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1e. Approve Agreement with Xcel Energy CITY OF CHANHASSEN 7700 Market Boulevard PO Box 147 Chanhassen, MN 55317 Administration Phone: 952,227,1100 Fax: 952,227,1110 Building Inspections Phone: 952,227.1180 Fax: 952,227,1190 Engineering Phone: 952,227,1160 Fax: 952,227,1170 Finance Phone: 952,227,1140 Fax: 952,227,1110 Park & Recreation Phone: 952,227.1120 Fax: 952,227,1110 Recreation Center 2310 Coulter Boulevard Phone: 952,227.1400 Fax: 952,227.1404 Planning & Natural Resources Phone: 952,227,1130 Fax: 952,227,1110 Public Works 1591 Park Road Phone: 952,227,1300 Fax: 952,227.1310 Senior Center Phone: 952,227,1125 Fax: 952,227,1110 Web Site www.ci.chanhassen.mn.us ie. ....n:J MEMORANDUM TO: Todd Gerhardt, City Manager d ()( Paul Oehme, Director of Public Works/City Engineer "\ t May 11, 2009 O~. FROM: DATE: SUBJ: Approve Agreement with Xcel Energy for Peak Electrical Control at City Hall - Admin. File No. 183 PROPOSED MOTION "Approve Electric Service Agreement with Xcel Energy for Peak-Controlled Tiered Services at City Hall." City Council approval requires a simple majority vote of the City Council present. BACKGROUND This spring the City installed a standby generator at City Hall for temporary power in case electrical service is disrupted. The generator will be able to supply power to City Hall for the entire building. Xcel Energy has a voluntary program that allows a customer to have a reduced yearly electrical rate if the consumer agrees to run on generator power when Xcel requests to have the customer removed from the grid. This request would be made by Xcel during high demand periods. The estimated annual electrical saving for the City Hall is $3,389. This does not include the fuel that would be needed to run the generator or any maintenance costs. The City currently has this service agreement with Xcel for the water treatment plant. The City records show Xcel has not requested the City to go on standby power at the treatment plant for the last two years. The City attorney has review the agreement. Attachments g:\eng\publie\pwO 16\city hall generator - adm file 183\051109 xeel agreement for peak eontroI.doe Chanhassen is a Community for Life - Providing for Today and Planning for Tomorrow Account No. 5636006 Electric Service Agreement Peak-Controlled Tiered Services THIS AGREEMENT, Made this ~day of May, 2009 by and between NORTHERN STATES POWER COMPANY, a Minnesota Company, doing business as Xcel Energy, hereinafter called the "Company," and CITY OF CHANHASSEN. hereinafter called the "Customer," engaged in the business of. WITNESSETH: That the parties hereto, each in consideration of the agreements of the other, agree as follows: I. KIND OF SERVICE: Company agrees to supply and Customer agrees to accept electric service in the form of ~ Phase, Wire, Alternating Current at a nominal frequency of 60 Hertz and at a nominal voltage of , for Customer's use solely for the operation of electric equipment now installed or to be installed by Customer on the property known as located at 690 CITY CENTER DR , CHANHASSEN. MN 55317. 2. ANNUAL MINIMUM DEMAND CHARGE: In consideration of the capacity commitment by Company and its investment in facilities to serve Customer, Customer agrees that if the net demand charge payments during any contract year hereunder, in accordance with the rate selected specified in Section 4 below, amount to less than the minimum demand charge specified in this rate schedule, the difference between such minimum demand charge and said net demand charge payment shall be included in the bill following the contract anniversary month and Customer agrees to pay same as a charge for service rendered. 3. TERM: This Agreement shall commence at 12:01 A.M. on May 22, 2009 and shall continue for a period ending at 12:0 I A.M. May 22,2014 and ifnot then terminated by at least six months prior written notice by either party for Tier 2 customers or by at least 36 months prior written notice by either party for Tier 1 customers, shall continue further until so terminated. 4. RATE: Customer agrees to qualify for and elects the rate schedule for PEAK CONTROLLED TIERED SERVICE (SECONDARY), Tier 2. Customer agrees to pay Company's established rate schedule in effect from time to time in this locality for such Service, the established rate schedule now in effect being the one attached hereto. Effective with the term commencement date, the rate code is: A23. However, the specific rate and rate code are subject to change following an annual evaluation of Performance Factor based on Customer's previous 12 months usage. This rate and rate code change does not require Customer authorization. 5. TERMS AND CONDITIONS: The service hereunder shall be supplied for Customer's use subject to the General Rules and Regulations of Company on file with the state regulatory commission as they now exist or may hereafter be changed. A copy of such rules and regulations is available from the Company. This agreement is also subject to Sections(s) N/A appearing under the heading "Additional Terms and Conditions" which are attached to this Agreement. Customer agrees to use electrical service only as herein stated and will not assign this Agreement except upon written consent of Company. 6. MINIMUM DEMAND CHARGE DIFFERENTIAL: Company agrees that during the term of this agreement, the minimum average annual demand charge differential wilI be the average annual differential between the fmn demand and controllable demand rates resulting from application of the variable interruption credit determination ofthe currently effective rate schedule as of the date ofthis agreement and listed in Section 4 above. 7. MAXIMUM HOURS OF INTERRUPTION: Company agrees that the total intentional interruptions of controlled demand will not exceed 80 hours per calendar year for Tier 2 customers, 150 hours per year for Tier 1 customers, and 300 hours per year for Tier I Energy-Controlled Service Rider customers. 8. CONTROL PERIOD NOTICE: Company will endeavor to give Customer one hour notice of commencement of control period. 9. EXPECTED MAXIMUM DEMANDS: For the term of this agreement, Customer's expected maximum annual adiusted demand is 102 kW. The expected maximum annual demand less the predetermined demand level is the expected maximum controlIed demand. The Customer's expected maximum summer season adiusted demand is 102 kW. 10. PREDETERMINED DEMAND LEVEL (PDL): Customer may elect either the standard or optional arrangement as specified below. Standard: Customer agrees to limit adjusted demand to Q kW during control periods. Optional: Customer agrees to reduce adjusted demand by N/A kW during control periods. Customer's PDL will be the monthly adjusted demand less the agreed to load reduction. Any customer with generating equipment which is operated in parallel with Company must comply with all requirements associated with Parallel Operations specified in the General Rules and Regulations of Company. The PDL may be revised within or after the trial period subject to approval by Company. If the revision of the POL occurs WITHIN THE TRIAL PERIOD, the Customer pays the demand charge differential for the corresponding months of the contract in the trial period multiplied by the number of kilowatts (kW) the Customer increases the PDL. Charges for the failure to control to their PDL are forgiven. The Customer will be credited any paid penalties against the recalculated amount. If the revision of the PDL occurs AFTER THE TRIAL PERIOD, the same calculation is made for the most recent months up to but not to exceed 18. In this case, however, the Customer is responsible for the greater of the following: (a) the amount determined by multiplying the demand charge differential by the PDL increase, as described above, or (b) the total amount of any penalties paid/owed for failure to control load to the previous PDL. 1 I. TRIAL PERIOD AND CANCELLA nON CHARGE: Company agrees that the first twelve months of this agreement will be a trial period. Customer must notifY Company in writing to terminate this agreement during the trial period. If Customer terminates this agreement during the trial period, Customer's Peak-Controlled Tiered Service or Peak-Controlled Tiered Time of Day Service bills will be recalculated using the corresponding firm rate (General Service or General Time of Day Service). Customer will be charged the difference between the recalculated amount and the amount charged under the corresponding Peak-Controlled rate. Also, Customer will receive a refund for any additional charges which were assessed during the trial period due to Customer failure to control load. A trial period for Peak-Controlled Tiered Service or Peak-Controlled Tiered Time of Day Service will not be available to any Customer account that has previously received either service, or the closed Peak-Controlled or Energy-Controlled Services. Customer will pay a cancellation charge after the twelve month trial period if Customer terminates this agreement and elects to receive service from NSP on a non-interruptible basis or this agreement is terminated as a result of any default of Customer. Customers no longer receiving service from NSP upon termination of agreement will not be assessed the cancellation charge. The cancellation charge will be the difference between the billing amounts described above, for the most recent 18 months for Tier 2 or 36 months for Tier 1 of Peak-Controlled Tiered Service or Peak-Controlled Tiered Time of Day Service. Customer will not receive a refund for any additional charges which were assessed during this 18 or 36 month period due to Customer failure to control load. Additionally, if at any time this agreement is terminated in any above described manner, Customer will be charged all installation and removal costs for special equipment and facilities provided by Company for Peak-Controlled Tiered Service or Peak-Controlled Tiered Time of Day Service. 12. FAILURE TO CONTROL: If in any month Customer fails to control load to predetermined demand level when requested by Company, the additional charge specified in the Rules for Application of Peak-Controlled Tiered Services and Peak-Controlled Services (Closed) shall be applied to the amount by which Customer's maximum adjusted demand during any control period exceeds predetermined demand. If Customer incurs three failures to control load to predetermined demand level when requested by Company, the Company reserves the right to renegotiate the predetermined demand level or remove Customer from Peak- Controlled Tiered or Peak-Controlled Tiered Time of Day Service. In a case where Customer is removed from Peak-Controlled Tiered or Peak-Controlled Tiered Time of Day Service, Customer will be subject to a cancellation charge specified in Customer's Electric Service Agreement. 13. GENERATING CUSTOMER CHARGE: Customer choosing the Optional Predetermined Demand Level agrees to pay Company $ N/ A per month for additional metering and billing expenses related to the use of Customer-operated generating equipment to reduce adjusted demand during control periods, as described in the Rules for Application of Peak-Controlled Tiered Services and Peak-Controlled Services (Closed). NORTHERN STATES POWER COMPANY CUSTOMER By: By: Ti tie: Title: Date: Dllte: Peak-Controlled Tiered Rate Agreement Worksheet (MN) Contact Information ccount Name: CITY OF CHANHASSEN Account #5636006 First Contact ..:. "-::--. ...... .... ". ":.' .,..,. Contact 1 Name: Please pro/lide clistomer address for Customer Address COlltact 1 if differeJlt fro!11 S eroke City, State Zip Address. Work Phone: I Extension Home Phone: Please provide two additiollal cuI/tad methodJ', Cell Phone E-mail Numeric Pal2:er Text Pal2:er SMS Fa.x S~cond Conta~t'::'" ":".:,' . . . ......<.. . .. " . .... .. .". . ..... ... .... .. .. ... .. ,', Contact 2 Name Work Phone: l Extension Home Phone: Please provide two additional contact methods. Cell Phone E-mail Numeric Pager Text Pager SMS Fax Third Contact- .. . :,' . . .... . .'. . ..... Contact 3 Name Work Phone: I Extension Home Phone: i Please rovide two additiot/al fOllta~"t Inethods. Cell Phone E-mail Text Pa r SMS Fax Prepared For: XCELENERGY Prepared By: City Of Chanhassen 690 City Center Dr CHANHASSEN, MN 55317 4/15/2009 Phone: Fax: CITY OF CHANHASSEN 5636006 Rate Comparison Summary Wednesday, April 15, 2009 Meter E00000361 030 1 Current Rate Projected Annual Billing * General Service (MN Elec) Proposed Rate Projected Annual Billing Peak Controlled Tiered Service Tier 2A Annual Projected Savings (Dollars) Annual Projected Saving (percentage) ............................................. ........... $ 32,647 ............................................. ........... $ 29,258 $ 3,389 10% Annual Projections Based on The Following: Annual Maximum Demand Voltage Type / Phase PDL: Standard 118.4 Secondary/3 o Monthly Savings $700 $600 $500 $400 $300 $200 $100 $0 * Note: Projections based on twelve months of historical data.