL A TRANSMISSION SUBSTATION OR
TRANSMISSION SWITCHING STATION AND A DISTRIBUTION STATION
6.1 When it is necessary or prudent for GRE to install a GRE Transmission
Substation jointly with a Member System's Distribution Substation, GRE
will pay for equipment, labor and material, as described in paragraph 4,
with the following changes:
6.1.1 Common Facilities: If the facilities are predominantly a Transmission Switching
Station/Substation then 3RE will pay for 213 of the actual construction cost,
including labor and materials, for the listed Common Facilities. If the facilities are
predominantly Distribution Facilities/Substation then GRE will pay for 1 /3 of the
actual construction cost, including labor and materials, for the listed Common
Facilities.
6.1.2 Land and Landscaping: If the facilities are predominantly a Transmission
Switching Station/Substation then GRE will pay for 2/3 of the actual cost of the
land for the substation and any landscaping required by the city, township or
county government agencies. If the facilities are predominantly Distribution
Facilities/Substation then GRE will pay for 1/3 of the actual cost of the land for
the substation and any landscaping required by the city, township or county
government agencies. The land used for the Substation is typically 1/3 of an
acre.
6.1.3 Control House: For a Transmission Substation there typically is a need for a
larger control house than with the typical distribution substation. Items such as
battery systems, control panels and relaying all require greater space and some
form of climate control. Due to this need, GRE will work with the Member
System to design the control house, and will pay for the portion of the control
house, which is required by GRE.
Page 5 of 6
GRE Transmission Division Operating Guideline 201
Effective July 2001
Revised May 2003
4.1.2.1 substation fence
4.1.2.2 substation ground grid
4.1.2.3 substation rock
4.1.2.4 grading and site preparation
4.1.2.5 landscaping
4.1.2.6 substation battery
4.1.2.7 construction permits
4.1.3 Land: GRE will reimburse the Member System for the portion of land occupied
at an average cost per acre. This is typically 1/3 of an acre.
4.1.4 Control House: Refer to Operating Guideline # 3-17 Distribution Substation
Metering/Control Building.
4.1.5 GRE will submit to the Member System for review all design and construction
drawings for the Transmission Facilities.
4.1.6 The Member System will provide GRE with an easement for the Transmission
Facilities.
5. MEMBER SYSTEM TO INSTALL DISTRIBUTION FACILITIES WITHIN A GRE
TRANSMISSION SUBSTATION OR TRANSMISSION SWITCHING STATION
5.1 When it is necessary or prudent for a Member System to install Distribution Facilities
within a GRE Transmission substation or Transmission Switching Station, the Member
System will pay for the following:
5.1.1 Distribution Facilities: The Member System will pay 100% of the actual costs
of design a nd construction, including labor and material, of the distribution
facilities:
5.1.1.1 distribution structure foundations 8 concrete testing
5.1.1.2 distribution buswork
5.1.1.3 distribution structure and equipment
5.1.1.4 distribution switches and/or breakers
5.1.1.5 distribution switch and/or breaker wiring and installation
5.1.2 Common Facilities: The Member System will pay the incremental cost of actual
construction including labor and materials for the following:
5.1.2.1 substation fence
5.1.2.2 substation ground grid
5.1.2.3 substation rock
5.1.2.4 grading and site preparation
5.1.2.5 landscaping
5.1.2.6 substation battery
Page 4 of 6