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Home My WebLink About5L - Utilities in Downtown Area CITY COUNCIL AGENDA REPORT 16200 Eagle Creek Avenue S.E. Prior Lake, MN 55372-1714 April 19, 2004 5L Frank Boyles, City Manager AGENDA ITEM: CONSIDER APPROVAL TO PROCEED TO UNDERGROUND UTiliTIES IN THE DOWNTOWN AREA AND DIRECT THE PREPARATION OF A CONTRACT. DISCUSSION: History: One element of the Downtown reconstruction project is the underground of utilities presently located along Dakota and Main Avenue. Initially, Xcel Energy estimated the cost for such undergrounding to be $335,000. They have now completed a refinement of their estimates and believe that $87,051 is a more accurate estimate. Current Circumstances: Historically, the cost to underground utilities are part of the project. Xcel has identified another mechanism for recovering these costs. The City Requested Facilities Surcharge (CRFS) is part of Xcel's tariff authorized by the Minnesota Public Utilities Commission (PUC). The cost to underground these utilities is spread among all Xcel customers within Prior Lake. In this case, each Xcel customer in Prior Lake would pay an additional $1 per month with their bills for the next 24 months. Conclusion: In order to initiate the City Requested Facility Surcharge, Xcel has requested confirmation that the City wishes to proceed. I am requesting Council action on this request. ISSUES: All new developments in Prior Lake are required to underground utilities. However, there are a number of areas in the City which have overhead utilities which may some day be relocated underground. The City Requested Facility Surcharge is an available financing tool to accomplish the undergrounding of utilities this year with the Downtown reconstruction project as well as in future reconstruction efforts. The CRFS allows undergrounding to take place by spreading the cost over all of Xcel's Prior Lake consumers rather than only those in the project area. This is more equitable since all customers share in te improved infrastructure benefits and expenses. ALTERNATIVES: (1) Approve the CRFS for the Downtown Reconstruction project area and direct the City Manager to coordinate with Xcel accordingly. (2) Direct the staff to recover the utility burial costs from another source. RECOMMENDED MOTION: Alternative (1). Xcel will confirm the City's desire to use CRFS in writing and request the preparation of a contract with the assistance of the City Attorney. www.cityofpriorlake.com 1:\COUNCIL\AGNRPTS\2004\CRFSJ)~ne 952.447.4230 / Fax 952.447.4245 ~'~"^"'-"""'^'~""'-~"'~'.~<"""-'~"" '".......,"'''"'''''',...,_~_.._,.__....._.'-..."'_'.~..._.."._______~.^"....__~"..,,..,.~..N...."...._..,~.........,.."'"""'_'-"---_._.._____.,."~.'._,'".,,_'^".>___~..._"~_....,_...._,___."_~~.,...",......_~.~_......... T II Xcel EnergYSM p.o. Box 1090 Mankato, Minnesota 56002-1090 April 12, 2004 Mr. Frank Boyles, City Manager City of Prior Lake 16200 Eagle Creek Ave. SE Prior Lake, MN 55372-1787 Re: Engineering Estimate to City for Special Facilities Project Dear Frank: The City of Prior Lake has requested information from Northern States Power d/b/a Xcel Energy (''Xcel Energy") regarding the Prior Lake Downtown Street Reconstruction Project, S.A.P. 201-119-01. For Xcel Energy, this project will entail replacement of overhead electric facilities with underground facilities along Dakota St. SE and Eagle Creek Ave. SE, two underground street crossings on Main Ave. SE and placement of underground facilities at the corner of Erie Ave. SE & Dakota St. SE. Also the overhead facilities along Main Ave. SE by Lakefront Park will be moved to the State Hwy. #13 right-of-way. We have completed an Engineering Estimate for the cost of this project, which we have determined is a "special facilities" project. Section 5.3 of the rules and regulations in our Minnesota Electric Rate Book (tariff) contains the definition of standard and special facilities; the relevant tariff sections are provided in Attachment B to this letter. Attachment A to this letter is an Engineering Estimate form, which provides the project scope, assumptions and estimated excess expenditures (i.e., the incremental costs above those for standard facilities) for this project. The estimated excess expenditure associated with this "special facilities" project is $87,051.00. Xcel Energy can commence construction based on this engineering design; however, scope changes, field conditions, winter construction charges and other variables may impact the final "special facilities" project cost, and hence, the excess expenditures. The Xcel Energy tariff allows Xcel Energy to recover or seek recovery of any excess expenditures associated with special facilities. The available methods of cost recovery depend on several factors. For example, if the project is distribution facility undergrounding ordered by a city, the cost recovery procedures in our City Requested Facilities Surcharge (CRFS) Rider may apply (see Attachment B). The CRFS Rider may also apply if a City requests undergrounding and agrees to use the CRFS. This is a Minnesota Public Utilities Commission (PUC) approved surcharge on customers within your city only. If the "special facility" does not involve the undergrounding of a distribution facility pursuant to a city's police powers, or if the city and Xcel energy do not mutually agree to use the CRFS to recover the excess expenditures, there is no automatic surcharge and Xcel Energy must propose a surcharge for approval by the Minnesota Public Utilities Commission. Or, the city can choose to prepay or to otherwise arrange for payment of the excess expenditures. If this project were to proceed and cost recovery were to occur under the CRFS Rider or similar surcharge, the following information is useful. Based on the projected excess expenditures associated with this Engineering Estimate and assuming the CRFS Rider is used to recover the costs, the estimated term of the surcharge is 24 months, and the estimated monthly surcharge amount per customer class is as shown below. However, the surcharge would reflect Xcel Energy's actual expenditures related to this project, so the term and/or total excess expenditures may be different than shown here. Customer Class Monthly Surcharge Residential Residential Low Income Small C&I Non-demand Billed Small C&I Demand Billed Large C&I Small Municipal Pumping Non-Demand $1.00 $1.00 $1.00 $3.00 $4.00 $1.00 Please note that your City will have the opportunity to challenge: (1) Xcel Energy's determination that a surcharge is necessary; (2) the amount of the surcharge; and (3) how the surcharge is distributed among Xcel Energy's customers in your City. City of Prior Lake CRFS 2004.doc Page 2 of3 Next Steps Please let us know if the City wishes to proceed with this project. If the project is to proceed, Xcel Energy will confirm that understanding in writing to the City. If you have any questions, please feel free to contact me at (507) 387-9633. Sincerely, YJ-nA~ David S. Pearson Manager, Community and Local Government Relations Xcel Energy Southeast Region Mankato, MN Cc: Ralph Teschner, Finance Director Bud Osmundson, Public Works Director Attachment A: Project Engineering Estimate Form Attachment B: Xcel Energy MN Electric Rate Book, Rules and Regulations, Section 5.3 City of Prior Lake CRFS 2004.doc Page 3 of3 II Xcel Energy' ATTACHMENT A SPECIAL FACILITIES ENGINEERING ESTIMATE This "Engineering Estimate" provides estimated Excess Expenditures based on an engineered design for a requested or ordered non-standard installation (Special Facility). This estimate is only valid for the specific project information and assumptions as detailed in this form. This Engineering Estimate is Xcel Energy's best evaluation of the Excess Expenditures associated with this Special Facility. However, there will be many factors that influence actual costs, such as: those associated with permitting; inclement weather; winter construction costs; unexpected increases in material costs; unexpected increases or changes in labor charges; scheduling, availability, and/or mobilization; ability to schedule outages on the existing electric facilities ofXcel Energy or other electric companies; emergencies occurring on the electric systems of Xcel Energy or electric companies; and other factors not specifically identified herein but allowed as an incremental cost for recovery. The actual Excess Expenditures will be calculated using Xcel Energy's actual costs, including all allowed overheads. REQUESTOR INFORMATION Name: Bud Osmundson, City of Prior Lake Public Works Director Address: 16200 Eagle Creek Ave. Prior Lake, MN 55372-1787 Phone: 952-447-9890 PROJECT, PERMITTING AND SITING INFORMATION Xcel Energy has relied on the Project Information, Project Assumptions and Permitting Requirements detailed below to produce this engineering estimate: Proj ect Information Name: Prior Lake Downtown Street Reconstruction Project S.A.P. 201-119-01 Dakota St., Eagle Creek Ave. SE, Main Ave. SE, & Erie Ave. SE Replacement of overhead facilities with underground facilities Location: Scope: Page 1 of3 along Dakota St and Eagle Creek Ave. SE, two underground street crossings on Main Ave. SE, and underground facilities at the corner of Erie Ave. SE & Dakota St. SE. Also the overhead facilities along Main Ave. SE by Lakefront Park will be moved to the Hwy. #13 right-of-way. Maps will be provided for reference. Project Assumptions: The city will arrange a pre-construction meeting with affected businesses and property owners to discuss the scope of the project and necessary requirements for businesses to convert their existing electrical system from overhead to underground.. The estimated cost of this project assumes favorable weather and construction conditions. It is anticipated the city or their contractor will break and remove concrete sidewalks and street surfaces to facilitate necessary trenching and backhoe operations. It is further anticipated that the necessary rights-of-way to install our facilities will be provided by the city of Prior Lake. Xcel Energy will also coordinate with city staff the placement of our pad-mount transformers, switching centers and underground cables. A project of this size will require a great deal of cooperation and coordination between the general contractor, sub-contractors and all utilities as well as the understanding and patience of the businesses affected. Permitting Requirements /Siting Issues Xcel Energy has reviewed the permitting requirements and siting issues that may be a factor for this project. These requirements must generally be satisfactorily resolved prior to starting any field construction. Right-of-Way Permit fees will be waived for this City requested project. It is anticipated that no other fees or permits are required from the city, county or MNDOT. ADDITIONAL INFORMATION Because costs increase over time, this Engineering Estimate may be considered valid for sixty (60) days from the date below. Unless otherwise agreed, the Requestor may be asked to prepay for Xcel Energy's costs to prepare any additional or revised Engineering Estimate necessary because of project scope Page 2 of3 changes, delays, or other factors beyond the control ofXcel Energy. COST ESTIMATES FOR STANDARD AND SPECIAL FACILITIES AND EXCESS EXPENDITURES Estimate of Standard Facility Costs: $ 53,618.00 Estimate of Non-Standard Facility Costs: $ 103,932.00 Engineering Estimate of Excess Expenditures: $ 87,051.00 This estimate expires in 60 days. Estimate Prepared by: Nathan Holmes Date: March 28, 2004 Estimate Prepared by: (signature) Page 3 of3 Exhibit 3-B Page 1 of 13 Docket No. E002/M-99-799 NiP Northern States Power Company Minneapolis, Minnesota 55401 MINNESOTA ELECTRIC RATE BOOK - MPUC NO.2 GENERAL RULES AND REGULATIONS (Continued) Section No. 6 1st Revised Sheet No. 27 5.2 GENERAL EXTENSION (Continued) Refundable payments will be in the amount determined by subtracting from the total estimated installation the anticipated revenue adjusted by the revenue factor, as set forth in Section 5.1, STANDARD INSTALLATION. For each additional customer served directly from the original contracted extension within five years from the date of its completion, the person who made the advance payment will receive refunds based on the revenue to be received from the additional customer served from the extension and the costs required to serve such customer. The total of such refunds will in no event exceed the total advance payment. Refunds will be made only for line extensions on private property to a single customer served directly from the original contracted facilities. 5.3 SPECIAL FACILITIES A. Definitions For the purposes of Section 5.3 and the City Requested Facilities Surcharge Rider, the following definitions apply: 1. "Distribution Facilities" are defined as all primary and secondary voltage wires, poles, insulators, N transformers, fixtures, cables, trenches, ductlines, and other associated accessories and equipment, including substation equipment, rated 35kV class and below, whose express function and purpose is for the distribution of electrical power from the Company's distribution substation directly to residential, commercial, and/or industrial customers. Distribution Facilities exclude all facilities used primarily for the purpose of transferring electricity from a generator to a substation and/or from one substation to another substation. As such, Distribution Facilities serve only customers on the primary and secondary rates of the Company. 2. "Transmission Facilities" are defined as all poles, towers, wires, insulators, transformers, fixtures, cables, and other associated structures, accessories and equipment, including substation equipment, rated 25kV class and above, whose express function and purpose is the transmission of electricity from a generator to a substation or substations, and from one substation to another. 3. "Municipality" is defined as anyone of the following entities: a county, a city, a township or other unit of local government. 4. "City" is defined as either a statutory city or a home rule charter city consistent with Minn. Stat. Sections 410.015 and 2168.02, Subd. 9. N Date Filed: 06-11-02 (Continued on Sheet No. 6-27.1) By: Kent T. Larson State Vice President - Minnesota & Dakotas Effective Date: Docket No. E002lM-99-799 Order Date: 1415861v1 Exhibit 3- B Page 2 of 13 Docket No. E002/1tf-99-799 I\S? Northern States Power Company Minneapolis, Minnesota 55401 MINNESOTA ELECTRIC RATE BOOK. MPUC NO.2 GENERAL RULES AND REGULATIONS (Continued) Section No. 6 Original Sheet 27.1 5.3 SPECIAL FACILITIES (Continued) A. Definitions (Continued) N 5. "Standard Facilities" are those facilities whose design or location constitute the reasonable and prudent, least-cost alternative that is consistent with the existing electric system configuration, will meet the needs of the Company's customers and will maintain system reliability and performance under the circumstances. In determining the design or location of a "Standard Facility", the Company shall use good utility practices and evaluate all of the circumstances surrounding the proposal, including (i) public and employee safety in the installation, operation and maintenance of the facility, (ii) compliance with the National Electrical Safety Code, other applicable engineering standards and electric utility norms and standards, (Hi) electric system reliability requirements, (iv) the presence, age, condition and configuration of existing facilities in the affected area, (v) the presence and size of existing right-of-way in the affected area, (vi) existing topology, soil, spacing, and any environmental limitations in the specific area, (vii) existing and reasonably projected development in the affected area, (viii) installation, maintenance, useful life and replacement cost factors, and (ix) other relevant factors under the particular circumstances. 6. "Special Facilities" are non-standard facilities or the non-standard design or location of facilities as provided in Section 5.3(8). 7. "Excess Expenditure" is defined as the total reasonable incremental cost for construction of SpeCial Facilities, including: the value of the un-depreciated life of existing facilities being removed and' removal costs less salvage; the fully allocated incremental labor costs for design, surveying, engineering, construction, administration, operations or any other activity associated with said project; the incremental easement or other land costs incurred by the Company; the incremental costs of immediately required changes to associated electric facilities, including backup facilities, to ensure reliability, structural integrity and operational integrity of electric system; the incremental taxes associated with requested or ordered Special Facilities; the incremental cost represented by accelerated replacement cost if the Special Facility has a materially shorter life expectancy than the standard installation; the incremental material cost for all items associated with said construction, less salvage value of removed facilities, and any other prudent costs incurred by Company directly related to the applicable Special Facilities. N Date Filed: 06-11-02 (Continued on Sheet No. 6-27.2) By: Kent T. Larson State Vice President - Minnesota & Dakotas Effective Date: Docket No. E002lM-99-799 Order Date: 1415861v1 Exhibit 3- B Page 3 of 13 Docket No. E002/M-99-799 I\SiI Northern States Power Company Minneapolis, Minnesota 55401 MINNESOTA ELECTRIC RATE BOOK - MPUC NO.2 GENERAL RULES AND REGULATIONS (Continued) Section No. 6 Original Sheet 27.2 5.3 SPECIAL FACILITIES (Continued) B. General Rule 1. When the Company is requested by a customer, group of customers, developer, or Municipality to provide types of service that result in an expenditure in excess of the Company designated standard service installation as provided under Section 5.1, STANDARD INSTALLATION, or designated standard Distribution Facilities or Transmission Facilities under Section 5.3 (A)(5) the requesting customer, group of customers, developer, or Municipality will be responsible for such Excess Expenditure, unless otherwise required by law. Common examples of Special Facilities include duplicate service facilities, special switching equipment, special service voltage, three phase service where single phase service is adequate, excess capacity, capacity for intermittent equipment, trailer park distribution systems, underground installations to wood poles, conversion from overhead to underground service, specific area undergrounding, other special undergrounding, location and relocation or replacement of existing Company facilities. T T 2. When requested under Section 5.3 (B)(1) the Company will evaluate the circumstances and determine the Standard Facility(ies) that would be appropriate to the particular situation. From this evaluation, the Company will determine the facilities design/configuration for the proposed project that meets the definition of a Standard Facility. This design/configuration shall constitute the Standard Facility for purposes of determining the Excess Expenditure associated with any requested or ordered Special Facility, including a Special Facility subject to a City Requested Facilities Surcharge or other rate surcharge. N 3. Subject to the requirements of applicable law, and subject to the Company's previously scheduled or emergency work, the Company will initially install Special Facilities or will replace, modify or relocate to a Company-approved location or route its existing Distribution Facilities or Transmission Facilities (a) upon the request of a customer, a group of customers, developer, or upon request or lawful order of a Municipality if the Company determines the requested or ordered Special Facilities will not adversely affect the reliability, structural integrity, ability to efficiently expand capacity or operational integrity of the Company's Distrib.ution Facilities or Transmission Facilities; and (b) the requesting or.ordering customer, group of customers, developer, or Municipality arranges for payment of the Excess Expenditures under Section 5.3(E)(1) or 5.3(E)(2), or a requesting or ordering City elects that the Excess Expenditures for undergrounding of Distribution Facilities be recovered by surcharge under N Section 5.3(E)(3). Date Filed: 06-11-02 (Continued on Sheet No. 6-28) By: Kent T. larson State Vice President - Minnesota & Dakotas Effective Date: Docket No. E002lM-99-799 Order Date: 1415861v1 ".......,~..-_,.,~,..".,~~.+4.,..,..~.,_ ~_.""".~,__"...,,~_.."_.~.,.._"_..._......_.........~._~..._..,...."""~"""_",._,___""""",,,,~~~~,,~,,,","""""""'.'~""',o~~'_"'___',___-,,__,_-.......__---.""~..-'"--=._..___~ Exhibit 3- B Page 4 of 13 Docket No. E002/1:f-99-799 I\5P Northern States Power Company Minneapolis, Minnesota 55401 MINNESOTA ELECTRIC RATE BOOK. MPUC NO.2 GENERAL RULES AND REGULATIONS (Continued) Section No. 6 1 $1 Revised Sheet No. 28 5.3 SPECIAL FACILITIES (Continued) C. Special Facilities In Public Right-Of-Way 1. Whenever a Municipality as a governing body of public right-of-way orders or requests the Company to N replace, modify or relocate its existing Distribution Facilities or Transmission Facilities located by permit in said public right-of-way to the extent necessary to avoid interference with construction on said public right-of-way, such facilities will be replaced, modified or relocated at Company expense, provided the construction is the Standard Facility(ies) installation designated by the Company. 2. If the Municipality requests a facility other than the standard facility(ies) determined under 5.3(C)(1), the Company will provide the Municipality notification of the Excess Expenditure compared' to the Standard Facility. If the Municipality requests or orders a type of construction with cost in excess of the Company designated standard construction, recovery of such Excess Expenditures will be subject to Section 5.3(E). 3. Except in emergencies, the Company has no obligation to commence initial construction of new Special Facilities, or to commence construction for replacement, modification, reconstruction or relocation of existing facilities, until the Company receives a permit, or other written authorization, from the Municipality (or its designee) having jurisdiction over use of the applicable public right-of-way, authorizing the construction at a Company-approved reasonable location within the public right-of-way or at a location established by lawful order of the Municipality. 4. The Company reserves the right to require an order from a Municipality if the Company determines the requested Special Facilities constitute an improvement primarily for the benefit of a landowner or other group and only an incidental benefit to public use of the right-of-way. The Company also reserves the right to challenge the lawfulness of a Municipality's order. N D. Underground Facilities Requirements The following provisions apply when replacing overhead facilities with underground facilities: 1. The customer, at customer's expense, must engage an electrician to adapt the customer's electrical facilities to accept service from Company underground facilities. 2. The Company will allow reasonable time for the customer to make the necessary alterations to their facilities, before removal of the existing overhead facilities. The customer, group of customers, developer or Municipality must provide Company reasonable notice of the undergrounding request so N Company may efficiently plan and install such facilities. Date Filed: 06-11-02 (Continued on Sheet No. 6-29) By: Kent T. Larson State Vice President - Minnesota & Dakotas Effective Date: Docket No. EOO2lM-99-799 Order Date: 1415861v1 ,,,,_~..=~,,,.........--..-,._~,,,~._,.....~~_..,.,.,.,,",..,...~_~,,,.~~..",,~~__,_,<",,",_,_____~,,,,,,__-,,,,_,.,,-.,_,_ "-_...._.~"__._,.,_"'_.....,............._._....;o^->><.-,..,~~.~_'~~_.=---_____~~ Exhibit 3- B Page 5 of 13 Docket No. E002/M-99-799 I\5P Northern States Power Company Minneapolis, Minnesota 55401 MINNESOTA ELECTRIC RATE BOOK - MPUC NO.2 GENERAL RULES AND REGULATIONS (Continued) Section No. 6 1s1 Revised Sheet No. 29 5.3 SPECIAL FACILITIES (Continued) D. Underoround Facilities Reouirements (Continued) 3. Perpetual easements will be granted Company at no cost to the Company whenever any portion of the underground distribution system is located on private land. Said private easements also will allow the Company access for inspection, maintenance, and repair of Company facilities. 4. The Company must receive, by franchise or permit, full access to its facilities installed underground for the purpose of inspection, maintenance, and repair of such facilities, such right of access to include the right to open public ways. T 5. The Municipality will give sufficient notice and will allow the Company sufficient time to place its facilities beneath public ways while the same are tom,up for resurfacing. The Municipality shall provide Company with access to the tom up public ways during such period so ,that Company will have unobstructed use of sufficiently large sections of the public ways to allow installation of the underground facilities in an economic manner. T T 6. Secondary voltage service supplied from an underground distribution lateral installation will require that the customer install, own, and maintain necessary conduits and secondary service conductors or bus duct to a point designated by Company within or adjacent to the secondary compartment of the transformer or vault. Company will make final connection of customer's secondary service conductors or bus duct to Company's facilities. 7. * Secondary voltage service supplied from underground secondary service conductors require that the customer install, own, or maintain necessary conduits on private property to a point designated by the Company at or near the property line. The secondary service conductors usually will be installed by the T customer in the customer's conduit, however, in some installations it may be preferred to have Company provide a continuous installation from the Company facilities through the customer conduit to the customer's service equipment. In these installations the customer must pay the total installed cost of the Company's cable installed on private property. The Company will make the final connection of T customer's secondary service connectors to Company's facilities. 8. The customer, group of customers, developer or Municipality will be subject to any charges imposed as a result of the conditions set forth in Section 5.1 , STANDARD INSTALLATION and charges for Special Facilities as provided in this Section 5.3. T T *See page 5 of 8 in redlined copy submitted June 22. 2001. Date Filed: 06-11-02 (Continued on Sheet No. 6-29.1) By: Kent T. Larson State Vice President - Minnesota & Dakotas Effective Date: Docket No. E002/M-99-799 Order Date: 1415861v1 'V^"'~''"''''''''''''''''''''''''__"''.''''''''''''''~~~_''''_''''''.'''_,"~",_"_'~__~"",,,,"~~.'~."~~~__O__'*'-~'~~"'''''''''''''''_'~''''__",''~_~'_'''''''..''_,",_''''''~'M'~~"~"""'."',_"""~~"""_""_____~,-=~"_""_",,,,,^,--,,,__,~~_,,,,",,,,, '~"~"'_'_~".'" ~""'~'_"'___""-"'---"_'_""U~~"~____".__,.._""",-",-,.____--"~,",,,,,,,._,,__..,.....~;~..""."'.;._." _., Exhibit 3- B Page 6 of 13 Docket No. E002/11-99-799 I\SiI Northem States Power Company Minneapolis, Minnesota 55401 MINNESOTA ELECTRIC RATE BOOK - MPUC NO.2 GENERAL RULES AND REGULATIONS (Continued) Section No. 6 Original Sheet 29.1 5.3 SPECIAL FACILITIES (Continued) E. Soecial Facilities Payments 1. Where the requesting or ordering party is required to prepay or agrees to prepay or arrange payment for Special Facilities, the requesting or ordering party shall execute an agreement or service fonn pertaining to the installation, operation and maintenance, and payment of the Special Facilities. Payments required will be made on a non-refundable basis and may be required in advance of construction unless other arrangements are agreed to in writing by the Company. The facilities installed by the Company shall be the property of the Company. Any payment by a customer requesting or ordering party shall not change the Company's ownership interest or rights. N N T N N Payment for Special Facilities may be required by either, or a combination, of the following methods as T prescribed by the Company: a single charge for the costs incurred or to be incurred by the Company due to such a special installation or a monthly charge being one-twelfth of Company's annual fixed costs necessary to provide such a special installation. The monthly charge will be discontinued if the special facilities are removed or if the requester eventually qualifies for the originally requested Special Facilities. 2. Where Special Facilities are requested or ordered by a Municipality which is not a City, or in circumstances other than those addressed in Section 5.3(E)(3), and payment is not made or arranged by the Municipality, the Company may seek approval of the Commission to allow the Excess Expenditures to be the responsibility of the Company's customers residing within the Municipality and may seek approval by the Commission pursuant to Minn. Stat. Chap. 216B to allow recovery of such expenditures from those customers through a rate surcharge or other method. Company will provide notice to an affected Municipality of any miscellaneous rate filing by Company under Minn. Stat. Sect. 2168.16, Subd. 1, to establish a Special Facilities surcharge applicable to customers in such Municipality. Customers in the applicable Municipality will be notified of (a) the implementation of the Special Facilities surcharge through either a bill message or bill insert during the month of implementation of such surcharge, and (b) any change in the surcharge. N N Date Filed: 06-11-02 (Continued on Sheet No. 6-29.2) By: Kent T. Larson State Vice President - Minnesota & Dakotas Effective Date: Docket No. EOO2lM-99-799 Order Date: 1415861v1 _...............~______..........__...-.~.~.....;.,.._~.~~",..~.._._.."'-~~.,_""-........._~_"'.._~__"""-"_",='"__''_'>m'''''~_'_''' .....~".',_,.. '"' '_"''''''''~''''~''-'-'''''''''__~''''''''''_''_''_~_~___'_''''''~_.'''__"'''''_~~""'."~.~~,."_,.._.~'"..,,...,.,..~.,,_"".._-.......-__....___~'_'"_~","___"'_____""'-'"'_'"~~m~_""_'__'_""""'_'''''_''''_'''''' Exhibit 3- B Page 7 of 13 Docket No. E002/M-99-799 I\SP Northern States Power Company Minneapolis, Minnesota 55401 MINNESOTA ELECTRIC RATE BOOK - MPUC NO.2 GENERAL RULES AND REGULATIONS (Continued) Section No. 6 Original Sheet 29.2 SPECIAL FACILITIES (Continued) E. Soecial Facilities Payments (Continued) 3. Where undergrounding of Distribution Facilities as a Special Facility is ordered by a City, and payment for excess expenditure is not made or arranged by the City, the Excess Expenditures will be recovered from the Company's customers located in the City through a rate surcharge set forth in Section 5.3 (F) and the City Requested Facilities Surcharge Rider subject to the following conditions: a. The Company shall provide written notice to the City containing the following: i. the estimated total excess expenditures required for the designated City undergrounding project and an estimate of the resulting surcharge; ii. notice to the City Clerk that the City has sixty (60) days from it receipt of the notice to file with the Commission an objection to the proposed surcharge under Minnesota Statutes 2168.17 or other applicable law. The notice shall contain a brief statement of facts and tariff or other legal authority on which the Company bases its right to surcharge the ratepayers located in the City. b. Within the sixty (60) day period noticed by the Company, the City may give written notice to the Company of its intention to pay all, a portion or none of the estimated Excess Expenditures, or '. otherwise enter into an agreement with the Company regarding payment of any Excess Expenditures. If the City does not respond in writing within the sixty (60) days, it is deemed to have elected not to pay any portion of the Excess Expenditures and will have waived its right to object to the Company's right to surcharge ratepayers in the City for the Excess Expenditures. Such failure, however, is not a waiver of the City's right to object to the Company's Excess Expenditures surcharged to ratepayers in the City, which objection may be exercised pursuant to other applicable law. c. A rate surcharge set forth in Section 5.3(F) and the City Requested Facilities Surcharge Rider may be used to recover the excess Expenditures of Distribution Facilities when such projects are initiated and controlled by a city even if the city does not act within its police powers to require the undergrounding project to be completed and the City and Company mutually agree in writing to using such a surcharge. Date Filed: 06-11-02 (Continued on Sheet No. 6-29.3) By: Kent T. Larson State Vice President - Minnesota & Dakotas Effective Date: Docket No. EOO2lM-99-799 Order Date: 1415861v1 ". ....,.."""',~_.~~.,~,"_.i~<".'.~.-'<,.,.~_...~"-.,.,."__~,,.,..,,~__'~''''''''''''~''''~~"_~'''",..,_......"",."...---.-......._",.,,~ N N Exhibit 3- B Page 8 of 13 Docket No. E002/M-99-799 I\SP Northern States Power Company Minneapolis, Minnesota 55401 MINNESOTA ELECTRIC RATE BOOK. MPUC NO.2 GENERAL RULES AND REGULATIONS (Continued) Section No. 6 Original Sheet 29.2 SPECIAL FACILITIES (Continued) E. Soecial Facilities Payments (Continued) d. The City may bring its objection to the proposed surcharge to the Commission by filing a statement of objection with the Commission and serving the Company within sixty (60) days. An objection proceeding shall not halt or delay the project, except for good cause shown. Notice and implementation of the surcharge shall be stayed until the Commission or a court of competent jurisdiction issues a final order or judgment e. Nothing in this tariff is intended to establish or IimiUhe rights of a Company customer that is a member of the class of customers surcharged or proposed to be surcharged from pursuing its rights under applicable law. f. Customers in the applicable City will be notified of: (i) the implementation of a City Requested Facilities Surcharge either through a bill message or a bill insert during the month preceding the month the surcharge is commenced; and (ii) any change in a preexisting surcharge. The Notification described in (i) and (ii) shall be approved by the Department. The Company shall provide the Department and City the proposed notice to customers no less than sixty (60) days prior to the first day of the month in which the Company intends to notify customers of the surcharge. N N Date Filed: 06-11-02 (Continued on Sheet No. 6-29.3) By: Kent T. Larson State Vice President - Minnesota & Dakotas Effective Date: Docket No. E002/M-99-799 Order Date: 1415861v1 Exhibit 3- B Page 9 of 13 Docket No. E002/M-99-799 I\SP Northern States Power Company Minneapolis, Minnesota 55401 MINNESOTA ELECTRIC RATE BOOK. MPUC NO.2 GENERAL RULES AND REGULATIONS (Continued) Section No. 6 Original Sheet 29.3 SPECIAL FACILITIES (Continued) F. Costs of Soecial Facilities Recovered bv City Reauested Facilities Surcharae 1. The Excess Expenditure required for any Special Facility undergrounding of Distribution Facilities requested or ordered by a City shall be subject to surcharge in accordance with the provisions of this section and the City Requested Facilities Surcharge (CRFS) Rider, if the City does not prepay or otherwise arrange payment The surcharge shall commence on such date as detennined by the Company, but no earlier than the first full billing month following at least 60 days notice to the applicable City of the planned implementation date of a surcharge. 2. City Project Tracker Account The Company will establish a City Project Tracker Account for the applicable City in order to track project cost recovery through customer collections. The initial balance in the Tracker Account will be the Company-detennined Excess Expenditure for the applicable Special Facilities. Excess Expenditures for subsequent, additional City requested or ordered Special Facilities may be added to the Tracker Account balance at any time to the extent additional Excess Expenditures are incurred by Company. The Tracker Account balance shall be detennined as follows: a. The total Excess Expenditure ("EE") for each City Special Facility undergrounding project to be recovered through a CRFS surcharge. The EE will be adjusted to reflect actual Company costs and any direct payments made by the City for the designated construction project; b. Plus the Carrying Charge ("CC") on the unrecovered or over-recovered monthly balance in the Tracker Account based on the overall rate of return from the Company's most recent electric general rate case decision; and c. Less the Recovered Project Costs ("RPC") equal to the actual monthly amounts billed to customers in the applicable city through the CRFS Rider, subject to subsequent reductions to account for uncollectibles, refunds and correction of erroneous billings. Date Filed: 06-11-02 (Continued on Sheet No. 6-29.4) By: Kent T. Larson State Vice President - Minnesota & Dakotas Effective Date: Docket No. EOO2JM-99-799 Order Date: 1415861v1 ""'~'~-""_"^__^'___'_''''''''"'''M___'''~'''''''''~~'''''''''_'~'''''''''~~',_~_~"~_",,,,-........,.,~..,_,.~~~_,,,...,_,,.,~,..,,,"_,,,__,-.......""~_~'~""_'~"-"'~'='&"'~',~"'~~~"'_""~__""'~--'_"~_""""-_'~'_.~,=.='_.__"'.__'~"~~'~.~."_ N N Exhibit 3- B Page 10 of 13 Docket No. E002/M-99-799 I\5P Northern States Power Company Minneapolis, Minnesota 55401 MINNESOTA ELECTRIC RATE BOOK - MPUC NO.2 GENERAL RULES AND REGULATIONS (Continued) Section No. 6 Original Sheet 29.4 SPECIAL FACiliTIES (Continued) N F. Costs of Soecial Facilities Recovered bv City Reouested Facilities Surcharoe (Continued) 3. The Company may delay implementation of a surcharge for a City Project Tracker Account until the minimum surcharge amount provided in the CRFS Rider is reached. Any under or over recovery of the Tracker Account balance in the last month of the final Recovery Period will be expensed. The Company will limit over-recoveries to no more than $0.05 per customer at the time the Tracker Account is terminated. 4. Record Access and Reporting Requirements. The Company's records associated with a City's Tracker Account shall be available for inspection by such City at reasonable times. If requested by a City, the Company shall provide a report on the status and balance of the City Project Tracker Account as follows: a. whenever Excess Expenditures for requested or ordered Distribution Facilities undergrounding are added to the Tracker Account for a designated or new City project, b. on or before the last business day of the month following the final month of the Recovery Period, or c. annually if the Recovery Period is greater than 12 months. 5. The surcharge for a particular Special Facility Distribution Facilities undergrounding project may be of a different design than set forth in the City Requested Facilities Surcharge Rider if approved in advance by Commission order in response to a rate filing by the Company under Minn. Stat. Section 2168.16, or in response to a complaint filed by the applicable City under Minn. Stat. Section 2168.17. N Date Filed: 06-11-02 By: Kent T. Larson State Vice President - Minnesota & Dakotas Effective Date: Docket No. E002/M-99-799 Order Date: 1415861v1 ,__,__>~>>,~>__>___,,'_'W""___,,',_'''______,______'"______ '!" Exhibit 3- B Page 11 of 13 Docket No. E002/M-99-799 NiP Northern States Power Company Minneapolis, Minnesota 55401 MINNESOTA ELECTRIC RATE BOOK - MPUC NO.2 CITY REQUESTED FACIUTlES SURCHARGE RIDER Section No. 5 Original Sheet No. 131 APPLICABILITY Applicable to bills for electric service provided under the Company's retail rate schedules in a City requesting or N ordering the installation of non-standard underground Distribution Facilities. The Excess Expenditure costs for these Special Facilities are to be collected from customers located within such City in accordance with the provisions in the General Rules and Regulations, Section.5.3, SPECIAL FACILITIES. RATE In each applicable City, there shall be included in the monthly minimum billing on each customer's biU a separately itemized surcharge line item determined in accordance with this Rider entitled City Requested Special Facilities. The City Requested Special Facilities Surcharge shall not be subject to current month billing adjustments or City surcharges and shall be subject to any applicable sales taxes. DETERMINATION OF CITY REQUESTED FACILITIES SURCHARGE The City Requested Special Facilities Surcharge for each applicable City project shall be calculated by determining a Class Facilities Surcharge to be applied to the Average Monthly Customers in the designated City such that the total Excess Expenditure plus carrying charges in the City Project Tracker Account are recovered over the designated Recovery Period. Averaae Monthlv Customers shall be the projected average number of active customers in each applicable customer classification located in the City for the designated Recovery Period. Class Facilities Surcharoe shall be the surcharge amount for each applicable customer classification determined in accordance with the Rules for Application. City Proiect Tracker Account is a regulatory asset account representing the sum of the following: (1) The total Excess Expenditures for each Distribution Facilities undergrounding project in such City, (2) Monthly carrying charges on the under recovered or over recovered monthly balance in the City Project Tracker Account based on the overall rate of return from the Company's most recent electric general rate case decision, (3) Less the recovered project costs collected to date through the applicable City's Facilities Surcharge. Recovery Period Is the number of months the City Requested Special Facilities Surcharge shall be applied to bills for a designated City project determined in accordance with the Rules for Application. Excess Exoenditures shall be determined in accordance with the provisions in the General Rules and Regulations, Section 5.3. N Date Filed: 06-11-02 (Continued on Sheet No. 5-132) By: Kent T. Larson State Vice President - Minnesota & Dakotas Effective Date: Docket No. EOO2lM-99-799 Order Date: 1415861v1 Exhibit 3-B Page 12 of 13 Docket No. E002/1\-I-99-799 I\5P Northern States Power Company Minneapolis, Minnesota 55401 MINNESOTA ELECTRIC RATE BOOK - MPUC NO.2 CITY REQUESTED FACILITIES SURCHARGE RIDER (Continued) Section No. 5 Original Sheet No. 132 RULES FOR APPLICATION 1. The Recovery Period shall not commence until the City Requested Facilities Surcharge to be applied to bills is at least $0.25 per customer per month. A surcharge of $0.25 up to and including $1.00 per customer regardless of customer class may be applied for a Recovery Period of exactly one month (e.g., a one-time surcharge). N 2. For a Recovery Period greater than one month, the Class Facilities Surcharge per month per customer in each non-residential customer class for any month in which a Residential Class Facilities Surcharge is applicable shall be as follows: a. Commercial & Industrial (C&I), Street Lighting and Municipal - Non-Demand Billed: Equal to the Residential Class Facilities Surcharge. '. b. Small C&I and Small Municipal- Demand Billed: Three times the Residential Class Facilities Surcharge. c. Large C&I - Demand Billed: Four times the Residential Class Facilities Surcharge. However, whenever the Non-residential Class Facilities Surcharges to be billed exceed the Customer Charge applicable on a customer account, the Class Facilities Surcharge for that account shall be equal to such Customer Charge. 3. A Residential Class Facilities Surcharge of $1.00 per Residential customer per month will be applied each month whenever the City Project Tracker Account balance to be collected allows for a Recovery Period of 36 months or less. 4. A Residential Class Facilities Surcharge of over $1.00, up to and including $4.50, per Residential customer per month will be applied each month for a Recovery Period of 36 months whenever the City Project Tracker Account balance is uncollectable at a Residential Class Facilities Surcharge level of $1.00 or less, provided that the surcharge amount for any Residential class customer account receiving a Low Income Energy Discount shall not exceed $1.00 per month. 5. A Residential Class Facilities Surcharge of $4.50 per Residential customer per month for a Recovery Period of 36 months up to and including 60 months will be applied only when necessary to recover the City Project Tracker Account balance, provided a surcharge of $4.50 may be collected pending Commission action on a Company petition or City complaint to modify the design of the rate surcharge for a specific project which cannot be recovered in 60 months. N Date Filed: 06-11-02 (Continued on Sheet No. 5-133) By: Kent T. Larson State Vice President - Minnesota & Dakotas Effective Date: Docket No. EOO2/M-99-799 Order Date: 1415861v1 ~,___,__,""""""""",~__"~,"""""""M"';"___~"__"_""",,,,,,;,_,',,,,,,........,._.,_,...___----......................-,,_,___-'",,""_........,_,...,."""~,.""__....____,.,.__........~<......_"'-"'__'_.._.,....____"""""'~~"""___~,"'~___.-=-.-------.~--'- Exhibit 3- B Page 13 of 13 Docket No. E002/M-99-799 I\SP Northern States Power Company Minneapolis, Minnesota 55401 MINNESOTA ELECTRIC RATE BOOK - MPUC NO.2 CITY REQUESTED FACILmES SURCHARGE RIDER (Continued) Section No. 5 Original Sheet No. 133 RULES FOR APPLICATION (Continued) N 6. The Class Facilities Surcharges may be adjusted annually and in the last 6 months of the Recovery Period to more closely recover the balance remaining in the City Project Tracker Account. 7. Subject to the limits on monthly surcharge amounts set forth above, the Class Facilities Surcharges may also be increased at any time, with notice as provided in Section 5.3 of the General Rules and Regulations, in order to recover Excess Expenditures associated with additional Distribution Facilities undergrounding projects requested or ordered by City. N Date Filed: 06-11-02 By: Kent T. Larson State Vice President - Minnesota & Dakotas Effective Date: Docket No. EOO2/M-99-799 Order Date: 1415861v1 '-~"'"~--r-'_'h~_""".~"'''''.'''