5.2. ERMUSR 10-10-2006'~~j
Elk River
Municipal Utilities
13069 Orono Parkway
Elk River, MN 55330
October 2, 2006
To: Elk River Municipal Utilities Commission
Jerry Takle
John Dietz
Jim Tralle
From: Bryan Adams
Subject: New Data Center Facility
phone: 763.441.2020
Fax: 763.441.8099
The discussions with United Health Group (UHG) continue to move forward. The plan is to
close on the property in January 2007, start construction in March 2007 with completion in
June 2008. They will start taking power for testing in January 2008. Attached is the following
information for your review:
1) Initial proposed service agreement. Their attorney's are reviewing and must be
completed by November 1, 2006.
2) Drawing of UHG feeder and substation proposed location. Estimated costs of
feeder and substation are $950,000 and $2,130,000 respectively.
3) Notice to bidders fora 69 kv transformer for the new substation to serve this facility.
Projected 50 week delivery period.
4) Memo to Parks & Recreation Commission addressing the feeder route through
Camp Cozy.
5) Projected performance for this project using projected 2007 retail & wholesale rates.
We are also meeting with GRE to coordinate the transmission capacity issues.
ELECTRIC SERVICE AGREEMENT
THIS AGREEEMENT, made and entered into this day of , by and
between the Elk River Municipal Utilities, a municipal utility organized under the laws of the
State of Minnesota ("Municipal Utility"), and UNITED HEALTH GROUP, a Minnesota
corporation ("UHG").
WITNESSETH:
WHEREAS, UHG is currently contemplating the acquisition of a certain parcel of land
depicted on Exhibit A attached hereto (the "site plan") consisting of approximately 19 acres,
which platted as " ,Elk Path Business Center, " (the "Property");
WHEREAS, UHG current intention is to construct and operate a technology center on
the Property (the "Project");
WHEREAS, UHG 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 available to the
Project;
WHEREAS, UHG has requested that Municipal Utility install a new primary electrical
feed for the Project capable of supplying 15 megawatts of power to the Project; and
WHEREAS, Municipal Utility has agreed to install the necessary substation and wires
to provide the new primary electrical feed as requested by UHG.
NOW, THEREFORE, in consideration of the premises and the mutual promises and
conditions hereinafter contained, it is hereby agreed as follows:
l . Electrical Power. Municipal Utility agrees to use its best efforts to deliver the
following electrical service to the property by the dates set forth below (collectively, "Electric
Power"):
(a) Temporary/Construction Power Power service for construction of the
Project with 300 kilowatt, 400 amps, 3 phase, 4 wire, 480 volt service. The
capacity for the service is now available at edge of site on Waco St.
(b) Emergency Power. Emergency power service to the Project with 500
kilowatt, 600 amps, 3 phase, 4 wire, 480 volt service. The capacity for the
service is now available at edge of site on Waco St.
(c) New Primary Feed. A Primary Feed for power of 2 - 10.3 megawatts, 500
amps, 3 phase, 3 wire, l 2,460 volt services from a single substation.
Municipal Utility will use its best efforts to provide the new Primary feed as
soon as possible, but no later then January 1, ?008. The approximate location of
the new Primary Feed is depicted on Exhibit B attached hereto.
2. Down Time. Although Municipal Utility will use its best efforts to ensure the
continuous operation of the new Primary Feed, UHG acknowledges that supplying the Project
with power from a single Primary Feed creates a risk that a substation failure, cut line or other
problem with the Primary Feed would result in Municipal Utilities inability to supply the
desired 15 megawatts of power for an extended time. During anytime 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. UHG acknowledges and accepts the
risk of down time in the Primary Feed and releases Municipal Utility from any claims arising
from such down time except to the extent that UHG would have such a claim under applicable
law independent of this Agreement at law or in equity.
3. Cancellation Fees. UHG acknowledges that Municipal Utility must order the
necessary equipment for the new Primary Feed and substation equipment immediately, and
hereby agrees that if UHG fails to construct the Project, then UHG shall be responsible for the
payment of fees and costs actually incurred by Municipal Utility for cancellation of those
orders.
4. Cost of Electric Charges. UHG and Municipal Utility hereby agree that UHG
shall pay for Electric. Power as follows ("Electric Charges"):
(a) Commercial/Industrial Rates. tJHG shall pay the "CommerciaUIndustrial" rates
as promulgates from time to time by Municipal Utility in accordance with all
applicable laws and regulations. The current "Commercial/Industrial" rates are
set forth on Exhibit C attached hereto.
(b) If Municipal Utility power suppliers impose a surcharge or "ratcheted rate" on
large power users, which surcharge or rate applies to UHG, Municipal Utilities
shall have the right to pass such surcharge or ratcheted rate on to UHG.
(c) UHG shall pay for one-half of metering facility costs for the Project, currently
estimated to be approximately $45,000, depending on the final metering
arrangements proposed by UHG.
5. Standards of Power Delivery. Electric Power and energy delivered to UHG by
Municipal Utility shall be delivered in compliance with all applicable laws and regulations,
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 Municipal Utility
by operation of federal or state law or regulation.
6. Notices. All notices and demands specified herein shall be deemed
appropriately and timely given when delivered personally or deposited in the United States
mail to the addresses herinafter set forth by certified mail (return receipt requested). The
addresses of the parties hereto are as follows until changed by written notice given as above:
If to Municipal Utility at: Elk River Municipal Utilities
Attn: General Manager
1 ~ 069 Orono Park~~~ay
Elk River, Minnesota 55330
If to UHG at:
7. Counterparts. This agreement may be executed in multiple counterparts, each
of which shall be deemed to be an original agreement, and all of which shall constitute one
agreement
[SIGNATURE PAGES FOLLOW)
IN WITNESS WHEREOF, the Elk River Municipal Utilities and UHG have caused this
Agreement to be duly' executed on this day and year first above written.
ELK RIVER MUNICIPAL UTILITIES
By:
Bryan Adams, P.E.
Its: General Manager
Bv:
Its: ,Elk River
Municipal Commission
UNITED HEALTH GROUP
USG
By:
Its:
STATE OF MINNESOTA )
)ss.
COUNTY OF SHERBURNE )
The foregoing instrument was acknowledged before me this _
Bryan Adams, General Manager of Elk River Municipal Utility and
of the Elk River Municipal Utility Commission.
day of by
Notary Public
STATE OF MINNESOTA )
)ss.
COUNTY OF SHERBURNE )
by
The foregoing instrument was acknowledged before me this
title
day of ,
on behalf of corporation.
Notary Public
~; :. C '~.
.~
NOTICE TO BIDDERS
PROPOSALS RECEIVED
Elk River Municipal Utilities, Elk River, Minnesota, will receive sealed bids in duplicate until
2:00 P.M., October 26, 2006, to furnish one 69ItV Substation Transformer
as more fully described in the specifications. Bids will be opened and read at that time.
The Elk River Utilities Commission will consider and possibly award a contract at its next
regular scheduled monthly meeting. Proposals should be addressed:
Bryan Adams, General I~4anager
Elk River Municipal Utilities
13069 Orono Parkway
Elk River, MN 55330
and shall be endorsed: 69KV Substation Transformer
BID BOND/ CERTIFIED CHECK
All bids must be submitted by the bidder on forms provided with the specifications and
must be accompanied by a certified check/ surety bond from a company authorized to do
business in the state of Minnesota made payable to Elk River Municipal Utilities, Elk River,
1~Iinnesota, in the amount of not less than five percent (5°%) of the maximum bid, as a
guarantee that if the bid is accepted, the bidder will comply and deliver in accordance with
the specifications. Should any bidder whose bid has been accepted, fail to execute the
contract and deliver satisfactory equipment /material it is understood and agreed that said
check/ bond shall be forfeited as liquidated damages. Bids received after the time set for the
opening of bids, will be returned to the bidder unopened. Certified checks/ bonds of the
unsuccessful bidders will be returned immediately following the bid opening with the
exception of the apparent low bidder and second apparent low bidder. These checks/ bonds
will be held until the contract is executed and delivered to Elk River 1\Iunicipal Utilities, at
which tune checks/ bonds will be returned. _
LATE BIDS
Bids received after the time set for the opening of the bids will be returned to the bidder
unopened.
RESECTION OF BIDS
The Elk River Municipal Utilities Commission reserves the right to reject any or all bids and
waive all technicalities.
SPECIFICATIONS
Specifications are on file and may be inspected or obtained at the office of the Elk River
Municipal Utilities, Elk River, Minnesota. There is no charge for specifications provided to
prospective bidders.
Elk River Municipal Utilities
Jerry Takle, President
Bryan Adams, P.E., General 1\lanager
9
-~,•,.
ilk ~Ziver` ~ ~ .~
ur~ici~~.l ~ti~ities
13069 Orono Psrl<way
Elk River, I~l'~I 57 3 ~0
September 25, 2006
To: f3i11 1\Iaetz, Director Parl: & Recreation
Parks & Recreation Commission
From: Bryan Adams, General Manager
Blk River Munici al Utilities ~'~ ~~
p
Subject: Camp Cozy Park
fix: 763.4 4L~099
As you are aware, another large data center will be constructed in Elk River. This data
center will substantially increase Elk River's tas base, provide jobs, and will encourage
development of future businesses in Elk River. This data center will be located just north
of the existing Target data center alone Waco St. in the Elk Path Business Center
development. This data center requires large quantities of electrical power and energy.
A new electric substation will be constructed on Co Rd 35 as it crosses the rail road (see
attached aerial view). Large underground electric feeders will be constructed From this
new substation to the new data center location.
The attached aerial view also reflects a proposed route of the new electrical feeders. This
route is on the eastern boundary of Camp Cozy Park. There could ultimately be as many
as 4 electrical feeders all within a 1 ~' strip between the future Waco substation and Elk
Path Business Center to support the current and future development.
We are proposing to install these feeders underground using either directional boring or
plowing to minimizing surface disturbance. Minimal tree disturbance is anticipated. A
small construction trail for equipment will need to be installed. Construction is
anticipated to tale place in mid 2007 time frame. The cost of this new substation and
electrical feeder work to serve this new data center is in the $2,00,000 range.
We ask authorization to proceed with this project, utilizing Camp Cozy Park as a route.
~Ue will work closely with your staff in locating an acceptable route and working through
any construction issues that may arise.
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